CONCENTRATION AND COMPETITIVENESS O THE BANKING MARKET IN SERBIA: CURRENT SITUATION AND POSSIBLE FUTURE CHANGES UNDER THE INFLUENCE OF MARKET CONSOLIDATION

Dragan Lončar and Vesna Rajić
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Dragan Lončar: Faculty of Economics University of Belgrade
Vesna Rajić: Faculty of Economics University of Belgrade

Serbian Association of Economists Journal, 2012, issue 7-8, 372-385

Abstract: Serbia is a bank-centered financial market, which means that the analysis of concentration and competition is important. Currently, the banking market is weakly to moderately concentrated or mildly oligopolistic. In the future, we can expect a consolidation of the banking market in terms of reducing the number of banks and strengthening the market power of the largest banks. Possible channels of consolidation are the sales of the remaining state owned banking package, takeovers between banks and the disappearance of some banks as a result of competitive selection. The paper analyzes the possible scenarios for the future consolidation and their impacts on the competitive dynamics. The authors argue in favor of a positive impact of a more moderate consolidation on competition indicators, but are also warning the regulator to prevent excessive concentration and cartel arrangements.

Keywords: banking market; consolidation; Serbia; concentration; competition (search for similar items in EconPapers)
JEL-codes: E00 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:srb:journl:y:2012:i:7-8:p:372-385

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