The Competitiveness-Stability Relation from The Viewpoint of The Bank System in Bulgaria

Lyubomir Georgiev (), Nedyalko Valkanov () and Andrian Yambolov
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Lyubomir Georgiev: University of Economics - Varna
Nedyalko Valkanov: University of Economics - Varna
Andrian Yambolov: University of Economics - Varna

An Annual Book of University of Economics - Varna, 2016, vol. 88, issue 1, 275-353

Abstract: In the study there is made an attempt to provide a satisfactory answer to thefollowing question-To what extent does the competition on the banking market in Bulgaria influence the stability of credit institutions andthe bank system as a whole? Inthis context the former is structured in the following order: 1. A theoretical and applied analysis of: the relation between competition in thebanking sector and the stability of credit institutions; the indicators for measuring the bank’s competitiveness and stability; the use of the indicators in various research models. 2. An empirical study of the competitiveness-stability relation from the viewpoint of the bank system in Bulgaria.The results of the study show the existence of a positive connection between thecompetition on the banking market and the Bank Z-Score indicator, measuring the so-called Distance-to-Default of banks. Therefore it provides evidence in support of thecompetitiveness-stabilityhypothesis. The research thesis being argued is that banking should not be protected from competition, i.e. competition can bring considerable benefitsto the banking sector in Bulgaria and should not be sacrificed in the name of greaterstability.

Keywords: Competitiveness-Stability Relation; Bank System; Bank Z-Score indicator; Distance-to-Default of banks (search for similar items in EconPapers)
JEL-codes: G21 (search for similar items in EconPapers)
Date: 2016
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