Market structure, financial intermediation and riskiness of banks:Evidence from Asia Pacific

Wahyoe Soedarmono and Amine Tarazi

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Abstract: From a sample of commercial banks in Asia Pacific over the 1994-2009 period, this study highlights that banks in less competitive markets exhibit lower loan growth and higher instability. Such instability is further followed by a decline in deposit growth, suggesting that Asian banks are also subject to indirect market discipline mechanisms through bank market structure. This study therefore sheds light on the importance of enhancing bank competition to overcome bank risk and strengthen financial intermediation. This study also advocates greater reliance on market discipline to promote bank stability.

Keywords: market discipline; Asia Pacific; Bank competition; loan growth; risk (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (1)

Published in Emerging Markets Finance and Trade, 2015, Emerging Markets Finance and Trade, pp.1-14

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Working Paper: Market structure, financial intermediation and riskiness of banks:Evidence from Asia Pacific (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01134830

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