Competition, financial intermediation and riskiness of banks: Evidence from the Asia-Pacific region

Wahyoe Soedarmono and Amine Tarazi

Working Papers from HAL

Abstract: From a sample of commercial banks in the Asia-Pacific region 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 competition. This study therefore sheds light on the importance of enhancing bank competition to overcome bank risk and strengthen financial intermediation. Likewise, this study advocates the importance of strengthening market discipline to reduce bank riskiness regardless of the degree of competition in the banking industry.

Keywords: Bank competition; loan growth; risk; market discipline; Asia Pacific JEL Classification: G21; G28 (search for similar items in EconPapers)
Date: 2015-02-02
New Economics Papers: this item is included in nep-ban, nep-com and nep-sea
Note: View the original document on HAL open archive server: https://unilim.hal.science/hal-01114380v1
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Citations: View citations in EconPapers (8)

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Journal Article: Competition, Financial Intermediation, and Riskiness of Banks: Evidence from the Asia-Pacific Region (2016)
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