Balancing prudential regulation and competition considerations in banking

Oecd

No 329, OECD Roundtables on Competition Policy Papers from OECD Publishing

Abstract: This paper examines the possible tensions, trade-offs, and complementarities between prudential regulation and competition in banking. Well-calibrated prudential rules, along with effective competition policy and enforcement, can jointly foster financial resilience, efficiency, and innovation. Focusing on retail deposits and lending, the paper examines how competition and prudential regulations may strike a balance between stability and open and dynamic markets. It highlights considerations in aligning prudential and competition objectives through proportionate, risk-based regulation. It also stresses the need for sustained co-operation between prudential and competition authorities to ensure these core banking markets deliver lasting benefits for consumers and the economy.

Keywords: Antitrust Law; banking; competition in banking; competition policy; innovation; prudential regulation; regulatory effectiveness (search for similar items in EconPapers)
JEL-codes: E42 F3 F38 G1 G18 G2 G21 G23 G3 K21 L4 L40 L41 L42 L43 (search for similar items in EconPapers)
Date: 2025-11-14
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Persistent link: https://EconPapers.repec.org/RePEc:oec:dafaac:329-en

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