Entry and Strategic Information Display in Credit Markets

Jan Bouckaert and Hans Degryse

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: The Riegle-Neal Act in the US and the Economic and Monetary Union in Europe are recent initiatives to stimulate financial integration. These initiatives allow new entrants to "poach" the incumbents' clients by offering them attractive loan offers. We show that these deregulations may be insufficient since asymmetric information seriously hampers the integration of credit markets. Moreover, banks may strategically display some information hindering the scale of entry when asymmetric information is moderate. We also show that voluntary information sharing emerges only when asymmetric information is low.

Keywords: financial integration; banking competition; asymmetric information; barriers to entry (search for similar items in EconPapers)
JEL-codes: D43 G21 L13 (search for similar items in EconPapers)
Date: 2002-03-01
New Economics Papers: this item is included in nep-cfn, nep-com, nep-fin and nep-rmg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published in The Economic Journal, 2006, vol. 116, pages 702-720

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Journal Article: Entry and Strategic Information Display in Credit Markets (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:79

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