Consolidation in banking and financial stability in Europe: Empirical evidence
Using aggregate balance sheet data from banks across the EU-25 over the period from 1997 to 2005 we provide empirical evidence that national banking market concentration has a negative impact on European banks' financial soundness as measured by the Z-score technique while controlling for macroeconomic, bank-specific, regulatory, and institutional factors. Furthermore, our analysis reveals that Eastern European banking markets exhibiting a lower level of competitive pressure, fewer diversification opportunities and a higher fraction of government-owned banks are more prone to financial fragility whereas capital regulations have supported financial stability across the entire European Union.
Year of publication: |
2009
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Authors: | Uhde, André ; Heimeshoff, Ulrich |
Published in: |
Journal of Banking & Finance. - Elsevier, ISSN 0378-4266. - Vol. 33.2009, 7, p. 1299-1311
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Publisher: |
Elsevier |
Keywords: | Market structure Financial stability Banking regulation |
Saved in:
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