"Under the traditional "competition-fragility" view, more bank competition erodes market power, decreases profit … margins, and results in reduced franchise value that encourages bank risk taking. Under the alternative "competition …-stability" view, more market power in the loan market may result in greater bank risk as the higher interest rates charged to loan …

bank performance. They argue that it is important to include indicators of all the relevant governance effects in the same … likely due to placing nonperforming loans into residual entities, leaving "good" privatized banks."--World Bank web site …