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 … their franchise values by increasing their equity capital or engaging in other risk-mitigating techniques. The authors test …

empirical tests confirm the value of the data for credit risk evaluation and provide insights regarding its use in supervision …, including in calculations of credit risk for capital and provisioning requirements, or as a check on a bank's internal ratings …