Although policymakers often discuss tradeoffs between bank competition and stability, past research provides differing … theoretical perspectives and empirical results on the impact of competition on risk. In this paper, we employ a new approach for … competition materially boosts individual and systemic bank risk. With respect to the mechanisms, we find that competition reduces …

Did regulatory reforms that lowered barriers to competition increase or decrease the quality of information that banks … deregulation-induced competition. We find that an intensification of competition reduced abnormal accruals of loan loss provisions … and the frequency with which banks restate financial statements. The results suggest that competition reduces bank opacity …