Using a unique data set on bank distress, this paper provides novel empirical evidence on the determinants of bank soundness in the European Union (EU) as a whole. Estimation results support the hypothesis that bank risks have converged across EU members, providing empirical justification for...

The global financial crisis has highlighted the importance of early identification of weak banks: when problems are identified late, solutions are much more costly. Until recently, Europe has seen only a small number of outright bank failures, which made the estimation of early warning models...

We examine the effect of competition on banking stability using a new measure of competition based on the reallocation of profits from inefficient banks to efficient ones (Boone, 2008). Examining a sample of European banks, we show that this measure does capture competition, that competition is...