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competition and a lower risk-free rate raise the screening costs of lending, which can result in pooling Nash equilibria with … credit booms. Such equilibria are characterised by sharp increases in credit supply and deteriorations in average loan … empirical results on the relationship between bank competition and financial stability. The model can be used to define a …
Persistent link: https://www.econbiz.de/10013028276
business model, and competition, result in the platform allowing one type of customers to participate in the platform for free … by the participants on the platform as well as have heightened focus on non-price competition when the participation for … concern a free platform side where there is no monetary measure of value. Finally, dynamic competition makes the analysis of …
Persistent link: https://www.econbiz.de/10014128700
, a for-profit monopolist, and a competitive credit market. To understand the magnitude of the effects analyzed, we … severe implications for borrower welfare, while despite possible enforcement externalities competition typically delivers … similar borrower welfare to non-profit lending …
Persistent link: https://www.econbiz.de/10013005531
We propose a new test to evaluate the impact of horizontal mergers on competition in the banking industry. The test is … and interest rates and consists in comparing the estimated degree of competition in the status- quo, where branching … estimated measures of competition quantifies the impact of the merger. We apply our test to French and Italian mergers …
Persistent link: https://www.econbiz.de/10012906151
How can competition enhance bank soundness? Does competition improve soundness via the efficiency channel? Do banks … heterogeneously respond to competition? To answer these questions, we exploit an innovative measure of competition [Boone, J., A New … Way to Measure Competition, EconJnl, Vol. 118, pp. 1245-1261] that captures the reallocation of profits from inefficient …
Persistent link: https://www.econbiz.de/10013141376
competition on this choice. We find that competing banks use collateral less often than a monopolistic bank because competition … will intensify if both banks collateralize. Moreover, bank competition is welfare improving if collateralization is rather …
Persistent link: https://www.econbiz.de/10010365861
Switching costs are a leading cause of customer lock-in in banking, reducing the extent of competition and increasing … time (a lock-in effect). Thus, the extent of potential competition in Brazilian banking could be severely limited by these …
Persistent link: https://www.econbiz.de/10011866317
affect the risk sensitivity of interest rates in the Norwegian credit market. We show that an increase in competition makes …We use unique data on banks' private risk assessments of corporate borrowers to quantify how competition among banks … corporate lending rates less sensitive to banks' own assessment of borrower risk and this is more pronounced in market segments …
Persistent link: https://www.econbiz.de/10012795608
This paper studies the links between competition in the lending market and spreads of bank loans in Brazil. Evidence …
Persistent link: https://www.econbiz.de/10012256418
Bank regulators interfere with the efficient allocation of resources for the sake of financial stability. Based on this trade-off, I compare how different capital requirements affect default probabilities and the allocation of market shares across heterogeneous banks. In the model, banks‘...
Persistent link: https://www.econbiz.de/10013198370