The paper tests the effect of competition on bank risk-taking for a sample of up to 800 banks worldwide over the period 1995-2010. Following the theoretical literature on bank competition and risk more closely than previous empirical research, we measure competition at the bank level and...

This study reinvestigates the theoretical relationship between competition in banking and banks' exposure to risk of failure. There is a large existing literature that concludes that when banks are confronted with increased competition, they rationally choose more risky portfolios. We briefly...