Countries differ on the extent to which their financial system relies on banks or on the financial market. We offer a … advantage. Countries specialising in bank dependent sectors favour the development of the banking sector. Simultaneously …. To empirically investigate our model's predictions, we construct a measure of sector bank dependence and establish a …

This paper analyses structural and cyclical determinants of banking profitability in 16 Western European countries. We … respective national financial system. Furthermore, higher diversification regarding banks’ income sources shows a positive effect …. The industry concentration of national banking systems, though, does not significantly affect aggregate profitability …