Bank Competition and Financial Stability: Evidence from the Financial Crisis

We examine the link between bank competition and financial stability using the recent financial crisis as the setting. We utilize variation in banking competition at the state level and find that banks facing less competition are more likely to engage in risky activities, more likely to face regulat...

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Main Authors: Atkins, Brian, LI, Lynn, NG, Jeffrey, Rusticus, Tjomme O.
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2016
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Online Access:https://ink.library.smu.edu.sg/soa_research/1271
https://ink.library.smu.edu.sg/context/soa_research/article/2270/viewcontent/Bank_competition_and_financial_stability_evidence_from_the_financial_crisis.pdf
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spelling sg-smu-ink.soa_research-22702016-05-29T01:31:35Z Bank Competition and Financial Stability: Evidence from the Financial Crisis Atkins, Brian LI, Lynn NG, Jeffrey Rusticus, Tjomme O. We examine the link between bank competition and financial stability using the recent financial crisis as the setting. We utilize variation in banking competition at the state level and find that banks facing less competition are more likely to engage in risky activities, more likely to face regulatory intervention, and more likely to fail. Focusing on the real estate market, we find that states with less competition had higher rates of mortgage approval, experienced greater housing price inflation before the crisis, and a steeper housing price decline during it. Overall, our study is consistent with greater competition increasing financial stability. 2016-02-01T08:00:00Z text application/pdf https://ink.library.smu.edu.sg/soa_research/1271 info:doi/10.1017/S0022109016000090 https://ink.library.smu.edu.sg/context/soa_research/article/2270/viewcontent/Bank_competition_and_financial_stability_evidence_from_the_financial_crisis.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection School Of Accountancy eng Institutional Knowledge at Singapore Management University competition risk-taking bank regulation bank failure Accounting Finance and Financial Management
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic competition
risk-taking
bank regulation
bank failure
Accounting
Finance and Financial Management
spellingShingle competition
risk-taking
bank regulation
bank failure
Accounting
Finance and Financial Management
Atkins, Brian
LI, Lynn
NG, Jeffrey
Rusticus, Tjomme O.
Bank Competition and Financial Stability: Evidence from the Financial Crisis
description We examine the link between bank competition and financial stability using the recent financial crisis as the setting. We utilize variation in banking competition at the state level and find that banks facing less competition are more likely to engage in risky activities, more likely to face regulatory intervention, and more likely to fail. Focusing on the real estate market, we find that states with less competition had higher rates of mortgage approval, experienced greater housing price inflation before the crisis, and a steeper housing price decline during it. Overall, our study is consistent with greater competition increasing financial stability.
format text
author Atkins, Brian
LI, Lynn
NG, Jeffrey
Rusticus, Tjomme O.
author_facet Atkins, Brian
LI, Lynn
NG, Jeffrey
Rusticus, Tjomme O.
author_sort Atkins, Brian
title Bank Competition and Financial Stability: Evidence from the Financial Crisis
title_short Bank Competition and Financial Stability: Evidence from the Financial Crisis
title_full Bank Competition and Financial Stability: Evidence from the Financial Crisis
title_fullStr Bank Competition and Financial Stability: Evidence from the Financial Crisis
title_full_unstemmed Bank Competition and Financial Stability: Evidence from the Financial Crisis
title_sort bank competition and financial stability: evidence from the financial crisis
publisher Institutional Knowledge at Singapore Management University
publishDate 2016
url https://ink.library.smu.edu.sg/soa_research/1271
https://ink.library.smu.edu.sg/context/soa_research/article/2270/viewcontent/Bank_competition_and_financial_stability_evidence_from_the_financial_crisis.pdf
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