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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2016
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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 |
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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 |
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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. |
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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 |
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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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