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Competition, efficiency, and stability in banking

Research output: Contribution to journalJournal article

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Competition, efficiency, and stability in banking. / Schaeck, Klaus; Cihák, Martin.

In: Financial Management, Vol. 43, No. 1, 2014, p. 215-241.

Research output: Contribution to journalJournal article

Harvard

Schaeck, K & Cihák, M 2014, 'Competition, efficiency, and stability in banking', Financial Management, vol. 43, no. 1, pp. 215-241. https://doi.org/10.1111/fima.12010

APA

Schaeck, K., & Cihák, M. (2014). Competition, efficiency, and stability in banking. Financial Management, 43(1), 215-241. https://doi.org/10.1111/fima.12010

Vancouver

Author

Schaeck, Klaus ; Cihák, Martin. / Competition, efficiency, and stability in banking. In: Financial Management. 2014 ; Vol. 43, No. 1. pp. 215-241.

Bibtex

@article{be1eae9e84074259b7bed3f373263713,
title = "Competition, efficiency, and stability in banking",
abstract = "We examine the effect of competition on banking stability using a new measure of competition based on the reallocation of profits from inefficient banks to efficient ones. In a sample of European Banks, we find that this measure does capture competition, that competition is stability-enhancing, and that the stability-enhancing effect of competition is greater for healthy banks than for fragile ones. Our results suggest that efficiency is the conduit through which competition contributes to stability and that regulators must condition policy on the health of existing banks.",
author = "Klaus Schaeck and Martin Cih{\'a}k",
year = "2014",
doi = "10.1111/fima.12010",
language = "English",
volume = "43",
pages = "215--241",
journal = "Financial Management",
issn = "0046-3892",
publisher = "John Wiley and Sons Inc.",
number = "1",

}

RIS

TY - JOUR

T1 - Competition, efficiency, and stability in banking

AU - Schaeck, Klaus

AU - Cihák, Martin

PY - 2014

Y1 - 2014

N2 - We examine the effect of competition on banking stability using a new measure of competition based on the reallocation of profits from inefficient banks to efficient ones. In a sample of European Banks, we find that this measure does capture competition, that competition is stability-enhancing, and that the stability-enhancing effect of competition is greater for healthy banks than for fragile ones. Our results suggest that efficiency is the conduit through which competition contributes to stability and that regulators must condition policy on the health of existing banks.

AB - We examine the effect of competition on banking stability using a new measure of competition based on the reallocation of profits from inefficient banks to efficient ones. In a sample of European Banks, we find that this measure does capture competition, that competition is stability-enhancing, and that the stability-enhancing effect of competition is greater for healthy banks than for fragile ones. Our results suggest that efficiency is the conduit through which competition contributes to stability and that regulators must condition policy on the health of existing banks.

U2 - 10.1111/fima.12010

DO - 10.1111/fima.12010

M3 - Journal article

VL - 43

SP - 215

EP - 241

JO - Financial Management

JF - Financial Management

SN - 0046-3892

IS - 1

ER -