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On measuring concentration in banking systems

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On measuring concentration in banking systems. / Alegria, Carlos; Schaeck, Klaus.

In: Finance Research Letters, Vol. 5, No. 1, 01.03.2008, p. 59-67.

Research output: Contribution to journalJournal article

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Alegria, C & Schaeck, K 2008, 'On measuring concentration in banking systems', Finance Research Letters, vol. 5, no. 1, pp. 59-67. https://doi.org/10.1016/j.frl.2007.12.001

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Alegria, Carlos ; Schaeck, Klaus. / On measuring concentration in banking systems. In: Finance Research Letters. 2008 ; Vol. 5, No. 1. pp. 59-67.

Bibtex

@article{7094b653f1124a02b6b579377f488ee9,
title = "On measuring concentration in banking systems",
abstract = "Assuming a Pareto-type distribution of bank sizes, we investigate the effect of changes in Zipf's exponent (α) and the sample size on the behavior of different concentration indices, such as the 3-bank concentration ratio, the Herfindahl–Hirschman index and the top 5%-concentration ratio. We derive analytical relations between these concentration indices and investigate the elasticity of these indices to changes in α and in the sample size N. We show different regimes under which each index can be used most appropriately. Our results are highly relevant for policymakers who rely on such concentration measures to derive public policy recommendations in banking.",
keywords = "Zipf's law, Concentration indices, Banking",
author = "Carlos Alegria and Klaus Schaeck",
note = "Date of Acceptance: 10/12/2007",
year = "2008",
month = mar
day = "1",
doi = "10.1016/j.frl.2007.12.001",
language = "English",
volume = "5",
pages = "59--67",
journal = "Finance Research Letters",
issn = "1544-6123",
publisher = "Elsevier BV",
number = "1",

}

RIS

TY - JOUR

T1 - On measuring concentration in banking systems

AU - Alegria, Carlos

AU - Schaeck, Klaus

N1 - Date of Acceptance: 10/12/2007

PY - 2008/3/1

Y1 - 2008/3/1

N2 - Assuming a Pareto-type distribution of bank sizes, we investigate the effect of changes in Zipf's exponent (α) and the sample size on the behavior of different concentration indices, such as the 3-bank concentration ratio, the Herfindahl–Hirschman index and the top 5%-concentration ratio. We derive analytical relations between these concentration indices and investigate the elasticity of these indices to changes in α and in the sample size N. We show different regimes under which each index can be used most appropriately. Our results are highly relevant for policymakers who rely on such concentration measures to derive public policy recommendations in banking.

AB - Assuming a Pareto-type distribution of bank sizes, we investigate the effect of changes in Zipf's exponent (α) and the sample size on the behavior of different concentration indices, such as the 3-bank concentration ratio, the Herfindahl–Hirschman index and the top 5%-concentration ratio. We derive analytical relations between these concentration indices and investigate the elasticity of these indices to changes in α and in the sample size N. We show different regimes under which each index can be used most appropriately. Our results are highly relevant for policymakers who rely on such concentration measures to derive public policy recommendations in banking.

KW - Zipf's law

KW - Concentration indices

KW - Banking

U2 - 10.1016/j.frl.2007.12.001

DO - 10.1016/j.frl.2007.12.001

M3 - Journal article

VL - 5

SP - 59

EP - 67

JO - Finance Research Letters

JF - Finance Research Letters

SN - 1544-6123

IS - 1

ER -