Bank Concentration and Financial Stability: International Evidence

• Main Authors: Chen Yu Kuang, 陳昱光
• Other Authors: S. Y. Wen
• Format: Others
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/06676542708102942316

碩士 === 長庚大學 === 工商管理學系 === 98 === The main idea of this paper is investigating the relationship between banking industry concentration and financial stability. Represented by the cross-country banking industry of the two global financial systems for the 2003-2007 period, and specific for the Germany, Japan, U.K. and U.S. totally amount to 7227 banks, using Panel Data regression model to analyze the correlation between bank concentration and financial stability. In concentration aspects, when measuring concentration by total deposits and total loans, the results suggest that a greater degree of concentration will destroy financial stability, or a greater degree of competition will increase financial stability. Furthermore, in characteristic of bank aspects, the results refer that banks with low asset scales, cost to income ratios, deposits to total assets and loans to total assets will have less overall risk exposure. Moreover, in macroeconomic aspects, the results show that higher GDP growth rate will contribute to financial stability, but higher unemployment rate and banking freedom will destroy financial stability. Finally the data provide some evidence that Germany has the most robust financial environment and bank-base financial system is more stable than market-base financial system.