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Competition and Stability in European Banking: A Regional Analysis


Hong Liu


University of Glasgow - Glasgow Business School

Philip Molyneux


Bangor University, Bangor Business School

John O.S. Wilson


University of St. Andrews

September 2, 2010


Abstract:     
National measures of competition and macroeconomic activity have been used by researchers in recent years to explain performance and risk differentials across banks. However, such measures may be inappropriate for banks which operate with a regional focus. In this paper we construct measures of competition and economic activity using regional data to examine bank risk and stability in 11 European countries over the period 2000-2008. The results suggest that a U-shaped relationship exists between regional bank competition and risks. Furthermore, regional economic conditions play a significant role in determining the stability of banks.

Number of Pages in PDF File: 29

Keywords: Competition, European Banking, Regional Economic Conditions, Risk, Stability

JEL Classification: G21

working papers series


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Date posted: September 2, 2010  

Suggested Citation

Liu, Hong, Molyneux, Philip and Wilson, John O.S., Competition and Stability in European Banking: A Regional Analysis (September 2, 2010). Available at SSRN: http://ssrn.com/abstract=1670744 or http://dx.doi.org/10.2139/ssrn.1670744

Contact Information

Hong Liu
University of Glasgow - Glasgow Business School ( email )
Glasgow, Scotland
United Kingdom
Philip Molyneux
Bangor University, Bangor Business School ( email )
Bangor Gwynedd LL57 2DG, Wales
United Kingdom
01248 38 2170 (Phone)
John O.S. Wilson (Contact Author)
University of St. Andrews ( email )
College Gate
The Observatory Buchanan Gardens
Saint Andrews, Fife KY16 9SS
United Kingdom
Feedback to SSRN (Beta)


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