Competition in the Financial Sector: Overview of Competition Policies

37 Pages Posted: 23 Mar 2009

See all articles by Stijn Claessens

Stijn Claessens

Bank for International Settlements (BIS)

Multiple version iconThere are 2 versions of this paper

Date Written: March 2009

Abstract

As in other sectors, competition in finance matters for allocative, productive and dynamic efficiency. Theory suggests, however, that unfettered competition is not first best given the special features of finance. I review these analytics and describe how to assess the degree of competition in markets for financial services. Existing research shows that the degree of competition greatly varies across markets, largely driven by barriers to entry and exit. I argue that changes in financial services industries require updated competition policies and institutional arrangements, but that practices still fall short. Furthermore, I show that developing countries face some specific competition challenges.

Keywords: Working Papers

Suggested Citation

Claessens, Stijn, Competition in the Financial Sector: Overview of Competition Policies (March 2009). IMF Working Papers, Vol. , pp. 1-35, 2009. Available at SSRN: https://ssrn.com/abstract=1366175

Stijn Claessens (Contact Author)

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
CH-4002 Basel
Switzerland

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