Competition and Stability in European Banking: A Regional Analysis

26 Pages Posted: 15 Feb 2013

See all articles by Hong Liu

Hong Liu

University of Aberdeen

Philip Molyneux

University of Sharjah - College of Business Administration

John O. S. Wilson

University of St. Andrews

Multiple version iconThere are 2 versions of this paper

Date Written: March 2013

Abstract

National measures of competition and macroeconomic activity have traditionally been used to examine performance and risk features across banks. Such measures may be inappropriate in cases where banks operate with a regional focus. In this paper we construct measures of competition and economic activity using regional data to examine bank stability in 10 European countries over the period 2000–8. The results suggest that an inverted U‐shaped relationship exists between regional bank competition and stability. Regional economic conditions are also found to play a significant role in determining the stability of European banks.

Suggested Citation

Liu, Hong and Molyneux, Philip and Wilson, John O. S., Competition and Stability in European Banking: A Regional Analysis (March 2013). The Manchester School, Vol. 81, Issue 2, pp. 176-201, 2013. Available at SSRN: https://ssrn.com/abstract=2218207 or http://dx.doi.org/10.1111/j.1467-9957.2011.02285.x

Hong Liu

University of Aberdeen ( email )

Dunbar Street
Aberdeen, Scotland AB24 3QY
United Kingdom

Philip Molyneux

University of Sharjah - College of Business Administration ( email )

University City Road
Sharjah, 27272
United Arab Emirates

John O. S. Wilson

University of St. Andrews ( email )

North St
Saint Andrews, Fife KY16 9AJ
United Kingdom

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