The Conditional Effects of Market Power on Bank Risk--Cross-Country Evidence
(2015) In Review of Finance 19(5). p.1997-2038- Abstract
- We investigate the relationship between market power and risk for a large panel of banks worldwide. Loan and deposit market power are measured separately at bank-year level, and the risk effect of market power is conditioned on several factors predicted by theory. Both loan and deposit market power have a stable, monotonically negative effect on risk, irrespective of risk measure. The effect is larger for asset risk, and is independent of charter value and capital ratios. The effect on default risk tends to decrease in the quality of banking regulation, whereas the conditioning effects of deposit insurance protection are mixed.
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/4864401
- author
- Forssbaeck, Jens LU and Shehzad, Choudhry Tanveer
- organization
- publishing date
- 2015
- type
- Contribution to journal
- publication status
- published
- subject
- in
- Review of Finance
- volume
- 19
- issue
- 5
- pages
- 1997 - 2038
- publisher
- Oxford University Press
- external identifiers
-
- wos:000361320200007
- scopus:84941662564
- ISSN
- 1572-3097
- DOI
- 10.1093/rof/rfu044
- language
- English
- LU publication?
- yes
- id
- e1848c73-8771-4a35-b7ab-96b05094a286 (old id 4864401)
- alternative location
- http://rof.oxfordjournals.org/content/early/2014/10/20/rof.rfu044.short?rss=1
- date added to LUP
- 2016-04-01 10:47:01
- date last changed
- 2022-04-12 17:28:49
@article{e1848c73-8771-4a35-b7ab-96b05094a286,
abstract = {{We investigate the relationship between market power and risk for a large panel of banks worldwide. Loan and deposit market power are measured separately at bank-year level, and the risk effect of market power is conditioned on several factors predicted by theory. Both loan and deposit market power have a stable, monotonically negative effect on risk, irrespective of risk measure. The effect is larger for asset risk, and is independent of charter value and capital ratios. The effect on default risk tends to decrease in the quality of banking regulation, whereas the conditioning effects of deposit insurance protection are mixed.}},
author = {{Forssbaeck, Jens and Shehzad, Choudhry Tanveer}},
issn = {{1572-3097}},
language = {{eng}},
number = {{5}},
pages = {{1997--2038}},
publisher = {{Oxford University Press}},
series = {{Review of Finance}},
title = {{The Conditional Effects of Market Power on Bank Risk--Cross-Country Evidence}},
url = {{http://dx.doi.org/10.1093/rof/rfu044}},
doi = {{10.1093/rof/rfu044}},
volume = {{19}},
year = {{2015}},
}