Competition in fragmented markets: New evidence from the German banking industry in the light of the subprime crisis

Research output: Journal contributionsJournal articlesResearchpeer-review

Authors

  • Nils Moch
Of all of the EU member states, Germany has the largest banking market. However, not all German banking institutions necessarily face fierce competition. Because the industry is highly fragmented, strict separation of the three existing banking pillars may impede competition, with negative effects on financial stability. We assess the competitive stances of 1,888 universal banks from 2001 to 2009 by using the Panzar-Rosse revenue test. We find evidence that measuring competition at an average country level does not necessarily generate valid evaluations of fragmented markets. In addition, we find no clear indication that either the particular objectives of cooperative and savings banks or the legal protection of these institutions impedes competition or discriminates against private banks. Therefore, as long as the relationship between competition and financial stability is dubious, the overall effect and the social costs or benefits of political measures that influence the structure of the German banking market are at least questionable.
Original languageEnglish
JournalJournal of Banking and Finance
Volume37
Issue number8
Pages (from-to)2908-2919
Number of pages12
ISSN0378-4266
DOIs
Publication statusPublished - 01.08.2013

Recently viewed

Researchers

  1. Marco Waage

Publications

  1. Mapping the Order of New Migration
  2. Is There a Way Back or Can the Internet Remember its Own History?
  3. Case study: The development of a multi-material heat sink by Additive Manufacturing using Aerosint technology
  4. Synthesis and future research directions linking tree diversity to growth, survival, and damage in a global network of tree diversity experiments
  5. Predicting the future performance of soccer players
  6. Testing for a break in the persistence in yield spreads of EMU government bonds
  7. Deep drawing of high-strength tailored blanks by using tailored tools
  8. Fluorometer controlled apparatus designed for long-duration algal-feeding experiments and environmental effect studies with mussels
  9. An assessment of the published results of animal relocations
  10. Numerical Investigation of the Effect of Rolling on the Localized Stress and Strain Induction for Wire + Arc Additive Manufactured Structures
  11. Diversity of Play
  12. Identification of Parameters and States in PMSMs
  13. Managing information in the case of opinion spamming
  14. Jordan Canonical Form for Solving the Fault Diagnosis and Estimation Problems
  15. Quasi-in-situ observation of microstructure at the friction interface
  16. Executive summary, conclusions, and policy implications
  17. An Experimental Approach to the Optimization of Customer Information at the Point of Sale
  18. Intermediate `time-spaces' - The rediscovery of transition in spatial planning and environmental planning
  19. Leib
  20. Understanding Context Collapse for Social Media Users
  21. Lernkonzepte im frühen Management
  22. Forest structure and heterogeneity increase diversity and alter composition of host–parasitoid networks
  23. The relation of flow-experience and physiological arousal under stress - can u shape it?
  24. Impacts of offshore wind farms on sediment structure and the water column during construction, and changes in bottom topography during the operation phase
  25. Measurement invariance in a grid-based measure of academic self-concept
  26. Development and characterisation of a new interface for coupling capillary LC with collision-cell ICPMS and its application for phosphorylation profiling of tryptic protein digests
  27. Accidental Representation–The Reconfiguration of Representation through Social Media