Competition in EU banking

Olivier De Jonghe, Maaike Diepstraten, Glenn Schepens

Research output: Chapter in Book/Report/Conference proceedingChapterScientificpeer-review

1 Citation (Scopus)

Abstract

This chapter discusses recent EU-wide movements in bank competition and concentration. We start with a concise overview of the most frequently used competition and concentration measures. Given that different measures may capture different aspects of bank competition, we focus on the differences and similarities between concentration and competition measures for a broad sample of EU banks. We show that a high level of bank concentration does not necessarily imply a low level of competition and that competition measures such as the Boone indicator (Boone, The Economic Journal, 118(531), 1245–1261, 2008) and the H-statistic (Panzar and Rosse, The Journal of Industrial Economics, 35(4), 443–456, 1987) might capture different aspects of bank competition. Next, we discuss the evolution of bank competition in the EU over time. We end with an overview of recent findings on three important issues concerning bank competition: the impact of bank competition on bank risk-taking, the relationship between bank competition and systemic risk and the relationship between bank competition and switching costs for bank customers.
Original languageEnglish
Title of host publicationThe Palgrave Handbook of European Banking
EditorsThorsten Beck, Barbara Casu
Place of PublicationLondon
PublisherPalgrave Macmillan
Pages187-211
ISBN (Electronic)9781137521446
ISBN (Print)9781137521439
DOIs
Publication statusPublished - 14 Jan 2017

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  • Cite this

    De Jonghe, O., Diepstraten, M., & Schepens, G. (2017). Competition in EU banking. In T. Beck, & B. Casu (Eds.), The Palgrave Handbook of European Banking (pp. 187-211). Palgrave Macmillan. https://doi.org/10.1057/978-1-137-52144-6_8