Abstract
In this paper we revisit the long debate on the risk effects of bank competition and propose a new approach to the empirical estimation of the relation between deposit market competition and bank risk. Our approach accounts for the opportunity of banks to shift to wholesale funding when deposit market competition is intense. The analysis is based on a unique comprehensive dataset which combines retail deposit rates data with data on bank characteristics and with data on local deposit market features for a sample of 589 U.S. banks.Our results support the notion of a risk-enhancing effect of deposit market competition.
| Original language | English |
|---|---|
| Place of Publication | Tilburg |
| Publisher | EBC |
| Number of pages | 34 |
| Volume | 2010-17S |
| Publication status | Published - 2010 |
Publication series
| Name | EBC Discussion Paper |
|---|---|
| Volume | 2010-17S |
UN SDGs
This output contributes to the following UN Sustainable Development Goals (SDGs)
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SDG 1 No Poverty -
SDG 8 Decent Work and Economic Growth -
SDG 10 Reduced Inequalities
Keywords
- bank competition
- wholesale funding
- bank risk
- deposit rates
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