Regulation, concentration and competition in financial intermediation
The strengthening of prudential regulation has, in general, led to increased concentration of the financial sector. While better prudential regulation may deliver a benefit in terms of higher solvency, it is usually understood that more concentration, in general, implies higher spreads. Thus, there...
Guardado en:
| Autores principales: | , |
|---|---|
| Formato: | Objeto de conferencia |
| Lenguaje: | Inglés |
| Publicado: |
1999
|
| Materias: | |
| Acceso en línea: | http://sedici.unlp.edu.ar/handle/10915/34012 http://www.depeco.econo.unlp.edu.ar/jemi/1999/trabajo16.pdf |
| Aporte de: |
| Sumario: | The strengthening of prudential regulation has, in general, led to increased concentration of the financial sector. While better prudential regulation may deliver a benefit in terms of higher solvency, it is usually understood that more concentration, in general, implies higher spreads. Thus, there is a view that these prudential measures imply a tradeoff between solvency and competition. In this paper we want to argue that such a tradeoff does not necessarily exist. We present a model in which product differentiation decreases with concentration potentially inducing more intense competition, and therefore lower spreads. We provide evidence from a cross section of countries in favor of this alternative view. |
|---|