Do Brazilian Banks Compete?
June 1, 2003
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Order a Print CopyDisclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary
More developed financial systems are associated with higher investment and better economic performance. This paper discusses possible factors that may inhibit a deepening of bank intermediation and more efficient banking in Brazil, two aspects that are found to be significantly different than in leading banking systems in other parts of the world. Using panel data, it finds positive evidence of the presence of a noncompetitive market structure in the Brazilian banking system, a factor that could explain why intermediation may be relatively low and costly. When banks behave like local monopolies or oligopolies, incentives to improve efficiency are weak and the interest rate spread is large, discouraging higher lending volumes.
Subject: Banking, Commercial banks, Competition, Financial institutions, Financial markets, Foreign banks, Loans, State-owned banks
Keywords: bank, bank assets, bank customer, bank data, bank intermediation, banking system, Brazil, Commercial banks, Competition, Eastern Europe, Financial Intermediation, Foreign banks, Interest rates, Loans, Market structure, revenue, State-owned banks, unit price, WP
Pages:
22
Volume:
2003
DOI:
Issue:
113
Series:
Working Paper No. 2003/113
Stock No:
WPIEA1132003
ISBN:
9781451853728
ISSN:
1018-5941
