Consolidation and Market Structure in Emerging Market Banking Systems
November 1, 2002
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Summary
This paper examines the evolution of market structure in emerging market banking systems during the 1990s. While significant bank consolidation has been taking place in these countries, reflected in a sharp decline in the number of banks, this process has not systematically been associated with increased concentration as measured by standard indices. Moreover, econometric estimates based on the Panzar-Rosse (1987) methodology suggest that, overall, markets have not become less competitive in a sample of eight European and Latin American countries. Lowering barriers to entry, by doing such things as allowing increased participation of foreign banks, appears to have prevented a decline in competitive pressures associated with consolidation.
Subject: Banking, Commercial banks, Competition, Emerging and frontier financial markets, Financial institutions, Financial markets, Foreign banks, State-owned banks
Keywords: Asia and Pacific, Banco de Chile, bank, bank consolidation, bank penetration, Banking, banking SystemsConsolidation, Commercial banks, Competition, consolidation process, contestability, Emerging and frontier financial markets, emerging markets, Europe, Foreign banks, HH indices, market power, market structure, number, Panzar and Rosse methodology, private bank, State-owned banks, WP
Pages:
30
Volume:
2002
DOI:
Issue:
186
Series:
Working Paper No. 2002/186
Stock No:
WPIEA1862002
ISBN:
9781451859478
ISSN:
1018-5941
