## Are More Competitive Banking Systems More Stable?

_IMF Working Papers, June 1, 2006_

## Source details

**Canonical URL:** [Are More Competitive Banking Systems More Stable?](https://www.imf.org/en/publications/wp/issues/2016/12/31/are-more-competitive-banking-systems-more-stable-19220)

## Other formats

- [Markdown version](/en/publications/wp/issues/2016/12/31/are-more-competitive-banking-systems-more-stable-19220/index.md)
- [Structured JSON version](/en/publications/wp/issues/2016/12/31/are-more-competitive-banking-systems-more-stable-19220/index.json)
- [Bundle manifest](/en/publications/wp/issues/2016/12/31/are-more-competitive-banking-systems-more-stable-19220/bundle-manifest.json)

## Bibliographic details
- Authors: Martin Cihak, Simon Wolfe, Klaus Schaeck
- Published: June 1, 2006
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451864038.001

---

### Summary
- Provides the first empirical analysis of the cross-country relationship between a direct measure of competitive conduct of financial institutions and banking system fragility.
- Uses the Panzar and Rosse H-Statistic as a measure for competition in 38 countries during 1980-2003.
- Presents evidence that more competitive banking systems are less prone to systemic crises and that time to crisis is longer in a competitive environment.
- Results hold when concentration and the regulatory environment are controlled for and are robust to different methodologies, different sampling periods, and alternative samples.

### Methodology and Data
- Competition measure: Panzar and Rosse H-Statistic.
- Sample: 38 countries.
- Sample period: 1980-2003.
- Empirical approach includes controlling for concentration and the regulatory environment and applying alternative methodologies, sampling periods, and samples.

### Key Findings
- More competitive banking systems are less prone to systemic crises.
- Time to crisis is longer in a competitive environment.
- Findings are robust to:
  - Controls for concentration.
  - Controls for the regulatory environment.
  - Different methodologies.
  - Different sampling periods.
  - Alternative samples.

---

## Content in this bundle

- **Wp06143**
  - [Wp06143 (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2006/_wp06143.pdf.md){rel="alternate" type="text/markdown"}
  - [Wp06143 (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2006/_wp06143.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/are-more-competitive-banking-systems-more-stable-19220_