| Description |
1 online resource (19 pages) |
| Series |
IMF working paper ; WP/13/126 |
|
IMF working paper ; WP/13/126.
|
| Contents |
Cover; Contents; I. Introduction; II. The Traditional Approach: "Structure -- Competition -- Risks"; A. Literature; B. Policy Implications; III. Modern View: Market-based and Contestable Banking; A. The Evolution of Banking; Figure; 1. Evolution of Bank Business Model: Information, Profits, Scalability; B. Implications for Competition and Prudential Policies; 2. Bank Concentration and Performance during the 2008 Crisis; C. Addressing the TBTF Problem; 3. Traditional vs. Modern Banking; D. Interaction with Structural Policies; E. Competition Policy and Crisis Management; IV. Conclusions |
| Summary |
Traditional bank competition policy seeks to balance efficiency with incentives to take risk. The main tools are rules guiding entry/exit and consolidation of banks. This paper seeks to refine this view in light of recent changes to financial services provision. Modern banking is largely market-based and contestable. Consequently, banks in advanced economies today have structurally low charter values and high incentives to take risk. In such an environment, traditional policies that seek to affect the degree of competition by focusing on market structure (i.e. concentration) may have limited effect. We argue that bank competition policy should be reoriented to deal with the too-big-to-fail (TBTF) problem. It should also focus on the permissible scope of activities rather than on market structure of banks. And following a crisis, competition policy should facilitate resolution by temporarily allowing higher concentration and government control of banks |
| Notes |
"May 2013." |
| Bibliography |
Includes bibliographical references (pages 15-19) |
| Notes |
Print version record |
| Subject |
Banks and banking.
|
|
Competition
|
|
Banks and banking
|
|
Competition
|
| Form |
Electronic book
|
| Author |
International Monetary Fund, issuing body.
|
| ISBN |
1299678106 |
|
9781299678101 |
|
9781484366172 |
|
1484366174 |
|
9781484354728 |
|
1484354729 |
|
9781484380703 |
|
1484380703 |
|
