Competition and bank risk: the effect of securitization and bank capital

Arbeitspapier

We find that the increased use of securitisation activity in the banking sector prior to the 2007- 2009 crisis augmented the effect of competition on realised bank risk (i.e. more intense competition and greater use of securitisation is correlated with higher levels of realised risk) during the crisis. In contrast, higher levels of capital did not buffer the impact of competition on realised risk. It follows that cooperation between supervisory and competition authorities is warranted to account for the stability implications of financial innovation and capital regulation.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECB Working Paper ; No. 1678

Classification and Topics

• Classification: Wirtschaft ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Firm Behavior: Empirical Analysis
• Subject: bank risk ; competition ; securitisation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Marqués-Ibáñez, David ; Altunbas, Yener ; van Leuvensteijn, Michiel
• Event: Veröffentlichung
• (who): European Central Bank (ECB)
• (where): Frankfurt a. M.
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/154111
• Last update: 10.03.2025, 11:44 AM CET