Consolidation in banking and financial stability in Europe: empirical evidence

Arbeitspapier

Using aggregate balance sheet data from banks across the EU-25 over the period from 1997 to 2005 this paper provides empirical evidence that national banking market concentration has a negative impact on European banks' financial soundness as measured by the Z-score technique while controlling for macroeconomic, bank-specific, regulatory, and institutional factors. Furthermore, we find that Eastern European banking markets exhibiting a lower level of competitive pressure, fewer diversification opportunities and a higher fraction of government-owned banks are more prone to financial fragility whereas capital regulations have supported financial stability across the entire European Union.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IWQW Discussion Papers ; No. 02/2009

Classification and Topics

• Classification: Wirtschaft ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Financial Institutions and Services: Government Policy and Regulation ; Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance ; Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices
• Subject: Market structure ; Financial stability ; Banking regulation ; Bank ; Marktstruktur ; Bankenpolitik ; EU-Staaten

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Uhde, André ; Heimeshoff, Ulrich
• Event: Veröffentlichung
• (who): Friedrich-Alexander-Universität Erlangen-Nürnberg, Institut für Wirtschaftspolitik und Quantitative Wirtschaftsforschung (IWQW)
• (where): Nürnberg
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/29556
• Last update: 10.03.2025, 11:45 AM CET