Banking Concentration in FYROM : Evidence from a Country in Transition

The country of FYROM belongs in the transition economies that have witnessed significant structural changes in their domestic markets during the 2000s. We examine the evolution of the banking competition from 2003 until 2011, covering a first period of economic growth followed by the acute financial crisis that still threatens European countries. We apply the HHI index and the CR3 and CR5 indicators in order estimate banking concentration on five industry variables. Our findings show that the market has been persistently operating under oligopolistic, if not monopolistic, conditions where the leading three or five institutions dominate the market. Foreign newcomers and legislative developments have not changed the situation during the past ten years and bank customers seem to keep their preferences unaffected, staying loyal to their prior choices