The paper examines a continuous-time delegated monitoring problem between competitive investors and an impatient bank monitoring a pool of long-term loans subject to Markovian “contagion.” Moral hazard induces a foreclosure bias unless the bank is compensated with the right...

Studies of banking competition and competitive behavior both within and across countries typically utilise only one of the few measures that are available. In trying to assess the relative competitive position of banking markets in 14 European countries, existing indicators of competition are...

C ARBo V ALVERDE S., H UMPHREY D. B. and R ODRiGUEZ F ERNaNDEZ F. (2003) Deregulation, bank competition and regional growth, Reg. Studies 37 , 227-237. Cross-country studies suggest that countries with greater financial sector competition have higher rates of economic growth. However, it is...

Banks were substantially deregulated during the 1980s. This altered the cost-minimizing mix between deposit interest payments and operating expenses (capital and labor for branch convenience and “free” deposit services). Measured bank output was relatively unaffected by these changes. The...

Parametric and nonparametric procedures are used to identify the apparent source of cost inefficiency in banking. Inefficiencies of 20–25% from earlier studies are reduced to 1–5% when, in addition to commonly specified cost function influences, variables reflecting banks’ external...