reduce their lending to developing countries in the event of a financial crisis. The analysis combines a bank-level dataset … of bank activity and ownership with country-level data on the stock of historical crisis events between 1800 and 2005. To … different types of crises. The question of learning is also examined from the perspective of other measures of bank performance …

Under the traditional "competition-fragility" view, more bank competition erodes market power, decreases profit margins …, and results in reduced franchise value that encourages bank risk taking. Under the alternative "competition …-stability" view, more market power in the loan market may result in greater bank risk as the higher interest rates charged to loan …