Using the Panzar and Rosse H-Statistic as a measure of competition in 45 countries, we find that more competitive banking systems are less prone to experience a systemic crisis and exhibit increased time to crisis. This result holds even when we control for banking system concentration, which is...

Intro -- Contents -- I. INTRODUCTION -- II. LITERATURE REVIEW -- A. Competition and Concentration -- B. Concentration and Stability -- C. Competition and Stability -- D. Regulation, Supervision and Stability -- III. METHODOLOGY -- A. Duration Analysis -- B. Logistic Probability Analysis -- C....

This paper provides the first empirical analysis of the cross-country relationship between a direct measure of competitive conduct of financial institutions and banking system fragility. Using the Panzar and Rosse H-Statistic as a measure for competition in 38 countries during 1980-2003, we...