be conditioned by the degree of market competition. We first identify conditions under which changes in marginal costs … competition setting. We then exploit changes in monetary policy to examine whether the pass-through of borrowing costs is affected …

competition and stability in banking. There are two basic channels through which competition may increase instability: by … incentives to take risk and raise failure probabilities. The competition-stability trade-off is characterized and the … implications of the analysis for regulation and competition policy are derived. It is found that optimal regulation may depend on …