BENCHMARK AND TREND ANALYSIS OF THE COMPETITION IN BANKING SECTOR
Autor (i): Belobrov, Angela
JEL: C4, G21, D40, D50, L11.
Cuvinte cheie: competition, banking sector, market power, market concentration, benchmarking analysis, trend analysis.
Abstract:
Competition in the banking sector brings a wide range of benefits: to clients-individuals, to clients-legal and as a whole to the economic development. Comparing to other sectors, where competition policies are oriented towards the promotion of a level near to a perfect competition, the banking sector faces a continuous trade-off between competition and stability: too much competition increases instability, but too little competition will also have dire consequences for consumers. There is a number of researches dedicated to this problem, however until today a consensus have not been reached yet. In the absence of this consensus, were decided to be applied to the benchmarking analysis. In addition, trend analysis identifies which areas are getting worse. For this purpose were selected a list of 8 countries in the region that are comparable either by territorial size, population size or cultural characteristics, including Armenia, Estonia, Latvia, Moldova, Romania, Russian Federation, Slovak Republic and Ukraine. The study contain analysis of concentration indices and of measures of market power. The results of the study emphasize the existence of different levels of concentration and performances on the banking markets of the analyzed countries, as well as some similarities which allowed us to make some conclusions and recommendations.
Competition in the banking sector brings a wide range of benefits: to clients-individuals, to clients-legal and as a whole to the economic development. Comparing to other sectors, where competition policies are oriented towards the promotion of a level near to a perfect competition, the banking sector faces a continuous trade-off between competition and stability: too much competition increases instability, but too little competition will also have dire consequences for consumers. There is a number of researches dedicated to this problem, however until today a consensus have not been reached yet. In the absence of this consensus, were decided to be applied to the benchmarking analysis. In addition, trend analysis identifies which areas are getting worse. For this purpose were selected a list of 8 countries in the region that are comparable either by territorial size, population size or cultural characteristics, including Armenia, Estonia, Latvia, Moldova, Romania, Russian Federation, Slovak Republic and Ukraine. The study contain analysis of concentration indices and of measures of market power. The results of the study emphasize the existence of different levels of concentration and performances on the banking markets of the analyzed countries, as well as some similarities which allowed us to make some conclusions and recommendations.
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