The Theory of Bank Risk Taking And Competition Revisited  

Oleh:

Boyd, John H. ; Nicolo, Gianni De

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 60 no. 3 (Jun. 2005), page 1329-1344.
Topik: risks; risk exposure; studies; banks; competition; theory
Fulltext: p 1329.pdf (100.74KB)

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Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ88 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

There is a large body of literature that concludes that - when confronted with increased competition - banks rationally choose more risky portfolios. We argue that this literature has had a significant influence on regulators and central bankers. We review the empirical literature and conclude that the evidence is best described as "mixed." We then show that existing theoretical analyses of this topic are fragile, since there exist fundamental risk- incentive mechanisms that operate in exactly the opposite direction, causing banks to become more risky as their markets become more concentrated. These mechanisms should be essential ingredients of models of bank competition.

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