Competition and efficiency in a unified European banking market

Abstract:

This work arises from several years of research by the author on competition, concentration, efficiency and performance in the European banking market. The book is organised over eight chapters, each one presented as a self-contained work which can be read separately.

Chapter one presents an introduction to market structure, competition and efficiency. The environment of the European banking industry is the focus of chapter two, which looks at intermediation, integration and internationalisation. Chapter three examines the measures of competition and concentration and the regulatory tools available to deal with these aspects of European banking. The recent waves of mergers are featured in chapter four, which seeks to measure the degree of competition and investigates the impact of concentration on competition, comparing it with the situation in the USA and other countries. Competition on EU deposit and loan markets is the focus of chapter five. Efficiency and cost differences across countries are explored in chapter six with concentration on the 'x-efficiency' definition. Chapter seven examines the cyclical patterns in profits, provisioning and lending of banks and how they might be related to the business cycle. The final chapter presents and overview of the effects of economic and financial integration in the EU and the euro area on the structure of their markets and financial institutions, and offers some policy recommendations.

The work will interest academics and policy makers involved in banking supervision, financial stability and monetary policy and banking analysts and strategists in central banking, regulatory bodies and competition authorities.

Jacob A. Bikker is Senior Economist, Section Banking and Supervisory Strategies, De Nederlandsche Bank, Amsterdam.