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This study aims to investigate both market concentration and bank competition of banking across six emerging Asian countries (e.g., Bangladesh, Indonesia, India, Philippines, Malaysia, and Vietnam) over pre and post the 2008 global financial crisis. The conduct parameter approach following the framework suggested by Uchida and Tsutsui (2005) is used to estimate bank competition in these countries. The study employs both seemingly unrelated regression (SUR) and three-stage least squares (3SLS) to estimate simultaneously the system of equations in our model. Generally we find a negative association between market concentration and bank competition across most of the countries in the study suggesting that banks in concentrated markets collude to generate higher profits. Monopolistic competition was the best description of competitive structure of banking across the majority of countries investigated by this study. The study fills the gap in the banking literature by investigating bank competition, concentration, and their relationship across emerging Asian economies over the 2008 global financial crisis. Moreover, several policy implications for banking industry are suggested.

After the global financial crisis, many countries deregulated their banking sectors. The banking sector has become the major funding supplier in most emerging countries. Bank in Indonesia has provided an essential role as an intermediary institution in matching up surplus and deficit parties with a relatively concentrated market structure. Moreover, banks should innovate and diversify to provide excellent products and services to their customers and win the market. More diversified banks are expected to have better performance and more resilience, especially during a crisis. This study examines the relationship among bank market power, diversification, and bank stability of listed bank companies in Indonesia from 2008 to 2020. This study employs a two-step system GMM to deal with potential endogeneity. This study finds that banks’ market power and diversification affect bank stability, and the presence of crisis encourages banks to be more prudent. The result of this study provides insightful implications for academics and policy-makers.

Deregulation and other factors permit and encourage financial institutions to become more integrated, both within their own (financial) industries, such as banking and insurance, and across these industries. Financial regulators have responded with like integration. As financial institutions increasingly compete with firms from other industries and areas, financial regulators similarly compete more across borders. The resulting competition in financial regulation enhances innovation, choice, and efficiency. The advent of home-run regulation, which in general allows financial institutions to adhere only to the financial regulations of their home area and is spreading across the US and Europe, may allow numerous regulatory regimes within a given market.

The aim of this study is to understand the determinants of relationship between banks and nonfinancial corporations within Poland (which are considered relationship banking from this point onward).

The main sources of data used in the study are the large credit database (credit register of the National Bank of Poland (NBP)) and other aggregated data, including data from the Warsaw Stock Exchange and the NBP. Econometric panel logit methods have been used to test how different factors affect bank–firm relationships. Three main groups of factors have been investigated: the characteristics of the firm (i.e., size, ownership type, and R&D activity); the characteristics of the financial sector (i.e., competition in the banking sector); and macroeconomic conditions.

The findings demonstrate that Polish firms readily establish single-bank relationships, and firms with the highest quality of credit portfolios borrow often from multiple creditors. All conducted estimations demonstrated that the relationship between financing from a single bank and from foreign capital had a positive sign. Also, a decrease in concentration in the banking sector, which may be identified with an increase in competition, supports the establishment of relationship banking.

The study was performed using the data from large exposure database collected for supervisory purposes. Exposures (credits, derivatives, etc.) larger than 500 thousand PLN (approx. 120 thousand EUR) were only considered. Future research on bank–firm relationships should focus on the influence of financing costs, maintaining relationships when the borrower is in a difficult financial position, and other unique features of banks using the strategy of relationship financing.

The understanding of the characteristics of bank–firm relationships can help to improve banking practice and supervisory policy in Poland.

This study makes a noticeable contribution to the understanding of the banking sector and its relationships with nonfinancial corporations in Poland. It is the first empirical study on such a large sample of panel data from Polish banking sector and industries, too.

Purpose – The chapter seeks to examine the changing nature of competition during and immediately after the consolidation within the context of Nigerian banking sector reform.

Design/methodology/approach – The chapter deploys the Herfindahl–Hirschman Index, interest rate spread and conducted interviews with senior bank managers to test the hypothesis that there was no change in competition.

Findings – The results obtained support the CBN's expectation of sustained competition and higher efficiency levels, resulting in a minimal reduction of interest rate spread.

Originality/value – This is the first study that examines the changing nature of competition resulting from the 2004–2006 Nigerian banking consolidation.

If banks solve an inter-temporal problem under adverse selection and moral hazard, then bank specific factors, regulatory and supervisory features, market structure, and macroeconomic factors can be expected to affect banks’ loan interest rates and their spread over deposit interest rates. To examine interest rate pass-through for Indian banks in a period following extensive financial reform, after controlling for all these factors, we estimate the determinants of commercial banks’ loan pricing decisions, using the dynamic panel data methodology with annual data for a sample of 33 banks over the period 1996–2012. Results show commercial banks consider several factors apart from the policy rate. This limits policy pass-through. More competition reduces policy pass-through by decreasing the loan rate as well as spreads. If managerial efficiency is high then an increase in competition increases the policy pass-through and the vice-versa. Reform has had mixed effects, while managerial inefficiency raised rates and spreads, product diversification reduced both. Costs of deposits are passed on to loan rates. Regulatory requirements raise loan rates and spreads.

This chapter examines the impact of banking competition, bank regulation, and the global financial crisis (GFC) of 2008–2009 on banks’ productivity changes. For the empirical analysis, I apply a semi-parametric two-step approach of Malmquist index estimates and bootstrap regression to a cross-country panel data of 8,451 commercial banks from 82 countries over the period 2004–2012. Empirical results show that (1) banking competition and capital regulation significantly enhance bank productivity, (2) a tighter bank supervision have a positive impact on bank productivity, and (3) bank productivity decreases during the GFC, but starts to increase as the GFC recovers. I also present consistent evidence that commercial banks in countries with better national governance have higher productivity growth before, during and after the GFC.

This paper examines the effect of bank expansion on credit access and terms of credit in early America. The bank records from Plymouth Bank, Massachusetts and the Census records provide detailed information on borrowers, endorser, types and terms of loans, and borrower characteristics. The results show that the introduction of new banks did broaden credit access. However, after competition was introduced, the Bank focused more on short-term bills of exchange. In other words, the Bank shifted its emphasis from long-term accommodation paper to short-term bills of exchange.

The relationship between borrowers and lenders can reveal a lot of information regarding loan pricing, information costs, and competition. In this study, the authors investigate the impact of FinTech lenders on Paycheck Protection Program (PPP) loan disbursement. Specifically, the authors investigate financial technology companies’ ability to provide loans at greater distances, expanding the available resources for businesses struggling during the Covid-19 pandemic. The authors find that not only were FinTechs able to lend at greater distances, but also they provided loans to firms that were younger and had less bank competition in their headquarters’ zip codes. The results remain consistent and are generalizable to the complete population of PPP loans.

Purpose – This paper examines the interaction of efficiency and bank risk taking in the Ghanaian banking industry.

Design/methodology/approach – We relate risk taking to price competitiveness, foreign ownership and cost efficiency and other control variables. Cost-inefficiency scores from a stochastic frontier model are used, and a Lerner price index is employed to proxy for market power.

Findings – Our results suggest that market power affects risk taking when conditioned on foreign ownership, but foreign bank risk-taking behaviour is not statistically different from local banks. Cost inefficiency diminishes bank soundness. We also find that industry concentration discourages greater risk taking.

Originality/value – Our study extends the views on risk taking and competition among banks in Ghana, which throws more light from an emerging economy perspective.