TY - JOUR
T1 - A reexamination on the effect of bank competition on bank non-performing loans
AU - Wang, Alan T.
PY - 2018/12/8
Y1 - 2018/12/8
N2 - This article examines whether competition in the deposit and loan markets results in a more stable or fragile banking industry. Following the assumption that deposit and loan competitions are not separable, a simple equilibrium model is developed. Then, using the aggregate time-series data of Federal Deposit Insurance Corporation (FDIC)-insured financial institutions, we estimate the generalized VAR model of deposit rate (DR), interest margin between the loan and DRs, and non-performing loan ratio. Our results support the competition–fragility hypothesis.
AB - This article examines whether competition in the deposit and loan markets results in a more stable or fragile banking industry. Following the assumption that deposit and loan competitions are not separable, a simple equilibrium model is developed. Then, using the aggregate time-series data of Federal Deposit Insurance Corporation (FDIC)-insured financial institutions, we estimate the generalized VAR model of deposit rate (DR), interest margin between the loan and DRs, and non-performing loan ratio. Our results support the competition–fragility hypothesis.
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U2 - 10.1080/00036846.2018.1489505
DO - 10.1080/00036846.2018.1489505
M3 - Article
AN - SCOPUS:85049945663
VL - 50
SP - 6165
EP - 6173
JO - Applied Financial Economics
JF - Applied Financial Economics
SN - 0003-6846
IS - 57
ER -