scholarly journals Market Structure and Financial Stability: the Interaction between Profit-Oriented and Mutual Cooperative Banks in Italy

2021 ◽  
Author(s):  
Adalgiso Amendola ◽  
Cristian Barra ◽  
Marinella Boccia ◽  
Anna Papaccio
Keyword(s):  
Market Structure ◽  
Financial Stability ◽  
Cooperative Banks

AbstractIn this study, we analyze the relation between market structure and financial stability both theoretically and empirically by considering two types of agents: profit-oriented banks and mutual cooperative banks in the context of Italy. The main findings show that under the condition that mutual cooperative banks are not dominated by borrowers, there is an inverted U-shaped relation in which a less concentrated market structure increases stability for both types of banks but a more concentrated market structure reduces it.

scholarly journals Capital Buffers in a Quantitative Model of Banking Industry Dynamics

Econometrica ◽  
2021 ◽  
Vol 89 (6) ◽  
pp. 2975-3023
Author(s):  
Dean Corbae ◽  
Pablo D'Erasmo
Keyword(s):  
Market Structure ◽  
Financial Stability ◽  
Banking Industry ◽  
Empirical Studies ◽  
Allocative Efficiency ◽  
Bank Lending ◽  
Quantitative Model ◽  
Industry Dynamics ◽  
Aggregate Shocks ◽  
Regulatory Policies

We develop a model of banking industry dynamics to study the quantitative impact of regulatory policies on bank risk‐taking and market structure. Since our model is matched to U.S. data, we propose a market structure where big banks with market power interact with small, competitive fringe banks as well as non‐bank lenders. Banks face idiosyncratic funding shocks in addition to aggregate shocks which affect the fraction of performing loans in their portfolio. A nontrivial bank size distribution arises out of endogenous entry and exit, as well as banks' buffer stock of capital. We show that the model predictions are consistent with untargeted business cycle properties, the bank lending channel, and empirical studies of the role of concentration on financial stability. We find that regulatory policies can have an important impact on banking market structure, which, along with selection effects, can generate changes in allocative efficiency and stability.

scholarly journals An Evaluation Of Italian Banks In The Period Of Financial Distress

2011 ◽  
Vol 10 (10) ◽  
pp. 103
Author(s):  
Mitja Stefancic ◽  
Neophytos Kathitziotis
Keyword(s):  
Economic Development ◽  
Financial Distress ◽  
Commercial Banks ◽  
Financial Stability ◽  
Business Models ◽  
Positive Contribution ◽  
Loan Portfolio ◽  
Cooperative Banks ◽  
Better Than

This paper evaluates the performance of Italian banks during the 2006-2009 period. Banks are analysed according to their business models and their main activities. The analysis focuses on both cooperative and commercial banks. By contrast to commercial banks, Italian cooperative banks do not perceive profit-making as a principle itself. These banks have been able to accumulate capital and provide credit to customers despite the ongoing crisis. On average, they manage their loan portfolio better than commercial banks. Findings suggest that cooperative banking in Italy should be encouraged due to its positive contribution to economic development and possibly financial stability.

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