StudentShare solutions
Triangle menu

COMPETITION AND FINANCIAL STABILITY - Essay Example

Not dowloaded yet

Extract of sample
COMPETITION AND FINANCIAL STABILITY

It has been argued that, similarly to other industries in the non-banking sector, competition prevalent in the banking sector is desirable because it tends to generate a market that is more efficient, as well as the benefits that tag along like efficient resource allocation and better consumer prices. However, other theories argue more competition in the banking sector may precipitate an increase in instability with regards to the financial systems. Since greater competition in the banking sector leads to a decrease in margins of bank profits, banks are banks are encouraged to acquire riskier investment so as to boost profit levels, which is in support of the competition fragility view (Boyd et al., 2009: 4). However, other arguments make the argument that greater concentration of banks in the loan markets may lead to an increase in instability via increased risks, especially because higher rates of interest that are charged on consumers could make it more difficult for them to pay back the loans, which supports the view on competition stability. Therefore, it is interesting when these hypotheses are tested to decide whether completion in the banking sector is desirable with an aim to increase financial stability (Boyd et al., 2009: 5). ...Show more

Summary

Competition and Financial Stability Name: Institution: COMPETITION AND FINANCIAL STABILITY Introduction There has been debate recently regarding the relationship between competition in banking and the stability, overall, in the financial system. As a result, there are two views in opposition that have emerged…
Author : demetris57
COMPETITION AND FINANCIAL STABILITY essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"COMPETITION AND FINANCIAL STABILITY"
with a personal 20% discount.
Grab the best paper

Related Essays

Global Financial Stability
The policies of the Federal Reserve affect international developments as many currencies of the world are pegged against the U.S. Dollar. The foreign exchange market is the mechanism to determine the value of a currency such as the U.S. Dollar against other currencies (Kidwell & Whidbee & Peterson).
3 pages (750 words) Essay
Evaluatin of Feasibility of Financial Stability in Increasingly Globalized Economy
In other words, the trend of the local matters becoming global matters, have increased sharply such that every other country is somehow associated with rest of other countries. The world has witnessed quite many economic downturns as well as financial bubbles and the impact of those global trends has been there on the individual country level like never before (Rahn, 2010).
7 pages (1750 words) Essay
Artificial Insemination Restrictions Based on Financial Stability
The procedure is, however, extremely costly, and only those with economic capabilities can afford. The procedure has provided infertile women with an opportunity to conceive children. Those who engage in this procedure often get in touch with their moral values and make their own decision.
8 pages (2000 words) Essay
Competition and financial stability
Many a banking sector has been stricken by banking crises for the past decades due to worldwide financial crisis. Although world wars impacted the banking system, the 21st century has thus far been more stable. The increased competition in the monetary markets has been among the main debating issues over the financial volatility across the globe.
8 pages (2000 words) Essay
Cost of Financial Intermediation
Financial intermediation has a cost and that cost is reflected in bank rates and overhead expenditures incurred by banks. Bank rates, however, are not determined in isolation or only from the perspective of profit maximization by the banking sector. These rates are impacted by many other economic and statutory issues pertaining to a particular economy and such issues may vary widely from economy to economy depending upon the administrative attitude towards matters of equanimity in various sectors of the economy, especially the banking sector itself.
12 pages (3000 words) Essay
International Finance - financial stability
The paper details its relevance in the global economy. It also analyzes and details factors that influence, and factors that articulate around international finance. To explain International finance it is the study pertaining to the dynamics of exchange rates, foreign investment, trade deficits, capital inflows, and how these affect international trade.
4 pages (1000 words) Essay
Hong Kongs Approach to Financial Stability
Crises management is a process by which an organization deals with major events to threat that tries to bring harm to the organization. It becomes very difficult to act during a crisis due to the shear element of surprise the crises meets the
3 pages (750 words) Essay
Financial Analysis As The Stability Of The Business
The following paper is divided into three sections where Section A is devoted to a comprehensive Ratio Analysis of Nene PLC. Section B uses tools of corporate finance to analyze situations where the shortage of resources can be appropriately adjusted to get the maximum amount of profits for the concern.
11 pages (2750 words) Essay
The future for financial stability of islamic banks in GCC
This causal relationship can be rightly identified and its validity tested hypothetically. The hypothetic-deductive logical approach makes use of hypothesis testing as well as inferential statistic to make credible statistical conclusions. In addition, this dissertation
12 pages (3000 words) Essay
Financial Intermediation
With this concern, the study of Ariss (2010) would help to determine the implications about the degree of market power, cost as well as profit
9 pages (2250 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT