Laser, Falk Hendrik (2021)
State Aid and Competition in the European Banking Markets.
doi: 10.2139/ssrn.3776254
Report, Bibliographie
Kurzbeschreibung (Abstract)
I investigate whether bank bailouts since the outbreak of the financial crisis affected competition in the European banking markets. Using a unique dataset on large bank rescues I compare the development of market power of rescued and non-rescued banks between 2000 and 2018. I find that bank bailout coincides with a substantial drop of six percentage points in the Lerner index. Effects are heterogeneous and driven by bank rescues directly after the outbreak of the financial crisis in 2008 and not by bank rescues triggered during the European sovereign debt crisis starting in 2010. My findings cast positive light on European competition policy as banks do not appear to have capitalized on rescue money in terms of market power. Protecting competition in European banking markets remains a topical policy issue in light of rising levels of market power and potential public interventions in the course of the ongoing COVID-19 pandemic.
| Typ des Eintrags: | Report |
|---|---|
| Erschienen: | 2021 |
| Autor(en): | Laser, Falk Hendrik |
| Art des Eintrags: | Bibliographie |
| Titel: | State Aid and Competition in the European Banking Markets |
| Sprache: | Englisch |
| Publikationsjahr: | 27 Mai 2021 |
| DOI: | 10.2139/ssrn.3776254 |
| Kurzbeschreibung (Abstract): | I investigate whether bank bailouts since the outbreak of the financial crisis affected competition in the European banking markets. Using a unique dataset on large bank rescues I compare the development of market power of rescued and non-rescued banks between 2000 and 2018. I find that bank bailout coincides with a substantial drop of six percentage points in the Lerner index. Effects are heterogeneous and driven by bank rescues directly after the outbreak of the financial crisis in 2008 and not by bank rescues triggered during the European sovereign debt crisis starting in 2010. My findings cast positive light on European competition policy as banks do not appear to have capitalized on rescue money in terms of market power. Protecting competition in European banking markets remains a topical policy issue in light of rising levels of market power and potential public interventions in the course of the ongoing COVID-19 pandemic. |
| Freie Schlagworte: | State aid, financial crisis, bank bailout, competition |
| Fachbereich(e)/-gebiet(e): | 01 Fachbereich Rechts- und Wirtschaftswissenschaften 01 Fachbereich Rechts- und Wirtschaftswissenschaften > Volkswirtschaftliche Fachgebiete 01 Fachbereich Rechts- und Wirtschaftswissenschaften > Volkswirtschaftliche Fachgebiete > Fachgebiet Internationale Wirtschaft |
| Hinterlegungsdatum: | 31 Mai 2021 05:17 |
| Letzte Änderung: | 31 Mai 2021 05:17 |
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