Skip to main content
Article thumbnail
Location of Repository

Bank Competition in the EU: How Has It Evolved?

By Laurent Weill


Economic integration on the EU banking markets is expected to favor competition, which should provide economic gains. However, even if there is a commonly accepted view in favor of enhanced bank competition during the last decade, no study has been performed in the 2000s showing this trend. In this paper, we aim to fill this gap by measuring the evolution of bank competition in all EU countries during the 2000s. We estimate the Lerner index and the H-statistic for a sample of banks from all EU countries. We provide evidence of a general improvement in bank competition in the EU, even if cross-country differences are observed in the pattern of the evolution of bank competition. We check whether convergence in bank competition has taken place on the EU banking markets, by applying ? and ? convergence tests for panel data. We show convergence in bank competition. These findings are also observed with standard competition measures (Herfindahl index, profitability indicators). We thus support the view th at bank integration has taken place in the European Union.banking, competition, European integration

OAI identifier:

Suggested articles


  1. (2009). Are More Competitive Banking Systems More Stable?
  2. (2009). Bank Competition and Financial Stability.
  3. (1977). Chamberlin vs Robinson: An Empirical Study for Monopoly Rents. Bell Laboratories Economic Discussion Paper.
  4. (2002). Competition, Concentration and their Relationship: An Empirical Analysis of the Banking Industry.
  5. (2000). Competition, Contestability and Market Structure in European Banking Sectors on the Eve of EMU.
  6. (1991). Convergence across States and Regions.
  7. (2009). Convergence in Banking Efficiency across EU Countries.
  8. (2009). Cross-Country Comparisons of Competition and Pricing Power in European Banking.
  9. (2011). Do Bank Profits Converge? European Financial Management (forthcoming).
  10. (2004). Does Trade Liberalization accelerate Convergence in Per Capita Incomes in Developing Countries ?
  11. (1996). Empirics for Economic Growth and Convergence.
  12. (2007). Explanatory Factors of Market Power in the Banking System.
  13. (2010). How Market Power Influences Bank Failures.
  14. (2005). Market Power in European Banking Sectors.
  15. (2010). On the Implications of Market Power in Banking: Evidence from Developed Countries.
  16. (2004). On the Relationship between Competition and Efficiency in the EU Banking Sectors.
  17. (2006). Scale Economies, X-Efficiency, and Convergence of Productivity among Bank Holding Companies.
  18. (1987). Testing for Monopoly Equilibrium.
  19. (2007). The Cost of Market Power in Banking: Social Welfare Loss vs. Cost Inefficiency.
  20. (2001). The Industrial Organization of Financial Systems and the Strategic Use of Relationship Banking.
  21. (1995). The Poor Stay Poor: Non Convergence Across Countries and Regions. Presentation at the CEPR Workshop on Empirical Macroeconomics.
  22. (2004). What Drives Bank Competition? Some International Evidence.

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.