Bank competition and crises revisited: New results

- We study the link between bank competition and stability for 145 countries.
- The Boone indicator, the Lerner, and the adjusted Lerner indices are used.
- We also use logit probability models, as well as the parametric duration approach.
- We find that bank competition is detrimental to bank stability.

We study the relationship between bank competition and stability for 145 countries over the period 1997-2010. We use three measures of bank competition, namely the Boone indicator, the Lerner and the adjusted Lerner indices, and two econometric methods. Our results show that bank competition is detrimental to bank stability, and it also shortens the survival time of banking systems.