Bank competition, crisis and risk taking: Evidence from emerging markets in Asia

► The impact of bank competition on capital ratios, income volatility and insolvency risk is examined in the Asian context. ► Higher capital ratios in banks in less competitive markets are not sufficient to guarantee bank solvency. ► During the 1997 Asian crisis, higher market power in banking has a stabilizing impact but only for countries with lower too-big-to-fail subsidies.