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Discussion of ‘Competition in the Financial Sector: the multi blinds approach’ (Jaap May)

Discussion of ‘Competition in the Financial Sector: the multi blinds approach’ (Jaap May). Jaap Bikker (De Nederlandsche Bank) ENCORE Annual Conference Thursday 15 April, 2004. Relationships between structure, conduct, performance and efficiency.

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Discussion of ‘Competition in the Financial Sector: the multi blinds approach’ (Jaap May)

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  1. Discussion of ‘Competition in the Financial Sector: the multi blinds approach’ (Jaap May) Jaap Bikker (De Nederlandsche Bank) ENCORE Annual Conference Thursday 15 April, 2004

  2. Relationships between structure, conduct, performance and efficiency

  3. Relationship between number of banks and returns on equity

  4. DNB, competition and efficiency • DNB as banking supervisor promotes consumer interest But aims at security of principle, not at low prices • DNB as central banker promotes financial stability Trade off between competition and financial stability? Beck et al. (2003) ► Inefficiency greater problem then lack of competition

  5. Bikker, J.A., 2004, Competition and efficiency in a unified European banking market, Edward Elgar

  6. Interest margin in the Netherlands, compared to the Euro area, September 2003

  7. The sum of all input price elasticities

  8. The sum of all input price elasticities:small banks versus large banks

  9. Ranking of European-wide estimates of X-efficiency using the SCF model, 1990–97

  10. Profit and cost efficiency of large banks in Europe en de USA

  11. From a pooled border to a meta border

  12. Conclusions • It is possible to measure competition • Measurement of competition on an aggregate level is also useful • Competition on the Dutch banking market and efficiency of Dutch banks compare favourable with the rest of Europe

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