Competition in the banking industry
Summary :
Table of Contents
- Report written by Benoit BALESTA.
- The effects of competition.
- Positive effects of competition in the banking industry.
- Negative effects of competition in the banking industry.
- Control and limits to impose to competition in banking.
- Conclusion.
- Bibliography.
Abstract
Nowadays, the banking industry has become significantly more competitive than in the past and competition is likely to increase further. New competitive pressures are emerging from abroad, owing to the liberalization of international banking and capital flows, and as a result of the adoption of new banking technologies. However, there are some limits resulting from the particular characteristics of the banking system. The word "system" is the key because it emphasizes the natural element existing among banks, which form the core of the monetary system, channeling liquidity to the other participants of the financial system and managing the payments traffic in the economy. Moreover, the public policy response to the question of whether competition among banks is good or bad has changed profoundly into viewing competition as predominantly positive since the mid 1970s.
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