Consolidation and Market Structure in Emerging Market Banking Systems

Posted: 2 Jan 2004

See all articles by Gaston Gelos

Gaston Gelos

Bank for International Settlements; Centre for Economic Policy Research (CEPR)

Jorge E. Roldos

International Monetary Fund (IMF)

Abstract

This paper examines the evolution of market structure in emerging markets banking systems during the 1990s. While a significant process of bank consolidation has been taking place in these countries, reflected in a sharp decline in the number of banks, this process has not systematically been associated with increased concentration as measured by standard indices. Moreover, econometric estimates based on the Panzar-Rosse (1987) methodology suggest that, overall, markets have not become less competitive in a sample of eight European and Latin American countries. Lowering barriers to entry, such as allowing increased participation of foreign banks, appears to have prevented a decline in competitive pressures associated with consolidation.

Keywords: Banking, market structure, competition, emerging markets, Panzar and Rosse methodology, contestability

JEL Classification: G21, L13, L51

Suggested Citation

Gelos, R. Gaston and Roldos, Jorge E., Consolidation and Market Structure in Emerging Market Banking Systems. Available at SSRN: https://ssrn.com/abstract=483042

R. Gaston Gelos (Contact Author)

Bank for International Settlements ( email )

Centralbankplatz 2
Basel, 4002
Switzerland
0612808201 (Phone)

HOME PAGE: http://https://www.bis.org/author/gaston_gelos.htm

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Jorge E. Roldos

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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