Nexus among Bank Competition, Efficiency and Financial Stability: A Comprehensive Study in Bangladesh

• 발행기관: 한국유통과학회
• 저자명: Syed Mohammad Khaled RAHMAN Mohammad Ashraful Ferdous CHOWDHURY Tasmina Chowdhury TANIA
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 8 No.2, 317~328쪽, 전체 12쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2021.02.28

영문 초록

This study examines the impact of bank competition and efficiency in the financial stability of the banking sector in Bangladesh. The study used the Lerner index and the Boone indicator to represent the bank competition, while the non-performing loan (NPL) and Z-score are used to represent financial stability. The secondary data were collected from the annual reports of 28 DSE listed commercial banks of Bangladesh over the period from 2011 to 2018. Using a dynamic panel GMM model, the study found the Lerner index is significantly negatively related with Z-score, which means that higher bank competition results in higher bank stability. It is also seen that higher cost efficiency results in higher bank stability. The Lerner index has negative, but insignificant impact on NPL. Similarly, using the Boone indicator, this study found that lower competition increases NPL. In terms of the Z-score, the Boone indicator found that 1 unit of increment results in decrease of the Z-score by 6.15 units. The study suggests that, as more competition results in more financial soundness, the banking industry competition should be ensured by policymakers or regulators. Banks could enhance financial stability by cost control to achieve cost efficiency as well as by improving loan-to-asset ratio.

목차

1. Introduction

2. Literature Review and Theoretical Framework

3. Results and Discussions

4. Recommendations and Policy Implications

5. Conclusion

키워드

Bank Competition Financial Stability Efficiency