A Framework for Analyzing Competition in the Banking Sector : An Application to the Case of Jordan

This paper proposes a framework to analyze competition in the banking sector using Jordan as an example. In particular, the paper pursues a multi-pronged approach to analyze competition including (i) an examination of the extent to which the market is contestable (that is, has low barriers to bank entry and exit), (b) an evaluation of the behavior of bank spreads, and (iii) an assessment of non-structural and direct measures of bank competition such as the H-statistic and the Lerner Index. This approach provides a more comprehensive framework to examine competition in the banking sector, compared with the commonly used alternative of looking only at bank concentration figures. In the case of Jordan, the analysis indicates that although concentration has declined, competition in the country is low and has decreased over time.

Bibliographic Details

Main Authors:	Demirguc-Kunt, Asli, Martínez Pería, María Soledad
Format:	Policy Research Working Paper biblioteca
Language:	English
Published:	2010-12-01
Subjects:	AFFILIATES, ASSET RATIO, AUDITING, AUDITORS, AUDITS, BALANCE SHEET, BANK ACTIVITIES, BANK ASSETS, BANK BORROWERS, BANK COMPETITION, BANK ENTRY, BANK INTEREST MARGINS, BANK LOANS, BANK OPERATIONS, BANK POLICY, BANK SPREADS, BANKING INDUSTRY, BANKING MARKET, BANKING REGULATIONS, BANKING SECTOR, BANKING SECTORS, BANKING SYSTEM, BANKS, BARRIERS TO ENTRY, BOND, BONDS, CAPITAL ADEQUACY, CAPITAL ASSET, CAPITAL REQUIREMENTS, CAPITALIZATION, CENTRAL BANK, COMMERCIAL BANK, COMMERCIAL BANKING, CONSOLIDATION, CONTESTABILITY, CURRENCY, DEPOSIT, DEPOSIT RATES, DEPOSITS, DEREGULATION, DERIVATIVE, DEVELOPING COUNTRIES, DEVELOPING ECONOMIES, DISCLOSURE OF INFORMATION, DISCLOSURE REQUIREMENTS, DOMESTIC BANK, DOMESTIC BANKS, EMERGING MARKET, EMERGING MARKET COUNTRIES, EXIT FRAMEWORK, EXTERNAL AUDITORS, FAILURE RESOLUTION, FINANCIAL COSTS, FINANCIAL DEVELOPMENT, FINANCIAL INFORMATION, FINANCIAL INSTITUTIONS, FINANCIAL INTERMEDIATION, FINANCIAL MARKETS, FINANCIAL SECTOR, FINANCIAL SECTOR ASSESSMENT, FINANCIAL SERVICES, FINANCIAL STABILITY, FOREIGN BANK, FOREIGN BANK PARTICIPATION, FOREIGN BANKS, FOREIGN PENETRATION, FRAUD, GLOBAL FINANCIAL SYSTEM, GOVERNMENT BANK, GOVERNMENT BANKS, HOLDING, HOLDING COMPANIES, INCUMBENT BANKS, INFLATION, INFLATION RATE, INPUT PRICE, INPUT PRICES, INSTITUTIONAL DEVELOPMENT, INSURANCE, INSURANCE ACTIVITIES, INSURANCES, INTEREST EXPENSES, INTEREST INCOME, INTEREST RATE, INTEREST RATE SPREADS, INTEREST RATES, INTERNATIONAL AUDITING STANDARDS, INTERNATIONAL BANK, ISSUANCE, JOINT VENTURE, JUDICIAL ENVIRONMENT, LACK OF COMPETITION, LAWS, LENDING INSTRUMENTS, LEVY, LIBERALIZATION, LIQUIDATION, LIQUIDITY, LOAN, MACROECONOMIC CONDITIONS, MARGINAL COSTS, MARKET POWER, MARKET STRUCTURE, MONEY MARKET, MONOPOLY, MORTGAGE, MORTGAGE LOANS, MUTUAL FUND, MUTUAL FUND INDUSTRY, OUTPUT, OUTPUTS, OVERDRAFT, OVERDRAFT FACILITIES, OVERDRAFTS, PERSONNEL EXPENSES, PRIME RATE, PRIVATE SECTOR DEVELOPMENT, PROFITABILITY, PROPERTY RIGHTS, REAL ESTATE, REAL ESTATE INVESTMENT, REGULATORS, REGULATORY FRAMEWORK, RETAIL, RETURN ON ASSETS, SECURITIES, SHARE OF ASSETS, SHAREHOLDERS, SOURCE OF FUNDS, SOURCES OF FUNDS, SPREAD, SUBSIDIARIES, SUBSIDIARY, SUPERVISION OF BANKS, SUPERVISORY AGENCY, TAX, TAX RETURN, TAXATION, TIME DEPOSITS, TRACK RECORD, TRANSPARENCY, UNION, WORLD DEVELOPMENT INDICATORS,
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20101213102840 http://hdl.handle.net/10986/3982
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