خصوصی سازی، رقابت و رقابت فوق العاده در سیستم بانکداری تجاری مکزیک
|کد مقاله||سال انتشار||مقاله انگلیسی||ترجمه فارسی||تعداد کلمات|
|18239||2003||21 صفحه PDF||سفارش دهید||8960 کلمه|
Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Journal of Banking & Finance, Volume 27, Issue 2, February 2003, Pages 229–249
Much literature before and after the privatization of Mexico's commercial banking system in 1991–1992 argued that the system was collusive and noncompetitive and would likely continue to be for years. Banks would collude to underloan so that – at least in comparison with what would happen in a competitive system – they could overcharge. Because a parallel literature on lending after bank privatization suggests that the problem is often not too little, but too much, we resolved to test for competitive behavior in the Mexican banking system. Using an empirical approach developed by Shaffer (Econom. Lett. 29 (1989) 321, J. Money Credit Bank. 25 (1993) 49, Federal Reserve Bank of Philadelphia, Working paper no. 93-28R), we find a structural break in the middle of the privatization period that signals the start of an episode of what Shaffer calls “supercompetitive” behavior. In such a supercompetition, banks run at levels of output where marginal cost exceeds marginal revenue. This behavior is consistent with a struggle in which banks take losses now because they think the market share they get in the bargain offers a positive present value of expected future return. The behavior can also be consistent with just the sort of banking crises that ensued in Mexico.
A major theme in the literature of privatization is that the benefits are much abridged if a government monopoly is simply replaced by a private sector monopoly or oligopoly (Hanson, 1994). Variations on this theme surfaced in many discussions of Mexico's bank privatization of 1991–1992, in which controlling interests in Mexico's 18 government-owned commercial banks were sold to financial groups—chiefly organizations that already dominated the nation's securities industry.1 A near-universal concern was that years might pass between when Mexico's banking system was privatized and when its performance might approach most standards of competitiveness. Although Mansell Carstens (1993) argued that privatization would raise some measures of efficiency, she also suggested that spreads between banks' cost of funds and interest rates on loans could remain high for years—in part because the high degree of oligopoly power in the provision of bank services would likely continue.2Bazdresch and Elizondo (1993) developed similar themes and—consistent with other authors—viewed Mexico's high interest rate margins as indicative of anti-competitive market power. An important reason for many observers' pessimism about competition in Mexican banking was the market's heavy concentration. Gavito et al. (1992) developed the anti-competitive implications of concentration in the Mexican commercial banking system while Gavito and Trigueros (1993) argued that “some additional measures would be useful to induce greater competition” in it. Market indicators suggested that, in fact, the new banks' purchasers themselves expected not to face very intense competition. Gruben et al. (1994) suggested that the high price-to-book ratios paid for the banks signaled that the new owners expected the banking system's industrial organization to remain relatively uncompetitive. Lopez de Silanes and Zamarripa (1995) measured the excess of expected returns over competitive returns and found them positive and significant. The North American Free Trade Agreement might ultimately allow greater competitive pressures in Mexico. So might the decrease in restrictions on starting new banks (Gavito and Trigueros, 1993). All of this, however, would take time and maybe much time. Even though privatization was expected to bring increases in lending and in the capture of financial assets by the banking system, analysts also anticipated that Mexican banks would still behave collusively for years—underloaning, at least compared with a competitive regime, so that they could overcharge. But even as this industrial organization of privatization literature depicted a collusive system following financial liberalization and privatization in Mexico, a parallel literature on the general trajectory of reactions to financial liberalization in developing countries suggested a different pattern of possible outcomes. In that paradigm the problem is not inadequate expansion of credit, but too much too fast. The excessiveness becomes recognizable ex post in a wave of loan defaults and a banking crisis. Consistent with this narrative, a common trajectory following financial liberalization and the appearance of new or newly privatized banks (Gorton, 1992) includes rapid increases in bank assets—which would typically include loans. Similarly, de Juan (1995) notes that on a bank-by-bank level, when new owners take control of a bank, they typically increase lending relative to the value of equity capital or the deposit base. Whether or not these liberalizations and related rapid loan expansions are followed by large increases in loan defaults—as they typically are in Gorton (1992), de Juan (1995), Kaminsky and Reinhart (1996), and McKinnon and Pill (1996)—a common adjunct to financial liberalization is often markedly increased competition in the banking system (International Monetary Fund, 1993). Under this paradigm of financial liberalization, large spreads between cost of funds and interest rates on loans are not prima facie evidence of an uncompetitive financial system. Instead, after a repressed financial system is liberalized, the banks are unable to supply intermediation services efficiently because they lack expertise, qualified human resources, and adequate technology. The result is high intermediation costs that are in turn covered by a large spread between cost of funds and interest rates charged (de la Cuadra and Valdés, 1992).3 Banks' portfolios become riskier because banks cannot evaluate the riskiness of loans and higher real interest rates under the new regime. Lenders lack past distributions on which to base their assessments.4 For example, when Mexico began to remove government controls on loan allocation in 1988, only 25% of credit extended by Mexican banks was “unrestricted”. The rest was “restricted”—allocated as credits to the federal government, or as other obligatory credits or distributions. By 1990, the year before the privatizations began, 70% of bank credit was unrestricted and by 1991, 100% was. These depictions of post liberalization/privatization banking markets are consistent with a more general theoretical literature on strategic interaction among firms in growing markets where investment and growth of the firm are constrained by physical factors (which could include qualified personnel) or financial factors. In this literature, firms make pre-emptive investments as part of a struggle for market share (Spence, 1979). These same depictions of post liberalization/privatization banking markets are also consistent with studies of consumer behavior in which, for example, a credit card holder typically develops a long-standing affinity for the first credit card he or she receives (Wall Street Journal, 1996). That is, banks fighting for market share may be willing to engage in riskier strategies in newly opened markets (as, in a de facto sense, consumer credit turned out to be in Mexico in the early 1990s) than they might in a more mature market for the simple reason that the long-term stream of rewards might be correspondingly greater to survivors who practiced pre-emptive behavior. Moreover, while concerns were raised about concentration in Mexico's privatized banking system, concentration by itself does not imply uncompetitive behavior. Although five banks accounted for 87% of all Canadian bank assets in the early to mid-1980s—a measure of concentration similar to that of the Mexican banking system—Shaffer's (1993) results from econometric tests of market contestability for 1969–89 “are generally consistent with perfect competition, and strongly reject the hypothesis of joint monopoly” and Nathan and Neave (1989) derived similar results for Canada using another measuring technique for 1982–84. Nevertheless, concentration has been shown able to attenuate competition in banking markets under conditions that are common in the western hemisphere. In a study of concentration and competitive behavior in regional US banking markets, Clark and Speaker (1992) found that the relation between concentration and measures of noncompetitive behavior was positive and significant under regimes of high entry restrictiveness.5 Indeed, the percentage increase in the ratio of past-due loans to total loans between the end of 1991 and the beginning of 1992 was actually smaller than this increase between the end of 1989 and the beginning of 1990 or between the end of 1990 and the beginning of 1991 (source: Comisión Nacional Bancaria). Cost would likely not be affected by an increasing past-due loan ratio during the period under consideration here. Deposit rates were falling throughout this period. Interest rates on 90–175 day deposits, for example, fell from 31.18% in May 1990 to 12.81% in May 1992 (source: Banco de México). In this context it is interesting to note the trajectory of Mexico's Herfindahl index (Fig. 1) over the period of our study. Consistent with a market share struggle in which the smaller banks take share away from the larger, the Herfindahl index falls from 1600 in 1991, during the privatization, to 1200 in 1993, a year after the privatization is completed.6 Similarly, note in Fig. 2 what could be construed by some as the competitive implications of the Mexican banking system's falling spreads between loan and deposit rates from the 1990, the year prior to the beginning of the privatizations, through 1993, a year after the final privatization.7 Conversely, as can be seen in Fig. 3, this same spread increases in the United States as a result of the deposit rate declining more rapidly than the loan rate. Full-size image (9 K) Fig. 1. Herfindahl index for Mexican Banks. Figure options Full-size image (6 K) Fig. 2. Mexico loan-deposit interest rate spread. Figure options Full-size image (6 K) Fig. 3. Loan-deposit interest rate spread: US thrifts. Figure options Although research on bank liberalizations or privatizations are not uncommon, it is somewhat more difficult to find econometric characterizations and hypothesis tests about them. In an effort to offer a past distribution—and so to facilitate assessments of future bank privatization outcomes—we use Bresnahan's approach (Bresnahan, 1982) as developed for banking by Shaffer (1993) to identify the strategies that banks in Mexico typically followed in the wake of privatization. Some possible alternatives—although they are mutually exclusive at any point in time—include the following. (1) Banks acted as price takers—behaving as if their demand functions and marginal revenue functions were identical and producing to a point where marginal cost equaled marginal revenue. The results would have included loan levels and interest rates consistent with perfect competition. (2) Banks recognized a distinction between demand and marginal revenue functions, colluded, produced at levels where marginal cost equaled marginal revenue, and so (compared to the perfectly competitive outcome) effectively underloaned in order to overcharge. (3) As in case (1), banks behaved as if the marginal revenue function and the demand function were identical. Differing from case (1), banks produced at output levels beyond where marginal cost equals marginal revenue (or price)—moving to a point where marginal cost exceeded marginal revenue—and creating what Shaffer (1993) refers to as a “supercompetitive market.” Our results for 1987 (when Mexico sold to the private sector a total of 34% of the ownership in the publicly-owned commercial banks) through 1991 (when Mexico began to sell controlling interest in each commercial bank to the private sector) are consistent with case (1) above, the more or less competitive case. That is, the mean bank treated the marginal revenue and demand functions as the same and produced where marginal cost equaled marginal revenue.8 Starting in 1992, however, when Mexico completed the sale of controlling interest in each commercial bank to the private sector, the supercompetitive case (case (3) above) held. The case (3) bank strategy is consistent with efforts to derive the long-term benefits of an early lead in market share (Shaffer, 1994) for those who can survive the obvious short-run inefficiencies. Although it is either tenuous or impossible to draw any conclusions from just two examples, it is interesting to note that Shaffer (1993) identifies a systemic shift to case (3) behavior in Canada immediately following liberalization there in the early 1980s just as we do for Mexico after liberalization and privatization there. More to the point, such findings raise supervisory and regulatory questions that can only be answered with many more models of financial liberalizations and privatizations than two. When human capital constraints are binding, as Lopez de Silanes and Zamarripa (1995) argue was true in the Mexican case, a loan expansion strategy to a point where marginal cost exceeds marginal revenue might also be consistent with increases in past due loan ratios like those that occurred in Mexico well before the peso crash of 1994.