رقابت، امکان رقابت و ساختار بازار در بخش بانکی اروپا در آستانه برگزاری اتحادیه پولی اروپا

In order to assess the effect of EMU on market conditions for banks based in countries which adopt the Single Currency, we use the H indicator suggested by Panzar and Rosse (Panzar, J.C., Rosse, J.N., 1987. Journal of Industrial Economics 35, 443–456). Our contribution is to assess results separately for large and small banks, and for interest income and total income as a dependent variable. From a panel of banks over the period 1992–1996, we provide evidence that the behavior of large banks was not fully competitive as compared to the US. Regarding small banks, the level of competition appears to be even lower, especially in France and Germany.

It is widely agreed that EMU will significantly affect the degree of competition in the banking sectors of countries adopting the Single Currency, due inter alia to heightened disintermediation and increased actual and potential cross-border competition. These tendencies are expected to put European banks’ profitability under significant downward pressure and enhance forces leading to restructuring and consolidation. In this context, our aim is to cast light on recent levels of banking market competition and to provide a benchmark against which the effects of EMU may be assessed. To confirm the relevance of our analysis we also provide comparative evidence on US banks, which operate in a largely deregulated and continental banking system – potentially akin to EMU. The methodology involves the estimation of revenue functions and consideration of the so-called H statistic, which is the sum of elasticities of revenue to the components of expenditure. One innovation of the paper is that competitive conditions are estimated both in terms of interest income and total income. This is considered to be highly relevant given that banks are seeking non-interest revenue as a supplement to declining interest income as deregulation and structural change proceeds. For example, OECD data show that non-interest income has accounted in recent years for 20–40% of total net income in the countries studied. Moreover, we assess results separately for large and small banks, which may face different competitive conditions. The paper is structured as follows: in Section 2 we seek briefly to motivate the analysis by considering how the structural changes triggered by EMU may affect banks. In Section 3 we provide details of the methodology of the paper. Section 4 describes the data sources employed, and Section 5 gives the main results. Section 6 draws conclusions.

We have seen from the econometric estimates that the US exhibits a higher level of competition than EU banking markets. Within the EU, whereas Germany and France tend to show monopolistic competition for large banks and monopoly for small ones, in Italy there is evidence of monopolistic competition for small and large banks. However, our short sample period as well as the substantial year-to-year variations of the results prevent us from drawing conclusions regarding trends in banking competition. Our findings are therefore limited to the assessment of the level of competition in banking markets at the start of EMU. The implications of these results are that there is room for an increase in competition in European banking sectors in the context of EMU, which could then reach levels typical of a liberalized and continental market like the US. As noted in Section 2, there is ample reason to anticipate such an extra impulse to competition in the future euro area. The implications of this may of course reach further than behavior alone, and may influence also the banking structure of the countries concerned; as is indeed confirmed by the indicators of excess capacity in Davis and Salo (1998). These imply that there may be considerable structural adjustment of the banking sector before a steady state situation is achieved.