Kriz zamanlarında banka piyasa gücü ve riski

Abstract

Purpose: This paper investigates the influence of bank market power on risk during the Global Financial Crisis 2007/2009 (GFC). 
 Methodology: We use a sample of 6,090 private and listed US banks for 2007-2016 and perform our estimations using panel data techniques, together with bank-fixed effects. 
 Findings: The findings suggest that the crisis increases banks’ default risk for banks with lower market power. Meanwhile, higher market power helps banks to remain stable during turbulent times and have lower default risk. Banks with more market power achieve this stability mainly because of lower leverage risk and lower portfolio risk. They managed to maintain a portfolio with higher and more stable earnings during the crisis. This paper supports the view that market power in banking is very vital, and competition is more harmful to stability during crisis periods. Originality: This paper provides important implications for the banking industry during crisis times. Policymaking in banking may specifically focus on improving bank market power but not maximizing competition between banks during crises.