THE EFFECT OF COMPETITION IN THE MARKET OF BANKING SERVICES ON THE STABILITY OF THE BANKING SYSTEM

Abstract

The increase in the number of banks and the size of banks in the banking system creates problems related to interbank competition and requires constant research. Competition in the banking services market and the factors affecting it required the use of new regulatory tools after the global financial crisis of 2007-2009. In the post-crisis period, establishing strict prudential requirements for bank supervision and ensuring the stability of the banking system became important. Interbank competition and the stability of the banking system, i.e. in the conditions of competition, the risk appetite of banks is high, and the question of financial stability raises more questions. Many analyzes have been carried out on this issue and there are different approaches. In this article, an econometric analysis of the interrelationship between the stability of the banking system and competition in the market of banking services is carried out, and the causes and consequences are evaluated.