The stability–concentration relationship in the Brazilian banking system

In this article, the relation between non-performing loans (NPL) of the Brazilian banking system and macroeconomic factors, systemic risk, and banking concentration is empirically tested. In evaluating this relation, we use a dynamic specification with fixed effects, while using a panel data approac...

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Bibliographic Details
Published inJournal of international financial markets, institutions & money Vol. 18; no. 4; pp. 388 - 397
Main Authors Chang, E.J., Guerra, S.M., Lima, E.J.A., Tabak, B.M.
Format Journal Article
LanguageEnglish
Published Elsevier B.V 01.10.2008
Elsevier
SeriesJournal of International Financial Markets, Institutions and Money
Subjects
Bank regulation
Banking system
Brazil
Economic stability
Financial fragility
Financial systems
Systemic risk
G15
Systemic risk
Banking system
Financial fragility
G21
O54
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Summary:In this article, the relation between non-performing loans (NPL) of the Brazilian banking system and macroeconomic factors, systemic risk, and banking concentration is empirically tested. In evaluating this relation, we use a dynamic specification with fixed effects, while using a panel data approach. The empirical results suggest that the banking concentration has a statistically significant impact on NPL, suggesting that more concentrated banking systems may improve financial stability. These results are important for the design of banking regulation policies.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:1042-4431
1873-0612
DOI:10.1016/j.intfin.2007.04.004