@techreport{211ce19c54844145a788026b04531f07,
title = "Bank competition and financial stability: evidence from the U.S. banking deregulation",
abstract = "This paper examines the causal relationship between banking competition and financial stability. We find that an exogenous competition shock significantly improved the stability of banks, consistent with the {\textquoteleft}competition-stability hypothesis{\textquoteright}. We show that banks improved their cost efficiency and reduced credit risks in response to U.S. banking deregulation. In addition, we show the competition shock had a larger impact on banks who were initially operating in a less competitive environment. Our findings provide the first quasi-natural experimental evidence on the non-linear relationship between bank competition and financial stability.",
keywords = "Bank competition, financial stability",
author = "Yifei Cao and Jenyu Chou and Ian Gregory-Smith and Alberto Montagnoli",
year = "2020",
month = apr,
language = "English",
series = "Sheffield economic research paper series",
publisher = "Department of Economics, University of Sheffield",
type = "WorkingPaper",
institution = "Department of Economics, University of Sheffield",
}