Prudential regulations, restructuring and competition: the case of the Argentine banking industry

Autores
Burdisso, Tamara; D'Amato, Laura
Año de publicación
2000
Idioma
español castellano
Tipo de recurso
documento de conferencia
Estado
versión publicada
Descripción
The Argentine banking industry has experienced a deep restructuring process since the beginning of Convertibility, when the industry was opened to competition and new prudential regulations were put in place in order to improve its solvency. Jointly with a dramatic increase in banking output, prompted by macroeconomic stability, the number of firms operating in the industry declined significantly. We analyze the extent to which this restructuring process has reduced the level of competition in the industry and we investigate the effects of regulations on bank profitability. Using panel data we try to explain the differences in profitability among the 20 largest retail banks. We construct concentration as well as market share indices by banks, to determine the degree of competition they face in local markets. Efficiency measures are also included as determinants of bank profitability in order to test if differences in profitability are due to these differences rather than to market power or concentration. The results indicate that there is no evidence of market power in the retail-banking sector. Regarding concentration, in the more populated areas of the country, were financial markets are more developed, the degree of concentration is very small. Given this result, the finding that banks whose business is mainly located in these areas earn lower profits, is an indication that the degree of competition in these areas is high. It is also true that the most X-Efficient banks mainly operate in more populated and developed areas. On the contrary, in the less populated areas, where financial markets are poorly developed, concentration is higher and banks that operate mainly in those markets earn higher profits and are less efficient. Finally, while banks with higher liquidity as determined by their liability structure earn lower profits, the effects of capital requirements on profitability are not clear.
Departamento de Economía
Materia
Ciencias Económicas
Argentina
banco
economía monetaria
banks
market structure
models with panel data
Nivel de accesibilidad
acceso abierto
Condiciones de uso
http://creativecommons.org/licenses/by/3.0/
Repositorio
SEDICI (UNLP)
Institución
Universidad Nacional de La Plata
OAI Identificador
oai:sedici.unlp.edu.ar:10915/33921

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spelling Prudential regulations, restructuring and competition: the case of the Argentine banking industryBurdisso, TamaraD'Amato, LauraCiencias EconómicasArgentinabancoeconomía monetariabanksmarket structuremodels with panel dataThe Argentine banking industry has experienced a deep restructuring process since the beginning of Convertibility, when the industry was opened to competition and new prudential regulations were put in place in order to improve its solvency. Jointly with a dramatic increase in banking output, prompted by macroeconomic stability, the number of firms operating in the industry declined significantly. We analyze the extent to which this restructuring process has reduced the level of competition in the industry and we investigate the effects of regulations on bank profitability. Using panel data we try to explain the differences in profitability among the 20 largest retail banks. We construct concentration as well as market share indices by banks, to determine the degree of competition they face in local markets. Efficiency measures are also included as determinants of bank profitability in order to test if differences in profitability are due to these differences rather than to market power or concentration. The results indicate that there is no evidence of market power in the retail-banking sector. Regarding concentration, in the more populated areas of the country, were financial markets are more developed, the degree of concentration is very small. Given this result, the finding that banks whose business is mainly located in these areas earn lower profits, is an indication that the degree of competition in these areas is high. It is also true that the most X-Efficient banks mainly operate in more populated and developed areas. On the contrary, in the less populated areas, where financial markets are poorly developed, concentration is higher and banks that operate mainly in those markets earn higher profits and are less efficient. Finally, while banks with higher liquidity as determined by their liability structure earn lower profits, the effects of capital requirements on profitability are not clear.Departamento de Economía2000-05info:eu-repo/semantics/conferenceObjectinfo:eu-repo/semantics/publishedVersionObjeto de conferenciahttp://purl.org/coar/resource_type/c_5794info:ar-repo/semantics/documentoDeConferenciaapplication/pdfhttp://sedici.unlp.edu.ar/handle/10915/33921spainfo:eu-repo/semantics/altIdentifier/url/http://www.depeco.econo.unlp.edu.ar/jemi/2000/trabajo11.pdfinfo:eu-repo/semantics/openAccesshttp://creativecommons.org/licenses/by/3.0/Creative Commons Attribution 3.0 Unported (CC BY 3.0)reponame:SEDICI (UNLP)instname:Universidad Nacional de La Platainstacron:UNLP2025-09-29T10:58:47Zoai:sedici.unlp.edu.ar:10915/33921Institucionalhttp://sedici.unlp.edu.ar/Universidad públicaNo correspondehttp://sedici.unlp.edu.ar/oai/snrdalira@sedici.unlp.edu.arArgentinaNo correspondeNo correspondeNo correspondeopendoar:13292025-09-29 10:58:48.039SEDICI (UNLP) - Universidad Nacional de La Platafalse
dc.title.none.fl_str_mv Prudential regulations, restructuring and competition: the case of the Argentine banking industry
title Prudential regulations, restructuring and competition: the case of the Argentine banking industry
spellingShingle Prudential regulations, restructuring and competition: the case of the Argentine banking industry
Burdisso, Tamara
Ciencias Económicas
Argentina
banco
economía monetaria
banks
market structure
models with panel data
title_short Prudential regulations, restructuring and competition: the case of the Argentine banking industry
title_full Prudential regulations, restructuring and competition: the case of the Argentine banking industry
title_fullStr Prudential regulations, restructuring and competition: the case of the Argentine banking industry
title_full_unstemmed Prudential regulations, restructuring and competition: the case of the Argentine banking industry
title_sort Prudential regulations, restructuring and competition: the case of the Argentine banking industry
dc.creator.none.fl_str_mv Burdisso, Tamara
D'Amato, Laura
author Burdisso, Tamara
author_facet Burdisso, Tamara
D'Amato, Laura
author_role author
author2 D'Amato, Laura
author2_role author
dc.subject.none.fl_str_mv Ciencias Económicas
Argentina
banco
economía monetaria
banks
market structure
models with panel data
topic Ciencias Económicas
Argentina
banco
economía monetaria
banks
market structure
models with panel data
dc.description.none.fl_txt_mv The Argentine banking industry has experienced a deep restructuring process since the beginning of Convertibility, when the industry was opened to competition and new prudential regulations were put in place in order to improve its solvency. Jointly with a dramatic increase in banking output, prompted by macroeconomic stability, the number of firms operating in the industry declined significantly. We analyze the extent to which this restructuring process has reduced the level of competition in the industry and we investigate the effects of regulations on bank profitability. Using panel data we try to explain the differences in profitability among the 20 largest retail banks. We construct concentration as well as market share indices by banks, to determine the degree of competition they face in local markets. Efficiency measures are also included as determinants of bank profitability in order to test if differences in profitability are due to these differences rather than to market power or concentration. The results indicate that there is no evidence of market power in the retail-banking sector. Regarding concentration, in the more populated areas of the country, were financial markets are more developed, the degree of concentration is very small. Given this result, the finding that banks whose business is mainly located in these areas earn lower profits, is an indication that the degree of competition in these areas is high. It is also true that the most X-Efficient banks mainly operate in more populated and developed areas. On the contrary, in the less populated areas, where financial markets are poorly developed, concentration is higher and banks that operate mainly in those markets earn higher profits and are less efficient. Finally, while banks with higher liquidity as determined by their liability structure earn lower profits, the effects of capital requirements on profitability are not clear.
Departamento de Economía
description The Argentine banking industry has experienced a deep restructuring process since the beginning of Convertibility, when the industry was opened to competition and new prudential regulations were put in place in order to improve its solvency. Jointly with a dramatic increase in banking output, prompted by macroeconomic stability, the number of firms operating in the industry declined significantly. We analyze the extent to which this restructuring process has reduced the level of competition in the industry and we investigate the effects of regulations on bank profitability. Using panel data we try to explain the differences in profitability among the 20 largest retail banks. We construct concentration as well as market share indices by banks, to determine the degree of competition they face in local markets. Efficiency measures are also included as determinants of bank profitability in order to test if differences in profitability are due to these differences rather than to market power or concentration. The results indicate that there is no evidence of market power in the retail-banking sector. Regarding concentration, in the more populated areas of the country, were financial markets are more developed, the degree of concentration is very small. Given this result, the finding that banks whose business is mainly located in these areas earn lower profits, is an indication that the degree of competition in these areas is high. It is also true that the most X-Efficient banks mainly operate in more populated and developed areas. On the contrary, in the less populated areas, where financial markets are poorly developed, concentration is higher and banks that operate mainly in those markets earn higher profits and are less efficient. Finally, while banks with higher liquidity as determined by their liability structure earn lower profits, the effects of capital requirements on profitability are not clear.
publishDate 2000
dc.date.none.fl_str_mv 2000-05
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