The evolution of market power in European banking

This paper analyses the effect that European financial market integration has had on the evolution of the banks’ market power disparities. The results show that market power disparity has narrowed among eurozone banks. The reduction is attributable to the convergence in the average levels of market power of the European banking sectors. In contrast, the disparities observed within each country have remained stable. As a result, the measures adopted to advance towards a single banking market should be complemented by measures at the national level designed to intensify competition among the banks within a given country.

Cruz, P., J. Fernández de Guevara and J. Maudos (2017): «The evolution of market power in European banking», Finance Research Letters, 23, November, pp. 257-262.