Competition and Stability in Concentrated Financial Systems

ISBN-13: 9786200533586 / Angielski / Miękka / 2020 / 64 str.

Bogie Ozdemir;Michael Giesinger

Opis

Many financial systems are overly concentrated with a few major banks dominating. This was long considered a necessary evil to ensure stability. It turns out that this is not true, as concentration is a main cause of systemic risk. More importantly, the end users of the financial system are paying a heavy price for this concentration. Large banks have market and pricing power and the financial systems are not nearly competitive enough. As a result, products and services are over priced, not differentiated, nor transparent. Switching providers, necessary for a competitive system, is still not easy with large banks controlling the client relationships. Big tech companies moving into financial services may not increase competition either as they can dominate as opposed to diversify and further increase systemic risk. A better solution is to develop a secure and well-regulated Open Banking system and increase the number of smaller banks without creating systemic risk, but there are formidable barriers. As increasing competition is on the agenda of policy-makers, this book discusses key considerations with deep dives in two heavily concentrated financial systems, Canada and Australia.

O autorze

Ozdemir, Bogie
Bogie Ozdemir is the CRO & EVP for CWB Financial Group and an active researcher. He has authored and co-authored 3 books and over 20 articles in peer reviewed risk management journals. Michael Giesinger is a risk professional with previous experience in BMO Financial Group and Barclays. He has authored and co-authored numerous publications.