Competition makes mutuals safer, commercial banks riskier
Competition has a positive effect on the stability of mutual savings banks (MSBs) with greater business risk and weaker corporate governance, while commercial banks tend to be less stable when they face competition pressure, a new Bank of Korea working paper finds.
Bank Competition and Financial Stability: A Comparative Study of Mutual Savings Banks and Commercial Banks in Korea by Jin Q Jeon and Kwang Kyu Lim, also shows that higher concentration and risk-shifting effects in a less competitive
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