Helping or hampering banks competition? The Asian experience after the Asian financial crisis

In this paper we revisit the question of determinants competition in banking markets and provide a new, in-depth analysis. We use successful stabilization experience that followed Asian Financial Crisis evaluate effects comprehensive set potential on sample nine countries observed period 2000–2016. Focusing loans market estimate two separate models competition: more flexible reformulation Bolt Humphrey’s efficiency, dynamic Lerner index model. Our results are consistent between models. Competition overall increases moderately, despite prudential policies adopted after crisis. Lower entry barriers, higher foreign penetration, ownership from stock market, as well concentration larger size, all encourage among banks. Higher freedom non-traditional instead promotes substitution reduces for loans, banks shift their competitive efforts towards potentially profitable non-interest activities. These findings lend some support to current restructuring region, concomitant liberalization processes have continued take place.