This paper presents a theoretical analysis of strategic competition in retail banking when some of the ®rms show expense preference behavior. The literature on expense preference behavior by banking ®rms is fairly large, but to our knowledge, so far, the strategic interaction between pro®t maximizing banks and banks with expense preference behavior has not been investigated. The paper has also ...

Savings banks and cooperative banks are important players in the German financial market. However, we know very little about their default risk, because these banks usually resolve financial distress within their own organizations, which means that outsiders cannot observe defaults. In this paper I use a new dataset that contains information about financial distress and financial strength of al...

This paper is one of the rst to analyse political in uence on state-owned savings banks in a developed country with an established nancial market: Germany. Combining a large dataset with nancial and operating gures of all 457 German savings banks from 1994 to 2006 and information on over 1,250 local elections during this period we investigate the change in business behavior around elections. We...

This paper discusses beta and sigma convergence of commercial, savings, and cooperative banks in the Eurozone from 1999 to 2012. For this purpose, concepts of the growth and efficiency convergence literature are consulted and GMM, fixed effects models, and OLS are applied. Convergence is analyzed by calculating two efficiency metrics – data envelopment analysis (DEA) and stochastic frontier ana...

Several theoretical studies suggest that only uninsured depositors have an incentive to discipline their banks, i. e. react with changes in deposit volumes or in required interest rates as a reaction to changes in banks’ risk. This paper empirically investigates whether German savings banks are disciplined by their depositors although these should be regarded as fully insured due to public guar...

The 'quiet life hypothesis (QLH)' posits that banks enjoy the advantages of market power in terms of foregone revenues or cost savings. We suggest a uni ed approach to measure competition and e ciency simultaneously to test this hypothesis. We estimate bank-speci c Lerner indices as measures of competition and test if cost and pro t e ciency are negatively related to market power in the case of...