A controversial question has arisen in the context of the ongoing global financial crisis: Is financial stability enhanced or weakened by competition? The Committee first addressed the link between concentration and competition in the financial sector and found it to be generally unreliable. Furthermore, a clear causal link between either competition or concentration and stability in the financial sector can be found neither in theory nor in the data. However, measures taken to remedy the crisis may have an effect on competition and stability, and in any event sound financial regulation is crucial. Guest speakers included Hans-Helmut Kotz, Chair of the OECD Committee on Financial Markets, Prof. Thorsten Beck of Tilburg University, Prof. Elena Carletti of the European University Institute, Mr Ross Jones, Deputy Chairman of the Australian Prudential Regulation Authority, Prof. Xavier Vives of the University of Navarra, and Prof. Lawrence White of New York University.
Competition, Concentration and Stability in the Banking Sector