Banking Competitions and Capital Ratios: Document Summary

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Banking Competitions and Capital Ratios The document Banking Competition and Capital ratios, is some interesting material that gives the reader some insight into the banking systems and their competitions. This document makes the point of how the competition in the banking systems even at this moment have all long been subject to debates that are among policymakers and supervisors. Cross-border mergers and association that goes on inside of the national limitations have encouraged apprehensions about market power appreciated by banks, and its impressions on competition among monetary organizations and financial constancy. With that said, this paper will give a summary of the document. The papers start off with giving an explanation of the Economic theory. It goes on to make the point that the theory really has not come yet to agree on the insinuations of augmented rivalry for banking reliability, and, more precisely, bank capital ratios. The author goes on to bring in an example, which makes the suggestion that increased competition reduces banks' soundness. The document explores the chief mechanisms that are talked about in the literature. The literature makes the point of mentioning that the bank managers have an inducement to take on extreme jeopardies to profit stockholders at the expenditure of investors. The document also brings in another perspective that had a contrast from what Camino and Matutes (2002) mentioned. Both of these made the point prove that

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