Bank competition, financial stability and welfare : does the objective function of competitors matter?
Gutiérrez, Oscar (Universitat Autònoma de Barcelona. Departament d'Empresa)
López-Puertas, Mónica (Universidad Carlos III de Madrid)

Data:	2025
Resum:	This paper investigates the implications for financial stability, social welfare, risk-taking incentives and expected profits of competition between banks that differ in their respective objective function. We differentiate between commercial banks (i. e. , shareholders' profit-maximizing banks) and stakeholder banks (i. e. , stakeholders' welfare-maximizing banks), showing that: (1) The presence of stakeholder banks increases systemic financial stability and social welfare. (2) Stakeholder banks are less risk-inclined and obtain a higher market share than commercial banks. (3) Any bank chooses a riskier portfolio and is less profitable when competing against a stakeholder bank compared to competing against a commercial bank. Our theoretical findings are consistent with the existing empirical evidence and yield important policy implications and new empirically testable predictions.
Nota:	Altres ajuts: acords transformatius de la UAB
Drets:	Aquest document està subjecte a una llicència d'ús Creative Commons. Es permet la reproducció total o parcial, la distribució, la comunicació pública de l'obra i la creació d'obres derivades, fins i tot amb finalitats comercials, sempre i quan es reconegui l'autoria de l'obra original.
Llengua:	Anglès
Document:	Article ; recerca ; Versió publicada
Matèria:	Commercial bank · ; Stakeholder bank ; Competition ; Risk-taking ; Systemic financial stabilit
Publicat a:	Annals of finance, 2025 , ISSN 1614-2454

DOI: 10.1007/s10436-025-00465-w

28 p, 481.9 KB

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