Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/297326 
Year of Publication: 
2024
Series/Report no.: 
ECB Working Paper No. 2886
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
Bank market power, both in the loan and deposit market, has important implications for credit provision and for financial stability. This article discusses these issues through the lens of a simple theoretical framework. On the asset side, banks choose the quality and quantity of loans. On the liability side, they may be subject to depositor runs whenever they offer demandable contracts. This structure allows us to review the literature on the role of market power for credit provision and stability and also highlight the interactions between the two sides of banks' balance sheets. Our approach identifies relevant channels that deserve further analysis, especially given the rising importance of bank market power for monetay policy transmission and the the rise of the digital economy.
Subjects: 
credit provision
bank runs
balance sheet interactions
monetary policy transmission
digital economy
JEL: 
G01
G21
G28
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-6366-4
Document Type: 
Working Paper

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