engleski

The Heterogeneity of Bank Market Concentration in the European Union

The European Union is trying to harmonize all aspects of markets and market policies in all member countries. Financial markets vary significantly across EU countries and this is especially obvious on bank markets. Because of the heterogeneity on EU bank markets, the concentration on bank markets is also very different from one country to another. This paper analyzes bank market concentration in the EU countries and gives the estimations for future trends. The market concentration will be shown through two indicators: Herfindahl index and concentration ratio. The analysis will show that there are large differences between EU countries concerning bank market concentration. In some countries the market concentration is high ; in other countries it is low. Some markets experience the decrease of the concentration, in others the bank market concentration is increasing. Analysis of the econometric models of concentration is developed and used to predict the future values of Herfindahl index and concentration ratio on bank markets of the European Union. The paper proves that the bank markets of the EU countries are very heterogeneous in terms of market concentration.

bank market concentration; European Union; econometric model; Herfindahl index; concentration ratio

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