Banking competition can impact financial stability differently depending on the type of risks involved and how banks are funded. In some cases, competition can increase stability, while in others it may lead to instability, especially in industries relying heavily on short-term funding. The study suggests that the structure of banks' liabilities and the source of their funding play a crucial role in determining the effects of competition on stability. This new perspective helps to make sense of conflicting research findings and offers a fresh approach to analyzing the relationship between banking competition and financial stability.