Economics, Econometrics and Finance
4 years ago

Bank competition drives advanced risk management, shaping future financial stability.

1 view
RePEc: Research Papers in Economics
What Influences Banks' Choice of Risk Management Tools?: Theory and Evidence
Dilek Bülbül, Hendrik Hakenes, Claudia Lambert

Paper Summary

Banks use advanced risk management tools because of competition and market concentration. A study of 249 German banks shows that competition makes banks adopt better risk management. When loan markets are concentrated, banks use more credit portfolio modeling but do less credit risk transfer.

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