This thesis explores how the structure of banking markets affects how banks operate in emerging economies. The researchers found that more competition in the banking sector can weaken the impact of monetary policies. However, competition can also make banks more stable by diversifying their activities. Banks in developing countries with high market power tend to have high profits and low risk of insolvency. The study suggests that regulations should be in place to balance the effects of market power on monetary policy effectiveness. Additionally, diversification in banking activities should not be restricted, as it can improve competition and stability. Overall, market power in banking is not necessarily bad, but how it is used can impact the risk of bank insolvency.