Does Competition Reduce the Risk of Bank Failure?
研究了竞争与银行倒闭风险之间的关系，发现两者呈U形关系，即竞争既可能降低也可能增加风险，取决于竞争程度。
A large theoretical literature shows that competition reduces banks' franchise values and \ninduces them to take more risk. Recent research contradicts this result: When banks charge lower rates, their borrowers have an incentive to choose safer investments, so they will in turn be safer. However, this argument does not take into account the fact that lower rates also reduce the banks´revenues from performing loans. This paper shows that when this effect is taken into account, a U-shaped relationship between competition and the risk of bank failure generally obtains.