How competition policy affects banks - report

A new report from the ECB finds that as competition policy strengthens banks' share prices rise, but those of non-financial firms fall.

The report, authored by Elena Carletti, Philipp Hartmann, and Steven Ongena, is based on a study covering nineteen countries for the period 1987 to 2004.

According to the report, a major determinant of the positive bank returns is "the opaqueness that characterizes the institutional setup for supervisory bank merger reviews."

"Thus strengthening competition policy

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