Some important aspects of inter-bank competition

ABSTRACT This paper examines the relationship between competition policies and policies to preserve stability in the banking sector. The research method in this study was the descriptive correlative type, and was based on the goal of the method applied. Descriptive and inferential statistics were used. To analyze research data, descriptive statistics, and for inferential statistics, the Pearson correlation, the Friedman ranking test and stepwise regression, were used. For data analysis, SPSS software was used. The results from the study show a wide variety of approaches emerges, with some countries giving a stronger role to prudential supervisors than to competition authorities and other countries doing it the other way round. Through this study, the positive role he theoretical and empirical literature on the competition-stability nexus in banking is surveyed. It turns out that the widely accepted trade-off between competition and stability does not generally hold.