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Benoit Julien and Pere Gomis-Porqueras
''Market Structure and the Banking Sector''
( 2007, Vol. 4 No.24 )
We propose a simple framework to explore how different market structures in the banking system affect credit allocation, and how deposits and number of entrepreneurs affect the equilibrium number of banks in the economy. We find that within the Marshallian aggregate surplus perspective, the number of entrants in the banking system is always larger than the socially optimal number of banks.
Keywords: and Entry
JEL: D4 - Market Structure and Pricing: General
G2 - Financial Institutions and Services: General
Manuscript Received : Nov 27 2006 Manuscript Accepted : Jun 18 2007

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