University of Hertfordshire

Standard

State ownership, credit risk and bank competition: a mixed oligopoly approach. / Saha, B.; Sensarma, R.

University of Hertfordshire, 2009. (UH Business School Working Paper).

Research output: Working paper

Harvard

Saha, B & Sensarma, R 2009 'State ownership, credit risk and bank competition: a mixed oligopoly approach' UH Business School Working Paper, University of Hertfordshire.

APA

Saha, B., & Sensarma, R. (2009). State ownership, credit risk and bank competition: a mixed oligopoly approach. (UH Business School Working Paper). University of Hertfordshire.

Vancouver

Saha B, Sensarma R. State ownership, credit risk and bank competition: a mixed oligopoly approach. University of Hertfordshire. 2009. (UH Business School Working Paper).

Author

Saha, B. ; Sensarma, R. / State ownership, credit risk and bank competition: a mixed oligopoly approach. University of Hertfordshire, 2009. (UH Business School Working Paper).

Bibtex

@techreport{aea8fa4cfcfa4fea9419c20aed9863cf,
title = "State ownership, credit risk and bank competition: a mixed oligopoly approach",
abstract = "Recent events have led many governments to buy equity in banks leading to a situation of mixed oligopoly in banking markets. We model such a case where a partially state-owned bank competes with a private bank in collecting deposits. The government is purely a welfare maximiser while the private bank maximises profits. Both banks face risks in the loan market. We show that if the risk of default is sufficiently high and there is limited liability, then the state-owned bank tries to mitigate depositors' losses by mobilising less deposit leading to contraction of aggregate deposit. This contradicts the standard mixed oligopoly results in the literature.",
keywords = "mixed duopoly, default risk",
author = "B. Saha and R. Sensarma",
year = "2009",
language = "English",
series = "UH Business School Working Paper",
publisher = "University of Hertfordshire",
type = "WorkingPaper",
institution = "University of Hertfordshire",

}

RIS

TY - UNPB

T1 - State ownership, credit risk and bank competition: a mixed oligopoly approach

AU - Saha, B.

AU - Sensarma, R.

PY - 2009

Y1 - 2009

N2 - Recent events have led many governments to buy equity in banks leading to a situation of mixed oligopoly in banking markets. We model such a case where a partially state-owned bank competes with a private bank in collecting deposits. The government is purely a welfare maximiser while the private bank maximises profits. Both banks face risks in the loan market. We show that if the risk of default is sufficiently high and there is limited liability, then the state-owned bank tries to mitigate depositors' losses by mobilising less deposit leading to contraction of aggregate deposit. This contradicts the standard mixed oligopoly results in the literature.

AB - Recent events have led many governments to buy equity in banks leading to a situation of mixed oligopoly in banking markets. We model such a case where a partially state-owned bank competes with a private bank in collecting deposits. The government is purely a welfare maximiser while the private bank maximises profits. Both banks face risks in the loan market. We show that if the risk of default is sufficiently high and there is limited liability, then the state-owned bank tries to mitigate depositors' losses by mobilising less deposit leading to contraction of aggregate deposit. This contradicts the standard mixed oligopoly results in the literature.

KW - mixed duopoly

KW - default risk

M3 - Working paper

T3 - UH Business School Working Paper

BT - State ownership, credit risk and bank competition: a mixed oligopoly approach

PB - University of Hertfordshire

ER -