Studying banking networks designed to achieve scale economies for their members, we argue that “inner” competition – competition inside network members – may be inefficient vis-à-vis “outer” competition – competition with outsiders. Testing our hypothesis on branch-level loan productivity per employee at the Banche di Credito Cooperativo (BCCs), Italy’s network of mutual cooperative banks, we find that BCC monopoly always dominates BCC duopoly. Moreover, productivity is generally higher in situations of either BCC monopoly or BCC facing only outer competition vis-à-vis situations exhibiting (also) inner competition. The policy implication is that limits to inner rivalry seem efficiency improving in cooperative banking networks

We investigate the relationship between a bank’s rating and its business model and hypothesize that relationship changed through the crisis. We use bank ratings by Fitch, Moody’s and S&P’s from 2006 to 2009 and proxy the business model via an index given by a banks’ traditional income share in total income. In a sample of 241 listed banks from 39 countries, controlling for sovereign ratings and other bank characteristics, we find that banks with higher values of the index had: (1) similar ratings to other banks until 2007; (2) better rating performance through 2008–2009. The evidence supports our hypothesis

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We investigate the relationship between a bank's rating and its business model and hypothesize that relationship changed through the crisis. We use bank ratings by Fitch, Moody's and S&P's from 2006 to 2009 and proxy the business model via an index given by a banks' traditional income share in total income. In a sample of 241 listed banks from 39 countries, controlling for sovereign ratings and other bank characteristics, we find that banks with higher values of the index had: (1) similar ratings to other banks until 2007; (2) better rating performance through 2008-2009. The evidence supports our hypothesis.