Assessment of Competition in the Banking Sector of Lithuania

Abstract

Abstract. Competition in the banking sector is different from the competition in the other sectors. Banks can compete only on the basis of banking products. Also, banks are dependent on each other -actions of every market participant may strongly affect the others. Problems of one bank may encourage distrust of the entire banking system. Analysis of Lithuanian banking sector has showed that country's banking sector can be divided into three groups -the biggest banks, smaller and medium-sized banks and foreign banks branches. The largest part of banking sector is concentrated in activity of the three banks. All these banks are owned by Scandinavian capital. Lithuanian banking sector is highly concentrated. In 2005-2012 years the average mean of three banks concentration index (CR3) in deposits, assets and loans markets was 68 percent. According to these high values of concentration rates, Lithuanian banking sector can be characterized as oligopoly.

Competition and stability in the banking sector of Kazakhstan

“…In measuring bank soundness the authors follow the experience of other researchers and use Z-score or Risk index as a stability indicator [1], ] [3], [23], [25]. Risk index measuring the probability of insolvency is based on the likelihood of return to assets being negative and larger than the capital-asset ratio [37] It incorporates data on the bank's expected profits, the likelihood that these profits will be realized, and a bank's capital base [38] Z-score is calculated from the formula (7):…”