The Comparative Banking assignment on market power.
You works for a leading consulting company who are advising the Government on how best to improve competition in the banking market. You have been tasked with preparing a briefing document for your CEO to present to Government and central banks officials.
The Report must contain sections on each of the following:
1. Review the theoretical relationships between market structure and bank performance.
2. Explain what is meant by market power and how it affects bank performance.
3. Define the quiet life hypothesis (QLH) and efficient structure hypothesis (ESH).
4. Which variables can we use to test the QLH and ESH? Present a suitable econometric model and identify expected relationships.
5. Review the empirical literature from more than one country and discuss if the QLH and/or ESH holds.
Word count: 5,000 words