Competition and Efficiency in the Mexican Banking Industry : Theory and Empirical Evidence

This useful new book contributes to the understanding of competition policy in the Mexican banking system and explains how levels of competition relate to banks' efficiency. It contrasts concepts of economic theory with empirical evidence to distill optimal policy decisions. The authors study the banking sector in Mexico, a developing country with a regulated and sound banking system and an industry with strong participation from global systemic banks. However, the Mexican banking system continues to have low financial deepening in the economy. Simultaneously, changes experienced by the Mexican financial system in recent decades have completely transformed its architecture, structure of ownership and control, and its competitive conditions, and have undeniably affected system performance and efficiency. This provides a natural laboratory in which to answer the questions of scholars, economists, and policymakers. Cover 1 Half-Title 2 Title 4 Copyright 5 Dedication 6 Contents 8 List of Figures and Tables 10 Preface and Acknowledgments 12 1. Introduction 16 2. Literature Review of Banking Studies 23 3. Structural Evolution and Cycles of Consolidation 50 4. Competition in the Mexican Banking System: A Review 84 5. Analysis of Competition and Efficiency in the Mexican Banking Sector 98 6. Competition Policy in the Mexican Financial System 137 7. Conclusions 171 Notes 177 References 185 Index 201 Front Matter....Pages i-xiv Introduction....Pages 1-7 Literature Review of Banking Studies....Pages 9-35 Structural Evolution and Cycles of Consolidation....Pages 37-70 Competition in the Mexican Banking System: A Review....Pages 71-84 Analysis of Competition and Efficiency in the Mexican Banking Sector....Pages 85-123 Competition Policy in the Mexican Financial System....Pages 125-158 Conclusions....Pages 159-164 Back Matter....Pages 165-197 Competition and Efficiency in the Mexican Banking Industry contributes to the understanding of competition policy in the Mexican banking system and explains how levels of competition relate to the efficiency of banks