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Risk, Size and Concentration in the Chilean Banking System

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  • Rómulo Chumacero E.
  • Patricia S. Langoni

Abstract

The possible merger of two of Chile’s largest banks spurred a strong debate. It is claimed that higher levels of bank concentration would significantly increase the aggregate (systemic) risk of the banking system. This assumes implicitly that the bankers’ attitude toward risk taking are correlated with bank size and that current regulations of Chilean banks would not be sufficient to prevent an increase in overall risk. This paper evaluates both at the theoretical and empirical level whether there is any support for this claim.

Suggested Citation

  • Rómulo Chumacero E. & Patricia S. Langoni, 2001. "Risk, Size and Concentration in the Chilean Banking System," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 4(1), pages 25-34, April.
    • Handle: RePEc:chb:bcchec:v:4:y:2001:i:1:p:25-34
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    References listed on IDEAS

    as
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