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Financial conglomeration and monitoring incentives

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  • Mälkönen, Ville

Abstract

If combining insurance and banking services generates scope economies in terms of monitoring the customers, competition in the financial markets becomes more intense after financial conglomeration. The pro-competitive effect reduces the prices of the financial services, increases monitoring and improves financial stability. Increased monitoring allows financial regulators apply lower capital requirements for financial conglomerates.

Suggested Citation

  • Mälkönen, Ville, 2009. "Financial conglomeration and monitoring incentives," Journal of Financial Stability, Elsevier, vol. 5(2), pages 105-123, June.
    • Handle: RePEc:eee:finsta:v:5:y:2009:i:2:p:105-123
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