Competition and Concentration in the European Banking Sector

This study is an attempt to assess the degree of competition in  European banking by computing the H statistic of representative set of banking institutions. We are addressing some estimation problems posed in the literature and evaluate the H estimation accordingly. We also explore the effect of concentration on competiveness of the industry with the usage of alternative to H proxy. We find that indeed some industries might be exhibiting monopolistic behavior albeit this cannot be determined by H alone. We also  find that it is not the level of concentration that influences competitiveness adversely.