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Banking structure and financial stability: a comparison of Chinese and German banking systems

  • Research Article
  • Published:
Frontiers of Economics in China

Abstract

In the process of financial globalization and diversification, the issue of financial stability has become heated all over the world. This paper attempts to uncover the delicate relationship between banking structure and financial stability by comparing and analyzing the situation of the Chinese and German banking systems. This paper suggests that (i) the trade-off between competition and concentration in banking industry is a vital factor to maintain financial stability and (ii) concentration is not always a bad thing for financial stability, especially in banking systems with discontent bank performance.

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Authors and Affiliations

  1. Department of Finance and Banking, Xiamen University, Xiamen, 361005, China

    Cai Conglu

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  1. Cai Conglu
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Correspondence to Cai Conglu.

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Cai, C. Banking structure and financial stability: a comparison of Chinese and German banking systems. Front. Econ. China 1, 433–448 (2006). https://doi.org/10.1007/s11459-006-0015-4

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  • DOI: https://doi.org/10.1007/s11459-006-0015-4

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