Explain what determines the level of competition in banking markets?

Word count: 2000

There are two questions, please write 1000 words for each question.

B1. Competition in the banking sector.
1. What determines the level of competition in banking markets?
In your discussion indicate the influences which have increased or reduced competition, making reference to both theory and past empirical assessments.

2. What is the best method to measure competition in banking markets? Within your discussion consider at least two different approaches used to measure competition in banking markets within the academic literature and critically discuss their relative benefits and failings.

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