Riccardo De Bonis, Giuseppe Marinelli, Francesco Vercelli, 16 April 2018

There is no consensus on how to measure competition in the banking system, though the 'Boone indicator' of profit elasticity with respect to marginal costs has recently provided reliable results. This column uses a dataset of 125 years of bank balance sheets to calculate this indicator for the Italian banking system. It shows that regulatory changes have driven bank competition, an insight that is supported by other indicators.

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