Call for Papers: Vierteljahrsheft zur Wirtschaftsforschung (Quarterly Journal of Economic Research)

European banking landscape between diversity, competition and concentration

In ecology, bio-diverse systems are considered to be particularly resilient. Biodiversity increases the ability to absorb shocks as well as the likelihood of returning to stable conditions without external interventions. Shock absorption is also essential to the banking system (Haldane & May 2011). Thus, it is worth examining if the paradigm of diversity also applies to the landscapes of European banking. Is a credit system, consisting of only a few, highly diversified and capital-market-oriented big banks, more efficient and stable than a system in which large banks share the market with numerous medium and small, largely deposit-financed, banks? Is a diversity of different banking types and a competitive, contested banking industry two sides of the same coin? At the height of the 2008 financial crisis, the European Parliament held in a resolution that, "the diversity of legal models and business objectives of the financial entities in the retail banking sector (banks, savings banks, cooperatives, etc.) is a fundamental asset to the EU's economy which enriches the sector, corresponds to the pluralist structure of the market and helps to increase competition in the internal market…."

Ten years after the Great Financial Crisis started, the question of how institutional diversity affects bank stability, competition, quality of client services, and the financing of small and medium-sized enterprises (SMEs) is still open and under-researched. However, finding an answer is increasingly pressing as doubts about the performance of a highly concentrated banking sectors have grown. A forthcoming issue of DIW-Vierteljahrshefte addresses these research gaps. For the issue, articles addressing, in a comparative perspective, the topics listed below are welcome. Contributions (in English) may be submitted in particular, but not exclusively, on the following topics:

• The term diversity and its measurement: what does diversity in the banking sector mean? Which measuring concepts are available and how can they be used?
• Taking stock: How diverse is the EU banking landscape and what are the root causes for distinct levels of diversity?
• Is structural diversity and the stability of the banking sector linked?
• How is diversity of the banking landscape related to competition in the banking sector?
• What impact does financial innovation and digitization of banking have on structural diversity?
• How is diversity in the banking sector related to bank-based financial systems? Are diversity and bank-based two sides of the same coin?
• How did the banking crisis and banking regulation affect structural diversity?
• What role does institutional diversity play in the access of SMEs to funds?
• How important are public-sector owned banks? How important are savings and cooperative banks for SME finance and sector stability?
• Business diversification within banks or diversity of different types of banks: what is better for stability and growth?
• Big banks and small banks: complementarity or conflicted?
• What structural policy for the EU banking landscapes?

Authors wishing to submit a contribution/an article should send a summary of the planned contribution (maximum 1 page) to Hans-Helmut Kotz & Dorothea Schäfer by June 15, 2018 (dschaefer@diw.de & kotz@fas.harvard.edu). Authors will receive feedback on whether the proposal is accepted no later than July 15, 2018. The final article, which should not exceed a length of 30,000 characters, must be submitted by December 31, 2018.

Submission is followed by a multi-stage editing and revising process. In March 2019 a workshop with authors will take place. The Vierteljahrsheft-Issue "European banking landscape between diversity, competition and concentration" is expected to be published in the first half of 2019. The publication and the workshop are part of the research project “Banking Sector Diversity: Does it matter for sector stability and SME financing?” funded by the Wissenschaftsförderung der Sparkassen-Finanzgruppe e. V. Further information for authors can be found here.