Margin pressure

Unless otherwise defined, this is understood to mean a low level of earnings in the banking sector of a country, triggered primarily by strong competition between institutions. – However, if banks are hardly ever cost-covering in their traditional line of business, experience shows that they turn to more risky engagements. This increases their vulnerability to shocks of all kinds. – This fact leads to the conclusion that a small number of coordinated institutions (collusive oligopoly: an oligopoly acting in tacit agreement; the large providers agree on prices) are advantageous for a country’s financial market. Canada is cited as an example. The five large nationwide financial institutions are well-capitalized universal banks that offer everything from loans and securities trading to asset management from a single source. They were barely touched by the subprime crisis and subsequent financial crisis. – See bank fees, brokerage, billing, deduction, charge, G-Sifi, market collusion, market clearing, banking, flat rate. – Cf. Financial Stability Report 2012, p. 50 f. (changed business policy in the face of margin pressure).

Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent!
University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/