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An Assessment of Competition in the Portuguese Banking System in the 1991-2004 Period

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JEL Code 
G21 - Banks; Other Depository Institutions; Mortgages
L13 - Oligopoly and Other Imperfect Markets
C23 - Models with Panel Data
The purpose of the present paper is to assess the competitive behaviour of Portuguese banking groups during the period ranging from 1991 to 2004, using the non-structural test developed by Panzar and Rosse. The main findings are that the Portuguese banking system has experienced weak competition between 1991 and 1996, underwent a period of restructuring until 2000, and from then until 2004 behaved consistently with perfect competition. Both private and, more markedly, domestic banks, seem to have competed more aggressively on occasions, and no relationship between competitive behaviour and bank size was identified.
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