To What Extent Is the Spanish Banking System an Oligopoly



Irrespective of the product or service that is being studied. it is apparent that all of a sudden the information flow has become more rapid, regulatory structures more oriented to free-market structures and the movement of capital and permission to access local markets freer. This has prompted national businesses to target global businesses and global businesses to target national markets. However lumpiness in the control of market shares is seen as yet which has tended to be diluted monopoly or monopolistic controls of the past and the structures have tended to turn, in general, to oligopolistic structures. The banking industry is no exception. Main features of the banking industry, irrespective of jurisdiction have been a long-standing history of business, ready demands for its products and services (barring economic downturns) and specific protection enjoyed from the national governments It has experienced a more benign and structured capital adequacy regimes in the form of Basle I and now Basle II apart from a host of other suggestive and market discipline based stipulations. Fact remains that banks enable target customers to do the essential functions of saving, investing and storing money or money equivalents and therefore banks tend to have a loyal and core segment of consumers on most jurisdictions where they were have chosen to operate. Spanish banks are no exception. This has spurred market control strategies from the banks and these strategies coalesce to determine as to what exact form of the market does the banking industry of a particular time looks like. Literature has often pointed out to the extent of competition in the banking industry: "Competition has become a recurrent topic in the banking literature. Specifically, during the last decade, a great deal of empirical work has attempted to measure the level of competition prevailing in European banking markets. The beginning of the third stage of the Economic and Monetary Union, in January 1999, and the projected changeover to the Euro triggered the interest of researchers in this issue" (Rozas, 2007).&nbsp.&nbsp.