Post Crisis Competitiveness of the European Banking Sector and Monetary Policy Effects

As the banking sector recovered from the 2008 financial crisis, the European Central Bank tried to improve the financial conditions in Europe by pursuing an expansionary monetary policy. This thesis tries to find whether banking competition was affected by this policy and to give an overview of the state of competition in Europe after the crisis. European banking competition is characterized by imperfect competition. The results suggest that the decreasing interest rates did not affect competition. This result is based on the north and south of Europe, and applies to small and big banks as well. Nevertheless, there are noticeable differences in competition between countries and banks.