What is the effect of the announcement of the Basel II Accord on the competition between European banks?

This research describes the effect of the announcement of the Basel II Accord on competition. The results show that competition between European banks increased after the announcement of the Basel II Accord and that this effect is bigger between larger banks. It also shows that the long-term interest rate and the competition level of one year earlier are important determinants of competition. Furthermore, this research gives an overview of the possible measurements of competition. An approximation of the Lerner index is used to measure competition in this research.