Variables to test QLH & ESH & Econometric model to test

ASB2505-3505 – Comparative Banking

Assignment 2013-14

The Comparative Banking assignment is a Group project on market power.

Each group must have only five students and you may choose your group members. You must

notify me by email ([email protected]) of the composition of your group (i.e. student

name, number, university email address). The Groups must be formed by ASB2505 students or

ASB3505 students; no mixture of H1 and H2 students is permitted. Any breach of this

requirement will result in a zero mark for all group members.

Your Group works for a leading consulting company who are advising the Government on how

best to improve competition in the banking market. You have been tasked with preparing a

briefing document for your CEO to present to Government and central banks officials.

The Report must contain sections on each of the following:

1. Review the theoretical relationships between market structure and bank performance.

2. Explain what is meant by market power and how it affects bank performance.

3. Define the quiet life hypothesis (QLH) and efficient structure hypothesis (ESH).

4. Which variables can we use to test the QLH and ESH? Present a suitable econometric

model and identify expected relationships.

5. Review the empirical literature from more than one country and discuss if the QLH

and/or ESH holds.

As a guide you should consult the materials associated with Lecture 9 (in Blackboard) plus other

relevant academic studies. HINT: see the bibliographies in the most recent papers in BB.

It is the responsibility of each group to allocate the five sections to its members. The content of

each section cannot change. A failure to answer any of the five sections, or the submission of an

answer to another question, will result in a mark of zero for that section. The Report should be

around 5,000 words in length.

Rubric for the Assignment

The Report will be around 5,000 words. Each section will be written by a group member.

The student’s name must be written at the start of each section, which should be

approximately 1,000 words; too few words will lose marks. Please note the number of

words per section.

Your assignment mark will be an average of the individual mark and the group mean.

If a report answers four sections, or an irrelevant answer is submitted, the mean will be

calculated using five as the denominator.

Marks will be deducted for incorrect referencing. For every incorrect reference a

deduction of 1 percent will be taken from the group mean.

General rules

You are expected to behave professionally and courteously to each other at all times. You have

been given the opportunity to select your groups and I do not expect to hear of free riding or

other examples of poor behaviour.

The assignment constitutes 20% of the final mark for the module.

Submission date: Friday 6 th

December 2013.

Requirements: electronic copy in TurnItIn; hard copy to Hen Goleg Office by 4pm.

Please note that plagiarism is a serious offence and is not tolerated. Extensions for assignments

will not be granted unless accompanied by certifiable evidence of a genuine complaint or

circumstance. Evidence must be presented to the module leader before the submission date.