Concentration of the banking sector in nicaragua
DOI:
https://doi.org/10.5377/aes.v2i2.13089Keywords:
banking concentration, banking system, financial institutionsAbstract
The analysis of market concentration allows to know about its structure. Based on the data published by the Superintendency of Banks and Other Financial Institutions, the market concentration indicators were calculated: “Concentration ratio” of the 4 largest institutions and the Herfindahl-Hirschman Index (HHI) from the variables: assets, liabilities, and current credit for the period 2008 - 2018, with monthly frequency data. The variables in aggregate terms show a positive trend during most of the study. The current credits are the series with the highest volatility when analyzing the first differences of variables in logarithms. None of the series in aggregate terms are stationary. Periods with HHI values greater than 2,500 points were identified, calculated from assets and liabilities. However, the HHI of the current credits does not show values greater than 2,500 in the study period. Values greater than 90% were identified in the concentration ratio indicator of the 4 largest institutions, calculated from each of the variables. The first differences in concentration indicators calculated have a significant positive linear relationship.
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