Kebour Ghenna (Photo : File/SM)By Kebour GhennaIn the developed world, the banking sector has seen a trend towards greater market concentration and a reduction in the number of banks. This shift, driven by market power, economies of scale, and the too-big-to-fail doctrine, has resulted in the emergence of larger, more complex, and increasingly opaque banking institutions. The widespread bailout of big banks during the recent financial crisis has sparked discussions about the potential benefits of smaller banks, particularly in local economies. Let’s take Germany’s banking system which is characterized by its three pillars – public sector banks, cooperatives, and commercial banks – presents a unique model. This stability highlights the value of smaller, locally focused banking institutions in supporting economic resilience and growth.

Source: Ethiopian News August 08, 2024 04:31 UTC