Competition and financial crisis

The recent global financial crisis was one of the tremendous financial events that were triggered due to the financial problems of developed countries. The main purpose of this paper is to identify the relationship between the bank instability features including bank runs, moral hazard, asymmetric information, contagion and their influence on financial crises under moderating impact of competition. The paper is written in the form of literature review by reviewing various studies concerning bank instability and financial crisis. The paper discusses the moderating role of competition between bank instability factors and financial crisis. Understanding and having a clear picture of the main determinants of financial crisis equips the policymakers with valuable information which can be used to formulate right strategies to overcome similar situations in future.

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