Credit relations of competition in the banking sector effect on efficiency

Abstract

ompetition in the banking sector is a form of struggle for the most favorable conditions among subjects, which directly affects the attractiveness of credit and the improvement of the quality of services. Since high monopolization of banking activities has a negative impact on the financing of investment needs of the economy, the optimal level of credit supply can be achieved only 
in competitive market conditions. In this regard, competition can create an incentive for the differentiation of the provided services, as well as for the implementation of strategies that envisage the regularity of customers' relations with the bank.