Theoretical Framework of Competition as Applied to Banking

This paper lays out a fundamental approach that revises our understanding of the theoretical framework of competition. First, it critically examines classical and neo-classical approaches to competition. Second, through eight elements the new approach lays out our new understanding of the framework of competition as applied to banking. Role of basic conditions in S-C-P, dynamic S-C-P, modified S-C-P as adapted to banking, entry, concentration and competition, goals and strategic groups in banking, importance of banking theory, dynamics of banking markets; and the new concept of entry facilitator; these are all the eight new dimensions that adapt competition theory to banks.