Essays on the spatial aspects of banking

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This study comprises three theoretical essays that explore the interplay between the competitive and regulatory environments of banks and their performance. It addresses key questions regarding the impact of bank competition on lending and risk, as well as how regulatory frameworks influence this competition. The introductory chapters apply economic geography theory to the banking sector, clarifying essential concepts of banking competition. Banks primarily engage in information production for opaque assets and provide insurance for uninformed investors. However, the exchange of information between banks and customers incurs significant transaction costs influenced by geographical distance. To delve into the effects of geography on banking competition, the introduction poses critical questions, such as how geographical distance can be conceptualized in banking terms and how banks and customers navigate this gap. The author further investigates the long-term decline in transaction costs within the banking industry, seeking to identify the factors contributing to this trend. Ultimately, the study examines how the transformation process affects the banking market and competitive landscape, questioning the relevance of distance in contemporary banking practices.