Bulletin of
Vitebsk State
Technological
University

Abstract

The relevance of the article is determined by the fact that the development of competition in the banking market is an important factor in the effective functioning of the country's financial system; it helps to reduce the cost of services, improve quality and innovative development, and leads to improved conditions for bank customers.

The main problem that is solved in the article is the high degree of concentration of the banking sector in Belarus and its impact on the competitive environment. Optimization suggestions are based on an analysis of the current situation and substantiated by current research.

The purpose of the article is to determine the impact of banking market concentration on the competitive environment in Belarus and propose measures for its optimization.

Research methods used in the article: analysis of the concentration of the Belarusian banking market using various indices of industry concentration, such as the concentration index, the Herfindahl – Hirschman coefficient, the Hann and Kay index and other indicators; general scientific methods are generalization, comparison, and system method.

Results. The article defines what is the optimal competitive environment in the banking market, defines the optimality criteria, calculates the concentration coefficients of the Belarusian banking market for 10 years. Based on the calculation of the values of the concentration indicators, it was concluded that the banking market of Belarus has an oligopolistic structure. It is shown that the concentration of banking activity is also accompanied by its centralization, as evidenced by the reduction in the number of banks, the number of bank branches, and the number of employees in the banking system. The article proposes the formation of an optimal competition model for the banking system of Belarus, which would be intermediate between a differentiated oligopoly and monopolistic competition. Methods for differentiating banking products and services are proposed.

Concentration of the Banking Market in Belarus: Impact on the Competitive Environment and Proposals for its Optimization