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USAA Trust Services - Protect your future and that of your loved ones

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In practice, there are a number of problems with the use of market structure and regulatory indicators to measure competitiveness which also apply in the context of the EAC. 3 For one, market structure is not exogenous since market structure itself can be affected by firms’ performance. Second, interpreting these measures requires some judgment on what should be the optimal structure of the banking system. Figure 2 illustrates the problem in the EAC countries by comparing three frequently used indicators of market structure and performance—the three-bank concentration ratio, interest rate spread, and the return on assets (ROA)—for the EAC countries and...

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