Competition, Incentives, and Risk-Taking in Banking: A Survey

Risk prevention and stable operation of the banking has always been hot and difficult by the theoretical research. This paper systematically reviewed literatures that market competition, incentive with risk-taking of commercial banks, made comprehensive analysis and comment on the research results of representative literatures. PR model is a better model that in the non-structural analysis methods to measure the degree of market competition, and we should construct a comprehensive indicator that can able to measure the level of bank risk-taking accurately, regulatory authorities should improve the incentive and restraint mechanisms associated with the control of risk, it is very important to improve business performance of commercial banks and to reduce the level of risk-taking.