ABSTRACT
Southeast Asian Nations Economic Community (AEC) initiatives are expected to increase financial integration, which potentially increases banking competition and eventually impacts the stability of the banking industry. From a theoretical point of view, there are two contradictory perspectives regarding the relationship between banking competition and stability: competition-fragility and competition-stability. This study use samples of commercial banks listed in the stock exchange in the ASEAN countries of Indonesia, Philippines, Malaysia, Singapore and Thailand, from 2005 to 2014. This research supports the ‘competition-stability’ hypothesis in the banking industry in the scope of the ASEAN region.
