This paper examines the relationship between bank competition and stability across different countries, exploring the market, regulatory, and institutional factors that influence this relationship. The authors find that an increase in competition has a larger impact on banks' risk-taking incentives in countries with stricter activity restrictions, more homogeneous bank revenue structures, more generous deposit insurance, and more effective credit information sharing systems. The economically significant effects suggest important implications for regulatory reform debates. The study combines theoretical and empirical literature, using a regression model to analyze the impact of various country characteristics on the competition-stability relationship. It also includes robustness tests and simulations to validate the findings. The results highlight the importance of considering country-specific factors when assessing the impact of competition on bank stability.This paper examines the relationship between bank competition and stability across different countries, exploring the market, regulatory, and institutional factors that influence this relationship. The authors find that an increase in competition has a larger impact on banks' risk-taking incentives in countries with stricter activity restrictions, more homogeneous bank revenue structures, more generous deposit insurance, and more effective credit information sharing systems. The economically significant effects suggest important implications for regulatory reform debates. The study combines theoretical and empirical literature, using a regression model to analyze the impact of various country characteristics on the competition-stability relationship. It also includes robustness tests and simulations to validate the findings. The results highlight the importance of considering country-specific factors when assessing the impact of competition on bank stability.