*Reply* **Reply to "Remarks on Bank Competition and Convergence Dynamics"**

**Maria Karadima 1,\* and Helen Louri 1,2**


Received: 10 June 2020; Accepted: 11 June 2020; Published: 15 June 2020

**Abstract:** In this reply, we provide detailed answers to the remarks made by Tsionas on the use of stochastic frontier-based measures of market power in a part of our empirical study, which examines the fragmentation and convergence dynamics of market power, concentration and credit risk in the euro area banking sector during 2005–2017. Our answers clarify all the issues raised by Tsionas and show that the only challenging, in our opinion, point of the criticism has been based on a hypothesis that does not hold in the case of our study.

**Keywords:** Lerner index; stochastic frontiers; convergence analysis
