*6.3. Theil Inequality for Concentration*

The results from the calculation of the total Theil inequality index for HHI and its within-group and between-group components are presented in Table 5, as well as in Figures 5 and 6. As it is shown in Table 5, as well as in Figures 5 and 6, the disparities in HHI values are due, almost exclusively, to differences inside each group (EA-Co or EA-Pe). This evolution suggests that there is a clear convergence between the EA-Co and EA-Pe country groups with respect to concentration, as measured by the HHI structural measure. In contrast to the case of the Lerner index, the lack of availability of the bank-level underlying determinants of HHI did not let us to go deeper in order to investigate whether the above-described differences stem from inequalities between different countries (between-country inequality) or from inequalities between banks in a given country (within-country inequality).

The results from the calculation of the total Theil inequality index for CR5 and its within-group and between-group components are presented in Table 5, as well as in Figures 5 and 6. As it is shown in Table 5, as well as in Figures 5 and 6, the disparities in CR5 values are due, almost exclusively, to differences inside each group (EA-Co or EA-Pe). This evolution suggests that there is a clear convergence between the EA-Co and EA-Pe country groups with respect to concentration, as measured by the CR5 structural measure. The lack of availability of the bank-level underlying determinants of CR5 did not let us to go deeper in order to investigate whether these differences stem from inequalities between different countries (between-country inequality) or from inequalities between banks in a given country (within-country inequality).

#### *6.4. Theil Inequality for Credit Risk (NPL Ratio)*

The results from the calculation of the total Theil inequality index for the NPL ratio and its within-group and between-group components are presented in Table 5, as well as in Figures 5 and 6. As it is shown in Table 5, as well as in Figures 5 and 6, the between-group component of the Theil index (disparities due to differences between EA-Co and EA-Pe) presented a sharp increase in 2008, when it started following a continuously increasing path until 2013, afterwards fluctuating slightly to the end of 2017. This evolution shows that there is a clear divergence between the EA-Co and EA-Pe country groups with respect to credit risk, as measured by the NPL ratio. The lack of availability of the underlying bank-level NPL data did not let us to go deeper in order to investigate whether the above-described differences stem from inequalities between different countries (between-country inequality) or from inequalities between banks in a given country (within-country inequality).
