Final answer:
The four-firm concentration ratio is calculated by adding the market shares of the four largest commercial banks to determine industry concentration and competition levels. The Herfindahl-Hirschman Index offers a more detailed view by squaring and summing the market shares of all firms. Specific asset data is needed to calculate the actual percentage.
Step-by-step explanation:
To determine the concentration of the commercial banking industry, we use the four-firm concentration ratio. This metric adds the market shares of the four largest firms in terms of total assets to assess the level of competition within the industry. A high concentration ratio indicates a more monopolistic market structure, while a lower ratio suggests a more competitive environment. The Herfindahl-Hirschman Index (HHI) is another measure, which considers the market shares of all firms by squaring them and summing the total, providing a more nuanced picture of market concentration.
Without specific data on the total assets held by the four largest commercial banks, we cannot directly calculate the concentration ratio. However, if such data were available, the calculation would involve dividing the sum of the four largest banks' assets by the total assets of all commercial banks in the market and expressing the result as a percentage to assess the industry's competitive landscape. Higher percentages would indicate less competition, and therefore more concern for the potential for monopolistic behavior in the industry.