According to theory, market concentration a?ects the likelihood of a ?nancial crisis in di?erent ways. The “concentration-stability” and the “concentrationfragility” hypotheses suggest opposing e?ects operating through speci?c channels. Using data of 160 countries for the period 1970-2007, this paper empirically tests these indirect e?ects of ?nancial market structure. We set up a simultaneous system in order to jointly estimate ?nancial stability and the relevant channel variables as endogenous variables. Our ?ndings provide support for the assumption of channel e?ects in general and both the concentrationstability and the concentration-fragility hypothesis in particular. The e?ects are found to vary between high and low income countries