The literature wisdom shows that both theoretical and empirical studies provide contradictory predictions about the relationship between market concentration or competiveness and financial stability in the banking system. In the past two decades, the structure of banking industry of many emerging countries went through considerable changes and has shifted from traditional intermediation activities, such as term deposit and loans products, towards to activities that could generate much more non-interest income. In this paper, we analyze theories of bank stability on market concentration, financial deepening, bank income structure and international debt situation by using panel data for 18 emerging countries. Our results show that alternative financial system plays an important role in the bank risk behavior. The potentially important policy implication is that policies supporting financial deepening or promoting liquidity in the banking industry might not necessarily improve banking stability. One needs to take into consideration of banks competiveness incorporates with degrees of financial depth and macroeconomic factors evolvement. Liberalized financial system analogously is not necessarily the ultimate solution.