Download or read book Why European Banks Adjust Their Dividend Payouts written by Marco Belloni and published by International Monetary Fund. This book was released on 2022-09-23 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a panel data approach for two samples of listed and unlisted European banks, this paper provides evidence that, over a decade and a half preceding the pandemic, bank dividend payouts were adjusted in line with the motivations found in the literature. Banks change their dividend payouts because they would like to signal good profitability to shareholders to address information asymmetry, or use dividends to mitigate the agency costs, or could come under pressure from prudential supervisors and regulators to retain earnings. Banks are found not to discount expectations about future economic conditions or their own profitability when making payouts. Simulations show that, in the absence of supervisory sector-wide recommendations to suspend dividend payouts, banks would likely have reduced the payouts only slightly in the first year of the pandemic.
Download or read book Why European Banks Adjust Their Dividend Payouts written by Marco Belloni and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Economic literature suggests that banks change their dividend payouts for three main reasons. They may be willing to signal good future profitability to shareholders to address information asymmetry, or use dividends to mitigate the agency costs, or could come under pressure from prudential supervisors and regulators to retain earnings. The COVID-19 pandemic led to introduction of sector-wide recommendation by regulators to suspend dividend payouts in view of prevailing large uncertainty. Using a panel data approach for two samples of listed and unlisted European banks, this paper provides evidence that, over a decade and a half preceding the pandemic, bank dividend payouts were adjusted in line with the three motivations found in the literature. The results are robust to selection of alternative variables representing these motivations. Banks are found not to discount expectations about future economic conditions or their own profitability when making payouts. Simulations shown in the paper suggest that, in the absence of supervisory recommendations, banks would likely have reduced the payouts only slightly in the first year of the pandemic.
Download or read book Payout Policy written by and published by . This book was released on 2007 with total page 83 pages. Available in PDF, EPUB and Kindle. Book excerpt: Dividend policy continues to be among the premier unsolved puzzles in finance. A number of theories have been advanced to explain dividend policy. This e-book briefly reviews the principal theories of payout policy and dividend policy and summarizes the empirical evidence on these theories. Empirical evidence is equivocal and the search for new explanation for dividends continues.
Download or read book Banks Adjustment to Basel III Reform written by Michal Andrle and published by International Monetary Fund. This book was released on 2017-02-20 with total page 23 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper seeks to identify strategies of commercial banks in response to higher capital requirements of Basel III reform and its phase-in. It focuses on a sample of nine EU emerging market countries and picks up 5 largest banks in each country assessing their response. The paper finds that all banking sectors raised CAR ratios mainly through retained earnings. In countries where the banking sector struggled with profitability, banks have resorted to issuance of new equity or shrunk the size of their balance sheets to meet the higher capital-adequacy requirements. Worries echoed at the early stage of Basel III compilation, namely that commercial banks would shrink their balance sheet by reducing their lending to meet stricter capital requirements, did materialize only in banks struggling with profitability.
Download or read book Banks and Capital Requirements written by Benjamin H. Cohen and published by . This book was released on 2014 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Effects of Bank Capital on Lending written by Joseph M. Berrospide and published by DIANE Publishing. This book was released on 2011-04 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: The effect of bank capital on lending is a critical determinant of the linkage between financial conditions and real activity, and has received especial attention in the recent financial crisis. The authors use panel-regression techniques to study the lending of large bank holding companies (BHCs) and find small effects of capital on lending. They then consider the effect of capital ratios on lending using a variant of Lown and Morgan's VAR model, and again find modest effects of bank capital ratio changes on lending. The authors¿ estimated models are then used to understand recent developments in bank lending and, in particular, to consider the role of TARP-related capital injections in affecting these developments. Illus. A print on demand pub.
Download or read book Usability of Bank Capital Buffers The Role of Market Expectations written by José Abad and published by International Monetary Fund. This book was released on 2022-01-28 with total page 61 pages. Available in PDF, EPUB and Kindle. Book excerpt: Following the COVID shock, supervisors encouraged banks to use capital buffers to support the recovery. However, banks have been reluctant to do so. Provided the market expects a bank to rebuild its buffers, any draw-down will open up a capital shortfall that will weigh on its share price. Therefore, a bank will only decide to use its buffers if the value creation from a larger loan book offsets the costs associated with a capital shortfall. Using market expectations, we calibrate a framework for assessing the usability of buffers. Our results suggest that the cases in which the use of buffers make economic sense are rare in practice.
Download or read book Global Financial Stability Report April 2012 written by International Monetary Fund. Monetary and Capital Markets Department and published by International Monetary Fund. This book was released on 2012-04-18 with total page 94 pages. Available in PDF, EPUB and Kindle. Book excerpt: The April 2012 Global Financial Stability Report assesses changes in risks to financial stability over the past six months, focusing on sovereign vulnerabilities, risks stemming from private sector deleveraging, and assessing the continued resilience of emerging markets. The report probes the implications of recent reforms in the financial system for market perception of safe assets, and investigates the growing public and private costs of increased longevity risk from aging populations.
Download or read book Investigating Diversity in the Banking Sector in Europe written by Rym Ayadi and published by . This book was released on 2010 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: A midst stormy waters, financial systems develop and evolve. New institutional forms and instruments are invented and put into use. Some of them turn out to be successful while others disappear: a natural process of creative and dynamic competition argues for diversity. Diversity offers an optimal environment in which new ideas can come to life, existing ideas can evolve and old ideas make a comeback. In the aftermath of the financial crisis, the foundations of several decades of modern and innovative financial systems have suffered serious damage. This has triggered massive state interventions and has led authorities to revamp the regulatory structures and frameworks. While many voices have called for a return to more traditional approaches to banking and finance, no one has argued the merits of diversity. This book investigates the merits of a diverse banking system with a special focus on the performance and role of cooperative banks in seven European countries where they are prominent (Austria, Finland, France, Germany, Italy, the Netherlands and Spain). The theoretical and empirical arguments that are developed in this book tend to support the view that it is economically beneficial to have stakeholder-value banks with a dual bottom-line function, such as cooperative banks. For those who accept this premise, it would suggest that policy-makers should not take or support actions that could jeopardise this valuable element of the financial system in various countries in Europe and of the emerging integrated European financial system. Book jacket.
Download or read book Global Financial Stability Report April 2013 written by International Monetary Fund. Monetary and Capital Markets Department and published by International Monetary Fund. This book was released on 2013-04-17 with total page 160 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Global Financial Stability Report examines current risks facing the global financial system and policy actions that may mitigate these. It analyzes the key challenges facing financial and nonfinancial firms as they continue to repair their balance sheets. Chapter 2 takes a closer look at whether sovereign credit default swaps markets are good indicators of sovereign credit risk. Chapter 3 examines unconventional monetary policy in some depth, including the policies pursued by the Federal Reserve, the Bank of England, the Bank of Japan, the European Central Bank, and the U.S. Federal Reserve.
Download or read book Do Central Banks Need Capital written by Mr.Peter Stella and published by International Monetary Fund. This book was released on 1997-07-01 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: Central banks may operate perfectly well without capital as conventionally defined. A large negative net worth, however, is likely to compromise central bank independence and interfere with its ability to attain policy objectives. If society values an independent central bank capable of effectively implementing monetary policy, recapitalization may become essential. Proper accounting practice in determining central bank profit or loss and rules governing the transfer of the central bank’s operating result to the treasury are also important. A variety of country-specific central bank practices are reviewed to support the argument.
Download or read book Sweden written by International Monetary Fund. Monetary and Capital Markets Department and published by International Monetary Fund. This book was released on 2016-11-17 with total page 61 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper discusses the findings of the Financial System Stability Assessment for Sweden. The Swedish financial system is large and highly interconnected, putting a premium on the accompanying policy framework. Relative to the size of the domestic economy, the financial system is among Europe’s largest. It features complex domestic and international linkages, reflecting Sweden’s role as a regional financial hub. However, the macrofinancial risks have grown since 2011, for example the rising share of highly indebted households. Stress tests also suggest that banks and nonbanks are largely resilient to solvency shocks, but concerns persist about the ability of bank models to capture unexpected losses.
Download or read book Business Models in European Banking written by Rym Ayadi and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The next few years will be critical for Europe's banking industry. It faces a number of financial sector reforms that will have a decisive impact on the dominant practices and business models followed across the European Union. This timely volume presents the results of the first screening exercise conducted on the performance, stability, risk, efficiency, and corporate governance of twenty-six major European banks--before, during, and after the financial crisis. The authors use those findings to help identify the key strengths and weaknesses inherent in the dominant business models, in light of the upcoming regulatory changes.
Download or read book The Transformation of the European Financial System written by Vitor Gaspar and published by . This book was released on 2003-01-01 with total page 334 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Making Banks Safer written by Mr.Julian T. S. Chow and published by International Monetary Fund. This book was released on 2011-10-01 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper assesses proposals to redefine the scope of activities of systemically important financial institutions. Alongside reform of prudential regulation and oversight, these have been offered as solutions to the too-important-to-fail problem. It is argued that while the more radical of these proposals such as narrow utility banking do not adequately address key policy objectives, two concrete policy measures - the Volcker Rule in the United States and retail ring-fencing in the United Kingdom - are more promising while still entailing significant implementation challenges. A risk factor common to all the measures is the potential for activities identified as too risky for retail banks to migrate to the unregulated parts of the financial system. Since this could lead to accumulation of systemic risk if left unchecked, it appears unlikely that any structural engineering will lessen the policing burden on prudential authorities and on the banks.
Download or read book Germany written by International Monetary Fund. Monetary and Capital Markets Department and published by International Monetary Fund. This book was released on 2016-06-29 with total page 118 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper evaluates the risks and vulnerabilities of the German financial system and reviews both the German regulatory and supervisory framework and implementation of the common European framework insofar as it is relevant for Germany. The country is home to two global systemically important financial institutions, Deutsche Bank AG and Allianz SE. The system is also very heterogeneous, with a range of business models and a large number of smaller banks and insurers. The regulatory landscape has changed profoundly with strengthened solvency and liquidity regulations for banks (the EU Capital Requirements Regulation and Directive IV), and the introduction of macroprudential tools.
Download or read book The Demographic Dividend written by David Bloom and published by Rand Corporation. This book was released on 2003-02-13 with total page 127 pages. Available in PDF, EPUB and Kindle. Book excerpt: There is long-standing debate on how population growth affects national economies. A new report from Population Matters examines the history of this debate and synthesizes current research on the topic. The authors, led by Harvard economist David Bloom, conclude that population age structure, more than size or growth per se, affects economic development, and that reducing high fertility can create opportunities for economic growth if the right kinds of educational, health, and labor-market policies are in place. The report also examines specific regions of the world and how their differing policy environments have affected the relationship between population change and economic development.