Download or read book Size Risk and Governance in European Banking written by Jens Hagendorff and published by OUP Oxford. This book was released on 2013-10-03 with total page 276 pages. Available in PDF, EPUB and Kindle. Book excerpt: The financial crisis that erupted in 2007 has brought the issues of the size, risk, and regulation of banks to the attention of a wide audience. It is difficult to open a broadsheet newspaper or a business magazine without being confronted with some aspect of bank behaviour, be it their risk levels, bankers' excessive rewards, the intertwining of bank and sovereign risk, or how they should be regulated to avoid problems in the future. In Europe, the recent and on-going crisis has demonstrated that the European Union (EU) was institutionally ill-prepared to manage a financial crisis, especially one involving large cross-border institutions which are systemically important to a number of countries. This book aims at integrating and synthesizing the various perspectives on the size, risk, and governance of banking as applied to the European markets, providing fresh insights and new analysis of the empirical data. The book is divided into three main sections. The first provides an overview of how the size of banking firms affects stability in the European banking sector, reviewing the quantitative empirical literature and offering new insights as to whether bank size motivates risk-taking where explicit or implicit 'too-big-to fail' policies shield bank creditors from market discipline. The next section discusses the debates relating to each of the different elements of risk in European banking, including new insights from a large dataset of European bank risk in different institutional contexts. The third section focuses on regulation, board monitoring, and opacity in European banking, employing a unique and hand collected dataset on the governance of European banks, as well as data on U.S. banks as a benchmark. The final chapter critically reviews the new insights gained from the chapters above, while offering policy implications as regards the role of size, risk and governance in European banking.

Download or read book Risk Governance at Board Level of European Banks written by Hans-Georg Beyer and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Proper Corporate Governance and specifically Risk Governance of banks at board level is key for a sound and robust banking sector, which based on the important function of banks as intermediaries is also relevant for the overall economy. According to supranational institutions as well as regulators weaknesses of these governance arrangements have supported the development and the size of the impact of the Financial Crisis in 2008. Therefore, regulatory changes with regard to this topic have been implemented in Europe. This study investigates the influence of Risk Governance at board level executed via the risk committee on the robustness of European banks through the economic cycle. Based on existing theories on Corporate Governance with focus on bank specifics, the current academic discussion, the regulatory environment as well as the opinion of experts an integrated framework of Risk Governance for banks, including the responsibilities and tasks of the Board of Directors, is developed. Using manually collected data of 157 European banks (EU28 and Switzerland) on 21 Risk Governance variables, relevant to board structures, processes and tools, a panel data analysis is performed for time period from 1999 to 2015 including. The presented dissertation is hence covering the three main financial crises of recent European history, i.e. the Dot.com Crisis, the Financial Crisis and the Eurozone Crisis. Based on this, the influence of the variables on the robustness of European banks, in form of 6 risk and performance variables, after controlling for bank and country specifics, is assessed. By applying Fixed and Random Effects estimators, multiple evidence for the influence of the variables on the robustness of banks is found. However, after using a dynamic systems GMM estimator and controlling, therefore, for further sources of endogeneity, evidence for the effectiveness of these measures and its influence on robustness of banks throug.

Download or read book Bank Size and Systemic Risk written by Mr.Luc Laeven and published by International Monetary Fund. This book was released on 2014-05-08 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: The proposed SDN documents the evolution of bank size and activities over the past 20 years. It discusses whether this evolution can be explained by economies of scale or “too big to fail” subsidies. The paper then presents evidence on the extent to which bank size and market-based activities contribute to systemic risk. The paper concludes with policy messages in the area of capital regulation and activity restrictions to reduce the systemic risk posed by large banks. The analysis of the paper complements earlier Fund work, including SDN 13/04 and the recent GFSR chapter on “too big to fail” subsidies, and its policy message is in line with this earlier work.

Download or read book Regulation of European Banks and Business Models written by Rym Ayadi and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Amidst talk of establishing an EU-wide banking union, the recent changes in the regulatory framework and the rethinking of the future of European banking structure, the future of EU bank regulation is inextricably linked to banks' business models. Using a sample of over 70 banks, which overlaps with those subjected to the European Banking Authorities' 2011 stress tests, this report emphasizes the key regulatory gaps that emerge from a comprehensive analysis of the soundness and performance of bank business models. This analysis provides policy-makers with guidance to reinforce the evolving regulatory framework in European banking.

Download or read book What Explains European Banks Risk Taking A Simultaneous Equations Approach written by Catarina Fernandes and published by . This book was released on 2017 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: The global financial crisis has led to an increasingly focused attention on excessive bank risk-taking. One of the consequences is that the role of internal governance mechanisms (such as the board of directors) in monitoring risk has come under greater scrutiny.In this paper we examine the impact of board structure, ownership structure, risk governance mechanisms and other bank-specific factors on bank risk-taking for a sample of 72 publicly listed European banks. Using a simultaneous equations approach, our main findings indicate that the proportion of independent directors, board size and Chief Executive Officer (CEO) power (or CEO authority) negatively affect bank risk-taking during the financial crisis. On the contrary, institutional shareholders positively influence bank risk-taking and both the existence of a risk committee and a Chief Risk Officer (CRO) who is a member of the board have no significant impact. The results remain unchanged when applying both three-stage least squares (3SLS) and the two-stage least squares (2SLS) estimation methods as well as when all variables are winsorised.Additionally, we extend our analysis for the period before the financial crisis (proxy for “stable” periods) to test whether the impact of governance mechanisms and other determinants of risk-taking depend on environmental conditions and we conclude that it is indeed sensitive to the economic context. In fact, we find that some of governance mechanisms are relevant in crisis conditions but not in non-crisis conditions and thus, their impact depends on macroeconomic conditions.

Download or read book The Future Of Large Internationally Active Banks written by Asli Demirguc-kunt and published by World Scientific. This book was released on 2016-09-16 with total page 494 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Great Financial Crisis of 2007-2010 has had a major impact on large cross-border banks, which are widely blamed for the start and severity of the crisis. As a result, much public policy, both in the United States and elsewhere, has been directed at making these banks safer and less influential by reducing their size and permissible powers through increased government regulation.At the Federal Reserve Bank of Chicago's 18th annual International Banking Conference, held in November 2015, the status of these large cross-border banks was critically evaluated. In collaboration with the World Bank, the conference held discussions on the current regulatory landscape for large and internationally active financial institutions; the impact of regulation on bank permissible activities and international trade; improvements in risk management; necessary repairs to the bank safety net; the resolution of insolvent banks operating across national borders; corporate governance for banks in the new environment; implications for market and government discipline; and, progress in achieving international cooperation.Contributors include international policymakers, practitioners, researchers, and academics from more than 30 countries. The papers from the conference are collected in this volume.

Download or read book Improving Banking Supervision written by D. Mayes and published by Springer. This book was released on 2001-05-22 with total page 312 pages. Available in PDF, EPUB and Kindle. Book excerpt: Improving Banking Supervision shows how greater market discipline can be used to help improve the quality of banks and their management in a world of increasing complexity, size and innovation. The book is based on research undertaken in the Nordic countries and New Zealand, and set in an international context through reference and comparison to the experiences of banks throughout the EU and the US. The authors show how traditional methods of regulation, particularly across borders face limits and can impose substantial costs on customers. They propose alternatives for today's international banks, based on a network of incentives to prudential behaviour and focusing on three main issues: - the development of transparent corporate structures - the public disclosure of comparable meaningful information so that markets can assess banks - the implementation of effective means to allow banks to exit without unacceptable costs to society

Download or read book Risk Disclosure in the European Banking Industry written by Salvatore Polizzi and published by Springer Nature. This book was released on 2022-02-02 with total page 150 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book analyses the use of qualitative and quantitative content analysis methodologies for risk disclosure practices in the European banking industry. While doing so, it assesses the level of transparency of financial and non-financial reports by focusing on the information disclosed to the public with reference to risk exposure and management. By drawing upon both qualitative and quantitative techniques, the book proposes two different methodological approaches to assess the information European financial institutions provide to the public with reference to the risk disclosure and derivative disclosure in their annual financial reports. These methodologies are subsequently employed to carry out empirical analyses on samples of European banks. By exploiting the points of strength of both qualitative and quantitative content analysis methodologies, this book offers insights into the advantages and disadvantages of these methodologies. The book is a must-read for academics and researchers that analyze disclosure practices of financial and non-financial firms, as well as financial analysts and other practitioners that are interested in assessing the level of transparency and evaluating the disclosures of financial and non-financial firms, especially, but not exclusively, with reference to risk disclosure and derivative disclosure.

Download or read book Revisiting Risk Weighted Assets written by Vanessa Le Leslé and published by International Monetary Fund. This book was released on 2012-03-01 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we provide an overview of the concerns surrounding the variations in the calculation of risk-weighted assets (RWAs) across banks and jurisdictions and how this might undermine the Basel III capital adequacy framework. We discuss the key drivers behind the differences in these calculations, drawing upon a sample of systemically important banks from Europe, North America, and Asia Pacific. We then discuss a range of policy options that could be explored to fix the actual and perceived problems with RWAs, and improve the use of risk-sensitive capital ratios.

Download or read book Corporate Governance of Banks and Financial Stability written by Deniz Anginer and published by . This book was released on 2019 with total page 55 pages. Available in PDF, EPUB and Kindle. Book excerpt: We find that shareholder-friendly corporate governance is associated with higher stand-alone and systemic risk in the banking sector. Specifically, shareholderfriendly corporate governance results in higher risk for larger banks and for banks that are located in countries with generous financial safety nets as banks try to shift risk towards taxpayers. We confirm our findings by comparing banks to non-financial firms and examining changes in bank risk around an exogenous regulatory change in governance. Our results underline the importance of the financial safety net and too-big-to-fail guarantees in thinking about corporate governance reforms at banks.

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 Microeconomics of Banking third edition written by Xavier Freixas and published by MIT Press. This book was released on 2023-08-22 with total page 229 pages. Available in PDF, EPUB and Kindle. Book excerpt: The third edition of a leading text on the microeconomic foundations of banking, comprehensively updated with new coverage of the 2008 Global Financial Crisis, fintech, and the latest research in banking theory. The banking industry has undergone seismic change in the twenty-first century, from the overhaul of regulation in the wake of the 2008 Global Financial Crisis to the digitalization of the economy and the disruption of traditional business models by ascendant tech giants. Now in a comprehensively updated third edition, this essential graduate-level text on the microeconomic foundations of banking provides the rigorous theoretical approach required to understand these new structures and norms, functioning as a user’s guide to recent academic literature. Microeconomics of Banking offers a comprehensive view of the evolution of banking theory and the rapidly changing realm of financial intermediation, examining the central issues and offering the necessary tools for understanding how they have been modeled. New edition highlights: Up-to-date coverage of the latest research in banking theory as well as the events of the global financial crisis and resultant Basel III regulatory framework New chapters on liquidity and systemic risk New material throughout on cryptocurrencies, fintech, and other facets of a digitalized economy

Download or read book Market Discipline and EU Corporate Governance Reform in the Banking Sector written by Emilios Avgouleas and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Much contemporary analysis has concluded that the recent financial crisis and bank failures were, inter alia, the result of a breakdown in corporate governance regimes and market discipline. Reform of corporate governance structures and remuneration incentives is at the heart of regulatory reform both in the EU, and internationally.New regulations strongly advocate tighter investor monitoring and greater control over executives' remuneration as market based remedies to the woes of the financial sector, which will safeguard future financial stability. Aside from the markets' tendency to be short-termist, which puts an obvious limitation to this remedy, the biggest shortcoming of this approach is that it largely ignores three very important aspects of modern financial markets that cannot be contained through market discipline: (a) the interaction between socio-psychological phenomena, such as irrational exuberance, herding and panic induced contagion, (b) the epistemological properties of financial market innovation, which can result in complex structures that stretch to a breaking point the markets' and individuals' limited capacity to measure the risks involved in opaque institutional structures and markets, (c) inherent inability to predict the uncertain risk correlations that risky products, financial market, interconnectedness, and too-big-to-fail institution behaviour can bring about.Furthermore, even rationally and well-managed financial institutions can be a threatto the stability of the financial system. Therefore, this paper argues that recent EU regulatory reform to corporate governance, as a means to improve financial stability is a large-scale intellectual fallacy. Absent EU-wide structural reform to control risk-taking in large and complex financial institutions, the stability of the EU banking sector will remain compromised. Smaller and less interconnected banks will both improve bank corporate governance and create a safer and more stable financial sector.

Download or read book Risk and the Corporate Structure of Banks written by International Monetary Fund and published by International Monetary Fund. This book was released on 2010-02-01 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: We identify different sources of risk as important determinants of banks'' corporate structures when expanding into new markets. Subsidiary-based corporate structures benefit from greater protection against economic risk because of affiliate-level limited liability, but are more exposed to the risk of capital expropriation than are branches. Thus, branch-based structures are preferred to subsidiary-based structures when expropriation risk is high relative to economic risk, and vice versa. Greater cross-country risk correlation and more accurate pricing of risk by investors reduce the differences between the two structures. Furthermore, the corporate structure affects bank risk taking and affiliate size.

Download or read book A Banking Union for the Euro Area written by Rishi Goyal and published by International Monetary Fund. This book was released on 2013-02-12 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: The SDN elaborates the case for, and the design of, a banking union for the euro area. It discusses the benefits and costs of a banking union, presents a steady state view of the banking union, elaborates difficult transition issues, and briefly discusses broader EU issues. As such, it assesses current plans and provides advice. It is accompanied by three background technical notes that analyze in depth the various elements of the banking union: a single supervisory framework; a single resolution and common safety net; and urgent issues related to repair of weak banks in Europe.

Download or read book Report on Financial Structures written by European Central Bank and published by . This book was released on 2002 with total page 376 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book European Banking Supervision written by André Sapir and published by . This book was released on 2016-06-14 with total page 182 pages. Available in PDF, EPUB and Kindle. Book excerpt: European banking supervision, also known as the Single Supervisory Mechanism, is the first and arguably the main component of European banking union. In late 2014, the European Central Bank became the supervisor for the region's largest banking groups; the ECB also oversees the supervision by national authorities of smaller banks. This Blueprint is the first in-depth study of how this ground-breaking reform is working in practice. Despite teething troubles and occasional misjudgements, this assessment finds that overall European banking supervision has been effective, demanding and broadly fair, at least for the banks under the ECB's direct watch. Even so, achieving a truly single market in banking services will require more time, further supervisory initiatives and new Europe-wide regulatory and legislative steps.