Trennbankensystem – ein Weg zu mehr Finanzstabilität in Deutschland?

2014 ◽  
Vol 15 (1) ◽  
pp. 41-55 ◽  
Author(s):  
Andreas Dombret ◽  
Thilo Liebig ◽  
Ingrid Stein
Keyword(s):  
Significant Role ◽  
Financial Stability ◽  
Banking System ◽  
Real Economy ◽  
The Real ◽  
Considerable Fraction ◽  
The Us ◽  
Proprietary Trading ◽  
Systemically Important Banks ◽  
The Eu

AbstractThis article examines how the introduction of a specialised banking system is likely to impact banks and the real economy in Germany, in particular from a financial stability perspective. This study is motivated by a recently passed law in Germany on a specialised banking system (Trennbankengesetz), current reforms in the US and UK and proposals for the EU. We focus on the consequences of a separation of the savings & loan business and proprietary trading. We conclude that proprietary trading plays a significant role only for large, systemically important banks in Germany. The latter act as universal banks and grant a considerable fraction of all loans that go to domestic enterprises and consumers. Costs for customers, however, are likely to be moderate. In contrast, a specialised banking system may provide the important advantage that insolvent trading units can be separated more easily from the savings & loan business arm and eventually liquidated. In this way, implicit state guarantees may be reduced.

scholarly journals Financialization and unconventional monetary policy: a financial-network analysis

2020 ◽  
Vol 30 (5) ◽  
pp. 1385-1428
Author(s):  
Chiara Perillo ◽  
Stefano Battiston
Keyword(s):  
Monetary Policy ◽  
Euro Area ◽  
Financial Stability ◽  
Banking System ◽  
Real Economy ◽  
Unconventional Monetary Policy ◽  
The Real ◽  
Recent Debate ◽  
Policy Measures ◽  
Net Flows

Abstract Over the last decades, both advanced and emerging economies have experienced the emergence of the phenomenon known as financialization, that, until some time ago, was generally considered beneficial for the economy. The 2007-2008 crisis and the severe post-crisis recession called into question the assumptions underlying the positive perception of the role played by financialization in the economy. In particular, the effects of financialization on financial stability and inequality are now widely recognized. A recent debate focused on the effectiveness of unconventional monetary policy tools in transferring their effects on the financial sphere to the economic sphere (e.g., via stimulating the transmission of resources from the banking system to the real economy). Among these unconventional policy measures, Quantitative Easing (QE) has been recently implemented by the European Central Bank (ECB). In this context, two questions deserve more attention in the literature. First, to what extent QE may generate net flows of additional resources to the real economy. Second, to what extent QE may also alter the pattern of intra-financial exposures among financial actors and what are the implications in terms of financialization. Here, we address these two questions by mapping and analyzing the euro area multilayer macro-network of financial exposures among institutional sectors across financial instruments (i.e., loans, bonds, equity, and insurance and pension schemes) and we illustrate our approach on recently available data. We then test the effect of the implementation of ECB’s QE on some novel measures of financialization that we derive from the time evolution of the financial linkages in the multilayer macro-network of the euro area.

scholarly journals Banking system stability in the context of the relationship between banks and the state

2020 ◽  
Vol 3 (45) ◽  
pp. 155-166
Author(s):  
V. O. Kornіvska ◽  
Keyword(s):  
Banking System ◽  
Legal Framework ◽  
The State ◽  
System Stability ◽  
Banking Union ◽  
Real Economy ◽  
The Real ◽  
Euro Zone ◽  
European Experience ◽  
Financial Liquidity

The article presents the results of a study of the banking system stability under the conditions of increased financial support from the state during the financial and economic destabilization. The banking system stability in the euro zone has been analyzed to assess the prospects for monetary and financial development in Ukraine. The European experience proves that strengthening relations between banks and the state amidst the financialization process is harmful. The author of the article treats this relationship as a closed-loop problem of public and financial liquidity circulation, which leads to financial bleeding in the real economy and destabilization of the financial system, as a whole. This problem requires to be fixed by reducing banking transactions with government securities. The article gives facts proving that the search for solutions to this problem made in the European financial space has become one of the factors of financial and institutional transformations in the euro zone and the EU, in general, and has led to the creation of a banking union. The newly introduced legal framework has manifested itself as unable to stimulate efficient financial distribution. It has also been demonstrated that due to the public and financial liquidity circulation the banking system becomes subject to profound redesigning, thus losing its ability to conduct effective financial distribution in the real sector of economy.

THE IMPACT OF BASEL III ON THE RUSSIAN BANKING SYSTEM

2021 ◽  
Author(s):  
Danila Andreevich Yakovlev ◽  
Keyword(s):  
Financial Stability ◽  
Banking System ◽  
Banking Regulation ◽  
Basel Iii ◽  
Entire Country ◽  
The Impact ◽  
Systemically Important Banks

Currently, the issue of banking regulation is one of the most urgent due to the fact that the destabilization of this area can threaten the financial stability of the entire country. The Basel Agreements use common approaches to the capital of banks in different countries, they are formulated taking into account possible risks and the presence of systemically important banks. The article analyzes the impact of the Basel III standards on the banking system and assesses the impact of these standards on the development of the banking system.

scholarly journals Investigating the Economic and Financial Damage around Currency Peg Failures

2019 ◽  
Vol 12 (2) ◽  
pp. 92 ◽  
Author(s):  
Colin Ellis ◽  
Emilia Gyoerk
Keyword(s):  
Exchange Rate ◽  
Financial Stability ◽  
Currency Crises ◽  
Exchange Rate Regime ◽  
Banking Crisis ◽  
Banking System ◽  
Economic Damage ◽  
Real Economy ◽  
The Past ◽  
Floating Exchange Rate

The choice and structure of a country’s exchange rate regime has wide implications for the effectiveness and flexibility of monetary policy tools, as well as for economic and financial stability. We examine 21 instances where exchange rate pegs have been abandoned in the past, to gauge the potential economic damage associated with pegs failing. The sample includes major exchange rate shifts over the past thirty years, spanning from the Latin America currency crises of the 1990s to the peg abandonment in Egypt in 2016. Given the close interconnection of banks to the sovereign and the real economy, risks often flow through to, and can also be magnified by, the banking system. We therefore examine the interaction of currency peg abandonment with the occurrence of a banking crisis to investigate the different circumstances and impacts of exchange rate pegs failing. We have found that countries that simultaneously suffered a systemic banking crisis during the period of exchange rate regime shift also experienced significantly greater economic and financial damage following the adoption of a freely floating exchange rate. Nevertheless, regardless of whether there was a banking crisis, countries start showing signs of recovery after the same amount of time once the currency floated.

How Has the EU Protected Depositors in the Financial Crisis?

2014 ◽  
Vol 16 ◽  
pp. 289-312
Author(s):  
Niall J Lenihan
Keyword(s):  
Financial Crisis ◽  
Banking System ◽  
The Us ◽  
The Impact ◽  
Deposit Guarantee Schemes ◽  
The Eu

AbstractThis chapter addresses the question of how the EU has protected depositors in the financial crisis. The chapter will discuss (1) the impact in Europe of the US system for the protection of depositors, (2) the important changes made to the EU Deposit Guarantee Schemes Directive, first in 2009 in response to the 2007 deposit run on Northern Rock, and then again in 2014 in response to the financial crisis, (3) the decision of the EFTA Court regarding the scope of Iceland’s obligations under the EU Deposit Guarantee Schemes Directive, following the collapse of the Icelandic banking system in 2008, and (4) the introduction of a powerful depositor preference rule throughout the EU, in response to the resolution of the Cypriot banking system in 2013. This chapter argues that the EU has responded to the impact of the financial crisis on bank depositors by enhancing the legal protections available to depositors.

scholarly journals Shadow Banking in Europe: Idiosyncrasies and their Implications for Regulation

2019 ◽  
Vol 10 (4) ◽  
pp. 781-810 ◽  
Author(s):  
Hossein NABILOU ◽  
André PRÜM
Keyword(s):  
Market Structure ◽  
Driving Force ◽  
Business Models ◽  
Banking System ◽  
Shadow Banking ◽  
Regulatory Frameworks ◽  
Money Market Funds ◽  
The Us ◽  
Shadow Banking System ◽  
The Eu

This paper studies the specificities of shadow banking in Europe. It highlights striking differences between the EU and the US shadow banking sectors based on both market structure and legal micro-infrastructure of the shadow banking sectors in these two jurisdictions. It argues that these different institutional and legal infrastructures, as well as the different trajectories in the evolution of the shadow banking sectors in terms of business models, size and composition of actors and transactions, can be the driving force behind the differential regulatory treatment of shadow banking across the Atlantic. In highlighting such differences, this paper focuses on repo transactions, as the main instruments that play a significant role in credit intermediation outside the regulatory perimeter of the banking system. It then discusses money market funds and highlights differences in their structure, functioning, and their existing regulatory treatment. The paper concludes that the market structure, business models, and legacy legal and regulatory frameworks of shadow banking display substantial differences across the Atlantic. The findings in this paper rally against one-size-fits-all approaches to addressing the problems of the shadow banking system worldwide and recommends differentiated and more nuanced regulatory approaches to regulating shadow banking across the Atlantic.

Banking

2019 ◽  
pp. lii-36
Author(s):  
Allen N. Berger ◽  
Philip Molyneux ◽  
John O. S. Wilson
Keyword(s):  
Systemic Risk ◽  
Financial Literacy ◽  
Global Financial Crisis ◽  
Banking System ◽  
System Stability ◽  
Real Economy ◽  
Research Themes ◽  
The Us ◽  
The Global Financial Crisis ◽  
Operational Issues

A lot has happened in the ten years since the global financial crisis. This chapter starts with a summary of key regulatory and operational issues that have impacted banks in Europe, the US and elsewhere. Banks are much more heavily regulated than pre-crisis, their performance in the US and Europe has been subdued although there are signs that those in the former have turned the corner. There continues also to be ongoing discussion as well as regulatory efforts to improve banking system stability with new rules on capital, liquidity, bailouts, and bail-ins to be fully completed. These issues are covered in the first part of the chapter. We then move on to discuss emerging research themes covering areas including: banks and their impact on the real economy; capital, liquidity, and tax regulation; systemic risk; unconventional monetary policy; FinTech; bank governance and culture; financial consumer protection and financial literacy; and finally financial inclusion. The final part of the chapter provides summaries of all the chapters in the Handbook.

Shadow banking in China: expanding scale, evolving structure

2014 ◽  
Vol 6 (3) ◽  
pp. 198-211 ◽  
Author(s):  
Tong Li
Keyword(s):  
Financial Stability ◽  
Banking System ◽  
Bank Loans ◽  
Data Sources ◽  
Shadow Banking ◽  
Real Economy ◽  
Content Type ◽  
Comprehensive Picture ◽  
Shadow Banking System ◽  
Banking Credit

Purpose – This paper aims to survey available data sources and put China’s shadow banking system in perspective. Although bank loans still account for the majority of credit provided to China’s real economy, other channels of credit extension are growing rapidly. The fast expansion of shadow banking has spurred wide concerns regarding credit quality and financial stability. Design/methodology/approach – This paper explores various data sources, provides an overview of shadow banking activities in China, discusses their close ties with banks and summarizes regulatory issues. Extensive descriptive data are included to provide a comprehensive picture of the nature of shadow banking activities in China. In particular, institutions and products are discussed in great details. Findings – While China’s shadow banking system is by no means simple, it does not (yet) involve the extensive use of financial derivatives. Rather, shadow banking credit is often directly extended to the real economy. In addition, shadow banks are typically interconnected with commercial banks in various ways. The expanding scale and constantly evolving structure of the shadow banking system has posed challenges for financial regulators. Originality/value – This paper attempts to quantify the scale and scope of China’s shadow banking activities and provides a consistent framework as the basis for cross-country comparison of shadow banking systems. This is one of the first scholarly research products that discusses the origin, nature and risks of China’s shadow banking system in a regulatory context.

The Dynamics of Geographic versus Sectoral Diversification: Is There a Link to the Real Economy?

2012 ◽  
Vol 02 (04) ◽  
pp. 1250019 ◽  
Author(s):  
Francesca Carrieri ◽  
Vihang Errunza ◽  
Sergei Sarkissian
Keyword(s):  
Asset Allocation ◽  
Global Economy ◽  
Real Economy ◽  
Geographic Diversification ◽  
The Real ◽  
Developed Economies ◽  
Country Level ◽  
The Us ◽  
Production Growth ◽  
Allocation Approach

We study the dynamics of gains from sectoral versus geographic diversification and relate economic sources to changes in those gains. We estimate conditional correlations between returns on the US equity market and 16 equity markets and 10 local industries from other OECD countries and find that the average correlation across countries has increased in relation to that across industries. We also show that this process is accompanied by increased alignment in the industrial structures across countries and an increase in the average conditional correlation of aggregate production growth across countries relative to that of disaggregated production growth, especially among developed economies. Thus, the increased benefits of industry-level investing across developed markets are reflected in the real side of the global economy. However, country-level investing should remain the predominant asset allocation approach in emerging markets.

scholarly journals STATE, DYNAMICS AND PROBLEMS OF UKRAINIAN BANKING SYSTEM LIQUIDITY

2020 ◽  
Vol 4 (2) ◽  
pp. 27-36
Author(s):  
P. Ilchuk ◽  
◽  
О. Kots ◽  
D. Martyniuk ◽  
E. Rak-Młynarska ◽  
...  
Keyword(s):  
Banking System ◽  
Sharp Change ◽  
Real Economy ◽  
Resource Base ◽  
Loan Portfolio ◽  
The Real ◽  
Excess Liquidity ◽  
Main Factors ◽  
Definition Of ◽  
Considerable Pressure

The approaches of scientists to the definition of categories “liquidity of banks” and “regulation of the banking system’ liquidity” are investigated. A retrospective analysis of the NBU’s approaches to regulating the liquidity of the banking system was carried out and the use of two main methods used by the NBU to calculate the liquidity level of the Ukrainian banking system during the independence period was identified. Dynamic ranks of liquidity of the Ukrainian banking system and instruments of its change in 2012–2020 were constructed, stable dynamic tendencies and the main factors causing such dynamics were identified. The changes in the liquidity of the Ukrainian banking system in the periods of the financial crisis 2014–2015 are analyzed in detail, the main factors of the change in the liquidity of the Ukrainian banking system during such period are identified. It was proved that the change in approaches to the calculation of the liquidity level of the Ukrainian banking system was accompanied by the implementation of a completely new refinancing tool for banks – NBU deposit certificates. It was also proven that changing the approach to calculating the liquidity level of the Ukrainian banking system and the use of a new refinancing tool resulted in maximizing the NBU’s influence on regulating the liquidity of the Ukrainian banking system. The crisis of excess liquidity of the banking system of Ukraine was detected, its time periods were identified, the main factors of its emergence and their quantitative characteristics were presented. The unproductive use of highly liquid assets by banks has been proved, which is caused by the processes of regulating the liquidity level of the banking system and the use of NBU certificates of deposit. A sharp change in the structure and level of liquidity of the banking system in 2020 and disruption of the transformation function of the banking system were identified. In particular, banks with significant free resources (76.24 % of banks' liquidity, which is equivalent to practically 20 % of the loan portfolio), are not able (or willing) to direct these resources to finance the real economy. Thus, a violation of the NBU’s monetary policy has been identified, which puts considerable pressure on the monetary sphere, and in the event that the NBU loses control of this process, excess liquidity of banks will cause an inflation spike. Also, the liquidity surplus in the second half of 2019 – early 2020 and the imbalance of the resource base are threatening to reduce the efficiency of banks in 2020. The NBU’s methodology for regulating banking liquidity with the help of mandatory standards is investigated. The legislative regulation of bank liquidity is analyzed and changes in the methods of calculation of liquidity ratios are revealed. Based on the analysis of retrospective data, it has been shown that, despite changes in the mandatory liquidity standards, during 2014–2020 the liquidity indicators exceeded the regulatory values several times, but peak exceedances were detected in 2020, which confirms the emergence of the excess liquidity crisis in the banking system of Ukraine. Grouping of banks by liquidity level revealed that practically 50 % of banks are in the range of 150–300 % of the standard, and 23 % of banks are in the range of 300–500 % of the standard, while 24 % of banks are in the range of more than 500 % of the standard. Such a significant excess of the liquidity ratio indicates the ineffective financing of banks in the real sector of the economy and the lack of attractive directions for active operations, which threatens both economic growth and efficiency of the banking system in 2020. The research develops key recommendations for banks to prevent excessive liquidity risk.

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