scholarly journals The Prospects of the European Banking Union and the Hellenic Banking Sector Challenges: A Preliminary Exercise

2013 ◽  
Vol 5 (2) ◽  
Author(s):  
John Mylonakis
Keyword(s):  
Banking Sector ◽  
Banking Union ◽  
European Banking Union ◽  
European Banking

Conclusion

2017 ◽  
Author(s):  
Rachel A. Epstein
Keyword(s):  
Economic Policy ◽  
Global Economy ◽  
Banking Sector ◽  
Banking Union ◽  
Major Powers ◽  
European Banking Union ◽  
Catching Up ◽  
European Banking ◽  
Domestic Banks

The study’s findings from Europe have implications for other major powers, including that: (1) banking sector protectionism became increasingly costly given other liberalizing trends; (2) foreign-owned bank subsidiaries can provide more stable funding in crises than alternative foreign or even domestic bank activity; (3) foreign domination in finance limited catching up in the global economy, but in fact few states showed the capacity to exploit domestic banks for national goals; and (4) centralized bank governance through European Banking Union weakened bank–state ties in Europe, and elevated the role of markets there. This chapter analyzes the relevance of the findings for the BRICS (Brazil, Russia, India, China, and South Africa). China is perhaps the clearest case of a country struggling to both liberalize and retain the economic policy autonomy associated with a largely state-controlled financial system. The conclusion specifies the broader transformation in bank–state ties, but also its limits.

scholarly journals Sustainability in the Banking Sector: A Predictive Model for the European Banking Union in the Aftermath of the Financial Crisis

2020 ◽  
Vol 12 (6) ◽  
pp. 2566 ◽  
Author(s):  
Cristina Gutiérrez-López ◽  
Julio Abad-González
Keyword(s):  
Financial Stability ◽  
Banking Sector ◽  
Stress Test ◽  
Random Effect ◽  
Poor Quality ◽  
Banking Union ◽  
European Banking Union ◽  
Financial Variables ◽  
European Banking ◽  
Bank Soundness

Given the central role of banks in financial stability and the recent impact of their insufficient capitalization, this article focuses on finding determinants of their solvency through financial variables. The study considers the European Banking Union framework and the results of the latter stress test exercises, using a panel of the 45 banks based in 15 European countries that were stress tested in 2014, 2016 and 2018. This paper models bank soundness proxied by the stressed tier capital 1 ratio by means of financial indicators representing a CAMELS (Capital, Assets quality, Management, Earnings, Liquidity and Sensitivity to market risk) approach as well as global systemically important financial institutions (G-SIFIs) additional requirements. The model also specifies a dummy covariate referred to the disclosure of corporate social responsibility (CSR) reports, adopting a comprehensive sustainability scheme. The research period starts with the European Banking Union and includes the three exercises conducted since then. We find that financial sustainability is positively correlated with higher capitalization, earnings and liquid assets, while poor quality assets (high non-performing loans) and inefficiency impact negatively on bank soundness. Moreover, it considers the year-scenario interaction either as a fixed or a random effect. The results support capital and liquidity regulation and highlight factors that reinforce banking soundness. They also reveal a positive connection between CSR and banking solvency.

Banking Overleveraging and Macro Instability: A Model and VSTAR Estimations

2016 ◽  
Vol 236 (6) ◽  
Author(s):  
Frauke Schleer ◽  
Willi Semmler
Keyword(s):  
Financial Crisis ◽  
Banking Sector ◽  
Capital Requirements ◽  
Banking Union ◽  
Star Model ◽  
European Banking Union ◽  
Regulatory Policies ◽  
European Banking ◽  
The Difference ◽  
Run Up

Abstract:Overleveraging of the banking sector has been considered one of the main causes of the 2007–09 financial crisis and the subsequent great recession. It was also of major concern for the subsequent BIS regulatory policies resulting in Basel III and its request for higher capital requirements. It has now become highly relevant for the planned European banking union. Overleveraging of the banking sector exposes the financial sector and the macroeconomy to vulnerabilities, but also, as critics state, seems to constrain credit flows to the private sector. We present here a measure of overleveraging, defined as the difference between actual and sustainable debt, conduct an empirical study on overleveraging for 40 banks in Europe, and study the vulnerabilities and credit contractions that can arise subsequently. Before the year 2004 overleveraging had not been a serious problem as leverage was on a sustainable level. However, in the run-up to the financial crisis, actual and optimal debt spread apart and the banking sector began to suffer from overleveraging. We use a non-linear Vector STAR model to evaluate the hypothesis that periods of increasing debt levels are accompanied by more severe credit constraints than periods of low leveraging. We demonstrate this for country groups across Europe.

scholarly journals Zehn Jahre nach Ausbruch der Finanzkrise – viel erreicht, noch viel zu tun

2018 ◽  
Vol 87 (3) ◽  
pp. 9-25
Author(s):  
Felix Rutkowski ◽  
Alexander Schäfer ◽  
Isabel Schnabel
Keyword(s):  
Banking Sector ◽  
Global Financial Crisis ◽  
Financial System ◽  
Banking Regulation ◽  
Capital Requirements ◽  
Banking Union ◽  
European Banking Union ◽  
Regulation And Supervision ◽  
European Banking ◽  
The Global Financial Crisis

Zusammenfassung: Die globale Finanzkrise und die Krise im Euroraum offenbarten deutliche Schwächen in der Bankenregulierung und -aufsicht. Drei wesentliche Reformstränge sollen das Finanzsystem stärken: die Erhöhung der Eigenkapitalanforderungen für Banken, die Gründung der Europäischen Bankenunion und die Einführung einer makroprudenziellen Regulierung und Aufsicht. Diese Reformen stellen zwar erhebliche Fortschritte dar, sie reichen jedoch nicht aus. Die Eigenkapitalanforderungen sollten vor allem für große Banken stärker erhöht werden. Um den Staaten-Banken-Nexus zu durchbrechen, sollten die Privilegierung von Staatsanleihen in der Bankenregulierung beendet und die Glaubwürdigkeit des Abwicklungsregimes erhöht werden. Eine wirksame makroprudenzielle Aufsicht erfordert eine Ausweitung des Instrumentenkastens sowieeine stärkere Berücksichtigung von Finanzinstitutionen außerhalb des Bankensektors. Rufen nach einer Deregulierung im Finanzsystem ist eine Absage zu erteilen. Summary: The global financial crisis and the euro area crisis revealed clear weaknesses in banking regulation and supervision. Three major reform strands shall strengthen the financial system: an increase in capital requirements for banks, the establishment of the European Banking Union, and the introduction of macroprudential regulation and supervision. While these reforms are significant advances, they are not sufficient. Capital requirements should be increased more, especially for large banks. To break the sovereign-bank nexus, the regulatory privileges for sovereign exposures of banks should be removed and the credibility of the bank resolution regime should be fostered. An effective macroprudential supervision requires an expanded toolkit and an additional focus on financial institutions beyond the banking sector. Calls for deregulation in the financial system should be rejected.

Risks outweigh rewards for very large EU bank mergers

2019 ◽  
Keyword(s):  
Mergers And Acquisitions ◽  
Banking Sector ◽  
Banking Union ◽  
Content Type ◽  
European Banking Union ◽  
Model Combining ◽  
Banking Markets ◽  
European Banking ◽  
Domestic Banks ◽  
The Eu

Significance The 2008-09 financial crisis led to consolidation of the EU banking sector through mergers and acquisitions (M&As) of mostly domestic banks. A few EU countries have highly concentrated banking sectors, but most do not, including Germany, the least concentrated in the EU. A prime motive for merging Deutsche and Commerzbank, the country’s first and second largest banks, was that Germany’s network of exporters requires access to competitive financing. Impacts Defragmenting national banking markets and the drive for a European Banking Union (EBU) will encourage M&A approval. EU competition bodies are likely to thwart M&As among the eight to ten largest EU banks over systemic-risk fears. Successful M&As will need at least one of the partners to have a profitable core model; combining bad banks just makes a larger bad bank.

scholarly journals ACTORS OF THE INSTITUTIONAL REFORMS OF THE EUROPEAN BANKING SECTOR IN RESPONSE TO THE CRISIS

2019 ◽  
pp. 234-245
Author(s):  
Małgorzata Zaleska
Keyword(s):  
Financial Crisis ◽  
Deposit Insurance ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Banking Union ◽  
Institutional Changes ◽  
Special Focus ◽  
Institutional Reforms ◽  
European Banking Union ◽  
European Banking

The article presents the main European policy makers implementing the reform of the banking sector in response to the contemporary global financial crisis. The institutional changes are assessed in the paper, including the establishment of the European banking union, modifications in the EU deposit insurance systems and considerable strengthening of the role of central banks, with special focus on the European Central Bank. Moreover, potential sources of another financial crisis are identified and further institutional changes in finance are proposed.

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