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2021 ◽  
Author(s):  
◽  
Johannes Hofinger

Banks communicate their regulatory risk exposures through disclosure reports to market participants. These reports are based on the Basel III Pillar 3 guidelines, implemented in the European Union in form of the Capital Requirements Directive and Regulation (CRD IV/CRR). Agency theory views such disclosures as one viable option to reduce the information asymmetry between the banks’ managers and investors. Also, high-quality risk disclosures can strengthen the competitive position of banks through lower cost of capital and higher stock liquidity. It is therefore in the interest of banks to prepare high-quality disclosures and evaluate current disclosure practices. This thesis proposes a scoring model that measures the quality of bank regulatory risk disclosures and thereby supports banks and their stakeholders in their decision-making process on risk communication. The model builds on a two-dimensional framework including 1) a risk dimension comprising credit risk, market risk, operational risk, other risks including liquidity risk, and risk management in general; and 2) a quality dimension covering the criteria readability, comprehensiveness, meaningfulness, time comparability, and sector comparability. The quality criteria are operationalised and applied to the risk categories to facilitate the calculation of composite disclosure scores for regulatory risk disclosure reports of a sample of thirty large European-headquartered banks for the period 2016 to 2018. Prior research shows that disclosure quality depends on both qualitative and quantitative elements. Therefore, a multi-methods approach is applied in this thesis to build the scoring model based on a pragmatic research philosophy. In the research design, qualitative elements are captured with semantic content analysis, while quantitative elements are explored using factor analysis. The calculation of composite disclosure scores results in an average composite disclosure score of 3.86 (out of a maximum of 5) with a spread of about 20% to both sides. The analysis finds that reading difficulty across individual disclosure reports is generally very high, disclosure quantity varies substantially, banks are reluctant to provide forward-looking information, and only few information on time and sector comparability is included. This, therefore, makes it difficult for different stakeholders to benefit from bank disclosure reports and leaves ample space for banks to improve on their risk communication. The main academic contribution of this thesis is the development of a scoring model that captures the quality of regulatory risk disclosures in the EU banking industry. Such a practice-based model does not yet exist and has long been called for in prior literature. This research also introduces a comprehensive word-based approach that is an adequate proxy for measuring disclosure quality. Finally, the thesis adds to the understanding of how the term “information content” is interpreted differently across EU banks in the context of agency theory. 4 For the professional contribution, the proposed scoring model enables banks to analyse their current disclosure practices and points them to areas for improvements. Supervisory authorities and analyst houses also benefit from the scoring model through a more efficient and effective analysis of disclosure reports. Finally, consultancies and software firms can benefit from such a model to expand their offerings on business intelligence. JEL classification: M48 (Government Policy and Regulation) Keywords: Banking risk reporting; Regulation; Disclosure; Basel III Pillar 3; CRD IV/CRR; Quality scoring model.


2020 ◽  
Vol 8 (Suppl 3) ◽  
pp. A402-A402
Author(s):  
Claire Galand ◽  
Vignesh Venkatraman ◽  
Marilyn Marques ◽  
James Strauss ◽  
Richard Carvajal ◽  
...  

BackgroundCD137 (4-1BB) represents a costimulatory pathway that promotes T, NK, and dendritic cell effector functions favorable for antitumor immunity. The extracellular domain of CD137, comprised of four cysteine-rich domains (CRD-I, CRD-II, CRD-III, CRD-IV), trimerizes upon binding to CD137 ligand (CD137L) to induce cell stimulatory transcriptional and epigenetic changes.1 2 The investigation of CD137-targeting agonist antibody, urelumab (CRD-I-binding, IgG4), in human subjects showed immunologic and pharmacodynamic effects, but poor efficacy due to dose-limiting liver toxicity.3 Preclinical studies using a murine surrogate antibody, clone 3H3 (CRD-I-binding, rIgG2a), also demonstrated hepatotoxicity that correlated with activation of CD137-expressing myeloid cells and memory CD8+ T cells.4 5 In contrast, utomilumab (CRD-II/III-binding, IgG2) showed acceptable tolerability, but limited clinical efficacy.6 7 These and more recent findings implicate epitope and Fc gamma receptor (FcγR)-dependent antibody cross-linking as critical factors for CD137 therapeutic antibody design.MethodsWe investigated the molecular and cellular effects of AGEN2373 (CRD-IV-binding, IgG1), a conditionally active CD137-targeting agonist antibody designed to bind and induce CD137 signaling upon FcγR cross-linking while permitting ligand binding to CD137. The role of epitope and FcγR binding as critical factors for anti-CD137 therapeutic activity were elucidated in primary cell-based assays and syngeneic tumor-bearing mouse models using anti-mouse antibody clones S3B1 (CRD-IV-binding) and 3H3, surrogates of AGEN2373 and urelumab, respectively. In an ongoing phase 1 trial (NCT04121676), we evaluated the safety and tolerability of AGEN2373.ResultsAGEN2373 bound with high-affinity to CD137 CRD-IV and promoted potent agonist activity of CD137 that was conditionally dependent on Fc-dependent antibody cross-linking. AGEN2373 surrogate, S3B1, showed comparable binding and cross-link dependent agonist activity. In CT26 tumor-bearing mice, S3B1 and 3H3 demonstrated complete tumor control that was not reproducible with a Fc-silent S3B1 antibody. The Fc-dependent activity of S3B1 correlated with induced immunologic changes in the TME including CD8 T cell expansion, NK cell activation, and Treg depletion. Patients with advanced solid cancers, treated with AGEN2373 up to 1 mg/kg every 4 weeks, demonstrate clinical activity with no evidence of hepatotoxicity.ConclusionsConditional and potent agonist activity of AGEN2373 is dependent on binding to CD137 CRD-IV and FcγR. Preclinically, our data demonstrate that AGEN2373-like murine surrogate antibodies promote potent immune activation and anti-tumor immunity. Phase 1 clinical trials investigating the safety and efficacy of AGEN2373, alone or combination with balstilimab (anti-PD-1), are underway.Trial RegistrationNCT04121676ReferencesWen TJ, Bukczynski and Watts TH. 4-1BB ligand-mediated costimulation of human T cells induces CD4 and CD8 T cell expansion, cytokine production, and the development of cytolytic effector function. J Immunol 2002;168(10): p. 4897–906.Bitra A, et al. Crystal structures of the human 4-1BB receptor bound to its ligand 4-1BBL reveal covalent receptor dimerization as a potential signaling amplifier. J Biol Chem 2018;293(26): p. 9958–9969.Segal NH, et al., Results from an integrated safety analysis of urelumab, an agonist anti-CD137 monoclonal antibody. Clin Cancer Res 2017;23(8): p. 1929–1936.Bartkowiak T, et al., Activation of 4-1BB on liver myeloid cells triggers hepatitis via an interleukin-27-dependent pathway. Clin Cancer Res 2018;24(5): p. 1138–1151.Lin GH, et al., GITR-dependent regulation of 4-1BB expression: implications for T cell memory and anti-4-1BB-induced pathology. J Immunol 2013;190(9): p. 4627–39.Segal, N.H., et al., Phase I study of single-agent utomilumab (PF-05082566), a 4-1BB/CD137 agonist, in patients with advanced cancer. Clin Cancer Res 2018;24(8): p. 1816–1823.Li Y, et al., Limited Cross-Linking of 4-1BB by 4-1BB ligand and the agonist monoclonal antibody utomilumab. Cell Rep 2018;25(4): p. 909–920 e4.


Author(s):  
Blanaid Clarke
Keyword(s):  

2020 ◽  
Vol 20 (237) ◽  
Author(s):  

Macroprudential oversight in Italy combines local elements with the European framework. At a local level, financial stability is a shared responsibility between Banca d’Italia (BdI), which is the national central bank and the prudential authority for banks and other financial institutions, the markets authority, Commissione Nazionale per le Società e la Borsa (CONSOB), the insurance supervisor, Istituto per la Vigilanza Sulle Assicurazioni (IVASS), and the pension funds supervisor, Commissione di Vigilanza sui Fondi Pensione (COVIP).2 Each authority exercises its responsibility within a combination of sectoral and activity boundaries and the BdI plays a leading role in surveillance and coordination. Within the European framework, the BdI is both the national competent authority and the designated authority for the macroprudential tools considered under the Capital Requirements Regulation (CRR) and the Capital Requirements Directive IV (CRD IV), which are implemented and activated following the processes described in these regulatory texts and the guidelines provided by the European Central Bank (ECB) – within the competences assigned to it by the SSM Regulation - and the European Systemic Risk Board (ESRB). The ubiquitous role of the BdI on both fronts eases the challenges posed by the coexistence of these two frameworks.


Author(s):  
Kern Alexander ◽  
Vivienne Madders

The chapter considers some of the main post-crisis European Union (EU) financial legislation from the perspective of high-level principles (Level 1) that apply to credit institutions and certain investment firms under the Capital Requirements Directive IV (CRD IV), including prudential requirements to hold minimum capital and liquidity requirements and prudential governance standards. The chapter also analyzes the EU legislation that regulates investment funds and the sale of investment products and the distribution of financial products, particularly the Markets in Financial Instruments Directive and Regulation (MiFID II/MiFIR), the Undertakings for Collective Investments in Transferrable Securities (UCITS), the Personal Retail Investment Products Regulation, and the Alternative Investment Funds Managers Directive (AIFMD).


Author(s):  
Christos V Gortsos

On 15 May 2014, the European Parliament and the Council adopted Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms (Bank Recovery and Resolution Directive or BRRD). It was the first time that harmonized rules were adopted at European Union (EU) level in this field, as opposed to other fields in which a regulatory framework had been in place since the late-1980s and mid-1990s (respectively), such as the field of authorization, prudential regulation and supervision of credit institutions, currently governed by Regulation (EU) 575/2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) 648/2012 (Capital Requirements Regulation or CRR) and Directive 2013/36/EU (Capital Requirements Directive IV or CRD IV) and the field of deposit guarantee schemes (DGSs), currently governed by Directive 2014/49/EU (DGSD).


Author(s):  
Scott James ◽  
Lucia Quaglia

Following the financial crisis, UK preferences shifted decisively in favour of trading up bank capital and liquidity requirements. To reassure voters, elected officials intervened in the regulatory process by strengthening the domestic institutional architecture for banking regulation. Financial regulators leveraged this political support to overcome resistance from the financial industry, but also pushed for international/EU harmonization of capital requirements to avoid damaging the UK’s competitiveness. Internationally, UK regulators therefore acted as pace-setters and exerted significant influence over the design of the Basel III Accord. However, at the EU level, the UK was forced to act as a foot-dragger by prolonging negotiations over the Capital Requirements Directive IV (CRD IV) in an attempt to resist Franco-German efforts to water down the rules. But UK negotiators were more successful in leveraging domestic constraints to oppose the Commission’s attempt to impose the ‘maximum’ harmonization of bank capital.


2019 ◽  
Vol 8 (2) ◽  
pp. 203-217
Author(s):  
Matias Huhtilainen

This study addresses the post-financial crisis EU banking regulation reform CRD IV. The specific focus is on the relationship between increased capital requirements and the subsequent change in both supply and the price of bank credit. This study employs a twofold data consisting of a panel of Finnish unlisted savings and cooperative banks’ key figures over the period 2002-2018 and a representative survey conducted with personnel of Finnish institutions. In addition to the consistent finding in regards to the effect of bank profitability as well as fairly consistent findings in regards to the effect of bank size and GDP growth, the key finding suggests a slight decrease in loan supply under the CRD IV.


2019 ◽  
Vol 19 (325) ◽  
Author(s):  

The Less Significant Institutions (LSI) sector in France is very small in terms of market share and is diversified by size and business model (Table 1). It proved itself resilient during the financial crisis and is not a source of systemic risk. The sector has a high cost structure and faces a number of competitive and other challenges. The regulatory framework, based on the Capital Requirements Regulation (CRR)/Capital Requirements Directive (CRD) IV, is the same as for Significant Institutions (SIs) but the supervisory framework under the Single Supervisory Mechanism (SSM) is very different. The French Prudential Supervision and Resolution Authority (ACPR) remains the direct supervisor of LSIs but it is now subject to the oversight of the European Central Bank (ECB), which also has full responsibility for certain common procedures. The ACPR has continued its comprehensive supervisory approach, both on-site and off-site, but reflecting the SSM’s emphasis on greater harmonization, it has had to become more procedural and may have lost elements of flexibility. In response to SSM initiatives, the ACPR has sharpened its focus on governance issues, although business model and profitability risk remains the main challenge for the LSI sector.


Author(s):  
Paweł Dec ◽  
Piotr Masiukiewicz
Keyword(s):  

<span style="font-family: TimesNewRomanPSMT; font-size: 9pt; color: #231f20; font-style: normal; font-variant: normal;">Artykuł dotyczy aktualnego i istotnego problemu zagrożenia bankructwem banków spółdzielczych<span style="font-family: TimesNewRomanPSMT; font-size: 9pt; color: #231f20; font-style: normal; font-variant: normal;"> w Polsce oraz opracowanego w tym kontekście modelu systemu ochrony instytucjonalnej (IPS) w polskich<span style="font-family: TimesNewRomanPSMT; font-size: 9pt; color: #231f20; font-style: normal; font-variant: normal;"> bankach spółdzielczych. Takie systemy zostały utworzone w dwóch stowarzyszeniach krajowych banków<span style="font-family: TimesNewRomanPSMT; font-size: 9pt; color: #231f20; font-style: normal; font-variant: normal;"> spółdzielczych jako spółdzielnie zarządzające programem ochrony instytucjonalnej (IPS). Zobowiązywa<span style="font-family: TimesNewRomanPSMT; font-size: 9pt; color: #231f20; font-style: normal; font-variant: normal;">ły do tego również regulacje europejskie, w tym dyrektywa UE, poprzez wprowadzenie odpowiednich<span style="font-family: TimesNewRomanPSMT; font-size: 9pt; color: #231f20; font-style: normal; font-variant: normal;"> przepisów w ramach pakietu CRD IV/CRR. Celem autorów było potwierdzenie, czy system IPS znacząco<span style="font-family: TimesNewRomanPSMT; font-size: 9pt; color: #231f20; font-style: normal; font-variant: normal;"> poprawia bezpieczeństwo stowarzyszeń banków spółdzielczych i poszczególnych banków będących ich<span style="font-family: TimesNewRomanPSMT; font-size: 9pt; color: #231f20; font-style: normal; font-variant: normal;"> członkami. Podkreślono przy tym konieczność objęcia takim systemem wszystkich banków spółdzielczych,<span style="font-family: TimesNewRomanPSMT; font-size: 9pt; color: #231f20; font-style: normal; font-variant: normal;"> wówczas bowiem będzie możliwa całościowa analiza funkcjonowania takiego systemu, z uwzględnieniem jego głównych zalet i barier. Autorzy przeprowadzili własne studium przypadku oparte na Systemie<span style="font-family: TimesNewRomanPSMT; font-size: 9pt; color: #231f20; font-style: normal; font-variant: normal;"> Ochrony Zrzeszenia <span style="font-family: TimesNewRomanPS-ItalicMT; font-size: 9pt; color: #231f20; font-style: normal; font-variant: normal;"><em>– </em><span style="font-family: TimesNewRomanPSMT; font-size: 9pt; color: #231f20; font-style: normal; font-variant: normal;">BPS.</span></span></span></span></span></span></span></span></span></span></span></span>


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