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This paper aims to analyzing the main risk culture traits of a sample of Central Banks and Supervisory Authorities in Europe as well as of the European Central Bank (ECB).

Risk culture is measured through text data processing of the official discourses made by the head Supervisory Authorities, during the years from 1999 to 2012.

Results highlight heterogeneous but converging risk cultures for European Union (EU) supervisors and the presence of a “distance” between these cultures and the risk culture of the ECB.

The paper points out that cultural differences, especially in presence of credit markets still characterized by poor integration, could create unwanted distortion effects during the initial stages of the Banking Union.

This study aims to investigate the drivers of bank automation system performance expectancy compared to that of bank employees. The purpose is to shed light on the role played by consumers' cognitive schema on automation that is the perfect automation schema (PAS).

A survey was administered to about 500 Italian subjects to measure their PAS; financial knowledge, anxiety, and security; and sociodemographic and socioeconomic variables. Ordered probit regressions and an instrumental variable two-stage least squares regression are run.

The analyses reveal that cognitive schemas play a crucial role in consumer expectations in banking. Individuals with stronger PAS tend to have more positive expectations about bank automation performance compared to employee performance. Financial anxiety and knowledge positively affect bank automation performance expectancy while women, older people, and financially insecure subjects have poor expectations of automated banking systems.

This study extends the understanding of key consumer characteristics that affect bank automation performance expectancy compared to that of bank employees in services delivery in the Italian context. Moreover, it provides useful results for researchers, practitioners, banking institutions, and regulators.

Leasing evaluation is a subject that has drawn significant interest in economic circles for many years. The numerous models proposed in the literature have approached the topic from a variety of outlooks and approaches. The contributions made to date, however, all share what would appear to be an unwritten premise: namely, that leasing evaluation logically occurs prior to the start of the leasing relationship. The purpose of this paper is to eliminate this premise, in order to take an in‐progress approach to the evaluation of leasing.

The evaluation approach is based on a model that takes into account both the real factors (the market value of the asset) and the financial aspects of the lease (interest rates on the market). The leasing price is arrived at by taking the sum of: the advantage offered by the leasing, as compared to potential purchase of the asset on the spot market; and the added yield provided by the leasing, as compared to alternative investments.

The paper finds that an in‐progress approach allows measurement of the value of a leasing even if the lessor and the lessee have already decided to initiate the leasing relationship. This approach is called for when one of the parties (the lessor or the lessee) is replaced, as well as in cases where pathological situations lead to the interruption of the relationship, plus instances where it is necessary to carry out estimates for accounting purposes. The need to evaluate the leasing in terms of its different components (real and financial) also emerges from the instructions contained in the IAS17 regarding leasing.

The contribution of the work to the leasing evaluation theme can be identified in a different perspective that can be useful both in a financial point of view and in an accounting one.

The purpose of this paper is to measure the cultural fit between supervisory authorities and banks, considering cultural gaps as possible stumbling blocks for effective supervision.

The paper uses a text‐analysis approach. The methodological assumption is that the analysis of culture is closely connected to the analysis of the type of language used by the members of an organization. To this aim, a cultural survey was developed in order to compare cultures of Bank of Italy, Italian banks, and Basel Committee during the years 1999 and 2004.

The results highlight several significant, but decreasing, cultural gaps relating to important issues for banks, such as risk, disclosure, change, and innovation.

The evidence and the measurement of cultural gaps are useful elements for the identification of change actions by supervisors and banks. In fact, identified gaps could be detrimental for an effective supervision and could be a source of regulatory risk for regulated banks.

This paper focuses on an evolutionary aspect of text analysis, concerning standardization in the treatment of data, combined with the use of standard vocabularies. This allows a greater comparability of the output of the various studies, enabling us to further refine the methodology. The analysis model includes the definition of several concepts – such as “risk” and “disclosure” – at the base of the development of banking culture and representing basic goals of prudential regulation.

This paper aims to develop a model to assess the effectiveness and compliance of bank boards, taking into account their unique characteristics, financial industry standards and regulations.

The literature on the roles and effectiveness of boards and directors in the financial industry is reviewed.

The main finding in the literature suggests that evaluating the effectiveness of a board must include characteristics of the entire board as well as individual contributions of directors.

Banking boards, more than in the past, must proactively evaluate their effectiveness and compliance with existing rules.

The paper proposes a model for assessing the effectiveness and compliance of boards and directors of banking organizations, considering their characteristics, financial industry standards and regulations.

The purpose of this paper is to analyse the creation of shareholder value (SHV) created by non‐depository financial institutions and, especially, by leasing and factoring (L&F) companies.

The cost of capital of both L&F companies is estimated using an accounting procedure and, next, the economic value added (EVA) created by Italian L&F companies over the period 2002‐2004 is estimated.

L&F companies display high profitability and EVA levels over the period analysed: a very large part of leasing and factoring companies achieved a positive EVA and the lowest median level of EVA created is at least 11 per cent of capital invested in the company, while at least 50 per cent of leasing companies achieved a positive EVA and the lowest median level of EVA created is almost 2 per cent of capital invested in the company.

Future research may try to investigate other markets. The paper's focus on Italy for data collection for L&F is problematic and data are collected from a unique data base.

SHV creation is the main strategic objective of L&F companies so the paper is of interest to both academics and practitioners.

This is the first study focusing on SHV creation by non‐depository financial institutions and, especially, L&F companies.

The purpose of this paper is to investigate how asset risk (i.e. the risk that the value of the leased asset loses unexpectedly most of its value at the end of the contract) is measured and hedged.

The evaluation of the lease contract is achieved by applying the theory of option pricing as the lessor is the writer of a call option on the leased asset. A sensitivity analysis on some parameters is performed.

The paper disentangles the components of the profit of a lease contract and allows to choose the optimal final purchase price. This lets the lessor hedge against asset risk.

The paper's result can be extended by considering more complex options (such as American or exotic ones) into the lease contract.

Results in the paper allow for a more flexible and efficient management of lease contracts where both parties benefit under an economic and a financial point of view.

This is believed to be the first paper that applies derivative evaluation to the analysis of lease contracts.

The purpose of this paper is to examine residual value risk modelling issues with a focus on automotive lease portfolios. Residual value risk is approached through a re‐sampling technique that provides the probability density function of losses and VaR measures for credit portfolios.

The methodology is applied to a portfolio of 37,523 operating leases issued between 1989 and 2001 by a major European financial institution.

The results show that residual value losses are low and sometimes non‐existent. Moreover, the major part of residual value risk is idiosyncratic and can thus be eliminated through adequate diversification. Additionally, this internal model seems to prove that capital requirements stemming from the Basel Committee's proposed new framework are somehow overestimated.

This paper advocates determining a more accurate risk weight for residual value risk in order to better reflect this relatively low‐risk part of leasing activities.

The purpose of this paper is to verify recovery risk management capabilities by lessors. It tests several hypotheses and finds out interesting specific results for lessors.

The approach is empirical: two different database of leasing contracts are analysed with econometric methodologies.

There is clear evidence that: lessors are ex ante able to balance the probability of default and the loss given default case by case, using proper contract structures; and they carefully manage recovery procedures and strategies according to operations' characteristics.

The data used are large enough, but come from institutions concentrated in Italy. Future research could be extended to other relevant countries.

Results presented are verified in leasing companies which made a limited use of rating systems and credit risk model: they have been achieved by the continuous improvements of traditional lending practices. The development of modern reliable systems can enhance risk management capabilities; our findings can help building more structured and advanced credit risk management tools.

The paper adds to the literature in the sense that gives clear evidence of a neglected but important fact of real world credit markets: financial intermediaries have the capability of properly assessing risk components and manage loss given default (LGD) in order to control overall credit risk.

The evaluation of the after tax cost of leasing is rather complex and financial operators often fail to emphasise the cost/benefit balance. We propose an analytical formula for the direct calculation of the true cost of leasing which does not involve the study of cash flows. Our discussion concerns the situation that we know best, the Italian case, which can easily be used more generally.