Search results

1 – 6 of 6
Per page
102050
Citations:
Loading...
Access Restricted. View access options
Article
Publication date: 25 June 2018

Harald A. Benink

Based upon recent statements made by the European Shadow Financial Regulatory Committee, a group of well-known professors coming from ten European countries, during the period…

171

Abstract

Purpose

Based upon recent statements made by the European Shadow Financial Regulatory Committee, a group of well-known professors coming from ten European countries, during the period 2012-2017, this paper aims to analyze from a European perspective the adequacy and credibility of the proposed framework.

Design/methodology/approach

This paper is a summary and interpretation of statements from the European Shadow Financial Regulatory Committee.

Findings

The authors argue that the credibility of the bail-in mechanism is likely to be limited. Because of this, unexpected losses may not be absorbed by unsecured debt holders. Therefore, there is still a need for relatively high equity capital buffers.

Originality/value

The issue of how to raise loss absorption capacity for banks is prominent on the international policy agenda. International regulators are aiming for a combination of equity capital, typically raised by issuing shares, retaining profits and issuing contingent convertible (CoCo) bonds and bail-in debt where unsecured creditors such as holders of subordinated and common bonds are supposed to take losses in case of a bankruptcy or restructuring of a bank.

Details

Journal of Financial Economic Policy, vol. 10 no. 2
Type: Research Article
ISSN: 1757-6385

Keywords

Access Restricted. View access options
Article
Publication date: 4 November 2013

Harald A. Benink

The purpose is to analyse how the policy approach to the immediate problems in the European financial sector has long-term effects on implicit protection of banks' creditors and…

420

Abstract

Purpose

The purpose is to analyse how the policy approach to the immediate problems in the European financial sector has long-term effects on implicit protection of banks' creditors and, thereby, on risk-taking incentives.

Design/methodology/approach

The near term issues in European banking are discussed within a framework for long-term reform along the lines proposed for a European banking union.

Findings

The author advocates conducting a thorough stress test with potential consequences for unsecured creditors of banks proven to be insolvent. Losses may have to be imposed on these creditors, following the example of recent cases in Cyprus and in The Netherlands.

Originality/value

There is widespread consensus among international policy makers that the European banking system is seriously undercapitalized. Unlike the USA, Europe failed to recapitalize its biggest banks following the financial crisis of 2007-2009. It is now urgent to start recognizing losses on balance sheets to avoid a proliferation of Japanese-style zombie banks in Europe.

Details

Journal of Financial Economic Policy, vol. 5 no. 4
Type: Research Article
ISSN: 1757-6385

Keywords

Access Restricted. View access options
Article
Publication date: 7 April 2015

Santiago Carbó-Valverde, Harald A. Benink, Tom Berglund and Clas Wihlborg

The purpose of this paper by the European Shadow Financial Regulatory Committee (ESFRC) is to provide an account of the financial crisis in Europe during the period 2010-2013 and…

1956

Abstract

Purpose

The purpose of this paper by the European Shadow Financial Regulatory Committee (ESFRC) is to provide an account of the financial crisis in Europe during the period 2010-2013 and an analysis of how the relevant authorities reacted to the crisis.

Design/methodology/approach

These actions included measures taken by central banks, governments or fiscal authorities, and by regulatory or supervisory bodies. In a previous study covering the regulatory developments during the financial crisis up until 2009, issues such as the implementation of Basel III rules in Europe and the (mostly ad hoc and unilateral) resolution mechanisms set in most European countries to fight the crisis were covered. This study focuses on developments since 2010 with a focus on the concerns and actions that emerged with the sovereign debt crisis in the euro area. In particular, the transition from the European Financial Stability Facility to the European Stability Mechanism is assessed. The focus after 2012 has progressively turned to the challenges of the European banking union.

Findings

These issues are jointly covered, along with some updates on the views of the ESFRC on recent advances in other areas, such as solvency regulation. All in all, the authors find that the weaknesses of the global financial system remain to be addressed, and they believe that the banking union is one of the main tools and opportunities for an improved and efficient crisis management in Europe.

Originality/value

The paper aims at contributing to the study of financial regulation after the banking crisis. The experience of the euro zone in this context is assessed in this article from a wide range of perspectives.

Details

Journal of Financial Economic Policy, vol. 7 no. 1
Type: Research Article
ISSN: 1757-6385

Keywords

Access Restricted. View access options
Article
Publication date: 1 September 2004

Elyas Elyasiani and Iqbal Mansur

This study employs a multivariate GARCH model to investigate the relative sensitivities of the first and the second moment of bank stock return distribution to the short‐term and…

2333

Abstract

This study employs a multivariate GARCH model to investigate the relative sensitivities of the first and the second moment of bank stock return distribution to the short‐term and long‐term interest rates and their respective volatilities. Three portfolios are formed representing the money center banks, large banks, and small banks, respectively. Estimation and testing of hypotheses are carried out for each of the three portfolios separately. The sample includes daily data over the 1988‐2000 period. Several hypotheses are tested within the multivariate GARCH specification. These include the hypotheses of: (i) insensitivity of bank stock return to the changes in the short‐term and long‐term interest rates, (ii) insensitivity of bank stock returns to the changes in the volatilities of short‐term and long‐term interest rates, and (iii) insensitivity of bank stock return volatility to the changes in the short‐term and long‐term interest rate volatilities. The findings indicate that short‐term and long‐term interest rates and their volatilities do exert significant and differential impacts on the return generation process of the three bank portfolios. The magnitudes and the direction of the effect are model‐specific namely that they depend on whether the short‐term or the long‐term interest rate level is included in the mean return equation. These findings have implications on bank hedging strategies against the interest rate risk, regulatory decisions concerning risk‐based capital requirement, and investor’s choice of a portfolio mix.

Details

Managerial Finance, vol. 30 no. 9
Type: Research Article
ISSN: 0307-4358

Keywords

Access Restricted. View access options
Article
Publication date: 10 August 2018

Clas Wihlborg

Before providing an overview of the conference with the above title and this Special Issue, this paper aims to present a view of the meaning of systemic risk, factors that affect…

399

Abstract

Purpose

Before providing an overview of the conference with the above title and this Special Issue, this paper aims to present a view of the meaning of systemic risk, factors that affect systemic risk and measures of systemic risk. Thereafter, the conference presentations and the papers in this issue are summarized.

Design/methodology/approach

Characteristics and measures of systemic risk are reviewed. Conference papers and presentations are summarized.

Findings

While some aspects of systemic risk of a financial institution can be measured, an important aspect associated with contagion through markets is not easily captured by simple measures.

Originality/value

The conference and the papers in this issue contribute to the policy debate about sources and characteristics of systemic risk.

Details

Journal of Financial Economic Policy, vol. 10 no. 2
Type: Research Article
ISSN: 1757-6385

Keywords

Available. Content available
Article
Publication date: 4 November 2013

Clas Wihlborg

2220

Abstract

Details

Journal of Financial Economic Policy, vol. 5 no. 4
Type: Research Article
ISSN: 1757-6385

Keywords

1 – 6 of 6
Per page
102050