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The Single Supervisory Mechanism (SSM) was implemented as a first step towards a Banking Union in November 2014. This paper investigates the impact of the SSM on Eurozone banks' efficiency and position of best-practice frontier. It is based on a balanced panel analysis of 931 European bank-year observations from 2011 to 2017 (133 banks, seven years). The study uses Data Envelopment Analysis and a difference-in-differences approach to explore the evolution of banking performance. We found that the SSM had a negative impact on the efficiency levels of Eurozone banks, particularly in the year after the introduction of the mechanism. Additionally, we observed that the frontier formed by non-Eurozone European Union banks is more productive than the frontier of Eurozone banks in all the years analysed. Both efficiency and frontier position show evidence of a recovery trend in more recent years for both groups. We also found that while Equity-to-Asset Ratio, Return on Average Assets and Gross Domestic Product per capita positively impacted banks' efficiency, domestic credit provided by banks expressed as %GDP had a negative impact on efficiency. [ABSTRACT FROM AUTHOR]

In alignment with the financial regulatory reform agenda after the 2008 Global Financial Crisis which sharpened the focus on the promotion and maintenance of financial stability, South Africa reformed its model of financial regulation, transitioning from a silo sectoral model of financial regulation to a Twin Peaks model of financial regulation by objective as introduced by the Financial Sector Regulation Act 9 of 2017. Commercial banks in South Africa are now no longer regulated and supervised by the South African Reserve Bank as central bank but by the Prudential Authority, recently established in terms of South Africa's new Twin Peaks model. Bank licensing, being of cardinal importance in enabling the supervision of banks and applying measures to keep them safe and sound, thereby promoting and maintaining financial stability, is part of the mandate of the Prudential Authority. This contribution benchmarks the South African bank licensing regime for commercial banks against the Basel Core Principles for Effective Banking Supervision to determine the South African commercial bank licensing regime's level of compliance with international best practice and to assess whether there is any need for reform. [ABSTRACT FROM AUTHOR]

This article deeply integrates the characteristics of the China financial market under the background of the spread of the global new coronavirus pneumonia epidemic and integrates the multi-sector DSGE model including heterogeneous residents, manufacturers, banks, and macro-prudential supervision, and then numerically simulates the impact of technology and financial shocks on major economic indicators. Macroprudential capital regulation can help stabilize large economic waves, increase labour supply in the economic system, and restrain excessive transmission of systemic risks in the financial system. Meanwhile, the leverage ratio of banks will also change correspondingly with the price fluctuations of the real estate market. The relevant decision-making departments of the central government and the financial supervision departments coordinated in many ways to find the optimal internal balance point and increase the combined effect of effectively deflating systemic risks. [ABSTRACT FROM AUTHOR]

The parliamentary oversight of the European Central Bank (ECB) is frequently criticised for its lack of focus in both monetary policy and banking supervision. While Members of the European Parliament (MEPs) can publicly question ECB decisions in these fields, they often use committee hearings for other purposes, such as expressing political positions on issues that may or may not be related to ECB activities. This article aims to conceptualise such variation by expanding the seminal distinction between 'police patrols' and 'fire alarms' to include two novel categories – 'planning bureaus' and 'ambulance chasers'. To illustrate the applicability of our typology, the article provides the first systematic comparison of the Monetary and the Banking Dialogues (2014–2021), combining a qualitative content analysis of 1,504 parliamentary questions with insights from interviews with MEPs. The findings highlight the pervasiveness of fire alarms and ambulance chasing in the parliamentary practice of overseeing the ECB. [ABSTRACT FROM AUTHOR]

Over the past decade, the Single Supervisory Mechanism (SSM) has pioneered supranational governance in Europe, becoming a leading example of shared administration. Despite challenges, including legal and institutional hurdles, the SSM has proven to be a robust framework for rigorous banking supervision. This article reviews its achievements and explores the legal, supervisory, and political obstacles that remain. [ABSTRACT FROM AUTHOR]

In November 2024 European banking supervision will have been operational for 10 years. The Single Supervisory Mechanism (SSM) has evolved from a start-up to a mature, well-established, and respected supervisor. Harmonized and transparent supervisory practices have been implemented, whilst the European banking sector has proved to be resilient. Nevertheless, whilst acknowledging the progress that has been made, Europe should not rest on its laurels. As the global financial landscape is continuously evolving, the European framework must also evolve. Growing geopolitical tensions, the rise of FinTech and BigTech companies, the ongoing digital transformation, and climate change not only impact banks but also add more complexity to the work of supervisors. This is due to unexpected and difficult-to-model events, the creation of new business models, products, and services, as well as the emergence of cultural, behavioural, and ethical considerations that should be taken into account. To address these challenges, supervisors should enhance their competencies, approaches, and tools to stay ahead of evolving market dynamics and to remain aligned with the rapid evolution of technology and the risks that climate change poses. Equally important, ensuring thorough and efficient supervision requires fostering and strengthening collaboration and information sharing between all relevant authorities. [ABSTRACT FROM AUTHOR]

This paper describes the establishment of banking supervision in Italy and its operation between 1926 and 1936, using a narrative approach based on previously classified documents from the Bank of Italy's Historical Archives. This case is particularly interesting from the international perspective, Italy having been the first European country to assign substantial supervision to its central bank, a few years before the 1929 crisis. Notwithstanding insufficient regulation and a light touch concerning the four major mixed banks, we document considerable enforcement of the law, which went beyond the initial provisions, thanks to the rather proactive supervisory approach adopted by the Bank of Italy. [ABSTRACT FROM AUTHOR]

The study aimed to design a proposed model for a system of regulation and supervision of Islamic banks that is consistent with the characteristics and nature of its work, by answering the main question: What is the proposed vision for the Saudi Central Bank to create an appropriate regulatory and supervisory regime for Islamic banks? To accomplish its main goal represented in establishing a proposed model for designing a supervision and regulation system for Islamic banks operating in the Saudi banking sector. The study used the deductive and inductive approaches to achieve its main goal. The study considers its construction of a proposed model that enables the Central Bank of Saudi Arabia to reach the formulation of a system of supervision and control of Islamic banks, the most important result that has been reached. [ABSTRACT FROM AUTHOR]

In this paper we investigate whether the banks which fall under direct supervision by the European Central Bank (ECB) are more likely to be considered more stable and trustworthy by the depositors due to the stricter supervisory activities performed since the implementation of the Single Supervisory Mechanism (SSM). Under the SSM, significant banks switched from national supervisors to ECB, whereas the remaining banks remained under national supervisory authorities (NSAs). Using the difference-in-difference (DID) method, we have found evidence of increased depositors' trust in significant banks after the SSM implementation. Additionally, in anticipation of the SSM launch and the comprehensive assessment, we have found evidence of increased depositors' trust in the banks which were expected to be supervised by the ECB. [ABSTRACT FROM AUTHOR]

Among the largest economies of the world, the EU not only has set the most ambitious and legally binding objectives for the reduction of the GHG emissions but also it has accompanied these objectives with a "state of the art" regulatory framework in the realms of investor protection and safety and soundness. Our paper focuses on the bank financing channel and highlights regulatory areas for improvement. To mobilize the necessary funds worldwide, a degree of interoperability of regional taxonomies is required, which calls for international cross-pollination and coordination to mitigate financial risks and the risk of harmful market fragmentation (BCBS 2022, FSB 2022). Also, the full interoperability between the international and the EU corporate reporting standards is a desirable objective. A building bloc methodological approach would make such interoperability easier having the sustainability impact perspective of the "double materiality objective" as an additional layer of the international requirements well understood to all investors in EU undertakings. As per the inclusion of climate risks in prudential regulation, it is completed for Pillar 3 disclosures relating effectively with the EU Taxonomy. Climate risk's long-term horizon still needs to be implemented in Pillar 2 by linking bank transition plans with stress testing based on climate risk scenario analysis covering both transition and physical risk. The inclusion of climate risks in Pillar 1 faces challenges similar to those of supervisors internationally. Fostering global ambition is an explicit objective of the EU. Its leadership on the realms of investor protection and prudential regulation of climate risks should ideally inform international cooperation and impregnate international standards. This will secure that investments for the fulfillment of the EU climate objectives will flow from in and outside the EU. [ABSTRACT FROM AUTHOR]

The aim of this study is to examine the degree to which a country's institutional quality, such as the degree of central bank independence and the rule of law, matters for enhancing banking supervision. While numerous studies have examined the effects of central bank independence (CBI) on inflation and the quality of governance on economic growth and development, empirical studies exploring these institutional impacts on banking supervisory regimes remain scarce. Hence, this study analyzes the political economy of enhancing the supervision over the banking sector using the expanded indices of enhancement of banking supervision for 100 economies from 1973 to 2013, which accounts for both institutional and operational independence of banking supervisory agencies. The results demonstrate that institutions matter in enhancing a country's banking supervision; a higher degree of central bank independence and the rule of law leads to a higher degree of banking supervision. I also analyze the sectoral impact on banking supervision. While resource curse theory holds, the results of sectoral influence tend to differ depending on the estimation method. [ABSTRACT FROM AUTHOR]

Purpose: Using system theory, this paper aims to interrogate the impact of Boko-Haram on bank administration. The paper explains how death, injury and property destruction caused by terrorism affect banking supervision and structures. Design/methodology/approach: With the aid of a mixed research method, this paper conducted 47 interviews. It extracted secondary data from the Central Bank of Nigeria database, the National Deposit Insurance Corporation publications, Enhancing Financial Innovation and Access Survey, the World Bank database and the Global Terrorism Index. Descriptive, content and regression analysis was used in this research. Findings: With a significant regression model (p-value < 0.05), the analysis shows that terrorism accounts for 84.02% variation in banking administration. The impact of Boko-Haram on banking administration is negatively significant, especially in the areas like on-site supervision of Money Deposit Banks/Micro-finance Institutions and citizens' accessibility to financial systems. Originality/value: This paper generates new knowledge in the thematic area, which is still grey. The influence of terrorism on financial institutions as an element of economic governance is less researched. Hence, the strategic linkage of the impact of Boko-Haram on banking administration as a component of financial institutions. Therefore, this paper contributes to the existing body of literature on terrorism and economic governance. [ABSTRACT FROM AUTHOR]

In this paper we investigate whether the banks which fall under direct supervision by the European Central Bank (ECB) are more likely to be considered more stable and trustworthy by the depositors due to the stricter supervisory activities performed since the implementation of the Single Supervisory Mechanism (SSM). Under the SSM, significant banks switched from national supervisors to ECB, whereas the remaining banks remained under national supervisory authorities (NSAs). Using the difference-in-difference (DID) method, we have found evidence of increased depositors’ trust in significant banks after the SSM implementation. Additionally, in anticipation of the SSM launch and the comprehensive assessment, we have found evidence of increased depositors’ trust in the banks which were expected to be supervised by the ECB.

This paper aims to determine the 'new normal' for banking stability in terms of capital adequacy, reviewing the incidence of banking stress episodes by lagged solvency ratios, based on the experience at the European level after the global financial crisis. We provide rating ladders for both risk‐weighted solvency ratios and a simple gearing (leverage) ratio for time horizons of up to 3 years using well‐known credit risk scoring procedures. Our findings empirically confirm that the recent dual metric structure of the capital adequacy framework is conducive to enhancing the accuracy of banking stability assessment. Specifically, our empirical analysis suggests that both tier 1 capital ratio and leverage ratio generally remain statistically significant in multivariate combinations for crisis probability measurement purposes. Robustness checks with well‐established macrofinancial indicators as control variables suggest that this tandem is hardly replaceable in multivariate early warning systems by combinations of macroimbalance and financial soundness indicators traditionally employed as leading factors of banking crises. Moreover, the pandemic period provides meaningful evidence that robust capital positions, in line with our estimate, have so far been 'part of the solution' for dealing with systemic events. [ABSTRACT FROM AUTHOR]

We use granular information on securities holdings from 2008 to 2021 to estimate the market risk of Italian bank securities portfolios. The market risk is measured by the value-at-risk and the expected shortfall. The main advantages of our approach are the following: (1) profits and losses are computed through simple operations and without the need of complex calibration algorithms; (2) we are able to incorporate all market data available in Refinitiv; and (3) the risk measures can be estimated for all banks located in Italy, irrespective if the bank has validated internal models for market risk or not. Finally, we conduct an econometric analysis to identify the main drivers of market risk and to perform a forecasting exercise. [ABSTRACT FROM AUTHOR]

This paper examines the intersections of fundamental rights and European banking supervision. It contributes to a more nuanced and refined understanding of the importance of European Union (EU) fundamental rights for supervised banks in the absence of an EU-wide administrative code. Since 2014, the European Central Bank (ECB) has assumed prudential supervisory tasks for supervised entities. Fundamental rights set clear boundaries as to how the ECB may exercise supervisory discretion to adopt measures that may adversely affect a supervised bank. The Court of Justice of the European Union declares void any measure whose adoption infringes upon a person's fundamental rights. Thus, fundamental rights are a powerful counterbalance to the standard of limited review established by the EU judiciary for European Banking Supervision activities. Every supervised entity may unequivocally enjoy the same rights of defence faced with any measure adversely affecting it, irrespective of whether the measure has been adopted under EU or national law. [ABSTRACT FROM AUTHOR]

This research aims to find the most accurate model for predicting bankruptcy in the Indonesian banking industry. The data used are secondary data in the form of financial reports from 2018 to 2022. The methodology includes hypothesis testing using normality, homogeneity, and one-way ANOVA tests. The research results indicate that the Springate model is the most suitable model for predicting bankruptcy in the Indonesian banking industry, followed by the Zmijewski model, and the Altman model. The results obtained are relevant for financial managers and regulatory authorities, showing that the Springate model can be used to assess the financial health of the banking industry in Indonesia and to take concrete preventive measures before bankruptcy occurs.

The key interest rates. which have risen since March 2022, continued with an increase in long-term yields on advanced economies government bonds in Europe and North America by 1. 7 to 2. 2 percentage points. In addition, the rise in interest rates increased banks' financing costs which in turn reduces the financing conditions of households and companies. The rise in interest rates has led to falling bond prices and reduced their vallie on banks' balance sheets. The Silicon Valley Bank (SVB), a US bank specialising in US startups, had to sell high-loss bonds in mid-March 2023 to offset deposit outtlows to operate. Due to liquidity bottlenecks, SVB and two other small US banks, Signature and Silvergate, closed. This has unsettled the financial markets. Silvergate Bank held assets in cryptocurrency. The failure of SVB was caused by mismanagement, inadequate oversight by the board of directors and senior leadership, and insujficient action from Federal Reserve supervisors. This highlights weaknesses in regulation and supervision that need to be addressed. The report emphasises the need to strengthen the Federal Reserve 's supervision and regulation based on the lessons learned from SVB 's failure. It identifiesfour key takeaways: SVB 's failure to manage risks, supervisors' failure to fully understand vulnerabilities, inadequate actions taken to address identified problems, and the negative impact of the board's tailoring approach on supervision. [ABSTRACT FROM AUTHOR]

The Banking Control Law j 966 (BCL 1966) is a key piece of the Saudi banking regulatory regime. Since its enactment just under 60 years ago it has seen little amendment. This is notwithstanding the fact that the banking and finance industry in Saudi has changed substantially during that period. In recognition of this fact the Saudi Central Bank (known as SAMA as it was formerly called the Saudi Arabian Monetary Authority), is of the view that there is an urgent need to update the current banking regulatory regime to rejlect the developed state of the banking and. finance sector and to keep pace with international developments and practices. On 26 January 2023, SAMA released a draft of the new banking law (DBL 2023). It contains some of the most substantial changes to the BCL 1966 since its inception. This article discusses the proposed changes and their origin in Saudi Vision 2030. It argues that most of the changes are worthwhile but as yet some important issues surrounding the place of Sharia in the banking system have not been reconsidered. [ABSTRACT FROM AUTHOR]

The article argues that operational resilience against cyber-risks infinance is inextricably intertwinedwith the resilience of regulatory frameworks. The article pinpoints patterns in cybersecurity threats since the COVID-19 pandemic and describes progress towards international standard-setting. The European Union 's (EU 's) Digital Operational Resilience Act is considered as an example cd a regime to mitigate cyber-risks. The article emphasises difficulties involved in establishing precise testing and reporting standards. [ABSTRACT FROM AUTHOR]

Copyright of Moneta e Credito is the property of Associazione Economia Civile and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Business Consultant / Poslovni Konsultant is the property of FINconsult Ltd. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

"Zombie lending" remains a widespread practice by banks around the world. In this paper, we exploit a series of large-scale on-site inspections made on the credit portfolios of several Portuguese banks to investigate how these inspections affect banks' future lending decisions. We find that an inspected bank becomes 20% less likely to refinance zombie firms, immediately spurring their default. Overall, banks seemingly reduce zombie lending because the incentives to hold these loans disappear once they are forced to recognize losses. This paper was accepted by Tomasz Piskorski, finance. Funding: D. Bonfim and G. Cerqueiro acknowledge financial support from Fundação para a Ciência e a Tecnologia [Grants PTDC/EGE-OGE/30314/2017 and UID/GES/00407/2013]. H. Degryse acknowledges financial support from Fonds Wetenschappelijk Onderzoek. S. Ongena acknowledges financial support from the Horizon 2020 European Research Council [Grant ERC ADG 2016 - GA 740272 lending]. Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2022.4452. [ABSTRACT FROM AUTHOR]

This research aims to find the most accurate model for predicting bankruptcy in the Indonesian banking industry. The data used are secondary data in the form of financial reports from 2018 to 2022. The methodology includes hypothesis testing using normality, homogeneity, and one-way ANOVA tests. The research results indicate that the Springate model is the most suitable model for predicting bankruptcy in the Indonesian banking industry, followed by the Zmijewski model, and the Altman model. The results obtained are relevant for financial managers and regulatory authorities, showing that the Springate model can be used to assess the financial health of the banking industry in Indonesia and to take concrete preventive measures before bankruptcy occurs. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Baghdad College of Economic Sciences University is the property of Republic of Iraq Ministry of Higher Education & Scientific Research (MOHESR) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The article is devoted to the disclosure of the theoretical foundations of ensuring the security of banks’ operations with derivative financial instruments. Today, there are dozens of approaches to solving the problem of ensuring the security of commercial banks. However, there are no studies on the general theoretical and methodological principles of ensuring the financial security of banks’ operations with derivative financial instruments. Therefore, the article is based on the hypothesis that identification by commercial banks of existing threats related to this type of operations allows them to be avoided through the development of an appropriate system of measures. Thus, scientific explorations in this direction are relevant and promising. The study established that from a theoretical point of view, during the implementation of bank operations with derivative financial instruments, security issues should be considered in the context of ensuring the financial security of commercial banks. Regardless of the specifics of this type of banking operations, in order to guarantee the financial security of the banks that carry them out, it is necessary to apply a set of measures, which mainly include methods and tools of financial management and risk management. The specific selection of these instruments and methods depends on the type of derivative financial instruments and the purpose of its holding by a commercial bank. The financial security of commercial banks forms the general financial security of the banking system, where another instrument containing banking regulation is already in use; banking supervision and macroprudential policy. Here, when banks carry out transactions with derivative financial instruments, it is promising to consider recommendations on security issues in the organization and functioning of the risk management system, when banks of Ukraine determine the amount of credit risk for active banking transactions, in the improvement of individual standards of commercial banks, determined by the relevant safety indicators and their threshold values.

This paper captures advances in prudential regulation and supervision for challenger banks and fintech in the UK. It presents a critical analysis of the prudential supervisory approaches towards fintech. The focus is placed on fast-growing firms (FGFs), building on the review performed by the Prudential Regulation Authority (PRA) of the Bank of England (BoE) in 2019. Specifically, it comprises a critical examination of the underlying regulatory framework in relation to the robustness of stress testing practices, as part of the review of FGF risk management practices and the weakness identified in the Internal Capital Adequacy Assessment Process (ICAAP). The economic analysis of law comprises the underlying methodology, using economic theory to analyse regulation and its effectiveness regarding fintech regulation and supervision. Recommendations for enhancements towards supervisory practices about the prudential governance and management of FGFs and fintech are included, with advances to the underlying regulatory framework in the UK. Overall, this critical legal research examines the supervisory practices of FGFs and fintech in the UK, under the lens of prudential regulation and risk management approaches, focusing on the design, development and implementation of the stress testing tool and scenario practices. [ABSTRACT FROM AUTHOR]

The article analyses the Banking Union from an economic-constitutional perspective. It argues that the areas covered by the Banking Union fall substantively mainly under the internal market area of EU law, where the microeconomic efficiency-based rationales and objectives are essential in legal assessments. In contrast, the euro area macroeconomic and stability-oriented rationales guided the decision on the Banking Union and the allocation of banking supervision to the ECB. The article claims that these different constitutional rationales, and the constitutional locus of the Banking Union, could have implications for the broader constitutional architecture and even for the EU legal order. Indeed, the microeconomic part of the EU economic-constitutional model suits legal approach to integration, but the macroeconomic rationales have a more problematic relation with law and courts. This could call for a resurgence of the internal market perspective in Banking Union going forward to remedy some of the constitutional concerns. [ABSTRACT FROM AUTHOR]

The COVID-19 pandemic triggered a major economic crisis worldwide. The monetary policy response of the European Central Bank (ECB) was fast and massive. The ECB also intervened on the supervisory side because, after the establishment of Banking Union, the ECB was given responsibility for banking supervision in the euro area through the Single Supervisory Mechanism (SSM). This paper explains the response of the ECB-SSM to the COVID-19 related economic crisis during 2020 and 2021, up until February 2022. These ECB actions include the reduction of bank capital buffers, the redefinition of non-performing loans, and the limitations on dividends and bonuses paid by banks. We adopt a neofunctionalist approach, which suggests that policies are developed at the EU level in response to need, whereby supranational actors and spillovers are particularly important. We offer some concluding insights into whether the ECB-SSM's responses have led to a further deepening of integration. [ABSTRACT FROM AUTHOR]

After over a decade of crisis, the ECB's functions have expanded considerably, which in turn altered its relationship with other institutions. In particular, when the ECB assumed the role of Banking Supervisor under the Single Supervisory Mechanisms, it was generally accepted that this role would require more accountability than its traditional role in monetary policy. Yet, accountability requires transparency. However, there is a dearth of studies on the transparency of European banking supervision, and the few that exist are usually single case studies. This leaves us without a point of comparison that would help us understand what constitutes a 'transparent banking supervisor'. Therefore, the aim of this article is to situate the transparency of the ECB within the wider literature on the transparency of banking supervisors. This allows us to pinpoint more precisely its strengths and shortcomings and the potential for reforms. [ABSTRACT FROM AUTHOR]

This paper analyzes the Single Supervisory Mechanism (SSM) from three overlapping perspectives: first, as a centralized hierarchy, seeking to enforce uniform rules, standards, and procedures; second, as a polyarchic network, seeking to orchestrate cooperation between the ECB and national authorities; and finally, as an experimentalist organization, seeking to learn from diversity by adapting common rules and procedures to the specificities of individual banks, and revising them regularly through peer review of implementation experience at multiple levels. Drawing extensively on interviews and primary documents, the paper traces the evolution of the SSM's institutional structures, decision-making processes, and organizational practices from its origins to the present. On this basis, the paper argues that the most encompassing perspective on the SSM is that of an experimentalist organization, which integrates and recasts key elements of the other two views into a more complete and dynamic analysis of its evolving architecture and practical operations. [ABSTRACT FROM AUTHOR]

This paper utilizes the turnover of head of local banking supervisory branches accompanied with the merger of China's banking and insurance regulatory authorities as a quasi-experiment and analyses the impact of supervisory independence on banks' non-performing loans. The difference-in-difference estimates indicate that in regions with heads of local supervisory branches from other geographic branches, banks' non-performing loan ratios will decline. The impact of supervisory independence is more pronounced in regions with lower financial marketization. It further shows that supervisory independence can reduce total loan amounts, medium-and-long-term loans, and enterprise loans, and clarifies the impacting mechanisms of supervisory independence on banks' non-performing loans. [ABSTRACT FROM AUTHOR]

We explore and summarize the evolution in bank capital regulations and bank risk after the global financial crisis. Using a new survey of bank regulation and supervision covering more than 120 economies, we show that regulatory capital increased, but some elements of capital regulations became laxer. Analyzing bank-level data, we also document the importance of defining bank regulatory capital narrowly as the quality of capital matters in reducing bank risk. This is particularly true for banks that have more discretion in the computation of regulatory capital ratios and are subject to weaker market monitoring. [ABSTRACT FROM AUTHOR]

The bailouts extended to large, complex and interconnected financial conglomerates labelled "Too Big To Fail" (TBTF), especially during the 2008 GFC, led to extensive regulatory intervention through the Basel Global Systemically Important Banks Framework (G-SIB Framework) and the Basel Domestic Systemically Important Banks Framework (D-SIB Framework), respectively. Against the backdrop of the D-SIB Framework this contribution explores recent developments in South Africa to address the identification, designation and stringent prudential regulation of systemically important banks in South Africa, herein referred to as "SIFI-banks ". [ABSTRACT FROM AUTHOR]

Until recently banks were not subject to detailed prudential regulation. This article seeks to explain why, historically, that changed. The first part argues that regulation has been driven by banking crises. The second part considers the theory of banking regulation, concluding that existing theories have limited explanatory power and that further theoretical analysis is needed for regulation to achieve its goals. [ABSTRACT FROM AUTHOR]

Nuri's evolving story may prompt BaFin and EU authorities to act, notably greater supervisory scrutiny of relationships between tied agents, and particularly in the case of FinTech firms which operate only under a local (GewO) licence but where the principal is an entity regulated by BaFin or another regulator. The reasons to assume this are presented in this article. [ABSTRACT FROM AUTHOR]

The article addresses the administrative penalties that the European Central Bank (ECB) can impose on supervised entities in the framework of the Single Supervisory Mechanism (SSM). It looks at the conditions and procedure for their imposition, and summarises the decisions that the ECB has imposed to date. It then deals with the publication and enforcement Of such decisions, as well as with the legal remedies against them. It.finally assesses two tangential questions regarding settlement and leniency. [ABSTRACT FROM AUTHOR]

We analyze the systemic risk of Italian banks with the ΔCoVaR from a bivariate normal GARCH model. The results show that it is a good measure of systemic risk and is applicable to the ranking of Italian other systemically important institutions. Using an elastic-net approach, we identify the balance sheet and market variables that explain the ΔCoVaR of Italian banks. The analysis confirms that these variables are key determinants of systemic importance and highlights how higher capitalization is beneficial to tackling systemic risk. And, we detect a connection between ΔCoVaR and some variables for trading and investment banking. [ABSTRACT FROM AUTHOR]

This paper finds that the disclosure of supervisory actions by bank regulators is associated with changes in their enforcement behavior. Using a novel sample of enforcement decisions and orders (EDOs) and a change in the disclosure regime, we find that regulators issue more EDOs, intervene sooner, and rely more on publicly observable signals following the regime change. EDO documents become longer, more complex, and contain more boilerplate language. Our results also indicate that intervention happens sooner and more frequently in counties with higher news circulation, which suggests that regulators take into account the public perception of their actions. We evaluate potentially confounding factors, including the savings and loan (S&L) crisis and competition from thrifts, and find robust results. We also study bank outcomes and document that uninsured deposits decline at EDO banks in the disclosure regime, especially for those covered in the news. Finally, we observe that bank failure accelerates despite improvements in capital ratios and asset quality. Overall, our research provides new insights on the disclosure of regulatory actions. [ABSTRACT FROM AUTHOR]

The financial crisis of 2007-2009 led to the redoubled attention of international institutions to the issue of banking regulation. In this regard, the Basel Committee to exercise effective banking supervision reviewed and introduced new standards and requirements in the field of banking regulations, such as capital adequacy requirements, providing liquidity requirements, and leverage ratio. On the whole, studies show that capital ratios have significant and negative impacts on large European bank-retail-and-other-lending-growth in a context of deleveraging and “credit crunch” in Europe over the post-2008 financial crisis period. Additionally, liquidity indicators have positive but perverse effects on bank-lending growth, which supports the need to consider heterogeneous banks’ characteristics and behaviors when implementing new regulatory policies. In this article, by using the data of the Iranian banks during 2006-2018, the simultaneous effect of the new liquidity and capital regulations, inspired by the requirements of Basel Committee and based on the new instructions of the Central Bank, has been studied. In other words, the issue addressed in this paper is what conditions the simultaneous implementation of capital and liquidity requirements by banks will put them in. According to the results, liquidity requirements and capital requirements are complementary. Based on the results, the relationship between liquidity risk (Inverse of Net Stable Funding Ratio) and capital adequacy is positive. Therefore, with the increase of liquidity risk in banks, it will not be possible to establish capital requirements following the provisions of Basel III.

The purpose of an effective liquidity risk assessment policy is to ensure that any given credit institution can meet its cash flow obligations, even factoring in the uncertainty caused by external factors. As part of the Supervisory Review and Evaluation Process (SREP), the European Central Bank (ECB) has determined this assessment should take into consideration both the institution's ability to meet its short-term obligations and its long-term funding strategy. Due to the fast pace of financial markets and more demanding regulations, there is a structural need for a precise and widely accepted risk assessment methodology. Furthermore, the ability to foresee alternative scenarios by stressing the involved key risk indicators is of the utmost importance. This work investigates whether machine learning techniques can successfully model liquidity risk, thus providing insights for stress-testing scenarios. We have applied the Risk Assessment System (RAS) methodology to classify credit institutions from the Portuguese banking sector according to their liquidity risk, using real supervisory data (from 2014 until March 2021). We then studied the ability to model this risk classification, by comparing a series of well-established machine learning algorithms to a traditional statistical model for benchmarking. The results show that extreme gradient boosting (XGBoost) outperforms other methods for this classification problem. The resulting model can be set up for a production environment and provide scenarios for stress-testing, or as an early warning system (EWS), thus supporting the overall SREP exercise. [ABSTRACT FROM AUTHOR]

The phenomenon of economic growth indicates the increase in a country's wealth during a certain period of time. Given the complexity of the phenomenon, there is a manifold of factors influencing its level. The study examined the determinants of economic growth in seven countries that are not members of the Basel Committee of Banking Supervision, namely Bolivia, Czech Republic, Estonia, Malaysia, Peru, Poland, and Thailand, for the decades 1990–2019. Our set of predictors included bank capital to assets ratio, bank liquid reserves to bank assets ratio, inflation, interest rate spread, bank nonperforming loans to total gross loans ratio. By means of panel data analysis and a random effects econometric model, we showed that economic growth proxied by gross domestic product growth rate was mainly driven by bank capital to assets ratio across the three decades. The implications of our empirical results could assist national authorities interested in elevating the level of economic growth for the benefit of the overall society. [ABSTRACT FROM AUTHOR]