scholarly journals Diversity across EU banking sectors: Poorly researched and underappreciated

2018 ◽  
Vol 87 (4) ◽  
pp. 153-179
Author(s):  
Hans-Helmut Kotz ◽  
Dorothea Schäfer
Keyword(s):  
Financial Crisis ◽  
Sovereign Debt ◽  
Large Scale ◽  
Goodness Of Fit ◽  
Banking Sector ◽  
Financial Sector ◽  
Future Research ◽  
Banking Union ◽  
The European Union ◽  
Research Gaps

Zusammenfassung: Das Interesse an der Rolle der Vielfalt im Bankensektor hat erheblich zugenommen, seit die Finanzkrise (und die anschließenden Staatsschuldenkrisen) die europäischen Länder in unterschiedlicher Weise getroffen haben. In diesem Überblicksartikel werden entscheidende Forschungslücken im Bereich der Vielfalt im Bankensektor herausgearbeitet. Vorbereitend dazu bilanzieren wir die Vielfalt der Bankensektoren in der Europäischen Union und beleuchten die Unterschiede vor und nach der Finanzkrise. Kernpunkte einer künftigen Forschungsagenda zur Bewertung der Diversität im Bankensektor (und im Finanzsektor im Allgemeinen) sind: (a) die Definition der empirischen Bedeutung des Konzepts und damit seiner messbaren Eigenschaften, (b) die Beziehung zwischen Diversität und Wettbewerbsniveau (Marktmacht) im Bankensektor, (c) die Verbindung zwischen Diversität und Stabilität des Bankensektors, (d) die Relevanz der Diversität im Bankensektor für einen erleichterten Zugang zu Finanzierung, insbesondere für KMU, und (e) die Verknüpfungen zwischen Diversität im Bankensektor (Finanzsektor) und nichtfinanzieller, „realer“ wirtschaftlicher Diversität („Goodness of fit“-Problematik, institutionelle Einbettung). Die aufgezeigten Forschungslücken zu schließen, wäre ein wichtiger Beitrag sowohl zur Debatte über eine tiefere Integration der europäischen Finanzmärkte (Bankenunion, Kapitalmarktunion) als auch zur Debatte über eine nachhaltige Finanzarchitektur, die gleichzeitig Innovation und Wachstum fördert und die Gesellschaft wirksam vor großen Finanzkrisen schützt. Summary: Interest in the role of diversity in banking sectors has increased substantially since the financial crisis (and the subsequent sovereign debt crises) have hit European countries differentially. The purpose of this note is to hint at crucial research gaps in terms of appreciating consequences of this variety. In preparation for this, we take stock of the across country diversity of banking sectors in the European Union before and after the financial crisis. Key issues in a future research agenda for evaluating diversity in the banking sector (and the financial sector more generally) have to do with: (a) defining the concept’s empirical meaning and hence its measurable properties, (b) the relationship between diversity and the level of competition (market power)in the banking sector, (c) the link between diversity and banking sector stability, (d) the pertinence of banking sector diversity for mitigating access to finance problems, in particular for SMEs and (e) the interlinkages between diversity in the banking (financial) sector and non-financial, “real” economy diversity (“goodness of fit”-issue, institutional embededdness). Filling the indicated research gaps would be an important contribution to both the debate on deeper integration of Europe’s financial markets (Banking Union, Capital Markets Union)as well as the debate on a sustainable financial architecture, being at the same time conducive to innovation and growth whilst protecting society effectively from large-scale financial crises.

scholarly journals The Growing Importance of the Financial Sector in the Founding Countries of the European Union

2021 ◽  
Vol 2 (26) ◽  
pp. 37-49
Author(s):  
Tomasz Florczak
Keyword(s):  
European Union ◽  
Economic Development ◽  
United Kingdom ◽  
Financial Crisis ◽  
21St Century ◽  
Banking Sector ◽  
Financial Sector ◽  
Developed Countries ◽  
The Other ◽  
The European Union

The economies of the 21st century countries operate on the principle of connected vessels. A significant element of changes in economies is the growth of the financial sector. The process of financial sector growth is often referred as financialization. The significant impact of this sector on economic development was shown during the financial crisis of 2008. Financialization is more visible in highly developed countries. Undoubtedly the founding countries of the European Union belong to highly developed countries. It is possible that the financialization is higher in bigger countries like France, Germany, Italy or United Kingdom, which can also have bigger financial sectors. From the other side there is also country, which economy is based on banks. The aim of the article is to indicate the growth of the financial sector in the founding countries of the European Union. To determine the growth of the financial sector, the author used the indicators appearing in the literature of subject. There are indicators relating to functioning of the economy and banking sector. The second method helps to determine in which country financialization is higher. To made the research there was used zero unitarization method. The results of the study allows to determine in which of the subjects the financial sector is at a higher level of development. It is possible, that during researched period there were changes in financializiation of researched countries.

THE IMPORTANCE OF THE BANKING UNION FOR THE STABILITY OF THE FINANCIAL SECTOR IN THE EURO AREA

2018 ◽  
Vol XIX (6) ◽  
pp. 129-134
Author(s):  
Elżbieta Kołodziej
Keyword(s):  
Financial Crisis ◽  
Euro Area ◽  
Banking Sector ◽  
Financial Sector ◽  
Legal Framework ◽  
Banking Union ◽  
The United Kingdom ◽  
Public Aid ◽  
Research Goal ◽  
The Stability

The research goal of this study is to assess the significance of the banking union for the stability of the financial sector in the euro area. A review of available literature, legal acts and the analysis of statistical data relevant to the research objective of the work turned out to be necessary to prepare the work. The financial crisis that began in 2007 had its source in the deregulation of financial markets, the lack of legal framework for supervisory institutions and inadequately functioning market information system. Public aid for banks in the EU within 5 years (2008-2012) amounted to nearly EUR 4 trillion. The majority of public aid (75%) was addressed to euro area banks. The largest amounts of public aid were directed to support banking systems in Ireland, the United Kingdom, Germany and Spain. In the case of Ireland, this led to almost bankruptcy. The crisis has led to changes in the approach to the security of the financial sector including the banking sector of countries belonging to the euro area. The most important project implemented in response to the financial crisis is the banking union. The banking union is based on three pillars: the Single Supervisory Mechanism (SSM), Single Resolution Mechanism (SRM), the Single Deposit Guarantee Scheme (SDGS).

The Banking Union in Europe

2019 ◽  
Author(s):  
Lucia Quaglia
Keyword(s):  
Euro Area ◽  
Sovereign Debt ◽  
Banking Sector ◽  
Debt Crisis ◽  
National Level ◽  
Academic Research ◽  
Banking Union ◽  
The European Union ◽  
On The Road ◽  
Set Up

The banking union is considered to be one of the main steps in economic integration in the European Union. Given the rather recent establishment of this policy, academic research on the banking union does not have a long lineage, yet it is an area of bourgeoning academic enquiry. There are three main “waves” of research on the banking union in political science, which have mostly proceeded in a chronological order. The first wave of scholarly work focused on the “road” to banking union, from the breaking out of the sovereign debt crisis in the euro area in 2010 to the agreement on the blueprint for the banking union in 2012, explaining why it was set up. The second wave of literature explained how the banking union was set up and took an “asymmetric” shape, whereby banking supervision was transferred to the European Central Bank (ECB); however, banking resolution partly remained at the national level, whereas other components of the banking union, namely, a common deposit guarantee scheme and a common fiscal backstop, were not set up. The third wave of research discussed the functioning of the banking union, its effects and defects. The banking union has slowly brought about significant changes in the banking systems of the member states of the euro area and in government–business relations in the banking sector, even though these effects have varied considerably across countries.

scholarly journals Measuring the systemic risk in the South African banking sector

2017 ◽  
Vol 20 (1) ◽  
Author(s):  
Gregory M. Foggitt ◽  
Andre Heymans ◽  
Gary W. Van Vuuren ◽  
Anmar Pretorius
Keyword(s):  
Financial Crisis ◽  
South African ◽  
Systemic Risk ◽  
Banking Sector ◽  
Risk Index ◽  
Financial Sector ◽  
Ethical Behaviour ◽  
The South ◽  
Case Scenario ◽  
Worst Case

Background: In the aftermath of the sub-prime crisis, systemic risk has become a greater priority for regulators, with the National Treasury (2011) stating that regulators should proactively monitor changes in systemic risk.Aim: The aim is to quantify systemic risk as the capital shortfall an institution is likely to experience, conditional to the entire financial sector being undercapitalised.Setting: We measure the systemic risk index (SRISK) of the South African (SA) banking sector between 2001 and 2013.Methods: Systemic risk is measured with the SRISK.Results: Although the results indicated only moderate systemic risk in the SA financial sector over this period, there were significant spikes in the levels of systemic risk during periods of financial turmoil in other countries. Especially the stock market crash in 2002 and the subprime crisis in 2008. Based on our results, the largest contributor to systemic risk during quiet periods was Investec, the bank in our sample which had the lowest market capitalisation. However, during periods of financial turmoil, the contributions of other larger banks increased markedly.Conclusion: The implication of these spikes is that systemic risk levels may also be highly dependent on external economic factors, in addition to internal banking characteristics. The results indicate that the economic fundamentals of SA itself seem to have little effect on the amount of systemic risk present in the financial sector. A more significant relationship seems to exist with the stability of the financial sectors in foreign countries. The implication therefore is that complying with individual banking regulations, such as Basel, and corporate governance regulations promoting ethical behaviour, such as King III, may not be adequate. It is therefore proposed that banks should always have sufficient capital reserves in order to mitigate the effects of a financial crisis in a foreign country. The use of worst-case scenario analyses (such as those in this study) could aid in determining exactly how much capital banks could need in order to be considered sufficiently capitalised during a financial crisis, and therefore safe from systemic risk.

scholarly journals An Overview of the Existing Schemes and Research Trends in Financing the Energy Upgrade of Buildings in Europe

2020 ◽  
Vol 27 (2) ◽  
pp. 53-62
Author(s):  
Christiana Panteli ◽  
Eglė Klumbytė ◽  
Rasa Apanavičienė ◽  
Paris A. Fokaides
Keyword(s):  
Built Environment ◽  
Large Scale ◽  
Energy Savings ◽  
Future Research ◽  
The European Union ◽  
Building Sector ◽  
Investment Bank ◽  
Research Activities ◽  
Funding Programs ◽  
European Investment

Financial supporting schemes for the energy upgrading of the building sector in Europe constitute one of the major policies of the European Union (EU). Since the beginning of the 2000s, dozens of funding programs and initiatives have been announced by the European Commission (EC). It is a fact that the majority of these policies have borne fruit, as the metrics on both energy savings in the building sector and the promotion of renewable energy in the built environment have turned the EU into a global pioneer. This paper attempts to give a brief overview of the main policy and financial tools for the energy upgrading of the built environment in Europe. Emphasis is placed on three major mechanisms, which concern different-scale projects: crowdfunding projects, public-private co-financing projects, and large-scale projects funded by financial institutions such as European Investment Bank (EIB). Reference is also made to recently implemented EU funded research programs in this field. This work aspires to constitute a reference study for future research activities in the field of financial supporting schemes for energy upgrading of buildings in Europe.

Relative Importance of Blockchain in Cryptocurrency, Banking & Health Care

2020 ◽  
Vol 8 (12) ◽  
pp. 6-25
Author(s):  
Hari Priya Ponnakanti ◽  
Bilal Gonen
Keyword(s):  
Large Scale ◽  
Banking Sector ◽  
Trade Credit ◽  
Future Research ◽  
Large Database ◽  
High Scale ◽  
Blockchain Technology ◽  
Medical Sector ◽  
Recent Developments ◽  
Pros And Cons

This paper looks at the opportunities and challenges of implementing blockchain technology across medical, finance and banking sectors, and provides a clear view which can enable Blockchain for more extents. After going through few articles and papers related to applications of Blockchain, we gained a vivid knowledge on pros and cons on Blockchain applications from each article. Few drawbacks that we encountered are using Power of Work (POW) in medical sector which is destroying the computing ability at a stage when system is getting bigger and eventually which is wasting lots of resources. One study over conceptual proposal on blockchain is the idea of using trade credit as the value of transactions, and this trade credit is in the scope of trade secret which improves trade confidentiality and makes it more secure. Moreover, centralization systems have few risks owing to their dependence on a high scale which could tamper the data or can even block access, change the rules and might even completely shut down the system. Few more drawbacks are designing and building a secure blockchain system is much more difficult on large-scale of banking sector with large database. To address these challenges, recent developments in blockchain technology are enabling novel opportunities in every possible sector by using Trust-worthy cloud, IoT and artificial intelligence, which makes it more powerful and secure. After analyzing Blockchain implementations and identifying their limitations, we conclude with several promising directions for future research.

Financial Market Integration and EMU

2020 ◽  
Author(s):  
Kern Alexander
Keyword(s):  
Market Integration ◽  
Banking Sector ◽  
Financial Integration ◽  
Banking Union ◽  
Shadow Banking ◽  
The European Union ◽  
Financial Market Integration ◽  
Banking Market ◽  
Capital Markets Union ◽  
European Banking

This chapter discusses the evolution of the market structure in European banking and the level of financial integration in the Eurozone and the interaction with financial regulatory developments. The chapter will address how the creation of the Banking Union’s Single Supervisory Mechanism (SSM) has affected banking market integration in the Eurozone. The chapter also raises related issues concerning monetary policy and banking supervision and some of the challenges in discharging these responsibilities within the Banking Union. This chapter also analyses the Capital Markets Union (CMU) proposal in respect of its important objective to increase the supply of credit from non-bank financial intermediaries to the economy of the European Union (EU) while also raising important prudential regulatory concerns concerning the risks raised by the shadow banking sector.

What Has Not Changed

2019 ◽  
pp. 209-239
Author(s):  
Huw Macartney
Keyword(s):  
Financial Crisis ◽  
Business Models ◽  
Banking Sector ◽  
Value Added ◽  
Financial Sector ◽  
Quantitative Easing ◽  
The Real ◽  
Anglo American ◽  
The Impact

This chapter begins by explaining that financialization since the financial crisis has continued. The chapter then shows how the real culture of banking has not changed as a result. It examines the business models of the largest Anglo-American banks and the impact of Quantitative Easing to show the disconnect between the banks and their respective economies. It then examines rising household indebtedness, and the lending practices of the banks that exploit the heavily indebted. Finally it explores pay in the financial sector, showing that fixed and variable remuneration remain out of proportion to the value-added of the banking sector, and disproportionately high compared to pay in most other sectors. The conclusion we should draw is that bank culture has actually changed very little.

The Global Financial Crisis: what have we learned so far?

2015 ◽  
Vol 11 (2) ◽  
pp. 134-161 ◽  
Author(s):  
Karyn L. Neuhauser
Keyword(s):  
Financial Crisis ◽  
Large Scale ◽  
Global Financial Crisis ◽  
Financial System ◽  
Future Research ◽  
Financial Assets ◽  
Content Type ◽  
The Subject ◽  
The Global Financial Crisis ◽  
Number Of Citations

Purpose – The purpose of this paper is to provide a cohesive review of the major findings in the literature concerning the Global Financial Crisis. Design/methodology/approach – Papers published in top-rated finance and economics journal since the crisis up to the present were reviewed. A large number of these were selected for inclusion, primarily based on the number of citations they had received adjusted for the amount of time elapsed since their publication, but also partly based on how well they fit in with the narrative. Findings – Much has been done to investigate the causes of the Global Financial Crisis, its effects on various aspects of the financial system, and the effectiveness of regulatory measures undertaken to restore the financial system. While more remains to be done, the existing body of research paints an interesting picture of what happened and why it happened, describes the interrelationships between the mortgage markets and financial markets created by the large scale securitization of financial assets, identifies the problems created by these inter-linkages and offers possible solutions, and assesses the effectiveness of the regulatory response to the crisis. Originality/value – This study summarizes a vast amount of literature using a framework that allows the reader to quickly absorb a large amount of information as well as identify specific works that they may wish to examine more closely. By providing a picture of what has been done, it may also assist the reader in identifying areas that should be the subject of future research.

scholarly journals The Mexican debt crisis redux: international interbank markets and financial crisis, 1977–1982

2015 ◽  
Vol 22 (1) ◽  
pp. 79-105 ◽  
Author(s):  
Sebastian Alvarez
Keyword(s):  
Financial Crisis ◽  
Sovereign Debt ◽  
Banking Sector ◽  
Debt Crisis ◽  
International Banking ◽  
Public And Private ◽  
International Lending ◽  
Interbank Markets ◽  
Interbank Lending ◽  
Currency Mismatches

The international banking crisis that began in 2007 has brought the relationship between international banking activities and financial crises to the forefront. The growing reliance on foreign interbank funding by domestic banks has been recognized as a crucial factor in explaining the banking and sovereign debt crisis currently affecting several peripheral European countries. This article shows that the link between financial crisis and international interbank lending is not a new phenomenon; a similar trend can be observed in the Mexican banking sector during the run-up to its 1982 debt crisis. I explore the international activities of Mexican commercial banks in the years preceding the country's default and demonstrate that they became involved in international lending which was funded largely through heavy short-term interbank foreign borrowing. I provide new archival evidence which shows that in intermediating foreign finance with local public and private borrowers, Mexican banks incurred maturity, interest rate and currency mismatches and dangerously increased their risk position. This article provides insights for understanding the Mexican debt crisis as closely intertwined with problems in the domestic banking sector, which were, in turn, linked to its involvement in the international financial system.

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