1,720,987 research outputs found
Vigilanza unica europea e rettifiche di valore prudenziali: una proposta nella prospettiva della sostenibilità dell’accesso al credito
No full textAs part of the Asset Quality Review conducted by the ecb since 2014 with reference to the main European banks, indicators typically used in corporate finance have been introduced. The element that unites the new guidelines appears to be the progressive abandonment of a backward-looking logic to embrace a fully forward-looking perspective based on the appreciation of cash flows. In the aqr framework, ebitda and dscr have assumed particular importance. As is known, the "aqr manual", with specific reference to the calculation of prudential provisioning, provides that banks, in a going concern perspective, estimate the recoverable amount of loans by appropriately discounting the cash flows. The aim of the work is to analyse the prudential provisioning model identified in the aqr framework in order to propose a generalization starting from the expected dscr of the borrower. The paper highlights how an "economic"approach to provisioning tends to reward companies capable of generating adequate prospective cash flows, in this way mitigating the potential allocative distortions implicit in the incentive structure underlying the aqr approach
How do bail-in amendments in Directive (EU) 2017/2399 affect the subordinated bond yields of EU G-SIBs?
No full textUsing a diff-in-diff analysis, we compare the yield reaction of subordinated bonds to the implementation of the Directive (EU) 2017/2399, for EU G-SIBs and smaller banks. We find an increase in the yields of EU G-SIBs relative to smaller banks of between 0.24 and 0.31 basis points. Such repricing indicates higher bail-in expectations among subordinated bondholders as the Directive's provisions improve the effectiveness of the bail-in. Moreover, this result implies the higher risk profile of subordinated bondholders following the implementation of the new Directive and suggests that its measures might be effective in restoring market discipline
Corruption, foreign aid, and international trade
No full textCorruption has varying effects on international trade flows. Through the lenses of the institutional and transaction costs theories, we propose a novel institutional analysis of foreign aid as a formal institution that moderates the negative impact of corruption on international trade. We investigate this framework using a sample of the imports and exports of 30 Organization for Economic Co-operation and Development (OECD) member countries and their 150 trading partners from 1995 to 2018. We analyze two main types of bilateral foreign aid within this framework: official development assistance and aid for trade. We present three main findings. First, the trading partners' corruption has a negative impact on OECD bilateral imports and exports. Second, both forms of foreign aid moderate the negative effect of the trading partners' corruption on OECD countries' exports. These findings confirm that OECD member countries are willing to export to very corrupt countries. Third, official development assistance does not moderate the relationship between corruption and imports, meaning that OECD countries do not import from corrupt locations. However, aid for trade still moderates the negative impact of corruption on OCED countries' imports. Overall, we confirm that foreign aid negatively moderates the adverse effect of corruption on exports but not on imports. Thus, foreign aid as a formal institution deserves more attention from OECD policymakers and managers of MNEs as a mechanism for reducing corruption and boosting international trade
Capital and asset quality implications for bank resilience and performance in the light of NPLs’ regulation: a focus on the Texas ratio
No full textBased on a sample of 63 listed European banks, this paper investigates the relationship of capital and asset quality, in terms of provisioning and coverage policies, with bank risk and performance during the period 2005Q1-2018Q4. Our results point out different relationships between risk-based and non-risk-based measures of capital with bank risk and performance profiles. In particular, the information content of the leverage ratio appears to be merely related to the bank dimensional feature, whereas the total capital ratio shows a positive and statistically significant relationship with bank stability and is also negatively related to insolvency risk, thereby suggesting a crucial role for capital for the overall bank resilience. In addition, more capitalized banks are associated with higher bank performance. Regarding asset quality, hefty coverage and provisioning policies are generally associated with both lower bank resilience and performance. These results are relevant for disentangling the implications that the regulatory overhaul set out to address the NPLs issue is having on banking activity
Corruption in economics : a bibliometric analysis and research agenda
Full text linkWe conducted a bibliometric analysis of the literature on corruption in the discipline of economics (4,488 articles) over the past 51 years between 1968–2019. Through this methodology, we identified seven research streams: (1) the economic framework of crime and corruption, (2) the legal institutions and corruption, (3) the effect of corruption on aspects of national economics, (4) the combating and monitoring of corruption, (5) the determinants of corruption, (6) political institutions and corruption, and (7) the effect of corruption on firms. In addition to these research clusters, we also identified the key journals, articles, countries, institutions, authors, data sources, measurements, theoretical frameworks, and networks dealing with this issue. Finally, we suggested 20 future research questions
Credit quality, bank provisioning and systematic risk in banking business
No full textBased on a sample of 59 European banks over the period 2006-2011, we investigate the impact of the loan loss provisioning (LLP) together with a wide array of credit-risk ex- posure and performance variables on systematic risk measured by betas. We develop a model for assessing whether management behaviour, accounting policies, such as LLP, and the quality of loan portfolio play a significant role in explaining the banks’ system- atic risk exposure. Our results suggest that financial performances do not have a direct significant relation with betas; rather measures of risk exposures (risk weighted assets on total assets) substantially affect systematic risk. During crisis systematic risk signifi- cantly responsive to provisions and their impacts on performances.
Our study has several implications, in particular at light of changing European regula- tion on non-performing exposures reporting and forbearance practices alongside with regulators forcing banks to strengthen their capital base
Bank provisioning and cost of capital
No full textBased on a sample of 59 European banks over the period 2006-2011, we investigate the impact of the loan loss provisioning (LLP) together with a wide array of credit-risk ex- posure and performance variables on systematic risk measured by betas. We develop a model for assessing whether management behaviour, accounting policies, such as LLP, and the quality of loan portfolio play a significant role in explaining the banks’ system- atic risk exposure. Our results suggest that financial performances do not have a direct significant relation with betas; rather measures of risk exposures (risk weighted assets on total assets) substantially affect systematic risk. During crisis systematic risk signifi- cantly responsive to provisions and their impacts on performances.
Our study has several implications, in particular at light of changing European regula- tion on non-performing exposures reporting and forbearance practices alongside with regulators forcing banks to strengthen their capital base
Liquidity pressure and the sovereign-bank diabolic loop
No full textWe study the sovereign-bank nexus through the liquidity channel. Using a sample of 22 European economies during 2012–2021, we find that an increase in banking liquidity pressures leads to a significant widening of SCDS spreads as banks are encouraged to purchase sovereign bonds for liquidity management purposes, consistent with the "flight to liquidity" phenomenon. This excessive exposure increases the probability of sovereign default in the long run by reducing the sustainability of sovereign debt and evoking a diabolic loop scenario. The results also suggest that ECB intervention can reinforce the feedback loop by lowering funding costs and triggering collateral trading
The convergence between Islamic and conventional exchanges: performances and governanc
No full textBased on a dataset of 31 conventional and Islamic stock exchanges we compare financial performance across these two groups for 2007–2011 period. Our results suggest that CEs and IEs are differently exposed to institutional constraints and have different drivers of profitability. Islamic stock exchanges’ performances are essentially driven by traditional listing and trading services and are affected by institutional factors such as the degree of foreign trading openness of their economies and measures of society development. Furthermore, they ensure greater stability during crisis, although Shari’ah compliant investments don’t affect their revenue generation. Conventional stock exchanges have higher trading intensity, higher level of revenues’ diversification and high capital investments, as they operate with different business models. Our results could have relevant business and strategic implications for further convergence between the two groups. Moreover our analysis could be significant for firms wishing to list their shares into Shari’ah Compliant Stock Exchanges or into Conventional ones and traders choosing the most convenient trading venue
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