[PDF] Distress In European Banks eBook

Author : Mr.Martin Cihak
Publisher : International Monetary Fund
Page : 39 pages
File Size : 50,24 MB
Release : 2009-01-01
Category : Business & Economics
ISBN : 1451871562

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The global financial crisis has highlighted the importance of early identification of weak banks: when problems are identified late, solutions are much more costly. Until recently, Europe has seen only a small number of outright bank failures, which made the estimation of early warning models for bank supervision very difficult. This paper presents a unique database of individual bank distress across the European Union from mid-1990s to 2008. Using this data set, we analyze the causes of banking distress in Europe. We identify a set of indicators and thresholds that can help to distinguish sound banks from those vulnerable to financial distress.

Author : Mr.Shekhar Aiyar
Publisher : International Monetary Fund
Page : 79 pages
File Size : 37,73 MB
Release : 2015-09-24
Category : Business & Economics
ISBN : 1513511653

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Europe’s banking system is weighed down by high levels of non-performing loans (NPLs), which are holding down credit growth and economic activity. This discussion note uses a new survey of European country authorities and banks to examine the structural obstacles that discourage banks from addressing their problem loans. A three pillared strategy is advocated to remedy the situation, comprising: (i) tightened supervisory policies, (ii) insolvency reforms, and (iii) the development of distressed debt markets.

Author : Michael Bräuninger
Publisher :
Page : pages
File Size : 36,80 MB
Release : 2019
Category :
ISBN : 9789289939799

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This paper describes a machine learning technique to timely identify cases of individual bank financial distress. Our work represents the first attempt in the literature to develop an early warning system specifically for small European banks. We employ a machine learning technique, and build a decision tree model using a dataset of official supervisory reporting, complemented with qualitative banking sector and macroeconomic variables. We propose a new and wider definition of financial distress, in order to capture bank distress cases at an earlier stage with respect to the existing literature on bank failures; by doing so, given the rarity of bank defaults in Europe we significantly increase the number of events on which to estimate the model, thus increasing the model precision; in this way we identify bank crises at an earlier stage with respect to the usual default definition, therefore leaving a time window for supervisory intervention. The Quinlan C5.0 algorithm we use to estimate the model also allows us to adopt a conservative approach to misclassification: as we deal with bank distress cases, we consider missing a distress event twice as costly as raising a false ag. Our final model comprises 12 variables in 19 nodes, and outperforms a logit model estimation, which we use to benchmark our analysis; validation and back testing also suggest that the good performance of our model is relatively stable and robust.

Author : Mariarosa Borroni
Publisher : Springer
Page : 118 pages
File Size : 25,15 MB
Release : 2019-04-09
Category : Business & Economics
ISBN : 3030150135

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This Palgrave Pivot provides a comprehensive overview of the dynamics that are affecting the profitability of European banks since the recent crisis period. More specifically, it sheds light on the most crucial changes in profit generation and on the consequential changes in banking strategies due to fiercer competition, reduced margin and changing regulation. The work is divided in four main parts. The first section introduces the changes in bank management policies, considering the periods before and since the crisis. In the second section, the authors review the literature on bank profitability and outline the main determinants of profit generation, and in the third section they provide a cross-country analysis of profitability for a wide sample of European banks during the great financial crisis. In the last section, the authors discuss the results of the quantitative analysis under the new regulatory and competitive framework that is progressively affecting the banking sector (fintech, Basel regulations, etc.). This book will be of interest to academics, researchers and students of European banking.

Author : Eric Thorez
Publisher :
Page : 51 pages
File Size : 12,38 MB
Release : 2017
Category :
ISBN :

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This paper empirically examines whether better governance necessarily reduces financial distress for banks.We have studied 49 banks among the TOP 100 European banks during the period 2006 to 2013 and performed a panel probit regression analysis on the financial distress dummy as our dependent variable using our selected governance, financial and economic explanatory variables.First, we found that governance determinants such as the independent Directors' ratio or the number of board meetings per year do matter to explain bank distress, giving credence to the extent of increasing supervision and regulation.Second, we show that the Tier 1 capital ratio, the ROA and the price to book ratio that we initially identified to use as financial control variables for our regressions give significant results.Hence, we highlight the use of the Tier 1 capital ratio as a key regulatory capital adequacy ratio in the Risk Management departments of European banks.

Author : Suman K. Bery
Publisher : World Bank Publications
Page : 124 pages
File Size : 50,85 MB
Release : 1997-01-01
Category : Business & Economics
ISBN : 9780821338933

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World Bank Technical Paper No. 361. Education has emerged as an essential component of the transition to a market economy in Central and Eastern Europe. Although the countries of the region inherited broadly accessible education systems, the legacies of central planning have constrained the systems from fully adjusting to market economies. This study examines empirical trends in access to and financing of education in nine Central and East European countries by drawing on the findings of a World Bank project that examined the social risks facing people and the policy responses taken by governments since 1989. Chapters address access and participation, the labor market, financing, and staff in the education sector.

Author : Stelios Markoulis
Publisher :
Page : pages
File Size : 34,84 MB
Release : 2019
Category :
ISBN :

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The recent financial crisis has clearly highlighted the importance of the timely identification of weak banks. This paper introduces and analyses a unique sample of EU banks, which faced distress during 2008-2015 and provides evidence regarding the relationship between distress and bank-specific and macroeconomic variables, paying particular attention to capital, size, and revenue diversification. Findings regarding these variables seem to connect well with current supervisory actions. The paper also focuses on banks in EU countries that faced economic problems and documents that the probability of distress in these countries has been influenced by different factors, in comparison to the rest of the EU.

Author : Board of Board of Governors of the Federal Reserve System
Publisher : CreateSpace
Page : 42 pages
File Size : 20,55 MB
Release : 2014-11-13
Category :
ISBN : 9781503205475

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We propose a hypothetical distress insurance premium (DIP) as a measure of the European banking systemic risk, which integrates the characteristics of bank size, default probability, and interconnectedness. Based on this measure, the systemic risk of European banks reached its height in late 2011 around e 500 billion. We find that the sovereign default spread is the factor driving this heightened risk in the banking sector during the European debt crisis. The methodology can also be used to identify the individual contributions of over 50 major European banks to the systemic risk measure. This approach captures the large contribution of a number of systemically important European banks, but Italian and Spanish banks as a group have notably increased their systemic importance. We also find that bank-specific fundamentals predict the one-year-ahead systemic risk contribution of our sample of banks in an economically meaningful way