Banks' risk-taking within a banking union

Arbeitspapier

We study the relationship between banks' size and risk-taking in the context of supranational banking supervision. Consistently with theoretical work on banking unions and in contrast to analyses emphasising incentives under- pinned by the too-big-to-fail effect, we find an inverse relationship between banks' size and non-performing loan growth for a sample of European banks. Evidence is provided that the mechanism operates through the enhanced organisational efficiency of the supranational set-up rather than incentives alignment among the supervisors and the banks.

Object Details

• ISBN: 978-92-899-4818-0
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECB Working Paper ; No. 2595

Classification and Topics

• Classification: Wirtschaft ; International Monetary Arrangements and Institutions ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Financial Institutions and Services: Government Policy and Regulation ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill ; Single Equation Models; Single Variables: General
• Subject: Supervision ; euro area ; non-performing loans ; banking union ; too-big-to-fail

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Farnè, Matteo ; Vouldis, Angelos
• Event: Veröffentlichung
• (who): European Central Bank (ECB)
• (where): Frankfurt a. M.
• (when): 2021

Further information

• DOI: doi:10.2866/85240
• Handle: http://hdl.handle.net/10419/246172
• Last update: 10.03.2025, 11:44 AM CET