Arbeitspapier

Banks' risk-taking within a banking union

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.

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

Bibliographic citation
Series: ECB Working Paper ; No. 2595

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

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

DOI
doi:10.2866/85240
Handle
Last update
10.03.2025, 11:44 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Farnè, Matteo
  • Vouldis, Angelos
  • European Central Bank (ECB)

Time of origin

  • 2021

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