Following the Great Financial Crisis, European Union (EU) rules in the area of banking supervision have become ever more strongly influenced by the (formally non-binding) standards developed by international financial fora, chief of which are the G20 and the Basel Committee on Banking Supervision. European representation in these fora fluctuates, as varying, though, reduced...
ECB officials have recently poured scorn on the notion that the ECB could introduce a central bank digital currency (CBDC) in the Eurozone, with one labelling such an initiative as “economically inefficient and legally untenable.” This article assesses the justifications for these claims from legal and economic perspectives. It finds that, based upon prevailing ECB policies and...
The past decade has profoundly reshaped the fiscal governance system of the Eurozone. Supranational prerogatives vis-à-vis State budgets have been significantly expanded, thereby redefining the nature of Union action in the field of fiscal policy and transforming the dynamics between the Union and its Member States. In spite of its overhaul and the practical effects that Eurozone...
This paper forecasts the response of Islamic banks’ dynamics (size, profitability, nonperforming financing, and stability) to the COVID-19 pandemic over the period ranging from 2019Q4 to 2021Q4. Nine jurisdictions are considered based on their Islamic banks’ systemic importance, namely Bahrain, Brunei, Indonesia, Kuwait, Malaysia, Pakistan, Saudi Arabia, Turkey, and UAE. Using...
The use of financial technologies (FinTech) by financial market participants fostered a discussion among public authorities on the use technologies for regulatory (RegTech) and supervisory (SupTech) purposes. This paper discusses the application of innovative technologies to crisis resolution (ResTech) and sets out its potential scope of application. ResTech is the application of...
We examine the impact of board structure, CEO power and other bank-specific factors on bank risk-taking for a sample of 72 publicly listed European banks in both stable and crisis periods. Using a simultaneous equations approach, our main findings indicate that the proportion of independent directors, the board size, and Chief Executive Officer (CEO) power affected bank risk...
As a major electronic alternative to cash, central banks and state administrations often support the development of card payments with regulatory and public policy steps. Hungary was extremely active in this field by executing POS-terminal installation programmes or setting limits to interchange fees a year before the European regulation. Within this study we investigate, how...
The purpose of this paper is to assess the effectiveness of the transitional provisions for the impact of International Financial Reporting Standard 9 (IFRS 9) as a supervisory tool to strengthen a bank’s capital base. The new IFRS 9 provisions are a significant banking supervisory measure of the so-called Capital Requirements Regulation (CRR) Quick Fix to mitigate possible...
The emergence of risk-based capital regulation that is allowing banks to use their internal risk models for regulatory purposes was among the main regulatory developments prior to the financial crisis. During the crisis, it became evident these models underestimated the level of risk. The post-crisis regulatory approach brought a reversal of policy by significantly reducing the...
Countries around the world are working hard to fight against the economic crisis caused by the coronavirus pandemic, with a special emphasis on small- and medium-sized enterprises (SMEs) due to their vulnerability and importance in the business ecosystem. This paper analyzes the Spanish guarantee model and the measures taken by regional governments in conjunction with the main...
This article examines the current Indonesian Financial Service Authority (IFSA) regulations on corporate governance that deal with the relevance, concept, and application of the stakeholder model in the Indonesian banking sector. This study shows that the current IFSA regulations on corporate governance in the Indonesian banking sector encourage the application of the stakeholder...
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The volume and complexity of financial regulations have increased significantly since the 2008 financial crisis. This has put increasing pressure on banks to monitor and report a range of intricate exposures to comply with new prudential requirements. Regulatory Technology (RegTech) is an emerging technology trend leveraging information technology and digital innovations that can...
After the subprime crisis, with the worsening of asset quality all around Europe, a lack of harmonization emerged concerning credit classification, monitoring, provisioning and writing-off in the banking industry. A wave of analysis and new regulations by the Supervising Authorities aimed at highlighting best practices and creating a common standard, in order to enhance...
The volume and complexity of financial regulations have increased significantly since the 2008 financial crisis. This has put increasing pressure on banks to monitor and report a range of intricate exposures to comply with new prudential requirements. Regulatory Technology (RegTech) is an emerging technology trend leveraging Information Technology and Digital Innovations that can...
Risk disclosure is a crucial factor in enhancing the efficiency of financial markets and promoting financial stability. This paper proposes a methodological tool to analyze credit risk disclosure in bank financial reports, based on the content analysis framework. The authors also uses this methodology to carry out an empirical study on a small sample of large Italian banks. The...
The collapse of the global financial industry in 2008 and the subsequent decay of most Western economies into a period of prolonged economic stagnation have represented a springboard for the progressive growth of alternative channels of financial intermediation. The reluctance and inability of mainstream banks in the post-crisis years to provide credit facilities to the real...
A key research question that remains largely unanswered especially in the African context is whether the macroeconomic environment and the level of financial development of a country determine the effectiveness of financial reforms. This has important policy implications. We choose Ghana as a case study and carry out an in-depth analysis of its comprehensive set of financial...
Throughout his long and distinguished career, David Mayes was concerned with a wide range of subjects. This paper focuses on three of them: on monetary and financial history, on monetary stability, and on financial stability. We use the first of these to open up exploration of the second and third. A relationship is often asserted between monetary and financial stability, but how...
The US financial crisis that started in 2007 ultimately had global reach, but those countries most severely affected were the advanced industrialized states. In the United States and Europe, banks, many of which had regional or global profiles, were the source of nearly unprecedented economic instability. This special issue therefore examines the politics behind the re-regulation...
This article uses the example of the collapse of the finance company sector in New Zealand in 2006–2010 to illustrate the problems with light touch regulation and a reliance on good governance to ensure financial stability. It shows two major governance failures, the first in the governance of the sector by the authorities and the second, serious failures in corporate governance...