SYSTEMICALLY IMPORTANT BANKS IN EUROPE: RISK, COMPLEXITY AND CROSS-JURISDICTIONAL ACTIVITIES

This paper aims to investigate the effects of the assets and liabilities structure of financial institutions considered for regulatory purposes on their probability of default, across a sample of European banks that are designated as Global Systemically Important Banks (G-SIBs). Our analysis spans f...

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Bibliographic Details
Published inReview of Economic and Business Studies (REBS) no. 23; pp. 163 - 183
Main Authors BĂLUȚĂ, ANA-ȘTEFANIA, Nistor, Simona
Format Journal Article
LanguageEnglish
Published Editura Universităţii »Alexandru Ioan Cuza« din Iaşi 2019
The Publishing House of the Alexandru Ioan Cuza University of Iasi
Subjects
Business Economy / Management
Economic history
Present Times (2010 - today)
Transformation Period (1990 - 2010)
complexity
Z score
financial stability
crossjurisdictional activity
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Summary:This paper aims to investigate the effects of the assets and liabilities structure of financial institutions considered for regulatory purposes on their probability of default, across a sample of European banks that are designated as Global Systemically Important Banks (G-SIBs). Our analysis spans from 1995 to 2018. The empirical findings of a Fixed Effects panel model indicate that characteristics like size, complexity and crossjurisdictional activities have a considerable impact on banks’ distance to default. This study also finds that financial institutions with greater Capital Tier1 ratios are more likely to have a lower probability of default, a result that highlights the importance of implementing the BASEL III Capital Accord specifications.
ISSN:1843-763X