Join Professor Franco Fiordelisi as he discusses evidence of strategic behaviour by European banks following a major announcement by European authorities.
14:00 - 15:30
Essex Business School EBS.2.41
Professor Franco Fiordelisi
Lectures, talks and seminars
Essex Business School
Dr Nikos Vlastakis firstname.lastname@example.org
The seminar will present evidence of strategic behaviour in a transparent and highly scrutinised setting in the banking sector. We use the unexpected announcement of the centralisation of banking supervision in Europe based on pre-announced threshold-based selection criteria.
On December 14, 2012, the European authorities abruptly announced the transfer of supervisory responsibilities of large banks from their national authorities to a supranational entity. As of January 1, 2014 banks with assets larger than €30 billion would be supervised by the European Central Bank. Using public data we show evidence of strategic behaviour by certain banks (i.e. sorters) around the threshold, that shrank in size to avoid centralized supervision. Over time these sorters exhibited distinct different behaviour than non-sorters including higher levels of nonperforming loans. We use instrumental variable to show that the centralization of banking supervision led to more stringent supervisory standards. Our results are robust to the use of confidential supervisory and credit register including comprehensive data on lender borrower credit relationships.
This is an open event; there is no need to book. Please feel free to attend and bring your colleagues, classmates and friends.
Professor Franco Fiordelisi currently associate editor of the European Journal of Finance, In the past, Franco was associate editor of the Journal of Banking and Finance (2012 -2015). He was visiting research scholar at the Olin Business School, Washington University in St. Louis, U.S. (Fulbright Scholarship), the Federal Reserve of New York (2017) and the European Central Bank (in 2010, 2017, 2018).