Breaking the Bank? A Probabilistic Assessment of Euro Area Bank Profitability - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Breaking the Bank? A Probabilistic Assessment of Euro Area Bank Profitability write by Selim Elekdag. This book was released on 2019-11-22. Breaking the Bank? A Probabilistic Assessment of Euro Area Bank Profitability available in PDF, EPUB and Kindle. This paper explores the determinants of profitability across large euro area banks using a novel approach based on conditional profitability distributions. Real GDP growth and the NPL ratio are shown to be the most reliable determinants of bank profitability. However, the estimated conditional distributions reveal that, while higher growth would raise profits on average, a large swath of banks would most likely continue to struggle even amid a strong economic recovery. Therefore, for some banks, a determined reduction in NPLs combined with cost efficiency improvements and customized changes to their business models appears to be the most promising strategy for durably raising profitability.
Breaking the Bank?
Breaking the Bank? - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Breaking the Bank? write by Selim Elekdag. This book was released on 2019. Breaking the Bank? available in PDF, EPUB and Kindle. This paper explores the determinants of profitability across large euro area banks using a novel approach based on conditional profitability distributions. Real GDP growth and the NPL ratio are shown to be the most reliable determinants of bank profitability. However, the estimated conditional distributions reveal that, while higher growth would raise profits on average, a large swath of banks would most likely continue to struggle even amid a strong economic recovery. Therefore, for some banks, a determined reduction in NPLs combined with cost efficiency improvements and customized changes to their business models appears to be the most promising strategy for durably raising profitability.
Euro Area Policies
Euro Area Policies - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Euro Area Policies write by International Monetary Fund. Monetary and Capital Markets Department. This book was released on 2018-07-19. Euro Area Policies available in PDF, EPUB and Kindle. This technical note consists of five chapters focusing on various aspects of systemic risk analysis across the euro area financial system. The chapters cover bank profitability, balance sheet- and market-based interconnected analysis, contingent claims analysis, and a brief discussion of data gaps in the nonbank, non-insurance (NBNI) financial sector. The ongoing economic recovery will support euro area bank profitability in general, but it is unlikely to resolve the structural challenges faced by the least profitable banks despite some recent improvements. This is important because persistently weak bank profitability is a systemic financial stability concern. Empirical analysis of 109 major euro area banks over 2007–2016 reveals that real GDP growth and the NPL ratio are the most reliable determinants of profitability, after accounting for other factors. Although higher growth would raise profits, a large swath of banks with the weakest profitability would most likely continue to struggle even with a robust recovery. Therefore, banks should take advantage of the current upswing by resolutely addressing their NPL stocks—such a strategy holds the most promise for weak banks’ profitability prospects.
Banking in Europe
Banking in Europe - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Banking in Europe write by Mariarosa Borroni. This book was released on 2019-04-09. Banking in Europe available in PDF, EPUB and Kindle. This Palgrave Pivot provides a comprehensive overview of the dynamics that are affecting the profitability of European banks since the recent crisis period. More specifically, it sheds light on the most crucial changes in profit generation and on the consequential changes in banking strategies due to fiercer competition, reduced margin and changing regulation. The work is divided in four main parts. The first section introduces the changes in bank management policies, considering the periods before and since the crisis. In the second section, the authors review the literature on bank profitability and outline the main determinants of profit generation, and in the third section they provide a cross-country analysis of profitability for a wide sample of European banks during the great financial crisis. In the last section, the authors discuss the results of the quantitative analysis under the new regulatory and competitive framework that is progressively affecting the banking sector (fintech, Basel regulations, etc.). This book will be of interest to academics, researchers and students of European banking.
Euro Area Policies
Euro Area Policies - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Euro Area Policies write by International Monetary Fund. Monetary and Capital Markets Department. This book was released on 2018-07-20. Euro Area Policies available in PDF, EPUB and Kindle. Overall the resilience of large euro area banks has improved, but important vulnerabilities remain. Capital buffers are in aggregate sizeable relative to immediate threats, but some banks are especially vulnerable to credit risk and others to market risks, including a substantial rise in risk premia. The banking system as a whole has ample liquidity, against a backdrop of ECB support. At a structural level, low profitability is found in many banks across all business models, despite improving conjunctural conditions. The interconnectedness analysis shows that strong buffers are effective in dampening both vulnerabilities and onward transmission. Risks to financial stability relate mainly to tighter financial conditions, weaker growth, and policy and geopolitical uncertainties. The withdrawal of the United Kingdom from the EU (Brexit) could potentially disrupt financial market and services, and thus the wider economy. Also, policy reversals could hurt debt sustainability and test the cohesion of policy making in the union.
