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Systemically Important Banks In Europe: Risk, Complexity And Cross-Jurisdictional Activities

Author

Listed:
  • ANA-ȘTEFANIA BÄ‚LUȚĂ

    (BabeÈ™-Bolyai University of Cluj-Napoca, Romania)

  • SIMONA NISTOR

    (BabeÈ™-Bolyai University of Cluj-Napoca, Romania)

Abstract

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 cross-jurisdictional 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.

Suggested Citation

  • Ana-ȘTefania Bä‚Luèšä‚ & Simona Nistor, 2019. "Systemically Important Banks In Europe: Risk, Complexity And Cross-Jurisdictional Activities," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 23, pages 163-183, June.
    • Handle: RePEc:aic:revebs:y:2019:j:23:balutaa
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    More about this item

    Keywords

    Z score; financial stability; complexity; cross-jurisdictional activity.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G01 - Financial Economics - - General - - - Financial Crises

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