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Measuring The Financial Performance Of The European Systemically Important Banks

Author

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  • TOMULEASA, Ioana-Iuliana

    („Alexandru Ioan Cuza” University of Iasi, Romania and Auvergne University, France)

  • COCRIŞ, Vasile

    („Alexandru Ioan Cuza” University of Iasi, Romania)

Abstract

This paper investigates the major determinants of bank performance in the European sector, taking into consideration the most important financial groups from this region. To account for performance, we have applied two fixed-effects regression models to a panel of European banks that covers the period 2004-2012, where profitability was assessed through two variables, namely return on average equity and net interest margin. The estimation results show that all bank-specific determinants affect bank profitability significantly, but not always in the anticipated way. Finally, the business cycle has a positive, albeit asymmetric impact on bank profitability, suggesting that profitability is pro-cyclical.

Suggested Citation

  • TOMULEASA, Ioana-Iuliana & COCRIŞ, Vasile, 2014. "Measuring The Financial Performance Of The European Systemically Important Banks," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 18(4), pages 31-51.
  • Handle: RePEc:vls:finstu:v:18:y:2014:i:4:p:31-51
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    More about this item

    Keywords

    Profitability; crisis period; too-big-too-fail; static panel regression; Moore-Penrose;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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