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Domestic Systemically Important Banks: An Indicator-Based Measurement Approach for the Australian Banking System

Author

Listed:
  • Patrick Brämer

    (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)

  • Horst Gischer

    (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)

Abstract

This paper serves as a response to the assessment methodology of the Basel Committee on Banking Supervision to identify systemically important banks. Based on the official technique, which requires an extensive collection of bank data, our paper develops a practicable modification. Utilising readily available indicators, we determine the domestic systemic risk of each licensed bank in Australia in the period 2002-2011. Our quantitative results uncover not only high levels of systemic risk for the four major banks, but their rising dominance during the global financial crisis. Consequently, we introduce a regulatory proposal that enables authorities to reduce the systemic risk of individual institutions.

Suggested Citation

  • Patrick Brämer & Horst Gischer, 2012. "Domestic Systemically Important Banks: An Indicator-Based Measurement Approach for the Australian Banking System," FEMM Working Papers 120003, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
    • Handle: RePEc:mag:wpaper:120003
    as

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    References listed on IDEAS

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    More about this item

    Keywords

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    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General

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