The Italian banks: which will be the "New Normal"? - Industrial, Institutional and Behavioural Economics


a cura di: Giampio Bracchi, Umberto Filotto, Donato Masciandaro

Editore
Edibank
Anno
2016
Pagine
356
ISBN
978-88-449-1106-5
Disponibilità
Disponibile
Prezzo di copertina€ 35,00
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Presentazione

In the coming months the European Union will be characterized by four features: a fragile, prolonged and uneven recovery path for the real growth and employment, persistence of a strong monetary policy accommodation, a further implementation of the new supervisory architecture, and a series of downside risks, triggered by structural trends - as migration - or historical event - as Brexit. Which will be the perspectives for the Italian banks? The 2016 Report on the Italian Financial System investigates the key issues using three different perspectives: industrial, institutional and behavioural economics.
   
Part One offers updated and aggregate evaluations of the health state of the European and Italian banks and of the sustainability of their current business models. Part Two goes in depth in exploring crucial and controversial topics in the evolving state of the new and complex single supervisory architecture. Part Three presents the results that can be obtained applying the tools of behavioural economics to explore the relationships between banking, financial choices and the shape of the regulatory and supervisory setting.
 
  
In conclusion, in the 2016 Report the emphasis has been on the today most critical issues of profitability, low rates, Npls, sustainability of business models, complex and incomplete regulatory environment, consolidation, capital levels, bailing-in. However, it is necessary to always remember that in the next years the different business models will be widely and rapidly impacted by the digital innovation. Banks have three to five years at most to become digitally proficient. Revenues and profits will migrate towards banks that successfully use digital technologies to automate processes, create new products, improve regulatory compliance, and disrupt key components of the value chain: many analyses suggest that digital laggards could see up to 35% of net profit eroded, while best performers may realize a profit upside of 40%. This is an additional and vital challenge for our banking system in the near future.

INTRODUCTION. THE CHANGING FACE OF BANKING
1. Banking industry economics 
2. Institutional economics 
3. Behavioural economics
Part 1 - BANKING INDUSTRY ECONOMICS
 
EUROPEAN BANKS IN THE XXI CENTURY: ARE THEIR BUSINESS MODELS SUSTAINABLE?
1. Introduction 
2. Bank business models: review of the literature 
3. Data and methodology 
3.1 Identification of bank business models and peer groups 
3.2 The dataset 
4. Results 
4.1 Identified bank business models and peer groups 
4.2 The performance of different bank business models and peer groups 
5. Conclusions 
Appendix 
References
SLICED AND DICED EUROPEAN BANKS’ BUSINESS MODELS AND PROFITABILITY
1. Introduction 
2. Institutional backdrop and justification for the proposed research 
3. Relevant literature 
4. Data and methodology 
4.1 Data 
4.2 Methodology 
5. Findings 
6. Conclusions 
References
CREDIT RATIONING AND THE RELATIONSHIP BETWEEN FAMILY BUSINESSES AND BANKS
1. Introduction 
2. Literature review 
2.1 Family firms and credit availability 
2.2 The role of lending technologies 
3. Data and methodology 
3.1 Empirical methodology and data description 
3.2 Credit rationing and lending technologies indices 
3.3 Control variables 
4. Results 
4.1 Baseline estimates 
4.2 Non-linear effects 
4.3 The role of multiple banking 
5. Conclusions 
Appendix 
References
DO BANKS LEND THEIR UMBRELLAS ONLY WHEN IT’S SUNNY?
1. Introduction 
2. Stylized facts concerning Npls 
3. The determinants of Npls: a review of the literature and our hypotheses 
4. Data and methodology 
4.1 Sample 
4.2 Econometric methodology 
5. Results 
6. Conclusions 
References
NPLS AND RESOURCE ALLOCATION IN CRISIS AND POST CRISIS YEARS: EVIDENCE FROM EUROPEAN BANKS
1. Introduction 
2. Data and stylized facts 
2.1 Data sources and descriptive statistics 
2.2 Stylized facts 
3. Testable predictions 
4. Impact of bank loan quality on bank lending 
5. Role of provisioning and capitalization 
6. Conclusions 
References
PRIVATE BANKING: INDUSTRY EVOLUTION AND CREATION OF A SECTORIAL TREND INDEX
1. Private banking: the definition 
1.1 Private banking: definitional aspects and characteristics 
1.2 Demand analysis: the private customer 
1.3 Offer analysis: main sector intermediaries 
1.4 Attempt of a new definition of private banking 
2. Private banking: the business model 
2.1 Private banking abroad: some comparative business models 
2.2 Private banking in Italy 
3. The creation of a sectorial trend index 
3.1 The indicator structuring 
3.2 Methodology 
4. Final remarks 
References
Part 2 - INSTITUTIONAL ECONOMICS
 
REGULATORY ARBITRAGE IN EU BANKING: DO BUSINESS MODELS MATTER?
1. Introduction 
2. Survey of the literature 
3. Data 
4. Results 
5. Conclusions 
References
THE ASYMMETRIC BURDEN OF REGULATION: WILL LOCAL BANKS SURVIVE?
1. Introduction 
2. The regulation-deregulation pendulum and banking structure 
3. A survey on the burden of regulation 
4. A new wave of banking consolidation? 
4.1 Overbanking in Europe
5. Global banks, local banks and distances in regional development 
5.1 Bank size, consolidation in banking industry and small business lending 
5.2 Organizational complexity, functional distance and credit allocation 
5.3 Local banks and local development 
6. Conclusions 
References
FROM THE RESCUE OF BANKS TO THE SINGLE RESOLUTION MECHANISM: INSTITUTIONAL AND EMPIRICAL ANALYSIS
1. Introduction 
2. Crisis management in Italian style and the new European scheme 
3. The new European resolution mechanism: starting with prevention and early intervention 
4. The macro-economic approach of the resolution objectives 
5. Resolution 
6. Transition to the new regime: the case of the four Italian banks from special administration to resolution 
7. Analysis of bail-in contribution capacity of Italian banks 
7.1 Liability structure and bail-in contribution: descriptive analysis of aggregate data 
7.2 Drivers of bail-in contribution: microeconometric analysis 
8. Conclusions and prospects 
References
THE CHANGING FACE OF DEPOSIT INSURANCE IN EUROPE: FROM THE DGSD TO THE EDIS PROPOSAL
1. Introduction 
2. The Deposit Guarantee Scheme Directive (DgsD) 
2.1 Main features 
2.2 State aid rules and Dgs interventions 
3. The European Deposit Insurance Scheme (EDis) 
3.1 Core architecture 
3.2 Assessment 
4. Final remarks and policy suggestions 
References
EUROPEAN SYSTEM OF CENTRAL BANKS AND COMMUNICATION: WHAT DO SOCIAL MEDIA REVEAL?
1. Introduction 
2. Literature review 
3. Sample 
4. Methodology 
5. Results 
5.1 @Mentions 
5.2 #Hashtags 
5.3 Network analysis 
6. Discussion 
References
Part 3 - BEHAVIOURAL ECONOMICS
 
RISK AVERSION AND LOSS AVERSION: TWO SIDES OF THE SAME COIN?
1. Introduction 
2. Risk aversion 
3. Loss aversion 
4. Regret aversion 
5. Empirical investigation 
5.1 Preface 
5.2 Questionnaire and sample relevant data 
5.3 Results 
5.4 Cluster analysis and other behavioural findings 
6. Concluding remarks 
Appendix 
References
THE ITALIAN ALTERNATIVE DISPUTE RESOLUTION (ADR) MECHANISM AND CUSTOMER BEHAVIOUR
1. Introduction 
2. The main features of Italian Banking and Financial Ombudsman 
3. Literature review 
4. The effects of Ombudsman’s decisions upon the customers’ behaviour 
5. Conclusions 
References
BORROWING DECISIONS AND REPAYMENT CAPACITY: CAN REGULATION ALLEVIATE INDIVIDUAL BEHAVIOURAL BIASES?
1. Introduction 
2. Literature review and the Italian reform on consumer credit 
3. Assumptions and research hypothesis 
4. Data and methods 
4.1 The dataset: sample of consumer credit positions and customers 
4.2 Difference-in-difference methodology 
5. Effects of regulation on consumer credit decision process (Time Dimension 1) 
6. Effects of regulation on repayment capacity (Time Dimension 2) 
7. Conclusions 
References
MEASURING RISK CULTURE IN BANKS: HOW CAN BEHAVIOURAL AUDITING MAKE THE IMPOSSIBLE POSSIBLE
1. Introduction 
2. Risk culture and corporate governance 
3. Scope of internal audit function on risk culture 
3.1 Tone from the top: the relevance of the audit mandate 
3.2 Audit techniques evaluating soft evidences 
4. The design of a risk culture framework 
5. Risk culture control objectives and risk culture indicators 
6. The survey: assessing risk culture in banking 
7. Conclusions 
References
ABOUT THE AUTHORS