Banks' Risk-Taking within a Banking Union
Copyright policy )Banks' Risk-Taking within a Banking Union
Abstract We study the relationship between banks’ size and risk-taking in the context of supranational banking supervision. Consistently with theoretical work on banking unions and in contrast to analyses emphasising incentives underpinned by the too-big-to-fail effect, we find an inverse relationship between banks’ size and non-performing loan growth for a sample of European banks. Evidence is provided that the mechanism operates through the enhanced organisational efficiency of the supranational set-up rather than incentives alignment among the supervisors and the banks.
G28, too-big-to-fail, ddc:330, non-performing loans, Supervision, euro area, banking union, Banking union; Euro area; Non-performing loans; Supervision; Too-big-to-fail, F33, G21, G32, C20
G28, too-big-to-fail, ddc:330, non-performing loans, Supervision, euro area, banking union, Banking union; Euro area; Non-performing loans; Supervision; Too-big-to-fail, F33, G21, G32, C20
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