The three essays on bank assets : Commonalities and systemic risk

I gratefully acknowledge financial support from the Mitsui Life Financial Research Center at the University of Michigan. This support made it possible to purchase the earnings conference call transcripts used in Chapter 2.

The British Accounting Review, 2017

Over the past decade or so, banks have been affected by an array of shocks, which have transformed the industry. The global financial crisis of 2007-2008 coupled with the euro sovereign debt crisis of 2010-2012 and the subsequent recessions in many countries all combined to create a new macroeconomic environment with slower economic growth, low (or negative) interest rates and a new policy environment (where credit and quantitative easing and other alternative monetary policies are prevalent). All these forces have affected the performance and strategies of banks. Extensive regulatory and supervisory reforms have also taken place in order to reduce the risks in the banking and wider financial services sector (Berger, Molyneux and Wilson, 2015). In the United States, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 has introduced controls designed to reduce the likelihood of future taxpayer bailouts of major banks by limiting proprietary trading and other volatile business areas. Similar major reforms have taken place in the European Union, not least the moves to create a European Banking Union and the introduction of a Single Resolution Mechanism that became partially operational after the x Corresponding editor. * The Guest Editors would like to thank the General Editors, Professor Nathan Joseph and Professor Alan Lowe for commissioning this special issue and for providing advice and guidance throughout the process. Thanks also go to Shereen Awan at the British Accounting Review and Shona Deigman at the University of St Andrews for administrative assistance. We wish to thank the scientific committee, discussants and participants at the Contemporary Issues in Banking Conference held at the University of St Andrews in December 2015 for the useful comments and suggestions on all the papers submitted to this special issue, and to the referees for further comments and suggestions post submission. Finally, and most importantly we thank the authors of the papers included in the special issue for their valuable contributions in enhancing our understanding of contemporary issues in banking, The usual disclaimer applies.

2012

Your article is protected by copyright and all rights are held exclusively by Swiss Society for Financial Market Research. This e-offprint is for personal use only and shall not be selfarchived in electronic repositories. If you wish to self-archive your work, please use the accepted author's version for posting to your own website or your institution's repository. You may further deposit the accepted author's version on a funder's repository at a funder's request, provided it is not made publicly available until 12 months after publication.

2014

Changes in the financial market and attempts at implementation of prudential regulation proposals after the recent financial crisis resulted in the scientific conference entitled International Conference on Management, Banking and Finance, held at the Faculty of Management, University of Warsaw, in June 2014. This monograph, the result of discussions and presentations delivered by participants, aims to present topics in the field of finance.

2010

Journal of Banking & Finance, 2002

The papers in this special issue were presented at a conference on Banks and Systemic Risk held at the Bank of England from 23-25 May 2001. 1 The papers covered three broad areas-banks and systemic risk; theory and evidence of market discipline and signals of bank fragility; and capital requirements and crisis prevention. The view that weakness in the banking sector may have serious systemic effects on the economy more generally hinges on several issues. Since the early 19th century (Thornton, 1802), it has been recognised that problems in one bank can spill over into more widespread difficulties in the sector. The nature of the contracts banks hold (short-term deposits and longer-term loans) exposes them to the possibility of runs; and linkages between banks combined with information asymmetries between counterparties and banks make them vulnerable to contagion. A number of papers have focussed on bank runs (e.g. Diamond and Dybvig, 1983) and the transmission mechanism of problems from one bank to others (e.g. Freixas et al., 2000). Other papers (e.g. Bernanke, 1983) have focussed on the wider costs to the economy if banks fail. This reflects the central position of banks in the payments system and their special role in intermediating flows of funds to small firms and the retail sector. One issue addressed at the conference was whether banking crises do in fact impose externalities on the system. It has been suggested that, with the growth of substitutes for bank intermediation particularly through the development of securities markets, bank failures may not impose substantial costs on economies. Hoggarth, Reis and Saporta ('Costs of banking system instability: some empirical evidence') review the estimates of fiscal costs incurred in dealing with a banking crisis and also

SSRN Electronic Journal, 2000

Banks are generally considered by most people to be utilities that allow for the transmission of value on a daily basis in modern society, but they also seem to create devastating events like credit crises by the manufacture of credit. How this power originated in human society is of interest. Most animals produce some degree of savings, either in caching from one season to the next or for later in one season. Often these savings are an intergenerational transfer for the initial survival of young as in some wasps, or in a later use by the same individual who produces the savings either in the same year or the next as in many birds. Caldararo has described many of these examples in an article that compares such caching to examples of human saving (Caldararo, 2009). The evolution of the bank, of institutions for organizing the savings of groups of humans has had a number of separate points of origin in history in various societies in antiquity and most recently during the Middle Ages in Europe. Why banks are seen as necessary and deserving of saving or protecting during economic crises often seems a matter of faith or dogma than of necessity. This explains why neither Bush nor Obama's advisors, nor the EU have crafted as bold actions in the present crisis as FDR took in his Bank Holiday and that regarding the Gold Standard. Similar actions are necessary as is massive employment, but attitudes towards banking prevent such measures.