To ensure the credibility of market discipline induced by bail-in, neither retail investors nor peer banks should appear prominently among the investor base of banks' loss absorbing capital. Empirical evidence on bank-level data provided by the German Federal Financial Supervisory Authority...

Wir fordern eine Absicherung aller Sichteinlagen. Jederzeit kündbare, aber ungesicherte Depositen sind der Hauptgrund für Bankenruns. Deren Geschwindigkeit und Ansteckungsrisiken sind durch Digitalisierung und soziale Medien stark gestiegen. Wir argumentieren, dass Bankenruns, die traditionell...

The SVB case is a wake-up call for Europe's regulators as it demonstrates the destructive power of a bank-run: it undermines the role of loss absorbing capital, elbowing governments to bailout affected banks. Many types of bank management weaknesses, like excessive duration risk, may raise...

In this paper we argue that the own findings of the SSM THEMATIC REVIEW ON PROFITABILITY AND BUSINESS MODEL and the academic literature on bank profitability do not provide support for the business model approach of supervisory guidance. We discuss in the paper several reasons why the regulator...

Over the past decade, the Single Supervisory Mechanism focused on making banks safer, resulting in stronger banks but limited euro area cross-border integration. We argue that overbanking hinders both cross-border integration for the EU and the development and integration of capital markets. In...

Almost ten years after the European Commission action plan on building a capital markets union (CMU) and despite incremental progress, e.g. in the form of the EU Listing Act, the picture looks dire. Stock exchanges, securities markets, and supervisory authorities remain largely national, and, in...

This study analyseswhy European banks, despite improved cost efficiency, continue to trade at lower valuations than their United States (US) counterparts. The gap stems from limited growth potential due to market fragmentation and underdeveloped capital markets. To close this competitiveness...

This paper analyses the demand-side prerequisites for the efficient application of the bail-in tool in bank resolution, scrutinises whether the European bank crisis management and deposit insurance (CMDI) framework is apt to establish them, and proposes amendments to remedy identified...

This study looks at potential windfall profits for the four banking acquisitions in 2023. Based on accounting figures, an FT article states that a total of USD 44bn was left on the table. We see accounting figures as a misleading analysis. By estimating marked-based cumulative abnormal returns...

In 2023, both the US and Europe witnessed banking crises, notably involving Silicon Valley Bank and Credit Suisse. Relevant authorities intervened to prevent contagion, and distressed banks were sold at seemingly deflated prices. We identify three primary factors contributing to elevated profits...