Bank regulation and systemic risk: cross country evidence

Using data for banks from 65 countries for the period 2001–2013, we investigate the impact of bank regulation and supervision on individual banks’ systemic risk. Our cross-country empirical findings show that bank activity restriction, initial capital stringency and prompt corrective action are all positively related to systemic risk, measured by Marginal Expected Shortfall. We use the staggered timing of the implementation of Basel II regulation across countries as an exogenous event and use latitude for instrumental variable analysis to alleviate the endogeneity concern. Our results also hold for various robustness tests. We further find that the level of equity banks can alleviate such effect, while bank size is likely to enhance the effect, supporting our conjecture that the impact of bank regulation and supervision on systemic risk is through bank’s capital shortfall. Our results do not argue against bank regulation, but rather focus on the design and implementation of regulation

Central Banks’ Commitment to Stakeholders: CSR in the Eurosystem: 2006–2016

This is a preprint version of the following final paper: Farina V, Galloppo G, Previati D (2019). Central Banks Commitment to stakeholders: CSR in the Eurosystem: 2006-2016. In: Frontier topics in Banking. Palgrave https://doi.org/10.1007/978-3-030-16295-5_

The Historical Evolution of Central Banking

International audience"Central banking" is what a central bank does, but the definition of "central bank" is less straightforward than it may appear at first sight. Following Ugolini (2017), this chapter defines central banking as the provision of public policies aimed at fostering monetary and financial stability, and surveys the historical evolution of such policies in the West from the Middle Ages to today. It shows that institutional equilibria mattered a lot in shaping the way stabilization policies were implemented: central banking evolved in markedly distinct ways in city states (like Venice, Amsterdam, Hamburg, Barcelona, or Genoa), centralized territorial polities (like Naples, Sweden, England, Austria, or France), or decentralized territorial polities (like the United States or the European Union). As a result, the historical evolution of central banking does not appear to have been driven by the "survival of the fittest", but rather by the constant adaptation of policymaking to changing political economy equilibria