Risk and regulation: A difference-in-differences analysis for Italian local banks

Barra, Cristian; Destefanis, Sergio; Lavadera, Giuseppe Lubrano

doi:10.1016/j.frl.2016.01.003

Cited by 24 publications

(11 citation statements)

References 20 publications

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“…It is also remarkable to highlight that the coefficient of time is always negative, indicating that during the years of the Lehman crisis the MCBs register significant losses in efficiency. While the nexus between crisis and small banks efficiency deserves to be investigated better, as done by Barra et al (), it is interesting to point out that our evidence is in line with the results provided by Tabak et al (), which focus on US savings banks over the period 2001–2009.…”

Section: Heterogeneity In Mcb Performance: the Empty Mlm And The Timesupporting

confidence: 91%

“…The period under scrutiny involved the years of crisis 2006–2011. This was a period of severe instability, whose effect on MCBs have not been studied in depth (the exception is Barra et al ). This paper contributes to the debate first by updating the analysis of the level and dynamics of MCB performance and secondly by modeling time as a determinant of MCB efficiency.…”

Section: Introductionmentioning

confidence: 99%

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Multilevel empirics for small banks in local markets

Aiello

Bonanno

2018

Papers in Regional Science

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Banking is increasingly a-spatial. However, the environment matters for small banks. Indeed, they are embedded in narrowed markets and hence benefit from proximity to their member-customers. By referring to multilevel approach, this article aims at measuring how much the performance of Italian mutual-cooperative banks is determined by both geographical (provincial level) and individual characteristics (small bank level). The effect of local markets explains 28.27% of bank heterogeneity in the empty multilevel model and 33% in the most extended model. Moreover, it is found that bank efficiency increases with market concentration and demand density and decreases with branching in local markets.JEL codes: G21, C13, D00, R19

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Section: Heterogeneity In Mcb Performance: the Empty Mlm And The Timesupporting

confidence: 91%

Section: Introductionmentioning

confidence: 99%

Multilevel empirics for small banks in local markets

Aiello

Bonanno

2018

Papers in Regional Science

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“…For a review of the topic on the years before the 2007 crisis, see Beck et al (2015), Ghosh (2015), Ozili (2015) and Tanaskovi c and Jandri c (2015). Studies that have considered the causes of rising NPLs after the 2007 financial crisis for (all or some) EU countries include: Skarica (2014), Beck et al (2015), Barra et al (2016), Tanaskovi c and Jandri c (2015) and Anastasiou et al (2016Anastasiou et al ( , 2019a [1]. Skarica (2014) is the first empirical study on the countries of the CEE region using aggregate, country-level data on problem loans.…”

Section: A Short Review Of the Empirical Studies On Npls In European Countriesmentioning

confidence: 99%

Government failures and non-performing loans in European countries: a spatial approach

Ofria

Mucciardi

2021

JES

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PurposeThe purpose is to analyze the spatially varying impacts of corruption and public debt as % of GDP (proxies of government failures) on non-performing loans (NPLs) in European countries; comparing two periods: one prior to the crisis of 2007 and another one after that. The authors first modeled the NPLs with an ordinary lest square (OLS) regression and found clear evidence of spatial instability in the distribution of the residuals. As a second step, the authors utilized the geographically weighted regression (GWR) to explore regional variations in the relationship between NPLs and the proxies of “Government failures”.Design/methodology/approachThe authors first modeled the NPL with an OLS regression and found clear evidence of spatial instability in the distribution of the residuals. As a second step, the author utilized the Geographically Weighted Regression (GWR) (Fotheringham et al., 2002) to explore regional variations in the relationship between NPLs and proxies of “Government failures” (corruption and public debt as % of GDP).FindingsThe results confirm that corruption and public debt as % of GDP, after the crisis of 2007, have affected significantly on NPLs of the EU countries and the following countries neighboring the EU: Switzerland, Iceland, Norway, Montenegro, and Turkey.Originality/valueIn a spatial prospective, unprecedented in the literature, this research focused on the impact of corruption and public debt as % of GDP on NPLs in European countries. The positive correlation, as expected, between public debt and NPLs highlights that fiscal problems in Eurozone countries have led to an important rise of problem loans. The impact of institutional corruption on NPLs reports that the higher the corruption, the higher is the level of NPLs.

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“…Recent studies have strongly approved of the inclusion of some environmental and bankspecific variables in a one-stage stochastic frontier (Lozano-Vivas et al, 2002, Hasan et al, 2009, particularly when considering the Italian context (Destefanis et al, 2014;Barra et al, 2016). Therefore, we include in the z-vector associated with the technical inefficiency of production units for the following environmental and bank-specific factors: (i) bank size as measured by the natural logarithm of total assets (TA); (ii) bank capitalization as measured by the ratio of equity to total assets (ETA); (iii) typology of banks such as MBs and PBs in which popular banks are used as the benchmark group; (iv) macro areas such as North-West (N-W), North-East (N-E), and South&Islands (SI), while Central (CE) is used as a benchmark to control for any unobservable territorial effects; and (v) the typology of major, large, medium, small, and minor.…”

Section: Data and Variablesmentioning

confidence: 99%

Market Structure and Financial Stability: the Interaction between Profit-Oriented and Mutual Cooperative Banks in Italy

et al. 2021

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In this study, we analyze the relation between market structure and financial stability both theoretically and empirically by considering two types of agents: profit-oriented banks and mutual cooperative banks in the context of Italy. The main findings show that under the condition that mutual cooperative banks are not dominated by borrowers, there is an inverted U-shaped relation in which a less concentrated market structure increases stability for both types of banks but a more concentrated market structure reduces it.

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Risk and regulation: A difference-in-differences analysis for Italian local banks

Cited by 24 publications

References 20 publications

Multilevel empirics for small banks in local markets

Multilevel empirics for small banks in local markets

Government failures and non-performing loans in European countries: a spatial approach

Market Structure and Financial Stability: the Interaction between Profit-Oriented and Mutual Cooperative Banks in Italy

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