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The Impact of the Designation of Global Systemically Important Banks on Their Business Model

Aurélien Violon et al.

International Journal of Central Banking2020article
AJG 3ABDC A
Weight
0.51

Abstract

To the best of our knowledge, this paper is among the first to provide empirical evidence on how the recent international regulation designed for global systemically important banks (G-SIBs) drove changes in these institutions' activity. Our econometric approach quantifies the impact of the designation of G-SIBs on their activity, controlling for both structural differences and industry trends. We find that G-SIBs have reduced the expansion of their balance sheet, which further improved their leverage ratio. A downward pressure is noticed on their return on equity, but no adverse consequences are observed on lending. We find no effect on G-SIBs' funding cost advantage, which suggests that "too-big-to-fail" distortions still persist.

9 citations

Cite this paper

@article{aurélien2020,
  title        = {{The Impact of the Designation of Global Systemically Important Banks on Their Business Model}},
  author       = {Aurélien Violon et al.},
  journal      = {International Journal of Central Banking},
  year         = {2020},
}

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The Impact of the Designation of Global Systemically Important Banks on Their Business Model

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Evidence weight

0.51

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.40 × 0.4 = 0.16
M · momentum0.80 × 0.15 = 0.12
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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