The Palgrave Handbook of European Banking

691 Pages·2016·14.22 MB·English

by  Thorsten Beck (editor), Barbara Casu (editor)

THE PALGRAVE HANDBOOK OF
EUROPEAN BANKING
Edited by
Thorsten Beck and Barbara Casu
The Palgrave Handbook of European Banking
Thorsten Beck • Barbara Casu
Editors
The Palgrave
Handbook of
European Banking
Editors
Thorsten Beck Barbara Casu
Cass Business School Cass Business School
City, University of London City, University of London
London, UK London, UK
ISBN 978-1-137-52143-9 ISBN 978-1-137-52144-6 (eBook)
DOI 10.1057/978-1-137-52144-6
Library of Congress Control Number: 2016959995
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Preface
The European banking landscape has profoundly changed as a result of the
regulatory response to the 2007–8 global financial crisis and ensuing sover-
eign debt crisis in the Eurozone. Moreover, the extensive changes in the eco-
nomic and regulatory environment have highlighted a number of unresolved
issues in European banking. This Handbook offers a comprehensive overview
of these key issues, taking stock after the recent crises and looking forward.
Although the new regulatory architecture is now mostly in place, its suc-
cessful implementation depends crucially on how the Eurozone deals with the
legacy of the financial crises. Even after substantial regulatory reforms, debates
on further reforms needed to strengthen the EU regulatory framework to
limit future risks arising from the banking system are ongoing. The persistent
weakness of some Eurozone banking systems puts the implementation of the
newly agreed rules to a test.
It is against this background that this Handbook aims to provide an under-
standing of the key issues facing European banks. The Handbook is com-
posed of five main parts. Part 1, European Banking: Through the Crisis and
Beyond, offers an overview of the European banking sector in terms of finan-
cial structure, ownership and business models and corporate governance, as
well as the payment system. Part 2, Performance and Innovation in European
Banking, discusses the key themes of bank competition, efficiency and perfor-
mance. In addition, it looks at the impact of technological development on
the banking sectors and how banks are embracing the opportunities it offers.
Finally, it explores the issues of bank diversification and the relevance of small
business lending.
Part 3, Financial Stability and Regulation, addresses the key issues of finan-
cial reforms and the increasing complexity of financial regulation. It also looks
v
vi Preface
at the impact of state aid and the impact of monetary policy. Finally, it con-
siders the increasing interactions between banks and markets. Part 4, Cross-
border Banking, looks at recent trends in cross-border banking in Europe and
evaluates the establishment of the Banking Union. Finally, Part 5, European
Banking Systems, offers a detailed analysis of the main issues facing national
banking system in key European banking markets.
The chapters of this Handbook document major trends across European
banking systems and the implications of a changed regulatory and monetary
environment. Building upon a close interaction between researchers, practi-
tioners and policy makers, this Handbook aims to provide the necessary tools
to understand the current practical and policy challenges.
London, July 2016 Thorsten Beck
Barbara Casu
Acknowledgements
This text could have never been completed without the help and support of a
number of individuals. First and foremost, we wish to thank the contributors
to this Handbook. We are delighted to have brought together an outstanding
group of experts, ranging from senior policy makers to academics, each with
a wealth of expertise in their field. Their expert contributions, together with
their commitment to the project, have helped us deliver a text that offers an
in-depth analysis of the key issues facing European banking.
We are indebted to Aimee Dibbens, Senior Commissioning Editor
Economics & Finance, whose enthusiasm was crucial in convincing us to
undertake the project. We also wish to thank the editorial team at Palgrave
Macmillan, in particular Alexandra Morton, Editorial Assistant Finance, who
has worked closely with us during the entire project ensuring a timely delivery
and high-quality content.
We would like to acknowledge the support of our home institution, Cass
Business School, City, University of London.
Finally, we wish to thank our families and friends for encouragement and
support. Thorsten Beck thanks his wife and sons for their patience with his
skewed work–life balance. Barbara Casu thanks her husband and her children
for their enthusiasm, their patience and support.
vii
Contents
Part I European Banking: Through the Crisis and Beyond 1
1 European Banking: An Overview 3
T. Beck, B. Casu
2 Financial Structure 25
Sam Langfield, Marco Pagano
3 Bank Diversification and Financial Conglomerates in Europe 49
Panagiotis Dontis-Charitos, Sotiris Staikouras, Jonathan Williams
4 Banks’ Business Models in Europe 81
Rym Ayadi, Willem Pieter de Groen
5 Ownership in European Banking 103
John Goddard, Donal G. McKillop, John O.S. Wilson
6 Pay Structures in European Banks 135
Jens Hagendorff, Abhishek Srivastav
ix
x Contents
Part II Performance and Innovation in European Banking 157
7 European Retail Payments Systems: Cost, Pricing,
Innovation and Regulation 159
Wilko Bolt, Nicole Jonker, Mirjam Plooij
8 Competition in EU Banking 187
Olivier De Jonghe, Maaike Diepstraten, Glenn Schepens
9 The Internet, Crowdfunding and the Banking Industry 213
Armin Schwienbacher
10 Small Business Lending 231
Santiago Carbo-Valverde, Francisco Rodríguez-Fernández
11 European Bank Efficiency and Performance: The Effects
of Supranational Versus National Bank Supervision 257
Rients Galema, Michael Koetter
Part III Financial Stability and Regulation 293
12 Regulatory Reforms in the European Banking Sector 295
Elena Carletti, Agnese Leonello
13 Complexity in Regulation 323
Andrew Haldane, Tobias Neumann
14 State Aid and Guarantees in Europe 349
Reint Gropp, Lena Tonzer
15 The Bank Lending Channel of Monetary Policy: A Review
of the Literature and an Agenda for Future Research 383
Mintra Dwarkasing, Narly Dwarkasing, Steven Ongena
Conten ts xi
16 The Interplay Between Banks and Markets:
Supervisory Stress Test Results and Investor Reactions 409
Giovanni Petrella, Andrea Resti
Part IV Cross-Border Banking 449
17 The Banking Union: An Overview and Open Issues 451
Dirk Schoenmaker
18 Recent Trends in Cross-Border Banking 475
Ralph De Haas, Neeltje van Horen
Part V European Banking Systems 499
19 Banking in the UK 501
Philip Molyneux
20 Banking in Italy 521
Elena Beccalli, Claudia Girardone
21 The German Banking System 541
Patrick Behr, Reinhard H. Schmidt
22 Banking in Spain 567
Joaquin Maudos, Xavier Vives
23 Banking in France 603
Laetitia Lepetit, Céline Meslier, Amine Tarazi
24 Credit Institutions, Ownership and Bank Lending
in Transition Economies 623
Rainer Haselmann, Paul Wachtel, Jonas Sobott
Index 645