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Aug 1, 2023 · Based on a sample of 535 banks from OECD countries for the period of 2004–2016, we find that while activity restrictions and stricter capital stringency tend to increase banks’ risk, more supervisory power tends to reduce this risk.
A one-notch rise in the SRF increases an average bank’s impaired loan ratio by roughly. 8 percent; the authors show similar effects on net charge-offs and for U.S. banks only. The authors also show that riskier banks are more likely to take advantage of potential government support.
Mar 26, 2014 · Today’s post approaches a complementary Too-Big-to-Fail (TBTF) question—do banks take on more risk if they’re likely to receive government support? Historically, commentators have expressed concerns that TBTF status encourages banks to engage in risky behavior.
Jun 7, 2019 · Banks need to answer three questions: Should we avoid any risks entirely? Instead of declarations about zero tolerance for certain types of risk, banks need a more realistic perspective on avoiding risks, based on an objective fact base.
Jan 21, 2015 · For any given financial institution to be open to fostering growth and employment generation, there has to be a business case. Within this tension between “micro-economic” and “macro-economic” objectives, there is an underlying question on banks’ optimal degree of risk-taking.
Informed by an analysis of the survey results as well as post-survey interviews with respondents, our report explores seven key themes that illuminate how banks are responding to a changed industry, even as they address additional challenges. 1. Banks are more alert to the speed of risk. 93% of respondents noted a need for the banking industry ...
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The management of non-financial risk (NFR) has become increasingly critical for banks because of losses incurred and increased stakeholder expectations that banks will manage future incidents better.
