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Bank Regulation and Risk Management
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Bank Regulation and Risk Management

A special issue of Journal of Risk and Financial Management (ISSN 1911-8074). This special issue belongs to the section "Banking and Finance".

Deadline for manuscript submissions: closed (31 May 2021) | Viewed by 5513

Special Issue Editor

Prof. Dr. Ana Lozano-Vivas

E-Mail Website
Guest Editor
Department of Economic Theory and Economic History, University of Málaga, 29071 Málaga, Spain
Interests: banking; intermediation; banking efficieny; banking productivity; competition; regulation; bank risk

Special Issue Information

Dear Colleagues,

The COVID-19 outbreak required a quick response from regulators in order to mitigate its impact on the banking sector. Although banks entered the virus outbreak in better shape than they did the Global Financial Crisis in 2008–2009, vulnerabilities persist in several areas. This Special Issue will focus on the broad topic of “Bank Regulation and Risk Management” as it relates to the impact of the virus.

We invite empirical papers that explore any aspect of the impact that the COVID-19 outbreak will have on regulation and risk management including, but not limited to, the three main areas of bank response to the virus crisis: the operational capacities of banks, the ability of financial institutions to use capital and liquidity buffers, and the regulation and risk management concerning asset quality.

Prof. Dr. Ana Lozano-Vivas
Guest Editor

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Journal of Risk and Financial Management is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1400 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • Capital
  • Liquidity
  • Asset quality
  • Operational capacity
  • Regulation
  • Risk management
  • Bank

Published Papers (2 papers)

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Research

18 pages, 2091 KiB  
Article
Bank Competition Using Networks: A Study on an Emerging Economy
by Molla Ramizur Rahman and Arun Kumar Misra
J. Risk Financial Manag. 2021, 14(9), 402; https://doi.org/10.3390/jrfm14090402 - 25 Aug 2021
Cited by 9 | Viewed by 2088
Abstract
Interconnectedness among banks is a key distinguishing feature of the banking system. It helps mitigate liquidity problems but on the other hand, acts as a curse in propagating systemic risk at times of distress. Thus, as banks cannot function in isolation, this study [...] Read more.
Interconnectedness among banks is a key distinguishing feature of the banking system. It helps mitigate liquidity problems but on the other hand, acts as a curse in propagating systemic risk at times of distress. Thus, as banks cannot function in isolation, this study uses the Contemporary Theory of Networks to examine banking competition in India for five distinct economic phases, emphasizing upon the Global Financial Crisis (GFC) and the ongoing COVID-19 pandemic. This paper proposes a Market Power Network Index (MPNI), which uses network parameters to measure banks’ market power. This network structure shows a formation of bank clusters that are involved in competition. Specifically, network properties, such as centroid, average path length, the distance of a node from the centroid, the total number of connections in the inter-bank market, and network density, do go on to explain banking competition. It is interesting to note that crisis periods witness a lower level of competition, with GFC bearing the least competition. The ongoing COVID-19 pandemic shows a lower trend, but it is of a higher magnitude than GFC. It was also found that big-sized, profitable, capital adequate, and public banks dominate the banking system. Notably, this study was conducted on a sample of 33 listed Indian banks from April 2008 to December 2020. Full article
(This article belongs to the Special Issue Bank Regulation and Risk Management)
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22 pages, 598 KiB  
Article
Solvency Regulation—An Assessment of Basel III for Banks and of Planned Solvency III for Insurers
by Peter Zweifel
J. Risk Financial Manag. 2021, 14(6), 258; https://doi.org/10.3390/jrfm14060258 - 8 Jun 2021
Viewed by 2790
Abstract
Basel III, regulating the solvency of banks, is to be fully implemented by 2027 while Solvency III directed at insurers is being prepared. In view of past experience, it will be closely modelled after Basel III. This raises two questions. (i) Will Basel [...] Read more.
Basel III, regulating the solvency of banks, is to be fully implemented by 2027 while Solvency III directed at insurers is being prepared. In view of past experience, it will be closely modelled after Basel III. This raises two questions. (i) Will Basel III and Solvency III be more successful than their predecessors? (ii) Is it appropriate to continue regulating the solvency of banks and insurers in the same way? The first question is motivated by an earlier finding that Basel I and II risked inducing more rather than less risk-taking by banks, which also holds for Solvency I and II w.r.t. insurers. The methodology applied was to determine the slope of an endogenous perceived efficiency frontier (EPEF) in (μ^,σ^)-space derived from banks’ and insurers’ optimal adjustment to exogenous changes, in expected returns dμ¯ and volatility dσ¯ on the capital market. Both Basel I and II and Solvency I and II neglected the impact of these developments on banks’ and insurers’ EPEF. This neglect had the effect of steepening the EPEF, causing senior management to opt for an increased rather than reduced value of σ^, and hence a lower solvency level. This issue is resolved by Basel III (Principle 5), which requires banks to take developments in the capital market into account in the formulation of their business strategies designed to ensure solvency. In combination with increased capital requirements, this is shown to result in a reduced slope of their EPEF and hence a reduced risk exposure. However, planned Solvency III may cause the EPEF of highly capitalized insurance companies to become steeper, with a concomitant decrease in their risk-taking and an increase of their solvency level. The second question, concerning the appropriateness of the uniformity of solvency regulation directed at banks and insurers, arises because the parameters determining the slope of the respective EPEF are found to crucially differ. Therefore, the uniformity of Basel and Solvency norms creates the risk of a mistaken regulatory focus. Full article
(This article belongs to the Special Issue Bank Regulation and Risk Management)
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