Implications of Basel II for Different Bank Ownership Patterns in Europe

Santiago Carbó-Valverde ()
Authors registered in the RePEc Author Service: Santiago Carbo Valverde

Atlantic Economic Journal, 2007, vol. 35, issue 4, 397 pages

Abstract: This paper explains that Basel II has different implications for stakeholder-owned (mutual) and stockholder banks in the European Union. Some strategic paths for stakeholder-owned banks are proposed as a response to the Stockholder Value Maximization goals Basel II implicitly advances. Even though empirical evidence indicates that capital strength and risk-taking exposures do not differ across bank ownership structures, SME lending and other characteristic specializations of stakeholder banks promise to generate high capital charges. However, improved corporate-governance practices and cooperative securitization and risk-management activities can reduce the compliance costs and risk-taking constraints mutual banks might experience from shifting to a Stakeholder Value Maximization Model. For all EU banks irrespective of their ownership structure, the analysis stresses that establishing an incentive-compatible cross-country safety-net scheme poses a critical challenge. Copyright International Atlantic Economic Society 2007

Keywords: Capital adequacy; Bank ownership; Regulation; G21; E52 (search for similar items in EconPapers)
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:kap:atlecj:v:35:y:2007:i:4:p:391-397

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DOI: 10.1007/s11293-007-9088-4

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