Transatlantic differences in bank resilience

Thomas Gehrig, Maria Chiara Iannino and Stephan Unger

Chapter 17 in Handbook of Financial Integration, 2024, pp 388-416 from Edward Elgar Publishing

Abstract: The relative importance of banks for the financial system differs widely in Europe and the U.S., where Europe has historically been more bank-based than the US How does the different role of the banking systems translate into the resilience of bank business models, and of the financial system overall? In aggregate, European banks are more exposed to systemic risk relative to U.S. banks despite the fact that their book-based tier-1 core capital is comparable. However, there is wide heterogeneity across European banks, rendering the transatlantic comparison more delicate. Also, the authors find differences in social responsibility scoring between the two systems. ESG scores tend to be higher for European banks, particularly on the social and environmental components. On the other side, US banks score higher on governance items. Effectively, at the start of the pandemic in March 2020 the largest European banks were more highly levered relative to their US peers, and, consequently lagging behind in terms of market capitalization. The emerging picture for the lower quintiles in the cross-section of European banks is more favorable in terms of resilience, both within Europe and across the Atlantic.

Keywords: Economics and Finance (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.elgaronline.com/doi/10.4337/9781803926377.00026 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 503 Service Temporarily Unavailable

Related works:
Working Paper: Transatlantic differences in bank resiliency (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:elg:eechap:21716_17

Ordering information: This item can be ordered from
http://www.e-elgar.com

Access Statistics for this chapter

More chapters in Chapters from Edward Elgar Publishing
Bibliographic data for series maintained by Darrel McCalla ().