Why do some banks contribute more to global systemic risk?

By Denefa Bostandzic, Gregor N. F. Weiß. Journal of Financial Intermediation, 2018

130 citations recorded by the source corpus.

We investigate why some banks are more exposed and contribute more to systemic risk in the global financial system than others. On average, European banks contribute more to global systemic risk than banks in the United States while banks on both continents have a comparable average exposure to systemic crises. In addition to being larger, European banks appear to contribute more to global systemic risk, because of the lower quality of their loan portfolios and their higher relative interconnectedness with the rest of the global financial system. Finally, more stringent capital regulations are found to decrease the average exposure of banks to systemic risk.

Subfields: Finance

View Paper: https://www.semanticscholar.org/paper/ba3878a67a27eec8921d6d392ba6ab4155196ffb

Citations in the corpus

• Fintech and banking: What do we know? (2019, unknown): “Bostandzic and Weiß (2018) provide interesting empirical evidence that banks contribute more to global systemic risk when they have lower capital.”
• Bank liquidity creation and systemic risk (2021, unknown): “Thus, consistent with the prior systemic risk literature (e.g., Pais and Stork, 2013; Bostandzic and Weiß, 2018; Iqbal and Vähämaa, 2019; Van Oordt and Zhou, 2019a; Berger et al., 2020), our estimates suggest that larger banks which have lower capital ratios, weaker financial performance, and more…”