Journal of
Italian
Banking
Association

year 100
 

Archive » October 2015 » Stressing the European business: an evaluation of the Ecb Comprehensive assessment

Stressing the European business: an evaluation of the Ecb Comprehensive assessment

Giovanna Paladino, Zeno Rotondi
October 2015 - n. 10
Jel codes: G28, G21, G11, G01

We use the results of the Ecb's Comprehensive Assessment to evaluate the importance of bank business model on risk profile and the persuasive effectiveness of different supervisory styles on banks' recapitalization. Our analysis reveals inconsistencies in the information content provided by the various regulatory measures used for assessing bank stability. As the thresholds considered to evaluate shortfalls are based on the Cet1ratio, our findings imply that the retail business model, and in particular the focused retail submodel, has been penalized in the Ca compared to other business models. With regard to the persuasive power of different supervisory architectures, we find that countries adopting the hybrid model of supervision were more severe and effective in persuading banks to act preventively

Interested in this paper?
Buy the issue