Zoekopties
Home Media Explainers Onderzoek & publicaties Statistieken Monetair beleid De euro Betalingsverkeer & markten Werken bij de ECB
Suggesties
Sorteren op
Niet beschikbaar in het Nederlands

Csaba Móré

8 September 2008
OCCASIONAL PAPER SERIES - No. 95
Details
Abstract
This paper reviews financial stability challenges in the EU candidate countries Croatia, Turkey and the former Yugoslav Republic of Macedonia. It examines the financial sectors in these three economies, which, while at very different stages of development and embedded in quite diverse economic settings, are all in a process of rapid financial deepening. This manifests itself most clearly in the rapid pace of growth in credit to the private sector. This process of financial deepening is largely a natural and welcome catching-up phenomenon, but it has also increased the credit risks borne by the banking sectors in the three economies. These credit risks are compounded by the widespread use of foreign currency-denominated or -indexed loans, leaving unhedged bank customers exposed to potential swings in exchange rates or foreign interest rates. Moreover, these financial risks form part of a broader nexus of vulnerabilities in the economies concerned, in particular the external vulnerabilities arising from increasing private sector external indebtedness. That said, the paper also finds that the authorities in the three countries have taken several policy actions to reduce these financial and external vulnerabilities and to strengthen the resilience of the financial sectors.
JEL Code
F32 : International Economics→International Finance→Current Account Adjustment, Short-Term Capital Movements
F41 : International Economics→Macroeconomic Aspects of International Trade and Finance→Open Economy Macroeconomics
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
Network
Eurosystem Monetary Transmission Network
28 May 2015
FINANCIAL STABILITY REVIEW - ARTICLE
Financial Stability Review Issue 1, 2015
Details
Abstract
Weak profitability among euro area banks is one key risk to financial stability. This special feature examines the main drivers influencing banks’ profitability, including bank-specific, macroeconomic and structural factors. The empirical part of the special feature finds that challenges appear to be mainly of a cyclical nature, although there may also be material structural impediments to reigniting bank profitability.
JEL Code
G00 : Financial Economics→General→General
24 May 2016
FINANCIAL STABILITY REVIEW - ARTICLE
Financial Stability Review Issue 1, 2016
Details
Abstract
This special feature reviews recent trends in business model characteristics, discusses their relationship with bank stability and performance, and looks at how this relationship has changed over time, comparing the period before the crisis with the crisis years and the current situation.
JEL Code
G00 : Financial Economics→General→General
24 November 2016
FINANCIAL STABILITY REVIEW - ARTICLE
Financial Stability Review Issue 2, 2016
Details
Abstract
The euro area banking sector is faced with cyclical and structural challenges, which are hampering many banks’ ability to generate sustainable profits. In particular, the prolonged period of low nominal growth and low yields compresses net interest income, which traditionally has been (and still is) euro area banks’ main source of income. One way for banks to compensate for compressed net interest margins could be to adapt their business models, moving towards more fee and commission-generating activities. This article discusses the challenges involved in boosting fee and commission income and highlights some of the potential financial stability implications related to a greater reliance on these income sources.
JEL Code
G00 : Financial Economics→General→General
29 November 2018
FINANCIAL STABILITY REVIEW - ARTICLE
Financial Stability Review Issue 2, 2018
Details
Abstract
On aggregate, bank profitability in the euro area has improved in recent quarters along with the cyclical recovery. However, the level of earnings for many banks is still below that required by investors and bank profitability is still vulnerable to a possible turnaround in the business cycle. This special feature looks at possible avenues for banks to reach more sustainable levels of profitability in the future. It highlights the need to overcome structural challenges in the form of low cost-efficiency, limited revenue diversification and high stocks of legacy assets (in some jurisdictions).
JEL Code
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G24 : Financial Economics→Financial Institutions and Services→Investment Banking, Venture Capital, Brokerage, Ratings and Ratings Agencies
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
18 November 2019
FINANCIAL STABILITY REVIEW - ARTICLE
Financial Stability Review Issue 2, 2019
Details
Abstract
Low aggregate bank profitability in the euro area, which weakens the resilience of the euro area banking sector, is partly explained by the persistent underperformance of a sub-set of banks. These banks all stand out in terms of elevated cost-to-income ratios. But there also appear to be three distinct groups: (i) banks struggling with legacy asset problems; (ii) banks with weak income-generation capacity; and (iii) banks suffering from a combination of cost and revenue-side problems. The common cost inefficiency problem seems most pronounced for the largest and smallest banks. Three strategies, all of which should reduce overcapacity, could address the root causes, while avoiding increasing market power or the systemic footprint of institutions which are already systemically important. For some banks, the focus should be on targeting continued high stocks of NPLs. But in systems with many weak-performing small banks, consolidation within their domestic system could improve performance. Finally, a combination of bank-level restructuring and cross-border M&A activity could help reduce the costs and diversify the revenues of large banks that are performing poorly., (ii) banks with weak income-generation capacity, and (iii) banks suffering from a combination of cost and revenue-side problems. The common cost inefficiency problem seems most pronounced for the largest and smallest banks. Three strategies, all of which should reduce overcapacity, could address the root causes, while avoiding increasing market power or the systemic footprint of institutions which are already systemically important. For some banks, the focus should be on targeting continued high stocks of NPLs. But in systems with many weak-performing small banks, consolidation within their domestic system could improve performance. Finally, a combination of bank-level restructuring and cross-border M&A activity could help reduce the costs and diversify the revenues of large banks that are performing poorly.
JEL Code
Add JEL codes separated by semi-colon. : General Economics and Teaching
25 November 2020
FINANCIAL STABILITY REVIEW - BOX
Financial Stability Review Issue 2, 2020
Details
Abstract
Euro area banks’ loan loss provisions increased markedly in the first half of 2020 amid the sharp contraction in economic activity, while provisioning levels were widely dispersed across both countries and banks within the same countries. This box aims at identifying drivers of the variation in banks’ provisioning and its possible implications. The wide dispersion of provisioning levels may partly reflect the pronounced economic uncertainty, the heterogeneous sectoral impacts of the COVID-19 crisis as well as the diversity of the impact of public support measures for borrowers. However, it is possible that some of the variation in provisions across banks reflects inadequate provisioning by some banks, in part due to profitability constraints and optimistic assumptions about the economic recovery in estimating credit losses under new, more forward-looking IFRS 9 accounting standard. From a financial stability perspective, it is helpful that euro area banks have generally avoided excessive procyclicality in provisioning, but those with less conservative policies may still need to raise provisioning (and coverage) levels so as to ensure investor trust in asset valuations and transparency in financial statements.
JEL Code
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation