Níl an t-ábhar seo ar fáil i nGaeilge.
João Matos Leite
- 9 November 2026
- WORKING PAPER SERIES - No. 3308Details
- Abstract
- This paper provides an assessment of supervisory effectiveness in credit risk using confidential data from ECB Banking Supervision. The analysis covers 8,106 supervisory measures issued and closed between 2016 and 2025. A central contribution is the construction of a measure level indicator of supervisory effectiveness based on large language model (LLM) analysis of supervisory narratives and closure justifications. The indicator captures whether supervisory measures resulted in full remediation of the underlying deficiencies. Using logistic and duration models, we examine the characteristics of findings, measures, and banks associated with remediation outcomes and remediation speed. The results show that multi-faceted findings are a key driver of supervisory outcomes. Measures related to data, reporting, and IT deficiencies are less likely to achieve full remediation and require longer remediation periods. Measures originating from on-site inspections are associated with higher remediation rates and faster closure. Stronger governance is also associated with more successful remediation outcomes.
- JEL Code
- G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
E51 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Money Supply, Credit, Money Multipliers
H81 : Public Economics→Miscellaneous Issues→Governmental Loans, Loan Guarantees, Credits, Grants, Bailouts
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
- 17 August 2023
- OCCASIONAL PAPER SERIES - No. 327Details
- Abstract
- This investigation starts with the observation that, over the last decade, profitability rates reported by euro area (EA) banks have remained, on average, persistently below those reported by peer banks in the United States (US). In particular, banks’ return on equity (ROE) has fluctuated around 5% in the EA, but around 10% in the US, indicating a profitability gap of around 5 percentage points. However, while comparisons are frequently made between EA and US banks in academic and political debate, they are not perfect benchmarks, nor should this paper be regarded as aiming for a like-for-like comparison.
- JEL Code
- G15 : Financial Economics→General Financial Markets→International Financial Markets
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages