Nistor, S. & Ongena, S. (2023) Journal of Financial Services Research [Core Economics, Q2]

Publicat: 17 Iulie 2024

Nistor, S. & Ongena, S. (2023) The impact of policy interventions on systemic risk across banks. Journal of Financial Services Research, 64, 155-206.

DOI: https://doi.org/10.1007/s10693-023-00404-8

✓ Publisher: Springer
✓ Categories: Business, Finance
✓ Article Influence Score (AIS): 0.659 (2023) / Q2

Abstract: What is the impact of policy interventions on the systemic risk of banks? To answer this question, we analyze a comprehensive sample that combines an original set of bank-spe- cific bailout events with the balance sheets of key affected and nonaffected European banks between 2005 and 2014. We find a positive and significant association of guarantees with systemic risk that is somewhat weaker in the long run when the regulator appoints mem- bers to the supervisory board. The short run association between recapitalizations and systemic risk is also positive for large and less capitalized banks, while in the long run, recapitalizations are linked with reduced systemic importance, especially for less profit- able banks and in cases when the regulator limits management pay. Liquidity injections are positively linked with systemic risk, but the long-run effect is mitigated for small or better capitalized banks. In the short run, injecting liquidity is associated with reduced systemic risk when the regulator imposes restrictions on supervisory board composition or on man- agement pay or capital payouts.

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