Top

Published in:

2019 | OriginalPaper | Chapter

4. Making Profits in the New Competitive and Regulatory Framework

Authors : Mariarosa Borroni, Simone Rossi

Published in: Banking in Europe

Publisher: Springer International Publishing

Activate our intelligent search to find suitable subject content or patents.

search-config

AI-assisted search

Off

Abstract

This chapter aims to identify the main guidelines by which the new competitive, regulatory and macroeconomic context can be translated into managerial behaviors capable of generating a sustainable level of profitability for the bank. The competitive pressure deriving from new entrants into the market, the macroeconomic environment characterized by lower growth and lower interest rates, the choice of the business model and the composition of a bank’s assets are, in fact, strategic choices on which that bank’s life depends. The chapter provides managerial ‘instructions’ in each of these areas of interest, starting from the data provided by the market examined in the previous parts of the book.

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 340 Zeitschriften

aus folgenden Fachgebieten:

Bauwesen + Immobilien
Business IT + Informatik
Finance + Banking
Management + Führung
Marketing + Vertrieb
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

previous chapter Profitability of European Banks: A Quantitative Analysis

Altunbas Y., Manganelli S., Marquez-Ibanez D. (2011), Bank risk during the financial crisis: do business models matter?, ECB Working Paper Series No. 1394, November.

Ayadi R. (2019), Banking Business Models. Definition, Analytical Framework and Financial Stability Assessment, Palgrave Macmillan.

Ayadi R., Arbak E., De Groen W.P. (2011), Business Models in European Banking. A pre-and-post-crisis screening, Centre for European Policy Studies, Brussels.

Ayadi R., Arbak E., De Groen W.P. (2012), Regulation of European banks and business models: Toward a new paradigm?, Centre for European Policy Studies, Brussels.

Ayadi R., De Groen W.P., Sassi I., Mathlouthi W., Rey H., Aubry O. (2016), Banking Business Models Monitor 2015: Europe, International Research Centre on Cooperative Finance, Montréal.

Bazot G. (2018), Financial Consumption and the Cost of Finance: Measuring Financial Efficiency in Europe (1950–2007), Journal of the European Economic Association, Volume 16, issue 1, February.

BCBS – Basel Committee on Banking Supervision (2012), Core Principles for Effective Banking Supervision, September.

BCBS – Basel Committee on Banking Supervision (2017), High-level summary of Basel III reforms, December.

Bofondi M., Gobbi G. (2017), The Big Promise of FinTech, in “FinTech and Banking. Friends or Foes?”, European Economy. Banks, Regulation, and the Real Sector, n. 2.

Bonaccorsi di Patti E., Palazzo F. (2018), Bank profitability and macroeconomic conditions: are business models different?, Bank of Italy, Occasional Papers no. 436, June.

Bonaccorsi di Patti E., Felici R., Signoretti F.M. (2016), Euro area significant banks: main differences and recent performance, Bank of Italy, Occasional Papers no. 306, January.

Boss M., Lederer G., Mujic N., Schwaiger M. (2018), Proportionality in banking regulation, Monetary Policy & The Economy, Oesterreichische Nationalbank, Q2/18.

CapGemini, LinkeIn, Efma (2018), World FinTech Report.

CGFS – Committee on the Global Financial System (2018), Structural changes in banking after the crisis, CGFS Papers No. 60, January.

Coen B. (2016), The global financial crisis and the future of international standard setting: lessons from the Basel Committee, Presentation given at Harvard Law School, Cambridge, MA, 12 December.

Cosma S., Ferretti R., Gualandri E., Landi A., Venturelli V. (2017), The Business Model of Banks: A Review of the Theoretical and Empirical Literature, in Chesini G., Giaretta E., Paltrinieri A. (eds), The Business of Banking. Models, Risk and Regulation, Palgrave Macmillan.CrossRef

CPMI – Committee on Payments and Market Infrastructures (2014), Non-banks in retail payments, Bank for International Settlements, September.

Cunliffe J. (2017), Ten years on: Lessons from Northern Rock, Single Resolution Board Annual Conference, Brussels.

De Meo E., De Nicola A., Lusignani G., Orsini F., Zicchino L. (2016), European Banks in the XXI Century: Are Their Business Models Sustainable?, 5th EBA Policy Research Workshop “Competition in banking: implications for financial regulation and supervision”, 28–29 November.

Deloitte (2018), Leading in times of change, Banking regulatory outlook 2019 – United States, December.

Di Antonio M. (2018), Business models analysis: the pitfalls of the financial data-driven approach, Bancaria, January.

DLA Piper (2018), Digital Transformation in Financial Services, October.

Draghi M. (2018), Letter to Mr. Enrique Calvet Chambon, Member of the European Parliament, 8 February.

EBA – European Banking Authority (2014), Guidelines on common procedures and methodologies for the supervisory review and evaluation process (SREP), 19 December.

EBA – European Banking Authority (2017), Risk Assessment on the European Banking System, November.

EBA – European Banking Authority (2018a), Risk Assessment on the European Banking System, December.

EBA – European Banking Authority (2018b), The EBA’s Fintech Roadmap. Conclusions from the Consultation on the EBA’s Approach to Financial Technology (FinTech), 15 March.

EBF – European Banking Federation (2018), EBF detailed recommendations for an EU framework of experimentation, 19 December.

ECB – European Central Bank (2016), Recent trends in euro area banks’ business models and implications for banking sector stability, Financial Stability Review, May.

ECB Banking Supervision (2017a), Guidance to banks on non-performing loans, March.

ECB Banking Supervision (2017b), SSM supervisory priorities 2018, 18 December.

ECB Banking Supervision (2017c), 2017 SREP for 2018–2018 Supervisory Priorities – 2018 Stress tests, Frankfurt 18 December.

ECB Banking Supervision (2018), Addendum to the ECB Guidance to banks on non-performing loans: supervisory expectations for prudential provisioning of non-performing exposures, March.

ECB Banking Supervision (2019), Recommendation of the European Central Bank on dividend distribution policies (ECB/2019/1), 7 January.

Elliehausen G. (1998), The Cost of Bank Regulation: A Review of the Evidence, Board of Governors of the Federal Reserve System, Washington, April.

EU Commission (2018), Third Progress Report on the reduction of non-performing loans and further risk reduction in the Banking Union, Communication from the Commission to the European Parliament, the European Council and the European Central Bank, Brussels, 28 November, COM(2018) 766 final.

EU Council (2018), Non-performing loans: political agreement reached on capital requirements for banks’ bad loans, 18 December, press release 815/18.

Farkas A. (2018), EU banks’ business models – Adapt to thrive, Deutsche Bundesbank Conference “Bank business models – Structural changes and their systemic implications”, Frankfurt, 20 February.

Feng G., Wang C. (2018), Why European banks are less profitable than U.S. banks: A decomposition approach, Journal of Banking and Finance 90 (2018), 1–16.CrossRef

FSA – Financial Services Authority (2009), The Turner Review. A regulatory response to the global banking crisis, March.

FSI – Financial Stability Institute (2017), Proportionality in banking regulation: a cross-country comparison, FSI Insights on policy implementation, Bank of International Settlements, No. 1, August.

G7 Cyber Expert Group (2016), Fundamental Elements of Cybersecurity in the Financial Sector, press release, October.

Haldane A. (2009), Rethinking the Financial Network, Speech at the Financial Student Association, Amsterdam, 28 April.

Hildebrand P. (2018), What next for banking union?, Bruegel, Brussels, 8 June.

Huljak I., Mikkonen K., Moré C., Perales C. (2018), Digitalisation and its impact on banks’ profitability, Box A, Financial Stability Review, November.

IMF – International Monetary Fund (2016), Global Financial Stability Report. Fostering Stability in a Low-Growth, Low-Rate Era, October.

IMF – International Monetary Fund (2017), Global Financial Stability Report. Getting The Policy Mix Right, April.

Ingves S. (2014), Implementing the regulatory reform agenda – the pitfall of myopia, Speech at the Federal Reserve Bank of Chicago Annual International Banking Conference, Chicago, 6 November.

IOSCO – International Organization of Securities Commissions (2017), Research Report on Financial Technologies (Fintech), February.

KPMG (2016), The profitability of EU banks. Hard work or a lost cause?, October.

Levine R. (2017), Comments in Phillipon T. (2017), The FinTech Opportunity, BIS Working Papers No. 655, August.

Liikanen E. (2012), High-level Expert Group on Reforming the Structure of the EU Banking Sector, Final Report, October.

Llewellyn D.T. (2013), Fifty Years in the Evolution of Bank Business Models, in Balling, M. – Gnan E. (eds.), 50 Years of Money and Finance – Lessons and Challenges, Larcier for SUERF – The European Money and Finance Forum.

McKinsey (2017), The case for digital reinvention, Digital McKinsey Survey, February.

Molyneux P. (2013), Performance in European Banking: Productivity, Profitability and Employment Trends, in Balling, M. – Gnan E. (eds.), 50 Years of Money and Finance – Lessons and Challenges, Larcier for SUERF – The European Money and Finance Forum.

Moody’s (2018), Minimising cost of regulatory compliance through RegTech, September.

Nicoletti B. (2017), The future of FinTech. Integrating Finance and Technology in Financial Services, Palgrave Macmillan.

Nouy D. (2017), Too much of a good thing? The need for consolidation in the European banking sector, Speech at the VIII Financial Forum, Madrid, 27 September.

Pasiouras F., Tanna S., Zoponnidis C. (2009), The Impact of Banking Regulation on Banks’ Costs and Profit Efficiency: Cross-Country Evidence, International Review of Financial Analysis, 18 (5): 294–302, December.

Phillipon T. (2017), The FinTech Opportunity, BIS Working Papers No. 655, August.

PRA – Prudential Regulation Authority (2018), Business Plan 2018/19, Bank of England.

Restoy F. (2018), Proportionality in banking regulation, speech at Westminster Business Forum Keynote Seminar “Building a resilient UK financial sector – next steps for prudential regulation, structural reform and mitigation risks, London, 4 July.

Roengpitya R., Tarashev N., Tsatsaronis K. (2014), Bank business models, BIS Quarterly Review, December.

Sattler A. (2018), Proportionality in European Banking Regulation, presentation at Policy Research Meeting on Financial Markets and Institutions, Bank of Italy, Rome, 4 October.

Schmitz M., Tirpak M. (2017), Cross-border banking in the euro area since the crisis: what is driving the great retrenchment?, Special features B, Financial Stability Review, November.

Siciliani P. (2018), Competition for retail deposits between commercial banks and non-bank operators: a two-sided platform analysis, Bank of England Staff Working Paper No. 728.

UBS (2018), The urge to merge: Consolidation to come, European Banks, Global Research, 3 September.

Title: Making Profits in the New Competitive and Regulatory Framework
Authors: Mariarosa Borroni
Simone Rossi
Publisher: Springer International Publishing
Book: Banking in Europe
Print ISBN: 978-3-030-15012-9

Electronic ISBN: 978-3-030-15013-6

Copyright Year: 2019
DOI: https://doi.org/10.1007/978-3-030-15013-6_4