This paper explores the determinants of profitability across large euro area banks using a novel approach based on … conditional profitability distributions. Real GDP growth and the NPL ratio are shown to be the most reliable determinants of bank … profitability. However, the estimated conditional distributions reveal that, while higher growth would raise profits on average, a …

Traditional theory suggests that more profitable banks should have lower risk-taking incentives. Then why did many … profitable banks choose to invest in untested financial instruments before the crisis, realizing significant losses? We attempt … to reconcile theory and evidence. In our setup, banks are endowed with a fixed core business. They take risk by levering …

The paper investigates EU banks' profitability through the recent financial cycle using banklevelbalance sheet and … income statement data. We find that banks that were more successfulat protecting their profits had a less pronounced …, such as higher reliance on fees andcommission income, were associated with better profitability post-crisis …

banks was sizable. We show that the shadow banking system was at least 50 percent bigger than documented so far. We also …, supervisors of large banks that report on a global consolidated basis may need to enhance their understanding of the off …-balance sheet funding that these banks receive via rehypothecation from other jurisdictions …

have higher capital and more liquidity, but lower profitability than domestic banks do. Only in developing countries is … countries. Current market shares of foreign banks average 20 percent in OECD countries and 50 percent elsewhere. Foreign banks … foreign bank presence negatively related with domestic credit creation. During the global crisis foreign banks reduced credit …

decades leads trading in banks to become increasingly risky, so that problems in managing and regulating trading in banks will …

been a significant decline in the interconnectedness in the pledged collateral market between banks and non-banks. We find …

in general, better capitalized and less leveraged banks have outperformed their peers, a finding that supports …