The paper identifies the business models followed by banks in the euro area, utilising a proprietary dataset collected … been neglected by economic theory and is defined here with respect to the set of activities performed by banks. We adopt a … are identified alongside a set of 'outlier' banks that follow unique business models. The risk and performance indicators …

We show that negative monetary policy rates induce systemic banks to reach-for-yield. For identification, we exploit … the 26 largest euro area banking groups. Banks with more customer deposits are negatively affected by negative rates, as … higher returns. Effects are stronger for less capitalized banks, private sector (financial and non-financial) securities and …

This paper investigates the relationship between bank funding costs and solvency for a large sample of euro area banks …. Among the deposit rates, the interest rates of the overnight deposits are the least sensitive. Banks' asset quality …

partial equilibrium model of euro area funds and banks calibrated over the period between 2008 and 2017. An initial shock to … yields causes funds to sell assets to address investor redemptions, while both banks and funds sell assets to keep their … banks. However, funds' relative contribution has risen due to their increased assets under management and banks' lower …

How a historic drop in bank deposits shapes banks' loan supply? We exploit the effects of a large, and unexpected … includes all bank-firm lending relationships in all euro area countries. We find that banks experiencing large deposit outflows … is stronger for fixed rate and longer maturity loans, but not for riskier borrowers. The effect is mostly driven by banks …

This paper studies the impact of voluntary climate commitments by banks on their lending activity. We use … increased participation by the largest banks and banks with the most pre-existing exposure to high-polluting industries. Setting … priority for decarbonization. However, climate-aligned banks do not change their lending or loan pricing differentially …

This paper studies the bilateral drivers of mergers and acquisitions (M&As) between European banks. Two findings … document that banks use M&A as a device to leverage their expertise rather than to diversify. (i) Following the literature on … matrimonial matching by using a binary logit model, the paper examines how the structure of acquiring banks in terms of …

Can banks trade credit default swaps (CDSs) referenced on their current corporate clients at competitive prices, or are … banks penalized for potentially holding private information? To answer this question we merge CDS trades reported under the … that the same dealer offers to banks and to other investors. We find that banks lending to a corporation purchase CDSs on …

When the Covid-19 crisis struck, banks using internal-rating based (IRB) models quickly recognized the increase in risk … and reduced lending more than banks using a standardized approach. This effect is not driven by borrowers' quality or by … banks in countries with credit booms before the pandemic. The higher risk sensitivity of IRB models does not always result …

many banks have a MRP below one, indicating that those banks have little incentive to enhance their efficiency to increase …-conduct performance, and 'quiet life' hypotheses and to detect comparatively weak non-competitive banks. Our new measure of firm …