When a country’s banking system becomes more linked to the global banking network, does that system get more or less prone to a banking crisis? Using simulations and econometric estimates based on a world-wide dataset, we find an M-shaped relationship between the stability and the...

The financial crisis has made the need for a more integrated regulatory and supervisory framework for the financial services sector evident. An important step towards this aim is the establishment of the Single Supervisory Mechanism. European leaders have committed to moving toward a banking...

The European Banking Union entered the EU’s agenda in the summer of 2012. The design of the project has been proceeding quickly. This paper is a summary of the issues which have been better understood while walking towards the union. It discusses the implications for central bank independence...

Banking union is the most ambitious European project undertaken since the introduction of the single currency. It was launched in the summer of 2012, in order to send the markets a strong signal of unity against a looming financial fragmentation problem that was putting the euro on the ropes....

This paper analyzes the channels through which financial liberalization affects bank risk-taking in an international sample of 4333 banks in 83 countries. Our results indicate that financial liberalization increases bank risk-taking in both developed and developing countries but through...

The recent crisis has spurred the use of bank stress tests as a crisis management and early warning tool. However, a weakness is that current stress tests are based on consolidated balance sheets, and thus omit potential risks embedded in banking groups’ geographical structures by assuming...

Financial integration can help to achieve sustainable economic growth in Africa; but, as in developed countries, it can also increase the risk of crisis contagion. To counter this, African countries need to put in place a set of public policies to help foster lasting and stable financial...

The financial crisis has led to a reconsideration of banks’ global business models. Using a dataset derived from the BIS banking statistics, this paper studies the geography of global banking. It distinguishes between “international” and “multinational” banks, their respective funding...

A bank’s interest expenses are found to increase with its degree of internationalization as proxied by its share of foreign liabilities in total liabilities or a Herfindahl index of international liability concentration, especially if the bank is performing badly. Our benchmark estimation...

L’intégration financière en Afrique peut contribuer à une élévation durable de la croissance économique, mais peut être également associée, comme dans les pays développés, à des risques croissants de contagion des crises. À cet égard, il apparaît essentiel de mettre en place des...