Size, Risk, and Governance in European Banking

This book explores the policy and regulatory challenges in European banking post-financial crisis, analyzing the impact of bank size, risk factors, and governance while offering new insights and policy implications.

Size, Risk, and Governance in European Banking explores the complex policy and regulatory landscape of European banking in the wake of the 2007 financial crisis. This pivotal event has drawn significant attention to issues surrounding the size, risk, and governance of banks, making it a pressing topic in financial discussions. The book highlights how the crisis exposed the European Union's lack of preparedness to handle financial emergencies, particularly concerning large, cross-border institutions that play a crucial role in multiple countries.

The book is structured into three main sections. The first section examines the relationship between the size of banking firms and stability within the European banking sector. It reviews existing quantitative literature and offers new insights into whether larger banks engage in riskier behavior, especially when protected by 'too-big-to-fail' policies that shield creditors from the consequences of market discipline. This analysis sets the stage for a deeper understanding of how size influences risk-taking in the banking industry.

The subsequent sections delve into the nuances of risk within European banking, drawing on a comprehensive dataset to provide fresh perspectives on various risk elements in different institutional contexts. The third section focuses on regulatory frameworks, board oversight, and transparency in European banks, utilizing a unique dataset on governance practices. The concluding chapter synthesizes the insights gained throughout the book and discusses the implications for policy, emphasizing the critical interplay between size, risk, and governance in shaping the future of European banking.