In this paper, we analyze the impact of business models on bank stability in 15 EU countries between 2002 and 2011. We represent banks’ business models by the share of non-interest income in total operating income and the share of non-deposit funding in total liabilities. In contrast to the literature, we include in our sample a large number of unlisted banks, which represent the majority of ba...

Banks are an important source of funding in economies all around the world, making it vital to understand how banks directly and indirectly affect funding through capital markets. Few issues have perhaps been as controversial as the appropriate scope of bank activities and whether banks should participate directly in capital market activities, providing both lending and other services, such as ...

Banks face a tradeoff between diversifying and focusing their loan portfolio. In this paper we carry out an empirical study for the German market to shed light on the question whether or not the benefits of risk sharing outweigh those of specialization. We use data from the Bundesbank’s quarterly borrowers statistic to determine the degree of diversification in the banks’ loan portfolios and co...

Banks finance their loans and other assets with a mix of deposits, debt, and equity capital. Maintaining adequate capital is important for banks because it absorbs losses and protects them from failure. Capital also protects the financial system and overall economy from the costs that can arise from bank failures. For example, one of the reasons policymakers were concerned about financial stabi...

This study proposes a political interference hypothesis to explain how political considerations depress government banks performance. In here, we define the political interference as the situation in which the executives of government banks are replaced within 12 months after the presidential elections. We classify government banks into political and non-political banks when the government bank...

This tutorial reviews the theory, structure and design methods for M-channel perfect-reconstruction (PR) lter banks. Some of the lter banks being considered here are the two-channel orthogonal lter bank; biorthogonal linear-phase lter banks; M-channel cosine-modulated lter banks and M-channel linear-phase lter banks. The connection with wavelet transform will be elaborated on the case of discre...

We study an oligopoly model of banking that allows us to evaluate the two leading explanations for banks’ ability to earn rents. In the model, banks can either invest in information acquisition, or in market power (through product differentiation). The two versions generate different predictions that are tested using panel data on Finnish local banks. We find that banks’ investments in branch n...

This paper explores the issue of banking efficiency in Central Europe by applying the Fourier functional form and the stochastic cost frontier approach in calculating inefficiencies for a large sample of German, Austrian, Swiss and Luxembourg banks between 1997 and 2003. The findings suggest that the largest sized banks are generally the least efficient banks and the smallest sized banks are th...

This paper addresses a polyphase structure of spectral graph wavelets and filter banks. We consider two-channel critically sampled graph filter banks. In classical signal processing, polyphase structure of filter banks is very useful since downsampler (upsampler) can be placed before analysis filtering (after synthesis filtering). We theoretically derive that a similar structure is also possibl...

In this paper we investigate whether banks that borrow from other banks have lower risk levels. We concentrate on a large sample of Central and Eastern European banks which allows us to explore the impact of interbank lending when exposures are long-term and interbank borrowers are small banks. The results of the empirical analysis generally confirm the hypothesis that long-term interbank expos...