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Basel III impact on the Italian banking sector

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  • Vasilios Sogiakas

Abstract

This paper examines the incentives and the effectiveness of tighter regulation of the Italian banks in terms of their profitability. Using balance and off-balance sheet data I focus on the capital requirements and the liquidity characteristics of the banking sector by the convenient Tier 1 ratio and the Basel III long-term Net Stable Funding Ratio (NSFR), respectively. The empirical findings of the paper underline the important role that the NSFR has as a preventive tool for potential bank failures while addresses the incentives behind the enforcement of higher Tier 1 ratios as a way for more risk averting profiles mainly during turbulent periods.

Suggested Citation

  • Vasilios Sogiakas, 2017. "Basel III impact on the Italian banking sector," Bulletin of Applied Economics, Risk Market Journals, vol. 4(2), pages 51-55.
    • Handle: RePEc:rmk:rmkbae:v:4:y:2017:i:2:p:51-55
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    References listed on IDEAS

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    1. Asli Demirguc-Kunt & Enrica Detragiache & Ouarda Merrouche, 2013. "Bank Capital: Lessons from the Financial Crisis," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 45(6), pages 1147-1164, September.
    2. Eberhard Feess & Ulrich Hege, 2012. "The Basel Accord and the Value of Bank Differentiation," Review of Finance, European Finance Association, vol. 16(4), pages 1043-1092.
    3. Francesco Vallascas & Jens Hagendorff, 2013. "The Risk Sensitivity of Capital Requirements: Evidence from an International Sample of Large Banks," Review of Finance, European Finance Association, vol. 17(6), pages 1947-1988.
    4. Manthos D. Delis & Panagiotis K. Staikouras, 2011. "Supervisory Effectiveness and Bank Risk," Review of Finance, European Finance Association, vol. 15(3), pages 511-543.
    5. Dietrich, Andreas & Hess, Kurt & Wanzenried, Gabrielle, 2014. "The good and bad news about the new liquidity rules of Basel III in Western European countries," Journal of Banking & Finance, Elsevier, vol. 44(C), pages 13-25.
    6. Gaston A. Giordana & Ingmar Schumacher, 2013. "Bank liquidity risk and monetary policy. Empirical evidence on the impact of Basel III liquidity standards," International Review of Applied Economics, Taylor & Francis Journals, vol. 27(5), pages 633-655, September.
    7. Ms. Inci Ötker & Ceyla Pazarbasioglu, 2010. "Impact of Regulatory Reforms on Large and Complex Financial Institutions," IMF Staff Position Notes 2010/016, International Monetary Fund.
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    More about this item

    Keywords

    Basel III; NSFR; banking efficiency; financial crisis;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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