Petras, Matthias ORCID: 0000-0002-2018-7533 (2020). Essays on Selected Issues of Post-Crisis Banking Regulation, Profitability, and Risk. PhD thesis, Universität zu Köln.

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This dissertation is a cumulative thesis in the field of empirical banking research. The three studies included contribute to the empirical literature on bank regulation and bank management. The central aim is to study specific issues of post-crisis banking regulation and bank management in light of their implications for bank risk and profitability. Therefore, all three studies apply econometric methodology to empirical bank data. In this way, my results provide guidance to bank regulators and bank management based on reliable data. The commonality of the issues considered is that they are proposed lessons from the financial crisis 2008. Contingent convertible capital instruments were introduced to increase the resilience of financial institutions as additional going concern capital. Corporate social responsibility is particularly for banks the response to misconduct and lacking corporate governance before the crisis. In the first essay, I provide evidence that banks can increase their profitability if they use contingent convertible capital instruments for regulatory purposes. These instruments are a type of hybrid capital which is eligible to a certain extent as a substitute for common equity instruments. Analysing a dataset of European banks, I find evidence that the substitution of equity by contingent convertible bonds as regulatory additional tier 1-capital increases bank profitability. In the second essay, I show that the usage of contingent convertible instruments reduces a bank's vulnerability to systemic risk. The broadly used SRISK measure of systemic risk is, however, not capable of properly reflecting this effect and shows biased results. Therefore, I propose an adjustment to the original formula and show, based on a global dataset, that this adjustment leads to unbiased evidence of the implied reduction of systemic risk. Both the increase in profitability and the reduction of systemic risk are good reasons for bank management to make use of these instruments. For regulators, it provides additional confirmation that these instruments do indeed strengthen the banking system. In the third essay, I find that corporate social responsibility in the form of environmental engagement reduces a bank's idiosyncratic risk. In this regard, I study the risk-effects of banks' environmental, social, and governance performance in a global dataset. The results offer additional motivation for bank managers to commit to sustainable banking. For regulators, it provides insights into the roots of the risk-reduction associated with corporate social responsibility, as well as justification for requirements to sustainable banking in the environmental sense.

Item Type: Thesis (PhD thesis)
Translated title:
Essays zu ausgewählten Themen der Bankenregulierung, Profitabilität und Risiko in Folge der FinanzkriseGerman
CreatorsEmailORCIDORCID Put Code
URN: urn:nbn:de:hbz:38-113480
Date: 2020
Language: English
Faculty: Faculty of Management, Economy and Social Sciences
Divisions: Faculty of Management, Economics and Social Sciences > Business Administration > Finance > Professorship for Business Administration and Bank Management
Subjects: Management and auxiliary services
Uncontrolled Keywords:
Bank regulation; banking; banking crisis; CoCo-bonds; profitability; risk; sustainable bankingEnglish
Bankenregulierung; Bank; Bankenkrise; CoCo-bonds; Profitabilität; Risiko; nachhaltiges BankingUNSPECIFIED
Date of oral exam: 15 June 2020
NameAcademic Title
Hartmann-Wendels, ThomasProf. Dr.
Schradin, HeinrichProf. Dr.
Refereed: Yes


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