No description available.

The reawakening of interest among Europeans of the nexus between religion and politics in the 21st century is nowhere better demonstrated than in the proliferation of new religious movements, revival of old religious identities, and formation of religious lobby groups. This revival has generated a debate about what kind of identity the EU is projecting, given the fact that the EU, as a unique post-Westphalian and secular construct, rejects the traditional tenets of identity that are normally associated with a nation-state, but it has also proved to be an area that has generated academic interest, since religious representations in Brussels are part of the lobby scene where they aim to exert influence just as much as business interest representations. The European Coalition for Israel (Eel) is one among many religious representations at the EU level that have well-established networks and specific aims for their lobbying, but, as a Christian organisation that supports the State of Israel, the ECI remains the only one such Christian Zionist group in Brussels. Contrary to widespread assumptions that Christian Zionism is uniquely an American phenomenon, it is in fact embedded in European Christianity, . and its current political activism in the EU is a natural progression of a centuries old philosemitism, specifically in Britain and Germany. Even though the ECI is at its core evangelical, it nonetheless conducts its advocacy within a secular framework for two reasons. Firstly, the organisation does not belong to any large Christian denominational structure in Brussels, and secondly, its primary aims and goals are in the political rather than the spiritual domain. The spiritual convictions of European Christian Zionists, i.e. God's un-annulled covenant with the Jews and eschatology, are of central importance to the movement, but equally a powerful factor that constitutes their value system is a historical dimension of Jewish experience in European Christendom. Consequently the normative framework of the ECI's Brusselsbased advocacy is defined by the fight against resurgent antisemitism, whilst its both defensive and offensive lobby strategy is conducted within the context of. the security issues of the Jewish state.

This thesis aims to explore the determinants of corporate default in the UK industrial companies and propose the best performing probability of default measurement. we re-examine some of the most popular probability of default models in the literature (Altman's Z-Score and Olson's O-Score) and define a hybrid model (H-Score), estimated from a dynamic legit model using accounting and market variables. Our Z-Score and O-Score results update many of the original covariate values proposed by above authors. Various performance test analysis show that H-Score provides the most information about the probability of default for our UK dataset. These various probability of default measurements arc then applied as the proxy of distress risk to examine the empirical analysis of distress risk premium in the UK context, mainly documented as a negative risk premium in US studies. We follow the latest development in this literature (Campbell et al (2008) and Chen et al. (2010) and carry out portfolio analysis to test the hypothesis of whether financially more distressed firms are rewarded by higher returns. Our results provide mixed findings. The existence of distress risk premium puzzle depends on many factors, including the way we construct the distressed p0l1folios and the selection of probability of default measurement as a proxy of distress risk. Finally, we twist our credit risk analysis to consider credit risk spillover effect and provide a measure of the risk-spillover connectedness within European investment banking system. We use the methodology advanced by Diebold and Yilmaz (2009,2013) and Greenwood-Nimmo el al. (2013) and apply the Vector Autoregression (VAR) model and Forecast Error Variance Decomposition (FE VD) to the credit default spread (CDS) data of the most liquid and actively traded nine European investment banks. Our various connectedness measurement results indicate that the inter-connectedness among European investment banks are extremely dynamic due to individual bank's idiosyncratic risk factors and the wider macroeconomic situations. Hence, supervisory institutions need la understand the time-varying dynamic nature of the connectedness among banks and be prepared to adjust policies to prevent accelerating of the systemic risk.

The aim of this research is to investigate the main weaknesses of the banking sector in Montenegro and, more generally, in Central and Eastern Europe. By contributing to the understanding of banking sector fragility, we seek to help regulatory authorities craft more effective regulations and policy interventions in order to minimize the costs that could arise from banking instability. The review of previous research suggests that an increase in the incidence of non-performing loans indicates increasing fragility of the banking sector and/or the lack of efficient banking supervision. Thus, the ratio of non-performing loans is taken as the key indicator of banking vulnerability. To examine the determinants of non-performing loans we use data at the individual bank level. We investigate whether in these countries the ratio of non-performing loans is driven predominantly by macroeconomic developments (i.e. similar factors to those recognized in the theory of financial crises) or by transition-specific factors, such as inadequate risk-assessments, the high risk appetite of banks’ management and the high concentration in the banking sector. This empirical analysis initially focuses on the sensitivity of the ratio of non-performing loans to macroeconomic and bank-specific factors in Montenegro. Subsequently, the analysis is extended to Central and East European countries. Bearing in mind the large presence of foreign banks in these countries, a particular feature of this analysis is that non-performing loans are modelled to capture differences between banks based on ownership structure. In order to account for time persistence in the structure of non-performing loans, a dynamic panel approach is used. However, in the Montenegrin model, given that the lack of cross sectional units precludes GMM Estimators, we investigate the use of FE estimation adjusted to take account of dynamic misspecification. The empirical findings suggest that strong performance in the real economy results in a lower ratio of non-performing loans but there is also a significant positive effect of past rapid loans growth in the second year after the end of the credit boom. The latter finding suggests that aggressive lending coincides with more reckless risk taking. Moreover, the empirical evidence suggests that some bank-specific features, which reflect banks’ management policies, affect the evolution of non-performing loans. The multi-national study suggests that foreign banks are likely to have lower ratios of non-performing loans. Based on our findings, regulatory authorities should expand their monitoring framework to include both macroeconomic and bank-specific indicators when assessing the stability of the banking system. In addition, regulators should be more concerned about any loosening of bank lending criteria in an upturn, since our results suggest a delayed effect of loans growth on the incidence of non-performing loans.

In this thesis, we use a wide cross-sectional sample of both privately held and publicly listed European banks over the period 1999 to 2008 to analyse the role played by bank shareholder incentives in the performance of banks and, ultimately, on the capital allocation efficiency of the economy as a whole. In our first essay, we use the entire range of Bankscope and Amadeus Top 250,000 to construct the portfolios of shareholders who hold equity stakes in banks for each year. We show that about 62 per cent of the ultimate largest shareholders of banks are diversified investors, holding on average equity investments from thirteen companies in their portfolio. We exploit this heterogeneity to investigate the impact of their portfolio diversification on bank risk-taking. Our results show that the relationship between portfolio diversification and bank risk-taking is both statistically significant and economically sizeable. Overall, these findings contribute to the literature by providing novel evidence on the characteristics of bank shareholders’ portfolios and by studying an explicit channel through which shareholders’ incentives for risk-taking affect the banks’ risk. In our second essay, we build on our previous evidence to further investigate whether the level of diversification of bank shareholders has any effect on the efficiency of capital allocation in the economy. We aggregate our data at regional level, using information on the address where companies and banks have their headquarters and identify regions based on Eurostat Nomenclature of Territorial Units for Statistics (NUTS) definitions. Our results indicate that capital appears to be allocated more efficiently in regions where banks are controlled by (more) diversified shareholders. In particular, a change in value-added growth increases capital investment by approximately 8 per cent of its mean in regions where banks are controlled by undiversified shareholders, while it increases capital investment by almost 21 per cent in regions where banks are controlled by shareholders with diversified portfolios. These findings contribute to the literature by studying a specific novel channel through which financial development, in the form of bank shareholders’ diversification, affects the real economy. Lastly, in our third essay we combine our detailed micro-level data on ownership with commercial loans market data from Dealscan to evaluate evidence of related lending in Western European banks. In doing so, we are able to explicitly identify related loans and provide original evidence of related lending and preferential lending terms. We show that 14 per cent of banks in our sample engage in related lending, and that firms borrowing from their related banks have lower costs and higher access to credit. Given these findings, we then proceed to analyse the effect of related lending in bank performance. Our tests show that banks participating in related lending experience an increase in average returns of 11 per cent. Results are both statistically significant and economically sizeable. Overall, our findings contribute to the literature by providing evidence in support the information asymmetry view of related lending, suggesting that in countries with strong rule of law related lending may become a relevant mechanism for informational capital accumulation for banks, allowing them to make more profitable lending decisions.