The thesis sheds light on key policy issues emerging from the recent Global Financial Crisis. The first chapter studies whether expansionary monetary policy contributes to bank risk-taking, in the case of Asia. I rely on panel data analysis covering 432 banks in 9 Asian countries over the year 2000-2011. The ratio of risky assets to total assets serves as a risk-taking indicator. The results support the existence of the bank risk-taking channel, which is more pronounced for banks listed on the stock market. I also report new findings with respect to how banks take more risk following monetary expansion. Importantly, evidence of excessive leverage is not found. The second chapter constructs a model for analyzing bank risk-taking. I embed firm heterogeneity, endogenous default risk and capital adequacy regulation into both RBC and NK DSGE models. A subset of the firms can partially default on their loans obligation but subject to non-pecuniary default penalty. With those financial frictions in place, I find that standard macroeconomic shocks can induce banks to engage in higher risk-taking. The chapter then explores the effectiveness of several macro-prudential tools in mitigating risk-taking. I find countercyclical capital buffers and risky to total asset ratio targeting to be effective. The third chapter emphasises the spillover effects of shocks originating in the housing and financial market on the real economy. I embed endogenous mortgage default into a New Keynesian model that features housing and the banking sector. The latter faces capital regulation. We study two key shocks, namely shocks to the variance of idiosyncratic housing shock and shocks to the penalty on capital regulation. Both are instrumental in causing a surge in mortgage default and loans risk premium, which constrains bank lending activity. The chapter later introduces three macroprudential measures to explore whether they improve economic stability and welfare.

Pleinement en phase avec le contexte de crise financière internationale d'une part, et avec les discussions autour de la réforme de la réglementation bancaire (Bâle III) d'autre part, cette thèse met l'accent sur la notion de la discipline de marché dans le secteur bancaire, l'un des piliers du dispositif bâlois. La thèse cherche, particulièrement, à répondre à la problématique suivante : les actionnaires de la banque peuvent-ils être considérés comme acteurs de la discipline de marché ou, au contraire, comme des acteurs contrariant les objectifs des autorités réglementaires ? Par le biais de deux études empiriques menées sur un échantillon de 247 banques européennes, sur une période allant de 2004 à 2006, cette recherche a étudié les déterminants de la probabilité de défaillance des banques (en tant que mesure de risque) et le rôle disciplinaire de l'actionnaire (à travers l'impact de la charter value sur la prise de risque des banques). Les résultats de ces études montrent : (1) que le ratio de solvabilité (ratio de Bâle I et II) n'est pas un indicateur robuste de la défaillance bancaire; (2) que d'autres critères (autres que l'adéquation des fonds propres), telles que la qualité des actifs, la profitabilité ou encore la liquidité, peuvent jouer un rôle important dans la détermination de la probabilité de défaillance des banques ; (3) que la charter value permet de discipliner la prise de risque des banques, ce qui est en faveur de l'hypothèse du rôle actif des actionnaires dans la discipline de marché ; (4) que la discipline par la charter value est totalement inefficace pour les grandes banques systémiques (too big to fail). Ces résultats vont globalement dans le sens de la réforme de Bâle III qui vise, notamment, à réviser la composition des fonds propres réglementaires et à appliquer un traitement particulier aux banques systémiques. Ce travail doctoral donne lieu à une contribution théorique qui permet d'éclairer le concept de discipline de marché dans le secteur bancaire, ainsi qu'à des contributions opérationnelles sous forme de recommandations aux régulateurs et superviseurs de l'activité bancaire. / Fully in line with the international financial crisis on the one hand, and with the discussions on the reform of banking regulations issued by Basel III on the other, this thesis focuses on the concept of market discipline in the banking sector, one of the pillars of Basel accords. The thesis seeks, in particular, to answer the following question: can bank shareholders be considered as potential source of market discipline or, conversely, as actors frustrating the objectives of regulators? Using two empirical studies conducted on a sample of 247 European banks over a period from 2004 to 2006, this study investigated the determinants of banks failure probability (as a measure of bank risk) and the shareholder disciplinary role (through the effect of charter value on banks risk-taking). Results highlight that: (1) the solvency ratio (Basel I and II ratio) is not a robust indicator of bank failure, (2) other criteria (others than capital adequacy), such as the asset quality, the profitability or the liquidity, can play an important role in the determination of bank failure probability (3) the charter value constrain the risk-taking of banks which confirms the effectiveness of shareholders discipline (4) that the charter value discipline is totally ineffective for large systemic banks (TBTF). These results converge globally with the Basel III reform which aims, in particular, to revise the composition of regulatory capital and apply special treatment on systemic banks. This doctoral work brings theoretical contributions which add to bank market discipline literature as well as operational contributions in the form of recommendations for regulators and supervisors of banking system.

Conselho Nacional de Desenvolvimento CientÃfico e TecnolÃgico / This work search to study as the agency costs and the moral hazard affect the decisions of the Brazilian banks as for the risk level that it are willing to assume, once determining the behavior of these banks is easier to formulate preventive politics to the occurrence of crises. As contribution in relation to the existent literature can stand out the attempt to model the variance taking into account the problem of the conditional heteroscedasticity and to verify as the banks have if held durant during the crises observed in the last decade. The results of this work point that the systemic risk was less expressive than the specific risk in the composition of the total risk and that, given the characteristics of the Brazilian banks, the property structure and the franchise value tend to affect the total and specific risks in an inverse way, however in what concerns the systematic risk no there is a very defined relationship. / Este trabalho busca estudar como os custos de agÃncia e o risco moral afetam as decisÃes dos bancos brasileiros quanto ao nÃvel de risco que estÃo dispostos a assumir, uma vez que determinando o comportamento destes bancos fica mais fÃcil formular polÃticas preventivas à ocorrÃncia de crises. Como contribuiÃÃo em relaÃÃo à literatura existente pode-se destacar a tentativa de modelar a variÃncia levando em conta o problema da heterocedasticidade condicional e verificar como os bancos tÃm se comportado durante as crises observadas na Ãltima dÃcada. Os resultados deste trabalho apontam que o risco sistÃmico foi menos expressivo do que o risco especÃfico na composiÃÃo do risco total e que, dadas as caracterÃsticas dos bancos brasileiros, a estrutura de propriedade e o franchise value tendem a afetar os riscos totais e especÃficos de forma inversa, no entanto no que diz respeito ao risco sistemÃtico nÃo hà uma relaÃÃo bem definida.

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.

This dissertation topic is on the market discipline of banking institutions during the most recent business cycle (i.e., the business cycle surrounding the Great Recession of 2007). Market discipline has been a focal point of banking regulation since the implementation of Basel II in June 2004. In an attempt to provide a comprehensive framework that provides international standards on bank supervision, the Basel Committee on Banking Supervision designed a complementary three-pillar structure. These include: capital requirements, the supervisory review process, and market discipline. Recent research has shown that the success of capital requirement ultimately lies in how well it serves market discipline (Gordy and Howells, 2006). The FDIC defines market discipline as: The forces in a free market (without the influence of government regulation) which tend to control and limit the riskiness of a financial institution’s investment and lending activities. Such forces include the concern of depositors for the safety of their deposits and the concern of bank investors for the safety and soundness of their institutions. Source: FDIC Glossary of Definitions Thus, regulators must account for market discipline in their design of a new regulatory framework. In Chapter 1, I investigate how the yield spreads of debt issued by U.S. Systemically Important Banks (SIBs) in the secondary market are associated with their idiosyncratic risk factors, as well as bond features, and macroeconomic factors, over a complete business cycle across the pre-crisis (2003:Q1 to 2007:Q3), crisis (2007:Q4 to 2009:Q2), and post-crisis (2009:Q3 to 2014:Q3) periods. Both Global and Domestic SIBs (G-SIBs and D-SIBs) are considered. Economic theory suggests that as SIB risk-levels increase, bond-buyers demand a higher yield spread (lower price) on the debt security (Evanoff and Wall, 2000). However, explicit and implicit government safety nets before, during, and after the crisis complicate the market discipline mechanism and make a priori predictions of the yield changes in response to increases in risk inconclusive. This renders the issue an empirical exercise. By stratifying across the most recent business cycle, I am able to investigate two broad objectives. First, I study how bond-buyers react to increases in SIB risk across the recent business cycle. Second, I investigate the degree to which the proportion of the variance in yield spreads explained by macroeconomic factors changed across the phases of the cycle. Unusual volatility during and after the financial crisis in the macroeconomic realm, and the keen focus by regulators, investors, and other stakeholders on idiosyncratic risk makes it theoretically unclear which countervailing force is the primary driver of yield spreads in the secondary market. The data includes over 9.7 million bond trades across the 26 SIBs based in the U.S. I obtain several interesting results. First, bond-buyers do react to increases in bank risk factors (leverage, credit risk, inefficiency, lack of profitability, illiquidity, and interest rate risk) by charging higher yield spreads. Second, bond buyer response to risk is sensitive to the phase of the business cycle. Third, the proportion of variance in yield spreads driven by issuing-firm-specific and bond-specific risk factors (as opposed to macroeconomic factors) increased from 29% in the pre-crisis period to 48% and 77% during the crisis and post-crisis periods, respectively. This last finding indicates that market discipline greatly improved in the two latter phases of the business cycle, and while the literature on market discipline following the 2007-2009 crises is still scant, this result is consistent with some extant studies (Balasubramnian and Cyree, 2014). Despite unprecedented accommodative fiscal and monetary policies during and after the financial crisis, market discipline in the secondary bond market has strengthened considerably, providing evidence that regulatory intervention and market discipline can work in tandem. These results can advise regulators, investors, bank risk managers, and others, on how bond traders react to issuing-bank, bond, and macroeconomic factors. For example, regulators and policy makers should account for the effect of market discipline in formulation of their monetary and fiscal policies designed to achieve specific targets because, otherwise, they may miss the targets. In Chapter 2, I study the impact of bank risk taking and macroeconomic factors on the growth of interest-bearing deposits and interest rates paid on those deposits for U.S. commercial banks with less than $10 billion in total assets (known as commercial banking organizations or CBOs). The sample period for deposit growth covers the recent business cycle (2003:Q1 to 2014:Q4) and it is broken down into pre-crisis (2003:Q1 to 2007:Q3), crisis (2007:Q4 to 2009:Q2), and post-crisis (2009:Q3 to 2014:Q4) sub-periods in order to contrast the patterns of effects over these phases of the business cycle. Deposit pricing equations are estimated over the post-crisis period only due to data limitations. Separate deposit growth rate equations are estimated across four deposit types (transaction, savings, large, and small time deposits), while separate deposit pricing equations are estimated across 30 deposit types (including various terms and balances for certificates of deposits as well as personal and business money market accounts and interest checking accounts, among others). Bank heterogeneity is accounted for via fixed effects estimation. I obtain several interesting results. First, there is a relationship between bank risk taking and subsequent deposit withdrawals over the three sub-sample periods, indicating that depositors do respond to bank riskiness under the pre-crisis, crisis, and post-crisis environments (market discipline). Second, there is also market discipline in deposit pricing as evidenced by the statistically significant and consistent relationship between bank risk taking and deposit pricing across all 30 different product types I study. Third, when deposits are disaggregated into insured and uninsured components, I find that the uninsured depositors react to changes in bank credit risk via deposit withdrawals (during the pre-crisis period) and pricing (during the post-crisis period) to a greater extent than do the fully insured depositors, supporting the presence of moral hazard. Fourth, since the pre-crisis period, macroeconomic factors have become even a greater force in driving the changes in deposit growth because of market intervention and implicit and explicit government guarantees. As macroeconomic factors drive more of the variation in deposit growth, mechanisms to keep CBO risk in check depend less on the depositors and banks and more on macroeconomic policy. In Chapter 3, I investigate the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) of 2010 on accounting fees for commercial banks with less than $10 billion in total assets (known as commercial banking organizations or CBOs), while controlling for their litigation risk via legal fees spent on outside counsel. Using panel data from 2008 through 2014 for U.S. CBOs, I find that litigation risk is the primary driver of accounting fees for “large” CBOs with $1 billion - $10 billion in total assets. This finding is contrary to previous studies, which attribute the majority of explained variance in those fees to firm size alone. To my knowledge, these results are the first to explicitly confirm the litigation risk-audit fee hypothesis (Seetharaman et al., 2002) for the banking industry. In terms of magnitude, I find that for every one percent increase in legal fees, accounting fees will increase from two to nine basis points, depending on CBO size. Controlling for bank-specific risk and the general business cycle, our results show that Dodd-Frank has the greatest impact on accounting fees for small CBOs (<$500 million in total assets), which experience an increase in these expenses of 73% due to the drafting of the Act, and an increase of 105% due to the subsequent passage (compared to an increase of 56% and 86% in accounting fees for the large CBO cohort during the drafting and subsequent passage of Dodd-Frank, respectively). I also find that a decrease in bank leverage (for CBOs of all sizes) and an increase in real estate loans to total loans (for large CBOs) are indicative of higher accounting fees. / Economics

Yes / We assess, for the first time in the literature, the impact of green credit on bank efficiency. We find that green credit has a negative impact on bank efficiency. However, the effect is heterogeneous among different types of banks. While small and low capitalized banks are more affected, the impact is lower in banks with higher levels of risk. On the other hand, we find that highly capitalized banks can offset the negative effects of green credit, while large banks and those highly involved in green credit, benefit from this activity.

Cette thèse de Doctorat représente une première évaluation empirique des implications de l’interaction entre la compétition bancaire et la titrisation des crédits sur l’efficience, le risque, et la structure du capital des banques commerciales Américaines. Précisément, l’objectif principal de cette thèse de Doctorat est de répondre aux questions suivantes : 1) Quel est l’impact de la compétition et de la titrisation, séparément et conjointement, sur l’efficience bancaire ? 2) La titrisation réduit-elle le risque bancaire sous la pression de la compétition bancaire ? 3) Quelles sont les implications de l’interaction entre la compétition bancaire et la titrisation sur la structure du capital des banques commerciales Américaines ? Le développement de ces questions est motivé par la croissance rapide de la titrisation, par l’évolution de la compétition bancaire à travers diverses réglementations bancaires Américaines, par le débat en cours entre les partisans et les opposants à la compétition et la titrisation, et par le caractère novateur de ces sujets. Après la mise en œuvre de la méthode de score de propension, le premier chapitre suggère que la titrisation augmente significativement l’efficience bancaire mesurée par la méthode de frontières stochastiques (SFA). Cet effet positif est plus prononcé au sein des marchés bancaires compétitifs. Dans le deuxième chapitre, nous utilisons un modèle à effets fixes à partir duquel nous démontrons que la titrisation semble avoir un effet négatif sur le risque bancaire, particulièrement et de manière surprenante lors de la crise financière récente, mais uniquement si les banques titrisent fortement les crédits dans des marchés bancaires compétitifs. Le troisième chapitre démontre que la compétition bancaire pourrait être considérée comme un canal qui explique comment la titrisation influence, d’une manière significative, la structure du capital des banques commerciales Américaines. Nos enquêtes plus approfondies, introduites par la régression quantile, indiquent que les banques légèrement capitalisées, qui titrisent largement des crédits dans les marchés compétitifs, ont augmenté leurs divers ratios de capital, tandis qu’une réduction dans ces derniers est signalée pour les banques fortement capitalisées. En plus d’apporter des contributions empiriques, opérationnelles, managériales et politiques, cette thèse de Doctorat souligne l’importance d’établir une réglementation bancaire prudente sur la titrisation prenant en compte les réponses hétérogènes de la capitalisation bancaire, les différentes réactions des divers crédits titrisés, ainsi que l’effet extrêmement significatif de la structure du marché bancaire Américain. / This PhD dissertation represents a first empirical assessment of the implications of the interaction between banking competition and securitization on efficiency, risk, and capital structure of US commercial banks United States. Precisely, the main objective of this PhD dissertation is to answer the following questions: 1) What is the impact of competition and securitization, separately and jointly, on bank efficiency? 2) Does securitization reduce bank risk under competitive pressure? 3) What are the implications of the interaction between competition and securitization on bank capital structure? The development of these questions is motivated by the rapid growth of securitization, the evolution of bank competition through various US bank regulations, the ongoing debate between proponents and criticizers of competition and securitization; and the novelty of these topics among academics and practitioners. After implementing a propensity score matching technique, the first chapter suggests that securitization significantly increases bank efficiency as measured by the Stochastic Frontier Approach (SFA). This positive impact appears to be more pronounced in competitive banking markets. In the second chapter, we use fixed-effects model through which securitization is found to have a negative impact on bank risk, particularly and surprisingly during the recent financial crisis, but only if banks highly securitize loans in competitive markets. The third chapter argues that banking competition could be considered a channel that explains how securitization significantly influences US commercial banks’ capital structure. Specifically, deeper investigations, introduced by the quantile regression, show that less-capitalized banks that highly securitize loans in competitive markets are more likely to increase their overall capital ratios, whereas a decrease in these ratios is reported for highly-capitalized banks. Providing several empirical and operational contributions as well as important managerial implications and policy recommendations, this PhD dissertation emphasizes the importance of considering a careful banking regulation on securitization that takes into account the heterogeneous responses of bank capitalization, the different reactions of various securitized loans, and the overall significant effect of US banking market structure.

The aim of this paper is to analyse processes particularly connected with providing bank services. Accordingly, those which enable standard bank existence; lead to the bargain; hedge the risks which rise from this bargain; accomplish book entry of this bargain and assure the profit. The analysis provides the "big picture" of all the circumstances with influence on bank financial management and adverts to aspects determining the bank sector. The outcome of the analysis is the overview of bank regulations, risk management and achieving expected return on equity.

My dissertation topic is on the impact of changes in the monetary policy interest rate target on bank distress and systemic risk in the U.S. banking system. The financial crisis of 2007-2009 had devastating effects on the banking system worldwide. The feeble performance of financial institutions during the crisis heightened the necessity of understanding systemic risk exhibited the critical role of monitoring the banking system, and strongly necessitated quantification of the risks to which banks are exposed, for incorporation in policy formulation. In the aftermath of the crisis, US bank regulators focused on overhauling the then existing regulatory framework in order to provide comprehensive capital buffers against bank losses. In this context, the Basel Committee proposed in 2011, the Basel III framework in order to strengthen the regulatory capital structure as a buffer against bank losses. The reform under Basel III framework aimed at raising the quality and the quantity of regulatory capital base and enhancing the risk coverage of the capital structure. Separately, US bank regulators adopted the Dodd-Frank Wall Street Reform and Consumer Protection Act (2010) to implement stress tests on systemically important bank holding companies (SIBs). Concerns about system-wide distress have broadened the debate on banking regulation towards a macro prudential approach. In this context, limiting bank risk and systemic risk has become a prolific research field at the crossroads of banking, macroeconomics, econometrics, and network theory over the last decade (Kuritzkes et al., 2005; Goodhart and Sergoviano, 2008; Geluk et al., 2009; Acharya et al., 2010, 2017; Tarashev et al., 2010; Huang et al., 2012; Browless and Engle, 2012, 2017 and Cummins, 2014). The European Central Bank (ECB) (2010) defines systemic risk as a risk of financial instability “so widespread that it impairs the functioning of a financial system to the point where economic growth and welfare suffer materially.” While US bank regulators and policy-makers have moved to strengthen the regulatory framework in the post-crisis period in order to prevent another financial crisis, a growing recent line of research has suggested that there is a significant link between monetary policy and bank distress (Bernanke, Gertler and Gilchrist, 1999; Borio and Zhu, 2008; Gertler and Kiyotaki, 2010; Delis and Kouretas, 2010; Gertler and Karadi, 2011; Delis et al., 2017). In my research, I examine the link between the monetary policy and bank distress. In the first chapter, I investigate the impact of the federal funds rate (FFR) changes on the banking system distress between 2001 and 2013 within an unrestricted vector auto-regression model. The Fed used FFR as a primary policy tool before the financial crisis of 2007-2009, but focused on quantitative easing (QE) during the crisis and post-crisis periods when the FFR hit the zero bound. I use the Taylor rule rate (TRR, 1993) as an “implied policy rate”, instead of the FFR, to account for the impact of QE on the economy. The base model of distress includes three macroeconomic indicators—real GDP growth, inflation, and TRR—and a systemic risk indicator (Expected capital shortfall (ES)). I consider two model extensions; (i) I include a measure of bank lending standards to account for the changes in the systemic risk due to credit tightening, (ii) I replace inflation with house price growth rate to see if the results remain robust. Three main results can be drawn. First, the impulse response functions (IRFs) show that raising the monetary policy rate contributed to insolvency problems for the U.S. banks, with a one percentage point increase in the rate raising the banking systemic stress by 1.6 and 0.8 percentage points, respectively, in the base and extend models. Second, variance decomposition (VDs) analysis shows that up to ten percent of error variation in systemic risk indicator can be attributed to innovations in the policy rate in the extended model. Third, my results supplement the view that policy rate hikes led to housing bubble burst and contributed to the financial crisis of 2007-2009. This is an example for how monetary policy-making gets more complex and must be conducted with utmost caution if there is a bubble in the economy. In the second chapter, I examine the prevalence and asymmetry of the effects on bank distress from positive and negative shocks to the target fed fund rate (FFR) in the period leading to the financial crisis (2001-2008). A panel model with three blocks of control variables is used. The blocks include: positive/negative FFR shocks, macroeconomic drivers, and bank balance sheet indicators. A distress indicator similar to Texas Ratio is used to proxy distress. Shocks to FFR are defined along the lines suggested by Morgan (1993). Three main results are obtained. First, FFR shocks, either positive or negative, raise bank distress over the following year. Second, the magnitudes of the effects from positive and negative shocks are unequal (asymmetric); a 100 bps positive (negative) shock raises the bank distress indicator (scaled from 0 to 1) by 9 bps (3 bps) over the next year. Put differently, after a 100 bps positive (negative) shock, the probability of bankruptcy rises from 10% to 19% (13%). Third, expanding operations into non-banking activities by FHCs does not benefit them in terms of distress due to unanticipated changes in the FFR as FFR shocks (positive or negative) create similar levels of distress for BHCs and FHCs. In the third chapter, I explore the systemic risk contributions of U.S. bank holding companies (BHCs) from 2001 to 2015 by using the expected shortfall approach. Developed by analogy with the component expected shortfall concept, I decompose the aggregate systemic risk, as measured by expected shortfall, into several subgroups of banks by using publicly available balance sheet data to define the probability of bank default. The risk measure, thus, encompasses the entire universe of banks. I find that concentration of assets in a smaller number of larger banks raises systemic risk. The systemic risk contribution of banks designated as SIFIs increased sharply during the financial crisis and reached 74% at the end of 2015. Two-thirds of this risk contribution is attributed to the four largest banks in the U.S.: Bank of America, JP Morgan Chase, Citigroup and Wells Fargo. I also find that diversifying business operations by expanding into nontraditional operations does not reduce the systemic risk contribution of financial holding companies (FHCs). In general, FHCs are individually riskier than BHCs despite their more diversified basket of products; FHCs contribute a disproportionate amount to systemic risk given their size, all else being equal. I believe monetary policy-making in the last decade carries many lessons for policy makers. Particularly, the link between the monetary policy target rate and bank distress and systemic risk is an interesting topic by all accounts due to its implications and challenges (explained in more detail in first and second chapters). The literature studying the relation between bank distress and monetary policy is fairly small but developing fast. The models I investigate in my work are simple in many ways but they may serve as a basis for more sophisticated models. / Economics

Tidigare finanskriser har resulterat i ett större fokus på bankers risktagande. Kriserna har påvisat hur bankers kris kan få förödande effekt på den globala marknaden vilket har föranlett olika konsekvenser (bland annat i form av nya regelverk) för att hantera bankers tendens mot ett för högt risktagande. Bankers inställning till risktagande kan förklaras utifrån dess ägarstruktur där ägarna kan ha olika riskpreferenser.   Forskningsstudier har påvisat att ett samband existerar mellan ägarkoncentration och bankers risk, dock utan någon konsensus om sambandets utseende. Syftet med studien är att undersöka hur ägarstruktur påverkar bankers konkursrisk, där banker inom EU-länder har undersökts. Vidare har karaktären på bankernas största aktieägare tagits i beaktning för att se om sambandet mellan ägarkoncentration och risk skiljer sig beroende på vilka ägare bankerna utgörs av. Därtill har sex hypoteser formulerats som syftar till att undersöka relationen mellan ägarstruktur, agentkostnader och konkursrisk utifrån agentteorin och teorier om bolagsstyrning. För studiens undersökning har  en kvantitativ metod använts tillsammans med en deduktiv ansats.   Undersökningen visar, likt andra studier, att det existerar ett samband mellan ägarstruktur och bankers risk. Mer specifikt visar vår studie att sambandet ser olika ut för olika ägartyper. För vissa ägartyper har vi identifierat ett positivt samband mellan ägarkoncentrationen och bankers konkursrisk medan för andra ägartyper har vi istället identifierat ett negativt samband. Avslutningsvis visar studien att agentkostnader föreligger i större grad när aktieägarna har mindre kontroll över ledningen. / Previous financial crises have resulted in a greater focus on bank’s risk taking. The crises have shown how the bank’s instability may create a devastating effect on the global market, which has given rise to several studies focus on bank’s risk. Bank’s attitude towards risk taking can be explained by its ownership structure where the owners may have different risk preferences.   Research studies have found a relationship between the concentration of ownership and bank risk, but without any consensus on the sign of the relationship. The purpose of this study is to investigate how ownership concentration affects bank’s default risk. The study has been performed on banks within the EU countries. Furthermore, the nature of the bank’s largest shareholders has been taken into consideration to distinguish whether they have an impact on the relationship between ownership concentration and risk. In addition, six hypotheses were formulated which aim to investigate the relationship between ownership concentration, agency costs and the default risk, based on the agency theory and theories on corporate governance. For this study’s survey a quantitative method has been used in conjunction with a deductive approach.   Our findings show that there exists a relationship between ownership concentration and bank risk. More specifically, our study shows that the relationship is different depending on the nature of the owner. For some types of owners, we have identified a positive relationship between ownership concentration and bank’s default risk, while for other types of owners we have instead identified a negative relationship. Finally, this study shows that agency costs are greater when shareholders perform a lower degree of monitoring of the management.