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Too-Big-to-Fail in Banking

Impact of G-SIB Designation and Regulation on Relative Equity Valuations

Tom Filip Lesche (Autor)

Buch | Softcover

XIX, 248 Seiten

2021 | 1st ed. 2021
Springer Fachmedien Wiesbaden GmbH (Verlag)
978-3-658-34181-7 (ISBN)

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This book provides a comprehensive summary of the latest academic research on the important topic of too-big-to-fail (TBTF) in banking. It explains TBTF from various perspectives including the range of regulatory measures proposed to counter TBTF, most notably the globally accepted regulation of global-systemically important banks (G-SIBs) and its main tool of capital surcharges. The empirical analysis quantifies the shareholder value of the G-SIB attribution by using quarterly observations from more than 750 global banks between Q2 2008 and Q3 2015. The main finding is that G-SIBs are confronted with a substantial relative valuation discount compared to non-G-SIBs. From the end of 2011 until the end of 2015, a stable discount of 0.6x-0.8x price-to-tangible common equity (P/TCE) is statistically highly significant. The results suggest that the G-SIB designation effect, which positively impacts G-SIBs' share prices because of funding benefits from IGGs, is dominated by the regulatory G-SIB burden effect, which negatively impacts G-SIBs' share prices because of lower profitability due to capital surcharges and other regulatory requirements placed on G-SIBs. The findings re-open the debate about whether breaking up G-SIBs would unlock shareholder value and whether G-SIBs are regulated efficiently.

Dr. Tom Filip Lesche is a venture capitalist investing into financial technology companies. Previously he was an investment banker advising financial institutions on capital markets and M&A transactions.

1 Introduction and Overview.- 2 A Primer for Economics of Banking.- Part I Too-Big-to-Fail in Banking Review.- 3 Introduction to Too-Big-to-Fail in Banking.- 4 TBTF Causal Chain: Explicit and Implicit Government Guarantees.- 5 Public Cost and Benets of TBTF.- 6 TBTF Policy Recommendations.- 7 TBTF Policy Initiatives.- 8 Conclusion.- Part II Quantifying the Shareholder Value of Too-Big-to-Fail in Banking.- 9 Related Research.- 10 Hypothesis Development.- 11 Empirical Methodology and Data.- 12 Results and Discussion.- 13 Conclusion

Erscheinungsdatum	30.06.2021
Reihe/Serie	Finanzwirtschaft, Banken und Bankmanagement I Finance, Banks and Bank Management
Zusatzinfo	XIX, 248 p. 36 illus.
Verlagsort	Wiesbaden
Sprache	englisch
Maße	168 x 240 mm
Gewicht	459 g
Themenwelt	Recht / Steuern ► Wirtschaftsrecht ► Bank- und Kapitalmarktrecht
	Wirtschaft ► Betriebswirtschaft / Management ► Finanzierung
	Betriebswirtschaft / Management ► Spezielle Betriebswirtschaftslehre ► Bankbetriebslehre
Schlagworte	Banks • Global Systemically Important Bank • Price-to-Book Value Ratio • Regulation • Too-Big-To-Fail • Valuation
ISBN-10	3-658-34181-5 / 3658341815
ISBN-13	978-3-658-34181-7 / 9783658341817
Zustand	Neuware