Complexity and riskiness of banking organizations: Evidence from the International Banking Research Network

Mapping exposures of EU banks to the global shadow banking system

“…correlated with the banks' size (depicted as the size of each of the circles). Indeed, this finding is consistent with the wider bank complexity literature, as in Buch and Goldberg (2021): the expansion of geographic complexity is, in particular, a feature of the largest banking organisations. A more comprehensive analysis of the geography of the asset exposures is presented in Section 3.3.…”

“…Our paper complements this growing literature on banks' complexity (e.g., Cetorelli and Goldberg 2014Goldberg , 2016Krause, Sondershaus and Tonzer 2017;Aldasoro, Hardy and Jager 2020;Flood et al 2020;Buch and Goldberg, 2021;Correa and Goldberg, 2021) by detailing the asset exposures of EU banks to the global shadow banking system using a unique dataset collected by the EBA in 2015. While some of these aforementioned studies on bank complexity capture the structure of banking organisations, including affiliate composition, our paper focuses instead on the asset exposures of EU banks to the global shadow banking system drawing on this novel dataset.…”

“…While the complexity of banks' exposures to shadow banking entities is often cited as a key financial stability concern, we are not aware of other studies which docu-ment and describe the nature of these linkages using granular EU bank and asset exposure-level information. Buch and Goldberg (2021) document the growing evidence on banks' complexity over the past decade including studies detailing organisational, business and geographic complexity. Organisational complexity captures the number of entities within the full banking organisation while business complexity refers to the span and concentration of affiliates across different types of business whereas geographical complexity measures the span and concentration of the number of affiliates across country locations.…”

A Comparative Analysis on Islamic Bank Performance and Efficiency Risk: Pre and Post IFSA 2013

“…A strong banking sector thus is necessary to ensure the growth of the economy, creation of jobs, generation of wealth, eradication of poverty, entrepreneurial activity and enhancement of Gross Domestic Product (GDP) growth. Over the past few decades, the banking sector has experienced significant changes due to the strict regulatory and compliance policies, changes in a competitive environment, continuous financial innovations, cultural shifts, improved human capital (Adesina, 2021) and management skills, geographical complexity (Buch & Goldberg, 2022;Cardozo et al, 2022).…”

Managerial Risk-Taking Incentives and Bank Earnings Management: Evidence from FAS 123R

“…Risk-taking incentives of bank management and corresponding bank risk are widely studied issues, especially after the 2008 financial crisis [9][10][11]. Banks are heavily criticized for having taken excessive risks in the recent financial crisis.…”