The Impact Of Basel III On Italian Banks Loan Rates: An Accounting-Based Approach

Biase, Pasquale di

doi:10.19030/iber.v11i11.7407

Cited by 3 publications

(4 citation statements)

References 8 publications

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“…Di Biase (2012) evaluates the impact of increasing minimum capital requirements on the Italian banking industry. He finds that increased capital standards boost a bank's ROE when lending rates rise.…”

Section: Literature On Basel Regulationmentioning

confidence: 99%

Basel accords and banking inefficiency: Evidence from the Italian local market

2022

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Using data for Italy from 1994 to 2015, we appraise the nexus between Basel II and III accords and both the cost and the profit inefficiency of profit‐oriented and mutual cooperative banks. Our analysis further deals with the effects of the regulation in different market structures. To assess the efficiency of the two types of banks under scrutiny, a stochastic frontier approach has been proposed. The evidence reported in this paper indicates that the regulatory framework of the Basel accords had heterogeneous effects on the efficiency of Italian banking institutions. Specifically, Basel II is associated with a contraction in the profit inefficiency and an increase in the cost inefficiency for mutual cooperative banks. On the other hand, Basel III worsened the profit inefficiency, though it is found to reduce the profit inefficiency of mutual cooperative banks, with no significant impact on cost inefficiency. Furthermore, once we control for the degree of market competition, the effects of the regulation are shown to be statistically insignificant. The advent of the 2008 recession and the application of the revenue inefficiency do not alter the main findings. There is also some evidence of spatial effects of the Basel II regulation at the LMA level.

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Section: Literature On Basel Regulationmentioning

confidence: 99%

Basel accords and banking inefficiency: Evidence from the Italian local market

2022

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“…Parcon et al (2012) argue that an increase in lending rates, as a strategy to meet the new capital requirements may have a negative impact on the economy. In some countries, it was found that the implementation of higher CAR impacts positively on LSR (Wong, 2010;Di Biase, 2012), while in other countries the higher CAR has a neutral impact on LSR as a result of Basel III implementation. Using an accounting-based model, King (2010) has estimated how much LSR would increase if banks are required to hold more capital.…”

Section: Relation Between Capital Adequacy and Lending Spread Ratiosmentioning

confidence: 99%

King’s Model on Capitalization under Basel III: The Case of Lebanese Banks

Badr¹,

Ahmadieh²

2018

JAFEE

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Objective: Lebanese banks have shown immunity towards the 2008 financial crisis that was attributed to many factors including a strong regulatory and supervisory system of conservative practices and structural economic factors such as the recurrence and non-speculative nature of capital inflows towards Lebanon supported by a large pool of offshore savings from diaspora and investors around the globe. The purpose of this study is to investigate the relation between capital adequacy ratios (CARs) and lending spread ratio (LSR). This paper presents the first assessment of the Basel III capital requirements on lending spread ratio before, during and after the financial crisis among commercial banks operated in Lebanon. Methodology: We consider King’s approach and assess his model’s applicability in the Lebanese context. Findings indicate some deviations, specifically related to the practices and financial performance of commercial banks in Lebanon. Results: We found no indication of impact of the change in CAR on LSR among Lebanese commercial banks in years prior to the recent financial crises; Nevertheless, the impact of changing CAR by 1 pp on LSR has a modest effect on Lebanese commercial banks during the years of financial crises; this effect is lowered to become modest after the crisis. Implication: The results of the current study reveal significant implications for managers in commercial banks in particular and all banks in general. Given that Lebanese commercial banks are well-capitalized and their Capital Adequacy Ratios are above international benchmarks, bank managers must carefully monitor the cost of the implementation of Basel III requirements

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“… 39 Anagnostopoulos and Kabeega, 2019; Andrle et al, 2019; Avadanei, 2013; Daniels, 2017; di Biase, 2012; Klepczarek, 2015; Lavelle, 2019; Price, 2016; Quaglia, 2019; Véron, 2020; Young, 2014.…”

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confidence: 99%

“… 42 Boora, 2018; Cummings and Guo, 2020; Denk and Gomes, 2017; di Biase, 2012; Golubeva et al, 2019; Grundke and Kühn, 2020; Jasrotia et al, 2019.…”

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The Power of Delay: Banking System Structure and Implementation of the Basel Accords

Mitchell

2021

Bus. Polit.

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Recent developments in the international banking system, especially the 2007–9 crisis and subsequent wave of postcrisis regulation, have drawn increasing attention to the structural power of banks and banking systems. States need a functioning financial system to ensure the overall health of their economies, so states must shape policy to protect their financial firms. National financial systems may be dominated either by banks or by capital markets. In states where banks dominate provision of capital, states must shape policy to protect their banks because of their structural importance, independent of any lobbying or other direct action on the part of banks to exercise instrumental power. The entangling of structural and instrumental power means studying differences in structural power requires either careful case-study work or cross-national comparison of responses to a common shock. The implementation of the 2011 Basel III Accords provides just such an opportunity. This article offers a quantitative analysis of a new dataset of implementation of Basel III components in the Basel Committee on Banking Stability member states from 2011 to 2019 and demonstrates the structural power of banks in bank-based systems to accelerate implementation of favorable policies and slow implementation of unfavorable ones.

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The Impact Of Basel III On Italian Banks Loan Rates: An Accounting-Based Approach

Cited by 3 publications

References 8 publications

Basel accords and banking inefficiency: Evidence from the Italian local market

Basel accords and banking inefficiency: Evidence from the Italian local market

King’s Model on Capitalization under Basel III: The Case of Lebanese Banks

The Power of Delay: Banking System Structure and Implementation of the Basel Accords

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