SSM reduced large eurozone banks’ risk-taking – ECB paper
Reduced credit risk was driven by supranational authority’s greater efficiency, authors argue
Supranational supervision reduced risk-taking by the eurozone’s largest banks due to organisational efficiency, a working paper published by the European Central Bank argues.
In Banks’ risk-taking within a banking union, Matteo Farnè and Angelos Vouldis examine changes in the credit risk of the eurozone’s 270 largest banks from 2014 to 2019. In this period eurozone banks were making considerable efforts to reduce their non-performing loan ratios.
The largest of these banks were supervised by
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