Federica Poli

Are Cooperative Banks a Lever for Promoting Bank Stability? Evidence from the Recent Financial Crisis in OECD Countries

Based on a sample of cooperative, savings, and commercial banks from OECD countries, this paper examines whether and to what extent cooperative banks affected average bank soundness during 2001–2010. To account for the impact of the recent financial crisis, we analyse separately the pre�?crisis period (2001–2006) and crisis years (2007–2010). Unlike published claims that blame the fragility of banking systems on the presence of non–profit�?maximising entities, our main finding is that cooperative banks have explanatory power for stabilisation during the crisis years, but only above a certain market share threshold.

How Accurately Can Z‐score Predict Bank Failure?

Bank risk is not directly observable, so empirical research relies on indirect measures. We evaluate how well Z-score, the widely used accounting-based measure of bank distance to default, can predict bank failure. Using the U.S. commercial banks’ data from 2004 to 2012, we find that on average, Z-score can predict 76% of bank failure, and additional set of other bank- and macro-level variables do not increase this predictability level. We also find that the prediction power of Z-score to predict bank default remains stable within the three-year forward window.

On the relationship between bank business models and financial stability. Evidence from the financial crisis in OECD countries

The cooperative credit sector represents an essential sector of the banking structure of many financial systems, especially in Europe where, in Austria, Finland, France, Germany, Italy and the Netherlands, the cooperative banks have a high market share (see Figure 1.1). In advanced economies and emerging markets outside Europe, cooperative banks generally have a lower share, but there are some countries where they play a non-negligible role, as in Japan and Canada, where in 2010 the share of the cooperatives was 15.72 per cent and 3.49 per cent, respectively.

Predicting European Bank Distress: Evidence from the Recent Financial Crisis

The global financial crisis has brought a large number of banks to the brink of collapse, including several European banks1, stressing the importance of detecting early signals of bank distress in order to activate prompt corrective actions. Indeed, identifying weak banks early is crucial, especially when problems are identified late, as solving them is much more costly. So in light of this, it becomes critically important to make use of data and indicators that can help supervisors and investors to discover which financial institutions are at risk of distress.

The Driving Forces of Credit Brokers’ Diffusion in Italy: An Empirical Analysis

In the last decade, there has been a tremendous growth in the number of credit brokers (CB) in Italy. Some estimates maintain that about a quarter of residential mortgage loans are intermediated by CB (Europe Economics, 2009); their market shares of some leasing and consumer credit products are also significant. Despite the importance of credit brokerage services, little empirical research has been devoted to investigating its origins. In this paper we undertake an analysis of CB diffusion in Italian provinces (NUTS3 level) based on spatial panel data model that aims to estimate the relevance of spatial effects. Two models are developed in order to identify the determinants of this phenomenon. The results emphasize that CB diffusion is to some extent influenced by the socioeconomic and banking features of the area, but estimates reveal also the emergence of a ‘herding effect’ whose occurrence is probably due to the fact that access to the brokerage profession is not hindered by heavy regulatory requirements.