Index

Note: Boxes, Figures and Tables are indicated by an italic “b”, “f ”, “t” and notes are indicated by “n” following the page numbers.

ABCP See asset-backed commercial paper (ABCP)

ABN Amro bank361

ABS See asset-backed securities (ABSs)

ABSA bank1089

access to financial services See financial inclusion

Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI)361, 380

accounting principles and practices114

accounting systems48–9

Act on Provision of Trust Business by Financial Institutions (1943), Japan1044

Action Program Concerning Enhancement of Relationship Banking Functions (2003 and 2004), Japan1056, 1057

Additional Credit Claims framework, Europe456

adjustable rate mortgages (ARMs)165, 471, 478–9, 479f, 481, 489f

Adrian, Tobias20, 530–65

adverse selection
and asset selection511–13
and contagion860
driving liquidity dry-ups610–11
information disclosure615, 802
and joint liability lending407–9
and shadow banking546

Africa1076–109
agent banking1098–9
bank-and branch-level evidence1087–9
banking concentration1083
banking losses890
benchmarking banking systems1085–6
branching1097–9
characteristics1077
competition1083
credit registries1096
credit unions332
creditor rights1096
cross-border entry1106–8
data available1078–9
deposits to GDP1079–80, 1080f
efficiency1082–3, 1087
enterprise access to finance1089–91, 1090f
exchange rate pegs582
financial development1079–85, 1080f
financial inclusion1080, 1082, 1082f, 1086, 1091–6, 1092f, 1093t, 1094f, 1095f, 1099–100
financial innovation1096–7
financial stability1083–4
foreign-owned banks1089, 1106–8
gender gap1092–6, 1094f, 1095f
global financial crisis1083, 1084
household access to finance1091–6, 1092f, 1093t, 1094f, 1095f
income gap1092–6, 1094f, 1095f
labor force gap1094f, 1095f
liquid liabilities to GDP1079–80, 1080f
long-term finance challenge1104–6
maturity distribution1083
microfinance418
microinsurance1100
mobile banking1102t, 1103–4
mobile money accounts1092
mortgages1083
new challenges1104–8
overcoming barriers to financial inclusion1096–104
overhead costs1088, 1088t
personal identification1100
population density1086
private credit to GDP1079–80, 1080f, 1081f, 1085–6, 1085f
privatization1089
profitability1082–3
property registration1096
rainfall insurance1100
regulatory reforms1107–8
short-term loans1083, 1084f
technological innovation1101–4

agency problems in shadow banking549–50

agent banking1098–9

aggregate shocks, and systemic risk862–3

AIG626, 903, 986

Alibaba558

Alipay558

Allen, Franklin16, 39–57

Allen, Linda17, 153–77

Allen and Gale framework43–4, 45, 607, 608, 859–60, 862, 863, 865

Allende, President Salvador1158

Almost Ideal Demand System237

Amanah (demand deposits)370

American International Group See AIG

amortization471, 479–80

Ancient Rome and Greece953–4, 970

Anginer, Deniz22, 685–703

Anglo-Irish Bank901

Anzen credit cooperative1059

Argentina
ATMs1166
bank failures921, 923
bank insolvencies890
bank runs892, 899
banking crises895
credit1164
cross-border entry1178
currencies582
deposit insurance696
efficiency1175
financial inclusion1166
financial liberalization1160–1
foreign-owned banks1156, 1161, 1171
global financial crisis1162
privatization1161, 1169

Argentine Central Bank1162

ARMs See adjustable rate mortgages (ARMs)

artificial intelligence (AI)268–9

ASF See available stable funding (ASF)

Ashcraft, Adam B.20, 530–65

Ashikaga Bank1060

Asia
East Asian crisis51, 865, 891
financial inclusion1092f
financing structure40–1
G-SIBs104
interest margins1167
interest rates1167
mergers and acquisitions931, 933f, 934f

Asian Infrastructure Investment Bank (AIIB)1184

asset commonality, and contagion49–50

asset management, and financial stability risks562–3

asset purchase program (APP)1019

asset quality review (AQR)1023

asset relief interventions, response to global financial crisis639

asset transformation role64–8 See also maturity transformation

asset-backed commercial paper (ABCP)
and bank runs547
evolution509
guarantees519
securitization72, 154–5
and shadow banking535, 539

asset-backed securities (ABSs)
benefits and risks to investors522–3
evolution506–7
growth in demand503–4
issuance507, 508t, 517–18
OTD model198
securitization154–5, 503, 517–18
and shadow banking535, 546–7

asset-backed securities purchase program (ABSPP)1019

asset-based lending (ABL)437, 1057

asymmetric information
banking problems853–4, 860
coordination games46
and corporate complexity115
and financial instability579–80
and information sharing802
and moral hazard523
and securitization511–12, 548–9
and systemic risk853–4

ATMs See automated teller machines (ATMs)

Australia1190–211
authorized deposit-taking Institutions (ADIs)1191, 1195, 1205
bank assets1191, 1192t, 1197–9, 1198f
bank failures921
bank levy1209–10
banking concentration1192–5, 1193t
capital buffers1207–8
capital requirements1206–8, 1207t, 1209
competition1192–5
debt funding1196–7
deposit insurance691, 1205
deposits1195–6
efficiency1200–4
financial services1191
financial system inquiries (FSI)1208–9
Four Pillars Policy1194–5
funding sources1195–7, 1196t
funding uses1197–200
global financial crisis1204–6
house price bubble1194–5, 1200
loans1199, 1199t
malpractice and misconduct1210–11
mortgages, residential1197–200
profitability1200–4
regulatory reforms1208–11
resilience of the banking system1206–11
size and significance of banking1191–2, 1192t
tax subsidies340

Australia and New Zealand Banking Group (ANZ)1192

Australian Federal Government1209–10

Australian Government Guarantee Scheme1204–6

Australian Prudential Regulation Authority (APRA)1206–7, 1209, 1210

Australian Securities and Investments Commission (ASIC)1210

Austria334

authorized deposit-taking Institutions (ADIs)1191, 1195, 1205

automated clearinghouse (ACH)265–6, 285, 289t, 292, 982

automated teller machines (ATMs)297–8, 982, 1166, 1194

automobile loans270, 437, 981

available stable funding (ASF)211

Azerbaijan1147

back end ratio472

bad loans661, 1132, 1136, 1141

Bagehot (Walter) recommendation589–90, 603, 609, 898–9, 900

bail-ins630–2, 656–76, 857 See also total loss-absorbing capacity (TLAC)
alternatives674–5
BHCs632, 657, 663
bonds175n
frameworks and experience657–61
market discipline752–3, 754–6
meeting of objectives666–70
objectives656–7
and other instruments670–3
overall consequences673–4
regulation1023–4
social costs and benefits663–4, 669, 673
theoretical motivation661–5
theoretical research663–5

bailouts630–55, 675–6
alternatives674–5
and banking crises888–90, 895
central banks624, 625–6
costs634
experiences635–41
funds distributed652
G-SIBs95–6
incentive distortions634
meeting of objectives645–54
objectives632–5
overall consequences655
role of LOLR603–4
social costs and benefits631, 644, 652, 655, 663–4, 674
sovereign debt crisis2–3
and systemic risk856
theoretical motivation641–4

balance sheets370–2, 370t, 371t, 708t

Banca Eutiria1024

Banca Marche1024

Banca Monte dei Paschi di Siena SpA (BMPS)660

Banca Popolare di Vicenza660

BancAlliance439

Banco Azteca418

Banco de Espirito Santo670

Banco de la Nación1161

Banco de la Provincia de Buenos Ayres1161

Banco del Sur1184

Banco Espirito Santo (BES)660, 1024

Banco Internacional do Funchal (BANIF)661

Banco Popular661

Banco Santander661

Bancorp996

Bangladesh360, 406, 414, 417

bank assets
Australia1191, 1197–9, 1198f
China1115–16
Europe1002, 1006
European Union (EU)1010t
Eurozone1007, 1009t, 1010t
global39–40, 40f, 1198f
Islamic banking362
Japan1034
New Zealand1191, 1197–9, 1198f
risk8, 1021
UK1191

bank branching See branching

bank capital See capital

bank consolidation
Brazil1162
Chile1162
and hard information444
Latin America1154–7, 1162–3, 1169–71, 1177–9
and relationship banking68–70
and small business lending433, 446–51
US991–4

bank culture
and corporate governance144–7
research studies14–15
risk-taking85–6

bank failures910–24
and contagion612–13, 918–19
and contagion versus fundamentals as causes of911–13
and deposit insurance693
economic consequences692–3
in the global financial crisis903, 910
Great Depression913–17
Iceland899
Ireland899
Islamic banking376, 379–80
Japan1059–60
late 20th century922–3
management and fraud887–8
payments312–13
pre-depression era919–22
role of LOLR603
US897, 915–17, 919–21

bank holding companies (BHCs)
bail-ins632, 657, 663
bailouts644, 666
Basel III205
capital requirements725t
credit enhancements515
forecasting747
leverage ratios727t
liquidity requirements212
ownership255
performance253–4
stress tests728
supervision749

Bank Insurance Fund986

Bank Itaú1155, 1157

bank levy1209–10

Bank of Africa1089

Bank of America636, 993, 996

Bank of Brazil1162

Bank of China103, 116, 1116

Bank of Communications1116

Bank of Cyprus659

Bank of East Asia1116

Bank of England123, 328, 729, 899n

Bank of Japan (BoJ)587, 590, 1053, 1057

Bank of Montreal919–20

Bank of New York636

Bank of Portugal660

Bank of US914–15

bank performance229–56 See also performance measurement
China1117–18, 1117t
and competition779t, 780–1
EU1004–16
Europe1004–16
Latin America1169–71
non-structural approaches252–5
structural approaches246–52
transition countries1145

Bank Recovery and Resolution Directive (BRRD), EU3, 632, 658, 659, 668, 746, 753–5, 1023

bank restructuring
and banking crises898–9
Latin America1154, 1155–7
transition countries1136

bank runs
and banking crises44–7, 892–4
and contagion918–19
and contagion versus fundamentals as causes of911–13
and deposit insurance686–7
distinguished from banking panic858
and liquidity78, 184n
and liquidity shortages687–8
market discipline741–2
maturity transformation606, 692
shadow banking547
and systemic risk608, 858

bank size
and financial crises455
historical trends341–4
and local outcomes351
post-crisis regulatory reforms1012
and relationship banking454–5
and small business lending447–50

bank-borrower relationship65–70, 197, 1056

Bankers Trust158

Bankhaus Herstatt312–13

banking
decade following global financial crisis1–28
emerging research themes4–16
and the real economy953–71

Banking Act (1933), US See Glass-Steagall Act (1933), US

Banking Act (2009), UK753

banking and financial crises44–51,  See also sovereign debt crisis (2009–11)subprime crisis (2007)
around the world885–905
and bank runs78
and bank size455
and banking panics44, 892–3
and business cycles873
and contagion47–51, 612, 893–4
costs895–6
and credit booms872–3
and debt871
diverse origins887–92
dynamic regulation904–5
early history886–7
East Asian crisis51, 865, 891
and financial liberalization889
and government policies890
impact47
information disclosure during614–16
Japanese banking crisis1058–62
and LOLR898–900
macro boom and bust890–2
Malaysian banking crisis889
management and fraud887–90
Mexican Tequila crisis888
and monetary policy623–5
and mortgages491–4
1920s and 1930s913–16
and regime changes888–9
response and prevention897–900
Savings and Loans crisis609
and small business lending454–5
sudden and fast-moving892–4
and systemic risk847–8, 863
theories to explain44–7

Banking Code (2010), Netherlands132

banking competition See competition

banking complexity See Global Systemically Important Banks (G-SIBs)

banking concentration
Africa1083
Australia1192–5, 1193t
Canada1193
Eurozone1007
Latin America1155, 1156t, 1172–7
New Zealand1192–5, 1193t
Sweden1193
transition countries1137, 1144

Banking Co-partnership Act (1826), UK328

banking globalization See cross-border entry

Banking Law (1981), Japan1039

banking nationalism1141

banking panics614
and banking crises44, 892–3
Chicago banking panic911, 915–16
and contagion867
and contagion versus fundamentals as causes of911–12
distinguished from bank run858
Great Depression913–17
role of LOLR603–4

Banking Reform Act (2014), UK1020

bankruptcy
as alternative to bailouts674–5
market discipline753
social costs and benefits674–5
and success of bail-ins649

BankWest1195

Barclays103, 104, 328

Barings Bank156, 888

Basel Committee on Banking Supervision (BCBS)81n, 127–9, 708, 751–2, 753, 897, 904–5, 1180

Basel I
capital requirements194–5, 202, 708
market discipline756, 758
risk-weighted assets (RWA)718, 718t

Basel II
capital requirements195, 202, 203f
market discipline82–4, 756–8
Pillar 3751, 756–9
quality of capital715–16
risk-weighted assets (RWA)709, 718–19, 719t
three pillars751, 897

Basel II.5 reforms719

Basel III
and banking crises898
capital distribution731–2, 732f
capital requirements8, 84, 161, 202–7, 203f, 210, 709, 721–9, 1020–1
End Game reforms720, 726
implementation1, 3
Latin America1180
liquidity creation183
liquidity requirements210
market discipline756–9
mortgages490
Pillar 3756–9, 759t
quality of capital716, 717t, 729, 730–1, 731f
quantitative impact729–32
quantity of capital716–17, 717t, 729, 730f
re-regulation987–8
risk weights720, 905
shadow banking550
three pillars751–2, 897

BCCI888

Bear Sterns50, 81n, 156, 903, 986, 993

Beck, Thorsten27, 1076–109

behavioral economics, and decision-making814, 820, 821, 822

Belarus1147

Belgium10, 296, 334, 1006

Bergengren, Roy F.332

Berger, Allen N.1–28, 431–59

Bernanke, Ben587, 633

BHCs See bank holding companies (BHCs)

biases
cognitive825–7
and decision-making820–1, 825–30, 838–9
forecasting764–5, 765t
and systemic risk852

Big Data mining (data analytics)70

Bitcoin13, 267, 274–5, 302, 996

Black, Lamont K.20, 431–59

Blank, Michael25, 953–71

Bliss, Robert R.23, 736–68

blockchain technology13, 263, 267–8, 274–5, 301–2

BNP Paribas104, 117

boards of directors
and corporate governance132–3, 141–2, 147–8
diversity142–4
independence145

BOJ-NET payment transfers286

Bolivia592, 696, 1155, 1164

bonds743, 746, 763–4

bonuses
cash137f
EU bonus cap14, 132, 137–8, 1021–2
and global financial crisis901
and risk-taking136–8

boom and bust, and banking crises890–2

Boone (2008) Competition Indicator784–5

Boot, Arnoud W.A.17, 62–87

Boot-Thakor model42, 348

borrowing
benefits and risks of securitization520–2
consumer decision-making816–18

Boubakri, Narjess19, 359–99

Bouwman, Christa18, 181–216

branching
Africa1097–9
and banking competition794
commercial banks982f
and deregulation983
Europe1006
Latin America1166
productive982

Brazil
ATMs1166
bailouts890
bank consolidation1162
bank stability1175
banking concentration1155
competition1173
credit1164
development banks1182–4
efficiency1176
financial inclusion1166
financial intermediation1164
financial liberalization1159–60, 1161
foreign direct investment (FDI)1155
foreign-owned banks1156, 1161, 1171
global financial crisis1162
interest rates1166, 1179
mergers and acquisitions1157
private credit1164
privatization1169
regional banks1155
textiles industry964

Breuer, Peter20, 530–65

Brexit1025

BRICS New Development Bank (NDB)1184

bridge bank structure659, 660, 997, 1060

Brunei361, 362

Bryant model184, 605–6

BTG Pactual1155

Buch, Claudia M.25, 928–46

Buffett, Warren162

Bulgaria291, 1135, 1141

Bulte, Erwin19, 404–25

Bundesbank582, 583

business cycles
and banking crises44–6
and credit871
and debt873
and financial stability579–80

business services
after global financial crisis988–91
offered by MFIs421–4, 422f, 423t

business strategies
after global financial crisis988f
performance measurement253–4
US988–91

buyer of last resort (BOLR)622–3

Caldwell and Co.915

Calomiris, Charles24–5, 910–24

CAMELS supervisory rating system215

Canada292, 294, 332, 696, 919–20, 1193

Cape Verde1079

capital
balance sheet708t
China1117
definition707–8
distribution731–2, 732f
and financial stability495–6
human405–6, 421–2, 424
injections of in response to global financial crisis639, 640t
Latin America1173, 1174t
quality715–16, 717t, 729, 730–1, 731f
quantity716–17, 717t, 729, 730f
research studies8–9
tier 1202, 715–16, 717, 717t
tier 2715, 717t

capital asset pricing model (CAPM)157–8

capital conservation buffers (CCBs)
Australia1207–8
and capital requirements721–3, 721t, 723t
countercyclical204, t, 722, 723t
research studies8

capital market funding
and bank lending70–3
and relationship banking73

Capital Purchase Program (CPP)615, 636

capital ratios193, 194f, 195, 984

capital requirements
after the global financial crisis707–33
Australia1206–8, 1207t, 1209
and banking crises897
Basel II202–7, 203f
Basel III161, 203f, 715–20, 721–9, 729–32
and deposit insurance701
Eurozone1207t
higher bank710–11
history708–9
and liquidity creation190–6, 207–10
and liquidity requirements214–15
literature review709–15
lower bank711–13
New Zealand1207–8, 1207t
optimal bank713–15
regulation84, 202–10, 1020–1
research studies8
sectoral496
and shadow banking210
UK1207t
US1207t

Capital Requirements Directive II (CRD II), EU516

Capital Requirements Directive IV (CRD IV), EU1, 8, 14, 1020–2

capital strategies, performance measurement252–3

capital structure
and corporate governance134–5
performance measurement243–4

Caprio, Gerard24, 885–906

Caribbean582

Carletti, Elena16, 39–57

Carmassi, Jacopo17, 95–129

Carvalho, Fernando J. Cardim de27, 1152–85

cash
bonuses136–8, 137f
and negative interest rates294–6
and tax evasion291
use of289–90, 289t, 292–3
vault191, 192f

cash cards, use of293–4

cash reserve requirements190–3, 192f, 196

Casu, Barbara20, 503–26

CATFIN systemic risk indicator174, 616, 672

causality debate954–6

Cavallo, Finance Minister Domingo1161

Cayman Islands114

CBCs See commercial bank clearinghouses (CBCs)

CDOs See collateralized debt obligations (CDOs)

CDSs See credit default swaps (CDSs)

CEE See Central Eastern Europe (CEE)

Central America1154–5, 1169

Central Bank of Brazil1160, 1161

central banks573–95 See also lender of last resort (LOLR)
and bailouts624, 625–6
and deposit insurance687–8
financial stability policy589–95
governance581–2
independence579, 581–2
interest rates619f
as lender of last resort79–80, 589–90
and liquidity provision79, 617
monetary policy579, 582–9
science573–81
total assets618f
transition countries1134

Central Eastern Europe (CEE)1132–50
bank lending1144–5
banking sector structure1143
financial inclusion1148
financial intermediation1142

CEO compensation See executive pay

Cetorelli, Nicola20, 25, 530–65, 953–71

CHAPS payment transfers286

Charles Schwab Corporation352, 996

charter value252, 642, 662

Chase Bank361

Chavez, Hugo1182, 1184

checks (cheques)288, 289t, 291–2, 982

Chen, Ruiyuan (Ryan)19, 359–99

Chicago banking panic (1932)911, 915–16

Chicago Board of Trade (CBOT)163

Chicago Board Options Exchange (CBOE), Volatility Index (VIX)646

Chicago Mercantile Exchange (CME)163

Chile
ATMs1166
bank consolidation1162
cross-border entry1177
deposit insurance696
financial inclusion1164, 1166
financial intermediation1164
financial liberalization1158–9
foreign direct investment (FDI)1155
foreign-owned banks1156–7
interest rates1166
private credit1164

China1113–29
bailouts889
bank assets1115–16
bank claims on non-bank financial institutions557, 557f, 558–9
bank performance1117–18, 1117t
capital1117
credit booms1115f
credit intermediation556–9
economic growth1113
efficiency1116–17
financial assets1113, 1114f, 1115, 1116f
financial inclusion1126–9
financial intermediation1122
financial sector size1113, 1114f
FinTech1115
foreign-owned banks1116–17
global financial crisis1121
G-SIBs103
and Latin America1153, 1155
local government funding1121, 1123–4
MMFs558
mobile banking1127, 1128
non-bank credit intermediation (NBCI)556f
online banking1127, 1129
regulatory arbitrage558
regulatory constraints1119–21
shadow banking533, 1118–25, 1119f, 1123
SIVs155
structure and performance of financial sector1115–18
traditional banking1115
unbanked population1127–8, 1128f
wealth management products (WMPs)155, 1118–20, 1119f, 1121, 1123, 1125

China Construction Bank1116

CHIPS payment transfers286, 307–9, 312–13

Citi156

CItibank361

Citibank Budapest1135

Citigroup636, 903, 986, 993, 1116

city banks1040–1

clearing houses688

CLS Bank See Continuous Linked Settlement (CLS) Bank

CoCos See contingent convertible bonds (CoCos)

Codetermination Act, Germany148

collars (option positions)165

collateralized debt obligations (CDOs)167–8, 507, 508t, 509

collateralized loan obligations (CLOs)513

Colombia
ATMs1166
banking concentration1155
branching1166
cross-border entry1176
financial inclusion1166
financial intermediation1164
regional banks1154–5

combined loan-to-value (CLTV) ratio472

commercial and industrial (C&I) loans648

commercial bank clearinghouses (CBCs)614

Commercial Bank of Africa (CBA)1103

commercial banks See also community banks
bank ratios990t
composition by size343, t
consolidation991–4, 994t
defining features322b, 326–7
deregulation983–4
deregulation and industry consolidation345
distribution992f
entry and exits346–7, 347f, 349–50
and global financial crisis984–7
historical origins327–8
historical trends341–4, 342f
joint-stock liability325
mortgage market share348–50
numbers977, 982f, 993f
performance229–31
profitability1011
ratios984f
services979
today328
versus universal in Japan1052

commercial loans647

commercial paper (CP)154–5, 200, 535, 978, 981–2, 1034

commercial real estate (CRE) bonds549

commercial real estate (CRE) loans437, 647–8

Commodity Futures Trading Commission (CFTC)162

Commonwealth Bank of Australia (CBA)1192, 1195

community banks
accessibility and social implications350–3
competition346
composition by size343, t
current challenges353–4
decline992
defining features321, 322b, 326
deregulation and industry consolidation344–6
dominance980
entry and exits346–8, 347f, 352
financial and technological innovations348–50, 353–4
historical trends341–4, 342f
institution types326–35
local specialization335–40
mergers and acquisitions344–6, 345f
regulation350
resilience325–6
services980
transformation in market structure341–50

Community Development Capital Initiative (CDCI)636

Compartamos, Mexico413

compensation in banking135–40

competition776–805
Africa1083
Australia1192–5
and bank strategy788–94, 796–7
Brazil1173
and capital market funding73
and community banks346
and conduct788–94
definition776
and deposit insurance694
and deregulation801
effects of cross-border entry940–2
Europe800, 1014–16
and financial stability797–801
and industries960–3
and information sharing802–5
Japan1046–7
Latin America1172–3
market structure and conduct788–94, 795–6
measurement777–88
and microfinance415
New Zealand1192–5
in providing payment services300–1
and regulation794–801
and relationship banking68–70
role in real economy959–60
and small business lending433–4, 451–3
and success of bailouts651, 654

competition-fragility hypothesis797–8, 799, 1016

competition-stability view798, 799, 1016

complaints300

Composite Indicator of Systemic Stress (CISS), ECB869

Comprehensive Assessment, Europe641

Comprehensive Capital Analysis and Review (CCAR)456, 638, 728

concentration See banking concentration

Conditional Value at Risk (CoVaR)11, 173, 315, 616, 645, 868–9

conduct
and competition788–96
and complaints300
misconduct145, 1210–11
and regulation796

conflicts of interest76

conforming loan limit485

conjectural-variations method778, 785–6, 790–1, 795

consolidation See bank consolidation

Constant Net Asset Value (CNAV) MMFs550–1

constant-money-growth rule583

Consumer Financial Protection Bureau (CFPB)15, 987

consumer protection15

consumers, financial decisions814–34

contagion
and bank failures612–13, 911–13, 918–19
and banking crises893–4
domino effect perspective612–13
empirical evidence867–70
and financial crises47–51
and financial innovation48–9
versus fundamentals as causes of bank failures911–13
and global financial crisis50–1
illiquidity175, 612
illiquidity view613–14
information disclosure614–16
and lender of last resort611–17
and liquidity shocks48–9, 607–9, 859, 870
measuring links between financial institutions616–17
microeconomic studies918–19
and systemic crises611–17
and systemic risk850, 858–62

Continental Illinois bank868, 893

contingent convertible bonds (CoCos)175n, 670–3

Continuous Linked Settlement (CLS) Bank286, 312–13

contract terms
flexibility66–7
intertemporal smoothing66
and success of bailouts650
and systemic risk853

contracts
co-signing408
microcredit419–20

contractual saving818

Convertibility Plan (Cavallo Plan), Argentina1161

Cooperative Bank of Peloponnese659

cooperative banks328–31
defining features322b, 328–9
historical origins329
today329, 330, t, 331

Corpbanca1155

Corporacion Andina de Fomento (CAF)1181–2

corporate complexity See Global Systemically Important Banks (G-SIBs)

corporate debt166, 521

corporate governance131–48
and bank culture144–7
and bank performance246–7
of banks131–3, 147–8
boards of directors132–3, 141–2, 147–8
difference between banks and non-banking institutions131–3, 134–5
Islamic banking380
policy implications147–8
research studies14–15
role of banks53–4
shareholder-orientated141–2

corporate sector purchase program (CSPP)1019

corporate social responsibility (CSR)382

costs
of banking crises895–6
payments296–7

cost-to-income ratios1202–3, 1202t

countercyclical capital buffers (CCyBs)204, t, 722, 723t

Countrywide Financial Corporation482

CoVaR See Conditional Value at Risk (CoVaR)

covered bond purchase program (CBPP)1019

CRAs See credit rating agencies (CRAs)

credit
costs1167
daylight310–11
and decision-making816–18
Latin America1163–4, 1167, 1177–9
transition countries1138
US980

credit booms492–6, 864–6, 871–3, 1113–14, 1115f

credit bubbles593–4

credit cards
costs296–7, 300
and decision-making823
increase982
interchange fees298–9
loans270
rationality of use831–4
reasons for292
and securitization of debt506
security301
use of285, 289t

credit cooperatives1044–5

credit crunches
global894, 901–3
Japan1061–2, 1063–5
Latin America1178
Spain873

credit default swaps (CDSs)165–9, 743–4, 746–7

credit derivatives166–9, 517

credit enhancements515–16, 517f, 541

Credit Guarantee Corporation Law, Japan1058

credit guarantee corporations (CGCs)1058

credit guarantees455–6, 542

credit intermediation
chain536f
China556–9, 1122
financial innovation537–9
and shadow banking536f, 537

Crédit Lyonnais888

Crédit Mobilier328

credit rating agencies (CRAs)
and banks75–7
and global financial crisis900–1
problems549, 553–4
regulatory reforms552
role in financial systems64
and securitization513, 525

Credit Rating Agency Reform Act (2006), US77

credit registries802–5, 872, 1096
public803–4

credit reporting348–9

credit risk155–6
contagion48–9
Islamic banking379
management489–90
measurement160–1
and risk-weighted assets (RWA)718–19, 720
success of bailouts647

credit scores
financial innovation348–9
model161
for mortgages473f
past reaction to995
small business (SBCS)266–7, 1057

credit shocks5–7

credit spreads763–4

Credit Suisse103, 1012

credit supply
research studies6–7
and residential mortgages494
success of bailouts647–50, 653–4
and systemic risk857

Credit Union National Extension Bureau332

credit unions See also community banks
and competition991–2
composition by size343, t
defining features322b, 331–2
deregulation and industry consolidation344–6
entry and exits346–7
expansion353
historical origins332
historical trends341–4, 342f
and mortgages350
numbers993f
tax subsidies340, 350
today332–3

CreditMetrics161

creditors, and corporate governance131, 134–5, 147–8

crises See banking and financial crisessovereign debt crisis (2009–11), subprime crisis (2007)

crisis management855, 875, 903, 1017–18

crisis management group (CMG)121–2

Croatia1140, 1143

cross-border entry924–46
Africa1106–8
and banking globalization929–35
changing patterns in complexity934–5
determinants of through acquisitions935–40
effects on efficiency and competition940–2
effects on risk942–4
Latin America1176–8
Mexico1176–7
through mergers and acquisitions929–34

cross-border payments302

cryptocurrencies13, 263, 267, 274–5, 301–2, 996–7

Cull, Robert27, 1076–109

culture See bank culture

Cyprus3, 658–9, 667, 668, 669, 697, 903, 1003

Cyprus Popular Bank (Laiki Bank)659

Czech Republic1143, 1148

Czechoslovakia1135

data and data-processing
and competition70
on corporate complexity127–9

daylight credit310–11

daylight overdrafts309–10

de Bandt, Olivier24, 847–75

de Larosière Report1018

de novo banks1136

debit cards
costs296–7
increase982
interchange fees298–9
reasons for292
security301
use of272–3, 285, 289t, 290

debt
and banking crises871
corporate166, 521
government51
inside debt140
rationality of831
yields745–7

debt instruments in Islamic banking367, 368–9, 368t

debt-based compensation140

decision-making
biases838–9
cognitive biases825–7
consumers’ financial814–34
extensiveness of decision processes815–19
fast and frugal heuristics837–8
financial816–18
framing821
heuristics and biases820–1
for household durables816–18
and hyperbolic discounting823–5
investment and borrowing816–18
market environments838–9
and mental accounting822–3
prospect theory821–2
rationality819
rationality of credit card use831–4
savings818–19

Degryse, Hans23, 776–805

delegated monitoring role of banks42, 53–4

DeLong, Gayle L.25, 928–46

Delta CoVaR173

demand deposits
Amanah370
and banking crises892–3
and liquidity688
and maturity transformation686

Demirgüç-Kunt, Asli22, 685–703

Democratic Republic of the Congo (DRC)1090

Denmark334, 582, 693

deposit funding1143, 1144t, 1146t

deposit insurance685–703
Australia1205
and bank failures693, 922–3
and bank runs686–7
countries with689–92, 689f, 690f, 692f
coverage limits698–9
covering bank liabilities691, 691f
design and the institutional environment698–702
economic benefits692–4
economic costs694–8
economic rationale686–8
and guarantees135
history of adoption and changes688–92
increasing integration of banks and financial markets85
and moral hazard688, 694–8, 699
regulation701
risk-based pricing699–701, 700f
supervision701
and withdrawal risk184

Deposit Insurance Corporation, Japan1053, 1060

deposit markets791–3

Depository Institutions Deregulation and Monetary Control Act (DIDMCA) (1980), US191, 335, 346, 983

Depository Trust and Clearing Corporation313

deposits
Australia1195–6
demand370, 686, 688, 892–3
Latin America1164
New Zealand1195–6

deregulation
and banking competition801
and commercial banks983–4
and community banks339–40, 344–6
and entrepreneurship961–3
Europe1004–11
increasing integration of banks and financial markets83–4
real economy956–7
US5, 983–4

derivatives, and risk-taking162–9

Desjardins, Alphonse332

Deutsche Bank103, 104, 300, 758

Development Bank of Japan1046

development banks1181–4

Dexia bank638

DeYoung, Robert25–6, 977–98

Dhan Foundation414

diabolic loop link620

Diamond model42

Diamond-Dybvig model47, 78–9, 184, 186–7, 213, 547, 605–6, 607, 610, 687–8, 695, 911

digital currencies292–4

direct market discipline739, 740

disclosure
information614–16
and Pillar 3757–9, 759t

discount brokerage995–6

discount windows
and bank failures916–17
and global financial crisis985–6
lending308, 604
and liquidity10, 182, 185
and regulation189
response to financial crises637
stigma615

discounting, and decision-making823–5

discrete choice models787, 872

discretionary saving818–19

distributed ledger technology267–8

diversification
boards of directors142–4
and contagion50
Europe1012
G-SIBs104, 105t
and risk-taking232–5, 232f

Dodd-Frank Act Stress Test (DFAST)728

Dodd-Frank Wall Street Reform and Consumer Protection Act (2010) (DFA)
bail-ins657
capital requirements8, 210
compensation14
credit rating agencies77
financial markets integration84
implementation3
market discipline752, 753
regulatory changes456–7
repeal of certain provisions674
re-regulation987
resolution authorities123–4
resolving large banks997–8
securitization516

Dominican Republic887–8

domino effect perspective612–13

Donaldson, Piacentino and Thakor model182, 185–7, 193, 207, 213

Dow Jones CDX (DJ CDX)167

Draghi, Mario6, 622

Dubai Islamic Bank360

Dun and Bradstreet349

Dybvig See Diamond-Dybvig model

dynamic incentives, joint liability lending410, 413, 415

dynamic model of bank runs46

dynamic provisioning6, 457, 496

E*Trade996

earnings quality in Islamic banking381–2

Eastern Europe1132–50 See also Central Eastern Europe (CEE)
bailouts641
credit unions332
global financial crisis1178
information sharing802
interest rates1167
non-performing loans889
relationship banking351
retail banking1005

ECB See European Central Bank (ECB)

Ecobank1089

ECOFIN Council3

econometrics, and market discipline763

economic activity See real economy

Economic and Monetary Union (EMU)1002

economic behavior815–30

economic costs of banking crises895–6

economic growth
credit booms1113–14
and Islamic banking386–8

Economic Growth, Regulatory Relief and Consumer Protection Act (2018), US457

economic role of banks64–8

economies, importance of banks39–41

economies of scale
Australia1195
and bank competition938
and bank consolidation991
and bank performance247–52
financial institutions247–52
impact433
importance1011–12
Japan1047–8
large banks437, 449, 981, 1011–12
Latin America1162, 1185
risk-taking232–5
shadow banking535

economies of scope
and bank competition794–5
and cross-border entry940
Europe1005, 1012–13
financial institutions247–9, 254
Japan1048
Latin America1185

Ecuador582, 1155, 1164, 1166

Edge Act (1919), US113

efficiency
Africa1082–3, 1087
Australia1200–4
China1116–17
effects of cross-border entry940–2
Europe1011–14
Islamic banking372–6, 373t
Japan1047–52
Latin America1170–2, 1175–7, 1175t
Mexico1173
New Zealand1200–4
and success of bailouts650

efficiency structure hypothesis779–81, 1172

efficient markets hypothesis740

El Salvador582

electronic payments303, 982

Elliehausen, Gregory23, 814–40

Emergency Economic Stabilization Act (2008), US635–6

emergency liquidity assistance (ELA)
conditions for provision609–10
and financial crises608
and global financial crisis603–4
and LOLR620, 859
and systemic risk855, 875

Emigrant Savings Bank of New York918

employment
Europe1006
and success of bailouts649

endowment effect826

enhanced supplementary leverage ratio (eSLR)725–6

Enron76, 76n

enterprise access to finance1089–91, 1090f

entrepreneurship
and bank competition961–3
and Islamic banking388

equipment lending437

equity, and banks74–5

Equity Bank1086, 1088–9, 1097–8

equity instruments in Islamic banking367, 368t

equity prices, and monitoring748–9

equity-based compensation138–40

Estonia1142, 1143, 1144

Ethiopia1092, 1099–100

euro (currency)622, 1000

Euro Area See Eurozone

Euro crisis See sovereign debt crisis (2009–11)

Euro1 payment transfer286

Europe1000–26, 1190–211
bail-ins632
bailouts631, 635–8, 640t, 652–4
bank assets1006
banking reform964
banking union1004, 1018, 1022–5, 1141
cash use290–1, 292
checks (cheques)288–9, 292
commercial banks326
competition800, 1014–16
cooperative banks329, 330, t, 331
credit unions332
deregulation1004–11
diversification1012
efficiency1011–14
employment in banking1006
financial inclusion1092f
funding sources1197
global financial crisis638, 901, 1016–19
government support1017
industries964
integration1004–11, 1007f
joint stock banks328
large banks1011–12
leverage134
mergers and acquisitions1005, 1007, 1011
MMFs551
new regulatory architecture1019–25
numbers of banks1006
payment services286
post-crisis business models1012
post-crisis regulatory reforms1012
profitability1011–14, 1015t
risk1014–16
savings banks334
securitization509–11, 510f, 552
SEPA initiative298
small business lending431, 454, 456, 458
sovereign debt crisis. See sovereign debt crisis (2009–11)
stress tests729
structure and performance of banking1004–16
universal banking model1001

European Banking Authority (EBA)1018, 1022

European banking union1004, 1018, 1022–5, 1141

European Central Bank (ECB)
bail-ins658
bailouts3
and banking union1004, 1018, 1022–3, 1141
establishment1000
LOLR policy622–3
long-term refinancing operations (LTROs)10
outright monetary transactions (OMT)6
research studies6
response to sovereign debt crisis1018–19
supervisory role590
total assets618f

European Commission1002
response to global financial crisis638–9, 641, 1002, 1017

European Company Statute1005

European deposit insurance scheme (EDIS)1004, 1025

European Economic Community (EEC)1000

European Financial Stability Facility (EFSF)3, 639, 1003

European Insurance and Occupational Pensions Authority (EIOPA)1018

European Securities and Markets Authority (ESMA)1018

European System of Financial Supervisors (ESFS)1018

European Systemic Risk Board (ESRB)81, 550, 1018

European Systemic Risk Council (ESRC)1018

European Union (EU)
bail-ins658–61, 666–70
bailouts638–41, 640t
bank assets1002, 1010t
Bank Recovery and Resolution Directive (BRRD)3, 632, 658, 659, 668, 746, 753–5, 1023
banking integration1001
banking structure1004–16
banking supervision1001
Basel II196
bonus cap14, 132, 137–8
capital requirements205
Capital Requirements Directive II (CRD II)516
Capital Requirements Directive IV (CRD IV)1, 8, 14, 1020–2
competition803
Council of Finance1018
deposit insurance690, 694
expansion1000–1
FinTech12
First Banking Directive (77/780/EEC) (1977)1001, 1004
government support to banks1002–3
house prices492–3, 493f
large banks1007, 1010t
market discipline754–5
mortgage credit tools495
numbers of banks1008t
Payment Services Directive 2 (PSD2)269, 300
Recovery and Resolution Directive (2014), EU1020
regulatory reforms753–4
Second Banking Directive (89/646/EEC) (1989)964, 1001–2, 1011
single market328
single resolution mechanism (SRM)1004
single supervisory mechanism (SSM)1004
White Paper on The Completion of the Internal Market1001

Eurozone
bank assets1002, 1007, 1009t, 1010t
banking concentration1007
capital requirements1207t
economies of scale249–50
expansion1001
financial services1191
financing structure39–41, 40f
household assets40–1, 41f
implementing LOLR policy621–3
large banks1010t
liquidity creation620
low interest rates592
non-financial corporations41, 41f
numbers of banks1007, 1008t
pension schemes40
risk-sharing43
shadow-banking533
sovereign debt crisis. See sovereign debt crisis (2009–11)

evergreening1065–6

exchange rates582–3

executive pay See also bonuses
compensation136–40
regulation1020–1
and risk-taking135–40

exposure at default (EAD)489

extreme-value theory (EVT)868

failures See bank failures

Fair, Isaac and Co. (FICO) See FICO (Fair, Isaac and Company) scores

Fair Credit Reporting Act (1970), US348

Faisal Islamic Bank of Egypt360

Faisal Islamic Bank of Sudan360

fake warehouse receipts185–6

Fannie Mae485, 490, 505, 903, 986–7

Fast Pay payment transfer308

fast payments24, 302–3

Federal Credit Union Act (1934), US332, 341

Federal Deposit Insurance Corporation (FDIC)84, 123–5, 327, 347, 637, 657, 689, 986, 997–8

Federal Deposit Insurance Corporation Improvement Act (FDICIA) (1991), US195

Federal Deposit Transaction Account Guarantee Program (TAGP)637

federal funds market185

Federal Home Loan Bank (FHLB)349, 551, 637

Federal Home Loan Mortgage Corporation (FHLMC) See Freddie Mac

Federal National Mortgage Association (FNMA) See Fannie Mae

Federal Reserve
automated clearinghouse (ACH)982
banking panics604
cash reserve requirements190–3
and commercial banks984
discount window. See discount windows
establishment288
forward guidance588
global financial crisis50–1, 637, 985–6, 987
independence582
liquidity creation620, 621t
liquidity provision80
and living wills124–5, 657
as LOLR185, 190
monetary policy591
Regulation Q980, 983
stress tests728–9
supervisory role590
systemic risk308–9
term auction facility (TAF)10
total assets618f

Federal Reserve Act (1914), US135

Fedwire payment transfer286, 306

fiat currency892

FICO (Fair, Isaac and Company) scores271, 348, 438, 443, 549, 981, 995