Browsing by Subject "banking regulation"

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  • Fungáčová, Zuzana; Koskinen, Kimmo; Tölö, Eero (2015)
    Bank of Finland. Bulletin 2/2015
    Weak profitability is a major problem for the European banking sector. Particularly in the euro area, a weakly performing economy and related impairment losses, subdued credit dynamics and prolonged low interest rates have weakened banks' profitability. The profitability of major European banks has also been undermined by court costs and sanctions imposed by the authorities. Growing regulation and an influx of new competitors on the market increase the need for balance sheet adjustment. The changes also affect Finnish banks.
  • Moreno, Diego; Takalo, Tuomas (2021)
    Bank of Finland Research Discussion Papers 3/2021
    We study the optimal precision of public information disclosures about banks assets quality. In our model the precision of information affects banks' cost of raising funding and asset profile riskiness. In an imperfectly competitive banking sector, banks'stability and social surplus are non-monotonic functions of precision: an intermediate precision (or low-to-intermediate precision if banks contract their repayment promises on public information) maximizes stability, and also yields the maximum surplus when the social cost of bank failure c is large. When c is small and the banks' asset risk taking is not too sensitive to changes in the precision, the maximum surplus (and maximum risk) are reached at maximal precision. In a perfectly competitive banking sector in which banks' asset risk taking is not too sensitive to the precision of information, the maximum surplus (and maximum risk) are reached at maximal precision, while maximum stability is reached at minimal precision.
  • Takalo, Tuomas (2019)
    Journal of Banking Regulation 4 ; December
    The regulation of short-term consumer credit markets is heatedly debated around the world. This article uses economic research as a basis for a qualitative assessment of the regulation of the short-term consumer credit market and discusses the experience of the recent regulations implemented in Finland. According to research, the interest rate ceiling is an inefficient way of regulating the short-term consumer credit market. In contrast, the regulations should be based on price transparency and results from behavioral economics.