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date: 24 May 2018

(p. 964) Index

(p. 964) Index

A1/P1 commercial paper 272
A2/P2 commercial paper 272
Abbey National 821, 822
ABCP 67, 91, 92, 134, 272, 273, 607
ABN AMRO 199, 824, 830
Abu Dhabi Investment Group 14
ABX index 611–12
accounting relief 328
studies 160–3
systems 324
Act on Provision of Trust Business by Financial Institutions (1943) 913
advanced measurement approach see AMA
adverse selection 558–9
advertising expenditure 790
agency cost 480
agency securities 583
aggregate fluctuations 661
Aglietta, Michel 20, 233–55
Agricultural Bank of China 956
AIG 4, 7, 136, 273, 299, 304, 311, 634, 688, 803, 838
AIRB 393
Akerlof lemon problem 125–6, 280
Allen, Franklin 18, 37–54
Allen, Linda 18, 90–110
Allen-Gale model 286, 289
Allende, President Salvador 874
Alliance and Leicester 821, 822, 823
Allianz 196, 819, 950
Allied Irish Bank 825
Alpha Bank 825
Altman, Ed 98
AMA 363, 364
amakudari 928
American Can 174
American Electric Power (AEP) 138
American Express 272, 950
American Home Mortgage 800
American Smelting and Refinery 174
AMLF 273
amortization 567
antitrust policy 196, 405–26
in European Union 423–5
and market structure 426
transparency 418
in US 419
antitrust regulation 425
Anzen 926
Aozora Bank 913, 932
APR 561
arbitrage pricing theory 159, 400
Argentina see Latin America
ARM see mortgages
Armstrong Committee (1905) 176
Asian developing nations 29
Bangladesh 942, 944, 945, 946
Bank
nationalization 948, 950, 951, 952, 953
ownership structure 946, 948
performance 955
banking sector
characterization 942–5
concentration 947, 949
depth 944
deregulation 955
East Asia 942, 944, 945, 946, 947, 948
South Asia 942, 944, 946, 947
statistics 943
China 942, 944, 945, 946, 947, 948, 949–50, 956, 959, 960
compared with other countries 944–5
financial structure 38–41
foreign bank ownership 945, 946, 947, 951, 952, 953, 956–7, 958, 959, 960
future of 959–61
government/state ownership 946, 947, 955, 956, 958, 959
Hong Kong 955
India 942, 944, 945, 946, 948, 951–3, 957, 958, 960, 961
(p. 965) Indonesia 944, 945, 946, 947, 950, 951, 955, 960
Korea 271, 942, 944, 947, 950, 955, 958, 959
Malaysia 942, 944, 947, 955, 959
Pakistan 942, 944, 945, 946, 953–4, 958
Philippines 942, 944, 945, 947, 955, 957
private bank ownership 945, 947, 953, 954, 955, 956, 957, 958, 959, 960
Singapore 955
Thailand 942, 947, 950, 951, 955, 957
Asociación de Bancos Privados de Capital Argentino 895
ASRF 367, 368
asset
convexity 582
correlation 370, 613
duration (mortgage) 581
management 2, 19
price meltdown 333
price volatility 255
prices and liquidity 47
quality 345
risks 60
securitization see securitization
transformation 114
asset-backed commercial paper see ABCP
asset-backed commercial paper money market-fund liquidity facility see AMLF
asset-backed securities see ABS
assets
asset-backed commercial paper see ABCP
cross-border 294
elasticity of market 308
granular 605
weakened portfolios 683
Associates First Capital Corporation 207
asymmetric information 44, 201–4, 261–2, 559, 639
and adverse selection 558–9
amelioration by banks 464
availability of good information 740
and market crises 645
and regulation 320
shareholders vs. creditors 201–2
shareholders vs. managers 202–4
in US panics 707
asymptotic single risk factor see ASRF
ATM and Debit News 493
ATM networks 415, 423, 492, 495, 713, 782, 794, 798, 829, 878
Auction Rate Securities 108
automated clearing houses 495–6, 711
automated credit bureaus 559
automated credit-scored loans 789
balance sheet characteristics 342
Banca Commerciale Italiana 820
Banca Intesa 820
Banca Nazionale del Lavoro 820
Banca Popolare de Verona e Novara 820
Banca Popolare Friuladria 820
Banca Popolare Italiana 820
banche di credito cooperativo 819
banche popolari 819
Banco di Napoli 820
Banco di Roma 820
Banco Bilbao Vizcaya Argentaria 821
Banco Central de la República Argentina 895, 896
Banco de la Nación 876
Banco de la Provincia de Buenos Ayres 876
Banco Espirito Santo Group 825
Banco Santander see Santander
bank
capital adequacy 357–8
concentration and growth 764
credit and economic activity 758–60
credit and value creation 761
crises see crises
delivery systems 798
distress and Great Depression 696, 697–701
holding companies see BHCs
liquidity and GDP 123
loans see loans
safety 76
security prices 380–3
size 786
Bank Act (1844) 234
Bank of America 4, 108, 121, 138, 199, 211, 394, 397, 423, 785, 796, 838, 950
Bank Austria Creditanstalt 825
Bank of China 950, 956
Bank of Communications 950
Bank Consolidation Company 847
Bank of East Asia 949
bank efficiency measurement 465–82
capital structure and performance equations 474–5
cost minimization 467–73
economic efficiency of 467
managerial utility maximization 467–73, 474
non-structural approach 473–4
output quality in performance equation 475–6
profit maximization 467–73
structural approach 467–73
(p. 966) structural models outputs and inputs 474
techical efficiency of 467
Bank of England 7, 120, 198, 234, 240, 248, 250, 251, 303, 306, 307, 326, 840
Special Liquidity Scheme 823
Bank Holding Companies see BHCs
Bank Holding Company Act see BHC Act (1956)
Bank Holiday (1933) 241
Bank for International Settlements see BIS
Bank of Ireland 825
Bank of Japan 922, 926, 928, 929, 933
bank loan supply
effects of shifts on 267–9
firms affected by 268–9
and macroeconomic activity 268
and monetary policy 263–7, 269, 271
Bank Merger Act (1960) 419
Bank of Montreal 703
Bank of New York 239
Bank of Nova Scotia 206
Bank One Corporation (BOC) 211
bank regulation see regulation
Bank of Scotland 822
Bank of Spain 297, 821, 838
Bank of Tokyo 932
Bank of US 697, 698
Bankers Trust 95, 188, 794
Bankhaus Herstatt 648
banking
aggregate shocks to 650–2
in ancient civilizations 756–7, 771
book positions 362
central see central banking
crises see crises
deregulation see regulation
diversification 146–67
efficiency 463–82
structural approach as choice theoretic 65
electronic 13
Financial innovation 489–501
government ownership 438
and industrial growth 763
industry prospects 17
industry structure 791–8
institutions, and legal systems 759
international differences in 26–9
international trends in 26–9
internationalization of 23
Internet 24, 139, 421, 493–4, 500, 715, 794, 798, 829, 878, 915
investment 185–7
liquidity as core function 113
losses 678
macroeconomic perspectives in 25–6
mechanisms 762
monopoly 410
openness 433–58
originate-and-hold 786
originate-and-securitize 786, 788
panics pre-WW1 694
performance and technology 465–76
product definition 417
and real economic activity 756–72
regulation see regulation
relationship-based approach 786
relationships in 52–4, 61, 63, 65, 269
retail 833
risk see risk
scale and scope in 21st century 185–8
SCP paradigm in 407–9
securitization see securitization
shocks 643, 650–2
stages in crisis 327
strategies 786–90
structures 26–9, 77
system panics 25–6
systemic risk see systemic risk
systems 26–9
theory 17–18
transformation 12–17
unit 703
universal 9, 19, 171–91, 820
conflict of interest 176–80
economic efficiency 180–5
in EU 830
human capital 172–6
industrial development 172–6
universal banking groups 820
vulnerability features 681–2
WTO statistics see WTO
see also banks; European Union; individual countries; technology;
Banking Act (1844) 240
Banking Act (1933) see Glass-Steagall Act
Banking Act (1984) 809
Banking Co-ordination Directive (1989) 184
Banking Law (1981) 909, 913, 914, 915, 916
Banking Regulation Act 953
Banking School 237, 245
bankruptcy 47, 297–301, 307, 333, 475, 851
asymmetries in resolution 220
of banks 307, 387, 675
banks and regulation 281
(p. 967) and complexity of LCFIs 221
and debt 254
failure cost 303
and insolvency 47, 297–301, 307, 333, 475, 696, 700
insolvency risk 75, 151
jurisdiction 217–20
laws 347–9
risk 75, 151
social cost 281
solvency shocks 279, 288
and SPVs 209–10
US resolution methods 219
zombie firms 270, 324, 325, 929–30
banks
assets 793
bailout policy 279
bank value and mergers/takeovers 481
bilateral credit relationships 49
branching extensions and poverty reduction 737–8
brand images 790, 794
bridge banks 83
business models 619–20
capital-to-asset ratios 266, 385
cash position 100
central see central banking
centrally planned Soviet 28
clearing systems 239, 289, 292
closure 304, 306
commercial/investment separation see Glass-Steagall Act
community banks 780, 781, 783, 787
and competition 60, 64, 65–6, 406–18, 425, 801
competition policies 22–3, 405–26, 742
components of condition 345
concentration 26, 764, 765, 947
condition and deposit volume 388
confidence in 7
conflicts of interest 204–5, 771
consolidation 271, 272, 405, 543, 820, 830, 853, 869–73, 884–92
consumer lending 24, 550–62
cooperative banks 915
and corporate governance 51–2, 54
corporate restructuring of 12
cross-border mergers 831
debt liabilities 464
debt risk premiums 657
decision making systems 188
decline in numbers 13
and delegated monitoring 41, 54, 72
deposit insurance see deposit insurance
distress sources 696
diversification 620
early Italian 674–5
economic role of 60–3
efficiency 463–82
enterprise-contributed net worth 324
and equity 51, 69–70
expansion of activities 155–7
failures see bankruptcy
FDIC insured 13
fee income 789
financial distress 205–10
and financial markets 59
foreign trade 846
fragility 60, 64, 72, 73–5, 321–6, 324, 328, 342, 425
functions of 463
funding opportunities
and globalization 329–32
and securitization 329–32
governance 51–2, 398–9
government intervention in 733
government ownership 465
and growth 50–1
high leverage role 682
illiquid 297–301
and industry dynamics in product markets 764–70
inefficiency models 468, 469
and information acquisition 61
and information processing 60–5, 72
integration with markets 58–83
as intermediators 61, 63–5
internal rating system 371
international mergers see international bank mergers
intertemporal smoothing by 43
and investor reaction 378
and IPOs 179, 185
and IT 10, 58, 186, 187, 253
largest in world 796
lender of last resort see LOLR
lending channels 266, 271–2, 274–5
lending function 66–7
loan loss provision 389
low-quality securities 177
market
contestability 331
discipline 696
integration 82
power 12
share in EU 15
mergers and acquisitions see M&A
(p. 968) monetary policy 20–1
shock 268
transmission 257–75
multi-market 540
multiple bank lending 52–3
net worth definition 218
new banks 792
offshore 208, 336
opacity 377, 379, 380–2, 384, 681, 703–4
openness 433–58
operating environment and efficiency 464
ownership structure 770–1
pan-European groups 834–6
payments systems see payments systems
and PE firms 59, 69–70
and percentage of GDP 38, 39, 42
performance 23–5, 407
portfolio holdings connections 48
prioritized bank debt 66
profit maximizing 471, 765
profitability 789, 791–2, 826
profits 9
proprietary trading 59, 381
regulation see regulation
reputation 93, 128, 186
resolution banks 915
restructuring after crises 687
return efficiency 471
returns 150
risk see risk
role in financial systems 37–54, 600
role in Soviet economies 844
scale economies 469, 793–4
screening by 67
securities regulation 215
securitization see securitization
single-market 540
special status 341–2
stand alone 265
state-owned commercial banks (SOCBs) 847
structures 293–4
subsidiaries 202–10, 211–12
supervision see regulation
and systemic risk see systemic risk
too-big-to-fail see TBTF
too-many-to-fail 310
transition 678
troubled 325, 333
uninsured deposits costs 265
use of securities affiliates 177–9
value influenced by failures 382
venture capital financing 69
write-downs by (2007–2008) 4, 5–6
Banque de France 234–5, 251
Banque Nationale de Paris (BNP) 817
Banque Postal, Le 809
Banques Populaires 809, 817
Barclays 14, 138, 199, 225, 822, 824, 830
bargaining power 66
Barings Bank 93, 206, 250, 676
Barnsley and Yorkshire 823
Barth, James R. 23, 430–58
Basel I (1988) 9, 16, 22, 267, 350, 358–60, 362, 381, 595, 680, 689, 888
category based approach 365
IRB approach 365
Market Risk Amendment 365
Basel II (2006) 9, 10, 16, 22, 28, 68, 72, 79, 80, 81, 82, 98, 297, 350, 360–74, 373, 587, 835
advanced internal ratings based (AIRB) approach 393
advanced measurement approach (AMA) 363, 364
bank capital regulation 586, 802
and bank failures 748
basic indicator approach 363
controversy over 686
designed to evolve 373
extreme-value theory 364
IRB approach 364–8
and market discipline 393
and risk management 624
and securitization 601
three pillars of 360–1, 367, 389, 685, 686
and VAR 500
Basel Committee on Banking Supervision 22, 218, 219, 337, 359, 372, 685, 690
basic indicator approach 363
basket credit default swap 104
Bausparkassen 819
Bayerische Hypo- und Vereinsbank (HVP) 509, 820
Bayerische Landesbank 865
BCCI 218, 219, 295, 303, 676
Bear Stearns 3, 7, 49, 76, 93, 107, 133, 135, 139, 222–3, 390, 394, 395, 396, 634, 641, 687, 803
Belgium see European Union
Berger, Allen N. 24, 531–45
Bermuda 208
Bernanke, Ben 642
(p. 969) best-practice performance 468
BGZ (agricultural bank) 853
BHC Act (1956) 153, 154, 216, 419
BHCs 148, 149, 157, 272, 779, 784
banking exposure 164
and counterfactual mergers 158–9
diversification of 156–7
failures 383
and product market diversification 160
Section 20 subsidiaries 154, 164, 179, 500, 784
Big Bang reforms (Japan) 9
bilateral credit relationships 49
BIS 9, 10, 95, 96, 103, 520, 615, 717
BIS Core Principles for Effective Banking Supervision 10
Black-Scholes-Merton framework 187
BLP (Berry, Levinson and Pakes) 414
BNDES 893
BNP 188, 199
BNP Paribas 817, 820
BOC 211
Bolivia see Latin America
bonds 2
CBOs 607
covered 605
high yield 606
rating changes 389
Bonin, John P. 28, 844–66
bonuses 398, 399
boom and bust 679, 882
Boot, Arnoud W.A. 18, 41, 58–83
BOPEC rating 392
Bradford and Bingley 4, 512, 821, 822, 823, 840
branch banking 703
branching extensions and poverty reduction 737–8
Brazil see Latin America
Bretton Woods 674, 675
bridge banks 83
British Bankers' Association 103
British Virgin Islands 208
brokerage 2
brokers 555
Brouwer report 77
Bryant-Diamond-Dybvig 279, 283
Buch, Claudia M. 24, 508–25
Budapest Bank 851
Bundesbank 723
business
credits 67
cycle fluctuations 650
cycle hypothesis 662
strategy measurement 479
buy and hold lending 133
CAD 3 (Capital Adequacy Directive 3) 10, 28
Caisse dʼEpargne 817
Caixa Geral de Depósitos 825
Caja de Ahorros y Pensiones de Barcelona 821
Calomiris, Charles W. 25–6, 693–707
CAMELS rating 152–3, 152–63, 345, 393, 477
Cameron, R. 765
Canada, branch banking 703
capital
adequacy 345, 357–8
asset pricing model see CAPM
capital-to-asset ratios 266, 385
capitalization and financial shock 266
charges for operational risk 363
crunch 267
deterioration 929
held by banks 16
human 172–3
liability structure 464
market competition 65–6
market funding 65–72
raised by banks (2007–2008) 4, 5–6
ratios in Japanese banks 270
regulation 22, 67, 72, 81, 357–74, 595
resource retention 11–12
risk-based capital ratio see RBCR
and SOEs 845
strategy measurement 479
structure and prioritization 604
target ratios 802
Tier-1 951
to risk weighted assets 888
Capital Adequacy Directive (CAD) 835
Capitalia 820
capitalization 801
increase in banks 801
CAPM 94, 656
Caprio, Gerard 25, 673–90
capture theory 302
CAR 473
Carletti, Elena 18, 37–54
Carlsson, H. 44
Carmassi, Jacopo 19, 195–226
Cassa di Risparmio de Parma e Piacenza 820
causality 757–61
and endogenicity 758
Cavallo, Domingo 876
Cavallo Plan (Convertability Plan) 876
Cayman Islands 208
CBOs 607
CD 134, 135
CDCIMI 817
CDS 59, 103, 104, 105, 106, 304, 311, 367, 394, 395, 397, 398, 601, 606–7, 609, 610, 616
CDX 609
CEBS 835
CEIOPS 835
Central Bank of Brazil 875, 896
Central Bank of the Republic of Argentina 895, 896
central banking 20–1, 46, 118, 233–55
and 2007–2009 crisis 244
autonomy 302
as bankers' banks 233, 234–43
CBs as senior creditors 305
centralization of payments 234–43
creation of 278
discount lending 280
emergence of 233–4, 236–9
free banking payment system 236
independence of 307
intervention 286, 300
law of reflux 236–9
as lender of last resort (LOLR) 240–3, 289, 301
and liquidity see liquidity
monetary policy 243–53
multilateral clearing systems 236–9
policy 287, 641
regulation of payment systems 239–40
role 233–4
rules of 235–6
Central Eastern Europe (CEE) see transition countries
Central-European International Bank Ltd. 848
centralization of payments 234–43
certificate of deposit see CD
CESR 835
Cetorelli, Nicola 26, 756–72
CFTC 99
charter value 479
Chase Manhattan Corporation 211, see also JPMorgan Chase
Chase Securities Corporation 178
Check Clearing for the Twenty-first Century Act (2003) (Check 21) 785
checks (cheques) 711, 713, 714, 715, 780, 782
Chemical Bank 211, 794
Cheshire and Derbyshire 823
Chicago banking panic 694
Chile see Latin America
China Construction Bank 950, 956
China Development Bank 14
Chinese Investment Corporation 14
CHIPS 292, 647, 661, 712
Chuo Mitsui Trust Bank 932
Ciampi law (1998) 820
CIC 817
Citi 93, 196, 199
Citibank 794, 854
Citibank Budapest Ltd. 848
Citibank Japan 932
Citicorp 180
CitiFinancial Credit Company (CCC) 207
Citigroup 4, 6, 7, 14, 190, 207, 395, 397, 679, 688, 796, 803, 949, 961
Citigroup Funding Inc. 207
Citigroup Global Markets Holdings Inc. 207
City of London 251
Clayton Act (1914) 41
Clearing House Interbank Payments System see CHIPS
clearing houses, automated 495–6, 711
click-and-mortar model 782
CLOs 124–5, 487
close-out netting 219
closed-system prepaid cards 494–5
closure rules 390–1
CLS Bank 648, 722, 723–4
CLTV ratios 491–2
CMOs 91, 124–5, 607
co-determination policy (Germany) 184
collateral
criteria for 241
principle 928
collateralized
bond obligations see CBOs
debt obligations see CDOs
loan obligations see CLOs
mortgage obligation see CMO
Colombia see Latin America
commercial bank charters 791
commercial bank clearing houses see CBCs
commercial paper 272
Commerzbank 818, 819
commitment lending 62
Committee of Banking Supervisors see CEBS
Committee of European Insurance and Occupational Pensions Supervisors see CEIOPS
(p. 971) Committee of European Security Regulators see CESR
Committee on the Global Financial System 243
Commodity Futures Trading Commission see CFTC
Communism, fall of 28
community banks 780, 781, 783, 787
Community Reinvestment Act 544, 748
Compaigne Financière Eulia 817
competing hazards model 578
competition 60, 64, 65–6, 406–18, 425, 801
and capital markets 65
competitive pressures 801
effects 887–90
and lending 60, 64, 65
and market segmentation 416
measurement 887
role of bank 762–4
Competition Commission (UK) 830
Competitive Equality Banking Act (1987) 155
conduits 2
conflicts of interest 204–5, 771
conforming loan limit 583
conjectural variations approach 411–12
Consolidated Law on Financial Intermediation (1998) 820
constrained discretion 247
constructive ambiguity 642
consumer lending 24, 550–62
adverse selection 558–9
asymmetric information 558–60
classification 551
consumer borrowing model 552
consumer credit use 553
consumer protection 560–1
consumer-loan turnover 788
controversy over 551
credit evaluation 559–60
credit rationing 556, 557, 558
default risk and credit supply 556–60
definition 550
demand for 552–4
and durable goods 551, 553–4
equality legislation 561–2
financial intermediaries 554–5
installment credit 551
investment-consumption theory 552
loan offer curve 556
loan supply curve 557
non-installment credit 551
regulation 560–2
revolving credit 551
supply of 554–6
Continental Illinois 120, 181, 202, 269, 656, 658, 659, 682, 877
contingent capital adequacy ratios 255
contract enforcement 63
Convertability Plan (Cavallo Plan) 876
Cooper Neff 188
Core Principles for Effective Banking Supervision 10, 888
corporate complexity 217–21
corporate governance in banking 51–2, 54
corporate restructuring of banks 12
cost minimizing 471
cost and profit productivity 478
counterfactual mergers 158–9
Countrywide Financial 108, 120, 133, 139, 423, 800
covered bond market 605
credit
absorption 67
access and aggregate economic growth 735–6
automated credit bureaus 559
availability 52
booms 652–4
bureaus 559
cards 551, 711
credit card base rate 273
creditworthiness 559
crises see crises
default swaps see CDS
derivatives 103, 618, 620
enhancement 68, 614
evaluation 559–60
line equilibrium 644
lines 115, 644
market frictions 261
production 112
rating agencies see CRAs
ratings 2, 72, 80, 93, 108, 109, 126, 189, 372, 586, 612
Monte Carlo exercise 614
rationing 556, 557, 558
registries 740
risk transfer see credit risk transfer
risks 60, 600
subsidized 62, 64
unions 554, 555
(p. 972) Crédit Agricole 206, 809, 817, 820, 826
Crédit Commercial de France (CCF) 817
Crédit Lyonnais 676–7, 817
Crédit Mobilier 235
Crédit Mutuel 809, 817
Credit Rating Agency Reform Act (2006) 72
credit risk transfer
and ABS 602–6
CBOs 607
and CDOs 601, 606–7, 608–9
and CDSs 601, 606–7
and funded instruments 602–6
and improved efficiency 620
main instruments 601–8
market development 621
and MBS 601, 602–6
SPVs 602–3, 606
structured finance instrument pricing 609–12
trading CDOs 608–9
and welfare reduction 621
Credit Suisse 14, 109, 196, 199
CreditMetrics 98, 368
Credito Italiano 820
crises 28, 43–6, 673–90
9/11 events 107, 122, 241
1907 239, 250
1997–1998 326, 335, 683, 960
2007–2009 3–9, 43, 49, 67, 68, 78, 82, 91, 106–10, 113, 132–40, 146, 189–90, 242–3, 244, 253–5, 272–4, 278, 280, 284, 296, 304, 326, 335, 339–40, 605, 634, 654, 673, 683, 693, 730, 749, 894–8, 960
implications of 394–400, 423
accountability 329
accounting relief 328
Argentina 681, 687, 705, 706
Asia 46, 166, 206, 270–1, 294, 326, 335, 659, 679, 701, 707, 941, 950, 959
Australia 705
Bank Holiday (1933) 241
Bankers' Panic (1907) 250
Baring crisis (1890) 250, see also Barings Bank
and bonuses/incentive payments 398, 399
boom-and-bust syndrome 679, 734
Brazil 705
breakdown probability 328
business cycle hypothesis 662
Chile 679
costs of 684–5
crisis containment policies 749
crisis prevention 685–8
crisis response 685–8
disaster myopia 679
in Dominican Republic 676
early US panics 702–3
European (2007–8) 836–41
exculpatory norms in management 326–9
fast-moving 681–4
following economic boom 685
and fraud 676
frequency 335
fundamentalist approach to 695–6
and government 675–81
government key roles 686
Great Depression 241, 246, 254, 295, 340, 387, 655, 658, 662, 693–707
herd effect 679
history 673–5
Iceland 308, 865
insider trading 677
Italy 706
key issues 83
in late twentieth century 705–6
late twentieth century 705–7
lessons from 139–40
liquidity 234, 242, 289, 300, 651, 693
LTCM 122, 166, 242, 297, 656, 659
and macroeconomics 675–81
and management 675–81
Mexican Tequila event 659, 681
and mismanagement 676
Northern Rock see Northern Rock
origins of 675–81
Pakistan 953–4
panic and contagion 681–4
phases in 107–10
pre-Depression 702–4
process of 332
regulation-induced 318, 326–9, 332–7
and regulatory competition 334–7
restructuring after 687
rogue traders 109, 676
rolling 328
Russian 242, 659
S&L 299
Scandinavia 679, 705
South Sea Bubble 679
stages in banking crisis 327
steps by Eurosystem and Federal Reserve System 2008 244
and strengthening supervision 336
Sweden 83
systemic 310
and systemic contagion 694
UK (1972) 241
and US banking structure 702–4
(p. 973) US securitization 333
in Venezuela 676
Wall Street stock market (1929) 153, 241
crisis management, exculpatory norms in 326–9
CROs 689
cross-border M&A 830
cross-border assets 294
cross-border contagion 36
cross-border finance in EU 834
cross-border mergers see international bank mergers
cross-price elasticity 413
CRT 188
cumulative abnormal return see CAR
currency deposit conversion 678
cyclical downturn 650
Czech Republic see transition countries
Czechoslovakia see transition countries
Danish Interbank Netting System 661
daylight credit 721
de Bandt, Olivier 25, 633–64
de Carvalho, Fernando J. Cardim 28, 868–98
de Gaulle, Charles 251
de Paula, Luiz Fernando 28, 868–98
de-leveraging 254
Dealscan database 133
debentures 384, 385, 387, 389
debit cards 24, 493, 713
debt
-equity swap 242
liabilities 464
risk premiums 657
underwriters 797
default
estimation 294
probability 366–7
risk premiums 387
degree of discrepancy 450
delegated monitoring 41, 54
delivery systems 798
delivery versus payment see DVP
DeLong, Gayle L. 24, 508–25
demand
-deposit contract 74
demandable liabilities 681
elasticity 413
stimulation 246
Demirgüç-Kunt, Asli 26, 50, 116, 729–50
Demsetz, Harold 408–9
Department of Justice see DOJ
deposit flows 658–9
deposit guarantees 76
deposit insurance 21–2, 81, 116, 281, 303, 304, 305, 306, 339–54, 378, 706
and bank runs 341–2, 383, 643
boom 689
current US structure 344–6, 349
in developing countries 742
downside of 343
effective system 352–4
FDIC limit 395
fixed rate 653
fund structure 346–7
funding 346–7
government guarantors 345, 348, 378
In European Union 347
in low-income countries 742
mixed record of 343–4
risk-related 350, 384
successful US period 706
UK scheme 347–8
Deposit Insurance Corporation 922, 927
Deposit and Loans Fund 826
deposit-risk premiums 384
Depository Trust and Clearing Corporation 724
deposits, and bank condition 387–8
deregulation see regulation
desupervision 331
Deutsche Bank 199, 200, 211, 818, 837
devaluation 250
Development Bank of Japan 915
Dexia 396, 824
DeYoung, Robert 27–8, 777–804
Diamond, D. 41
Diamond-Dybvig model 285, 300, 301
Dick, Astrid A. 22, 405–26
Dillon Read Capital Management 107
Directive on Financial Conglomerates 77
disaster myopia 652
disclosure costs 561
discount rate 252
discount windows interventions 300
discrete choice models 414
diseconomies of scope 196
disintermediation 781
diversification 19, 67, 146–67
of BHCs 156–7, 164
in European banks 161
geographic 162–3, 165
in German banks 161
in Israeli banks 161
in Italian banks 162
in large banks 162
product market 163–4
(p. 974) reasons for 149–53
and risk 157–65
understanding 147–57
in US 161, 165–6
DOJ 419
Dominican Republic 676
domino effect and contagion 291–7
double taxation 213
Douglass Amendment 153
Dresdner Bank 818, 819
dualist money systems 249
DuPont 174
Durkin, Thomas A. 24, 550–62
duty
of conscientious representation 317
of efficient operation 317
of prompt corrective action 317
of vision 317
DVP 648
dynamic panel estimation 758–9
E-money 253, 829
EAD 361, 371, 372, 586
EBRD
EBRD/World Bank surveys 863
index of banking reform 857
surveys 863
Transition Report 860
ECB 7, 74, 76, 77, 252, 253, 281, 307, 717, 720, 833, 837–8
Brouwer report 77
Economic and Finance Committee 77
financial rescue involvement 78
and Maastricht Treaty 243
Memorandum of Understanding 77
economic activity and bank credit 758–60
Economic Commission for Latin America and the Caribbean 870
economic development, role in Financial sector 729–50
economic growth 50–1
economic policy, liberalization of 677
economies of scope 196
Ecuador see Latin America
Edwards, J. 51–2
effective liquidity 300
efficiency
analysis application 465–6
in banking 65, 463–82
and deregulation 760–1
efficient systemic events 638–40
efficient-structure hypothesis 409
EFG Eurobank Ergasius 825
EFTPOS 829
Eisenbeis, Robert A. 21–2, 339–54
Electronic Benefit Transfer 719
electronic funds transfer at point of sale see EFTPOS
electronic transfer accounts see ETAs
Elliehausen, Gregory 24, 550–62
emergency liquidity assistance 299
Emigrant Savings Bank of New York 701–2
Emporiki Bank 826
endogenicity and causality 758–60
endogenous prices 391–2
England, early industrialization 173
Enron 71, 225–6
entry models, and sunk costs 415–17
Equal Credit Opportunity Act 561
Equifax 784
equilibria 44, 45, 47, 71, 283, 300, 574, 683, 694
equity
dividend paying contract 74
ownership 51
to assets 800–1, 802
tranche 126
Erste Bank 825
ETAs 748
Euro area financial structure 38–41
Euro1 712
European Bank for Reconstruction and Development Transition Report 863, 864
European Banking Charter (proposed) 220, 836
European Central Bank see ECB
European Commission on Competition 424–5
European Company Statute 808
European Systemic Risk Board 634
European Union
asset totals 826
Austria 825
bank capital raised 839
bank capitalization 838
bank cross-border mergers 831
bank license 27
bank numbers 826
bank profitability 826, 828
bank regulation 76
bank sector concentration 829
bank sizes 810–81
bank structural indicators 827
bank write-downs 839
banking changes 28
banking industry integration 830–3
banking integration barriers 833
banking legislation 832
banks market share 15
CAD 3 (Capital Adequacy Directive 3) 10
Denmark 823–4
deposit insurance structures 347
European Company Statute 808, 824
European Union-15 807, 819, 826, 829
Financial crisis (2007–8) 836–41
Financial stability 834–41
Finland 823–4
First Banking Directive 807
France 809–17
in 19th century 173
bank sizes 812
Germany 818–19
in 19th century 173, 175
bank sizes 813
co-determination policy 184
diversification 161
government deposit insurance 224
hausbank system 51
industry financing 172
Greece 825–6
increase in banks 13
Ireland 825
Italy 819–21
bank sizes 814
crises 706
diversification 162
Luxembourg 824
membership 831
Netherlands 824
Nordea group 523, 823–4
Norway 823–4
pan-European banking groups 834–6
Portugal 825
recession 961
retail banking 833
Scandinavia 823–4
Second Bank Coordination Directive 830
Second Bank Directive 770
single banking passports 830
Single Market Programme 9, 516
Spain 821, 838
bank sizes 815
structural change and bank performance 826–30
supervision 834–41
supervisory authorities within 78
Sweden 83, 823–4
transition countries membership 853
United Kingdom 822–3
bank sizes 816
credit crisis 840
Financial structure 38–41
government competition rules 4
Iceland bank crisis 308, 865
Eurosystem 647
EVT 364, 657
exchange rate pegs 675
Experian 784
exposure at default see EAD
extreme-value theory see EVT
FACITs 213
Fair Credit Reporting Act (1970 revised 2003) 562
Fair Debt Collection Practices Act (1978) 562
Fair Isaac 570
Fannie Mae 3, 4, 8, 126, 127, 135, 255, 395, 571, 583, 587, 602, 688, 783, 803, 838
FDI 513, 853, 870
FDIC 3, 13, 20, 81, 120, 207, 308, 340, 343, 344–5, 349, 350, 351–2, 353, 390, 393, 395, 763, 779, 784, 792, 803
FDICIA 181, 207, 344, 345, 347, 350, 351–2, 378, 801
Fed Funds 122
Fed, The see Federal Resreve
FedACH 496
federal deposit insurance see deposit insurance
Federal Deposit Insurance Act 349
Federal Deposit Insurance Corporation see FDIC
Federal Deposit Insurance Corporation Improvement Act (1991) see FDICIA
Federal Deposit Insurance Reform Act (2005) 393, 802
Federal Home Loan Banks see FHLB
Federal Home Loan Mortgage Corporation see Freddie Mac
Federal Housing Authority see FDA
Federal Housing Finance Agency see FHFA
Federal National Mortgage Association see Fannie Mae
Federal Open Market Committee 242
Federal Reserve 3, 4, 7, 8, 20, 46, 49, 78, 107, 121, 122, 132, 135, 137, 139, 140, 154, 200, 207, 241, 243, 252, 253, 258, 272, 273, 288, 289, 290, 297, 304, 306, 307, 345, 371, 390, 420, 633, 642, 700, 715, 779, 798, 803, 838
Regulation Q 780, 781, 784
Federal Reserve
Act Section 10B 306
Section 23A 215
Section 23B 215
Federal Reserve Discount Window 305
Federal Savings and Loan Insurance Corporation see FSLIC
Federal Trade Commission see FTC
Federal Trade Commission Act (1914) 419
FHA 126
FHCs 779
FHFA 4, 838
FHLB 292, 388, 399
fiat monetary systems 251–3, 682
FICO scores 98, 784
Fidelity sector funds 396
FIDSX 396
FILP 914, 915, 931
finance
access to 745–9
aggregate data 731
bank growth 808
and economic development 731–8
and growth 731–5
identification issues 731
income distribution and poverty 735–8
Financial Accounting Standard (No.140) 210
Financial Action Task Force 10
Financial asset securitization investment trusts see FACITs
Financial assets and GDP 42
Financial commodity production process 788
Financial commodity strategy 786
Financial crises see crises
financial deregulation 331
financial development
effects 734
exogenous component 759
and foreign banks 745
and growth 734–5, 736, 737
historical determinants 739
and income distribution 735–6
measurement and non-linearities 734
financial distress 205–10
financial fragility hypothesis 637–8
financial holding companies see FHCs
financial index deflation 396
financial innovation
asset securitization 497–9
ATMs 492, see also ATM
automated clearing houses 495–6
and banking 489–501
credit scoring 488
debit cards 24, 493
and finance 488–9
Internet banking 24, 139, 421, 488
online banking 493–4
organizational forms 500
prepaid cards 494–5
production processes 495–500
products 489–92
risk management 499–500
services 492–5
small business credit scoring 496–7
structural conditions for 489
subprime mortgages 488, 490–2
financial institutions
and economic prosperity 730
fragility 730
government ownership 743
and legal systems 759
Financial Institutions Reform, Recovery and Enforcement Act (1991) see FIRREA
financial integration, and systemic risk 646
financial intermediation 59–61
financial liberalization 731, 744–5
financial linkages, and contagion 290
financial markets
contestability 330
development 42, 45
financial options valuation 187
financial ratios 787
financial sector, competition and access 749
financial sector size 758
Financial Services Action Plan see FSAP
Financial Services Agency (Japan) 922
Financial Services Authority (UK) see FSA
Financial Services Committee see FSC
Financial Services Compensation Scheme see FSCS
financial services, facilitating access to 745–9
Financial Services Modernization Act (1999) see Gramm-Leach-Bliley Act
Financial Services Oversight Council 634
financial shock policy 694
financial stability 834–41
Financial Stability Forum see FSF
Financial Stability Review (Bank of England) 198
financial structures 38–41, 734
Financial Supervisory Agency 922, 927
financial systems
architecture 41, 65
and corporate complexity 217–21
depth 758
effective legal systems 740
future policy 750
government role 738–49
and growth 730–2, 738
information infrastructure 739–40
legal infrastructure 739–40
macroeconomic environment 739
and market frictions 729–30
overview 37, 38
political environment 739
pro-cyclicality 654
role of 488–9
(p. 977) safety and soundness 217–21
size in developing countries 744
stability 73
underdeveloped 746
financial technology 10
financial underdevelopment 731–2
finland see European Union
FIRREA 207
First American Loan Performance 591
First Bank of the United States 238
First National Bank of Chicago 176
first-to-default-swap 104
Fiscal Investment and Loan Program see FILP
fiscal stimulus packages 8
Fischer, K. 51–2
Fitch Ratings 371, 584
fixed-asset lending 534–5
technology 537
Flannery, Mark J. 22, 377–400
flight to quality 109, 118, 242
Fobaproa 875
follow-your-customer strategy 518
Ford (Motor Co.) 614
foreclosure 3, 565, 571, 683
foreign bank issues 430–58, 440, 444–5, 516, 541, 744–5
foreign direct investment see FDI
foreign tax credit 213
Fortis 19, 84, 281, 302, 396, 512
forward contract 100, see also swaps
foundation IRB approach 372
fractional reserve system 282
fragility 60, 64, 72, 73–5, 321–6, 324, 328, 425
Frame, W. Scott 23–4, 486–501
France see European Union
franchise value 324
Francq Report 835
fraud 351, 398, 717
Freddie Mac 3, 4, 8, 126, 127, 135, 255, 395, 583, 587, 602, 688, 783, 803, 838
free banking payment system 236
Freixas, Xavier 21, 47, 278–311
Friedman, Milton 245, 344
FSA 20, 297, 301, 307, 348, 840
FSAP 831
FSC 835
FSCS 390
FSF 214, 621
FSLBX 396
FSLIC 344, 345
FSPCX 396
FSRBX 396
FTC 419
functional specialization 304
funded instruments 602–6
funding 67, 330
funding technologies 330
futures 100–1, 102
G7 countries 456, 621
G20 countries 8, 456
GAAP accounting 394
Gale, D. 42–3, 45, 46, 47, 48, 50, 53
GARCH models 657
Garn-St Germain Depository Institutions Act (1982) 155, 784
gatekeepers role 59
GATS 430–4
MFN (most-favoured nation) principle 432
objective 432
obligations 432–3
Gazprombank 855
GE Capital 851
generalized autoregressive conditional heteroskedasticity models see GARCH models
Genossenschaftliche Zentralbanken 819
geographic diversification 162–3, 796
Germany see European Union
Gerschenkron, A. 50, 171–91
Giannini, A.P. 121
Gini coefficient 737
Ginnie Mae 583
Glass, Senator Carter 706
Glass-Steagall Act (1933) 9, 70, 80, 95, 153, 154, 177, 178, 179–80, 190, 205, 779, 785, 875, 921
Global Financial Stability Report (IMF) 198
globalization 329–32, 335–6, 358, 508–25, 742
GM (General Motors) 614
GMAC 272
GNMA 127
goal autonomy 302
Goddard, John 807–41
gold exchange standard 251
gold standard 250, 251, 697, 700
Goldman Sachs 4, 96, 139, 199, 204, 395, 803, 950
Goldsmith, R. 50
Goodhart's law 391–2
Gordy, Michael B. 22, 357–74
governance 51–2, 398–9
Government Housing Loan Corporation 915, 931
Government National Mortgage Association see GNMA
Government of Singapore Investment Corporation 14
Grameen Bank 736
(p. 978) Gramm-Leach-Bliley Financial Services Modernization (GLB) Act (1999) 9, 16–17, 19, 27, 70, 95, 155, 166, 180, 185, 188, 215, 785, 798
Grant Street Bank 202
Great Depression 34, 241, 246, 254, 295, 387, 655, 658, 662, 693–707
Great Inflation (1970s) 246
Greece see European Union
Greenfield foreign operations 848
Greenspan, Alan 399
gridlock equilibrium 644
gross income 363
gross settlement 647
growth and manufacturing 50
Grupo Santander see Santander
GSE 127, 255, 395
guarantee schemes 7, 8, 76, 77, 80, 325, 326, 329, 339–54, 378, 385, 396, 678, 707, 803, 817, 819, 821, 823, 825, 840, 851, 950
Habib Bank 954
Halifax 822
Halifax Bank of Scotland see HBOS
Hannan, Timothy H. 22, 405–26
Hartmann, Philipp 25, 633–64
Hasan, Iftekhar 28, 844–66
hausbank system 51
HBOS 4, 7, 8, 822, 823, 840
hedge funds 11, 70, 242, 381, 396, 498
hedging 59, 67, 101, 150, 603, 802
Heitield, Erik A. 22, 357–74
Herindahl-Hirschman Indexes see HHI
Herring, Richard 19, 83, 195–226
HHI 15, 149, 199, 408, 409, 417, 419, 422, 424, 477
Hokkaido Takushoku Bank 927
Home Mortgage Disclosure Act 590
Hong Kong Shanghai Banking Corporation see HSBC
Honohan, Patrick 25, 673–90
Hoover, President Herbert 700
Hope Now Alliance 589
horizontal mergers 419–20
household
financial assets 39
financial needs 781
investments 551
HSBC 93, 134, 199, 817, 822, 830, 949, 950, 961
Hughes, Joseph P. 23, 463–82
human capital 172–3
Humphrey, David 26, 711–27
Hungarian National Bank 848
Hypothekbanken 819
HypoVereinsbank (HVB) 821, 824, 865
IBBEA 9, 12, 481
IBM 102
ICBC 14, 950, 956
Iceland 308, 865
ICICI 953
IFRS 82, 297
IKB Deutsche Industriebank 108, 134, 837
illiquidity see liquidity
IMF 46, 198, 214, 325, 675, 861
Imperial Bank of India 951
implicit contracting 62
incentive
conflicts 321–6
payments 398, 399
structures 337
incentives 321, 470
income distribution and poverty 735–8
index tranches 609
indirect balance sheets linkages 48
Indosuez 817
Industrial Bank of Japan 913
Industrial and Commercial Bank of China see ICBC
industrial development, and universal banking 172–5
industrial recession 46
Industrial Revolution (1st) 174
Industrial Revolution (2nd 1870–1914) 174
IndyMac 3, 139, 283, 350
inefficiency models 468, 469
inflation 678
inflation targeting 247–8, 253
information acquisition 61
ING 196, 206, 396, 824
initial public offering firms see IPOs
initial public offerings see IPOs
insolvency see bankruptcy
installment credit 551
institution-driven fragility 72
insurance 2
deposit insurance 21–2
reinsurance 72
Inter-American Developmenmt Bank 883
interbank
connections 47
connections and insolvency 47
credit lines 285
deposits 705
lending exposures 644
(p. 979) linkages 645
payment systems 646–7, 661, 719
wholesale funding 292
interest
laws 560
margins 788–9
rates 67, 254, 258, 558–9
deregulation 28
risk 651
intermediated finance 51, 113
intermediated loans 263
intermediation, and competition 63–5
Internal-Ratings-Based approach see IRB
international bank mergers 831
bank-specific factors 516–17
barriers and misuse of power 516
by continent 511
by year 510
and competitive structure 520
determinants of 513–18, 524
efficiency
barriers 514
comparisons 520–1
and competition effects 518–21
event studies 519–20
follow-your-customer strategy 518
foreign regulation/supervision risk 522–3
information costs 514
macroeconomic factors 517–18
and market power 521
policy issues 525
rarity of 509–13
regulations 515–16
risk effects 521–3
and Societas Europaea 523
structure 510
success linked to size and profitability 518
trade and finance links 518
see also risk
International Convergence of Capital Measurement and Capital Standards see Basel II
international financial conglomerates 195–226
asymmetic information 201–5
conflicts of interest 204–5
conglomeration trend 196
consolidation trend 196
corporate complexity 217–21
financial distress 205–10
limited liability 206
managers 202–4
mergers and acquisitions 210–12
regulatory constraints 214–16
regulatory models 214–15
regulatory systems to deal with 196
safeness and soundness 217–21
shareholders 201–4, 206
subsidiaries 202–10, 211–12, 215–16
tax frictions 212–14
International Financial Reporting Standards see IFRS
International Harvester 174
International Monetary Fund see IMF
International Swap Dealers Association see ISDA
Internet banking see banking
Interstate Banking and Branching Efficiency Act (1994) see IBBEA
intertemporal smoothing 43
investment
banking 2
grade market 109
opportunity measurement 479
relationship-specific 63
uncertainty 287
investor influence 379
IPOs 70, 179, 185, 852
IRB 22, 362, 364–8, 374
foundation IRB approach 372
risk weight formulas 368–73
Ireland see European Union
ISDA 219, 224
Israel 161, 179–80
IT 10, 58, 186, 187, 253, 487, 740, 781, 794
Italy see European Union
iTraxx 609, 610, 611
JA (Japan Agriculture) Bank 915
Japan 903–35
bank descriptive statistics 910–11
bank failures 926, 927
bank ownership restrictions 909
bank problems 269–70
bank profits and losses 934
bank system overview 904–22
bank types listed 917–19
bank-oriented financial system 903
banking crisis 926–30
banking importance 904–8
banking market segmentation 908–9
banking relationships 923
Big Bang reforms 9, 16–17
city banks 909, 921, 926
commercial 921–2
competition 916–20
cooperative banks 915
corporate assets and liabilities 906–7
corporate (vertical) keiretsu 923
(p. 980) credit cooperatives 913–14, 920, 926
deregulation 916
economy and banks 270
efficiency 920–1
financial assets 905, 908
financial crises 903, 926–30, 926–34
financial (horizontal) keiretsu 923
financial structure 38–41
foreign banks 914, 957
household assets and liabilities 906–7
importance of banking system 28–9, 269
intermediated finance 904–8
Internet banks 915
jusen real estate companies 926–7
lending and credit 270
liquidity constraints 924
liquidity provision 925
long-term credit banks 913, 921, 926
main bank system 51, 903, 923–6
market structure 916, 916–20
money trusts 913
mortgage loans outstanding 931
mutual banks 909
post-war growth 908
postal savings 914
private bank assets 912
private bank outstanding loans 912
public banks 914–15
recession 961
regional banks 909, 921, 926
regulation 916, 922
relationship banking 923–6
resolution banks 915
second regional banks 909, 921, 926
securitized products issued 932
segmentation 916
Shinkin banks 913–14, 916, 920, 926, 933
SME lending 909, 915, 923, 925–6
and subprime crisis 930–4
trust banks 913, 921
universal 921–2
Japan Bank for International Cooperation 915
Japan Finance Corporation for Small and Medium Enterprises 915
Japan Housing Finance Agency 931
Japan Post Bank 914–15, 922
Japan Real Estate Institute 930
J.P. Morgan see J.P.Morgan Chase
JP Morgan Chase 3, 4, 7, 76, 95, 96, 97, 135, 138, 174, 175, 177, 186, 199, 210, 212, 223, 390, 394, 397, 423, 634, 641, 796, 803, 838
Kane, Edward J. 21, 116, 315–37
Kaufman, George G. 21–2, 339–54
Kazakhstan see transition countries
KBC Group 824, 865
Kerviel, Jerome 19
key currency 250
Keynes, John Maynard 246
Klapper, Leora 29, 941–61
KMV risk models 152
Knickerbocker Trust 290
Knightian uncertainty 10, 642, 652
Konsolidacni Bank 852
Kreditanstalt fur Wiederaufbau (KfW) 837
Kreditgenossenschaften (Cooperative banks) 819
Kredytbank 865
Krozner, R.S. 177–8
Labour Banks 933
Lamfalussy report 78, 834
Landesbanken (Land banks) 818
large complex Financial institutions see LCFIs
large-value payment system see LVPS
Latin America 868–98
M&A 869, 870, 871, 872, 873, 884, 885, 886
Argentina 681, 687, 705, 706, 870, 871, 873, 875, 876, 877, 878, 880, 882, 883, 884, 885, 886, 887, 888, 889, 890, 891, 892, 893, 894, 895–6
ATMs 878
bad loans 882
bank performance 869, 870, 871, 872, 876, 877, 878, 884–7
bank portfolio risk 881
bank restructuring 872
banking consolidation 88, 869–73, 884–93
banking reforms 868–9, 873–4
banking sector
competition 888, 889
concentration 870–1, 872, 889, 892
conditions 888
heterogeneity and dollarization 882–4
banking spread 881
banks, state-owned 873, 874
Bolivia 881, 883
boom and bust cycles 882
Brazil 705, 870, 872, 873, 875, 876, 877, 878, 880, 882, 883, 884, 885, 887, 888, 889, 890, 893, 894, 895, 896–7
Chile 679, 871, 872, 873, 874, 875, 876, 877, 878, 880, 881, 884, 886, 888, 890, 892, 893
Colombia 878, 881, 884, 886, 889–90, 892
credit disruptions 891
(p. 981) credit growth 882
dollarization ratio 883
Ecuador 884
financial conglomerates 875
financial depth 878, 879
financial penetration 878–82
financial policy 873–84
foreign bank penetration 869, 870, 871, 872, 876, 877, 878, 884–7, 889–93
foreign direct investment (FDI) 870
growth rates 873
interest rates 880, 890, 892, 893
and international financial crisis 894–8
Internet banking 878
liberalization policy 874, 875–6, 880, 886, 889, 892, 893
macroeconomic factors 881–2, 893
market concentration and competition 887–90
market structure 884–7
markets 869–70
Mexico 659, 681, 870, 871, 873, 874, 875, 877, 878, 882, 883, 884, 885, 888, 889, 890, 891, 892, 893, 894, 895, 897–8
mortgage-backed securitization share of market 894
Paraguay 883
Peru 880, 882, 883, 892
privatization 872, 876, 878, 884–7, 891, 893
regulation 874, 878, 893
Tequila crisis 659, 677, 681, 876, 883, 885
Uruguay 876, 878, 880, 883
Venezuela 676, 882, 883, 884, 893
law of reflux 236–9, 245
lazy bank hypothesis 928
LBO market 186
LCBOs 657
LCFIs 196, 197–201
assets 200
Bank of England concern over 198
breakdown table 209
complexity and bankruptcy 221
corporate complexity and tax 214, 216, 217–21
dominance of 198
and global identity 211
growth 200
institutions included in 198, 199
international subsidiaries 215
need for simplification of 222
regulatory constraints 214–16
and structured credit market 208
leasing 534
Legge Amato Law (1990) 820
Lehman Brothers 4, 49, 136, 139, 198, 199, 222–6, 273, 292, 304, 395, 633, 634, 642, 654, 688, 803, 838, 933
Lehman Brothers Holdings International 223, 225
Lehman Brothers International 224
Lehnert, Andreas 565–95
lemons problem 125–6, 280
lender of last resort see LOLR
lending
against good collateral 310
anti-predatory regulation 748
booms 652, 661–3
buy and hold 133
consumer see consumer lending
criteria (5 Cs) 559–60
function 66–7
originate-to-distribute 133
portfolio to securitized 799
reckless 928
to less developed countries 653
truth-in-lending regulation 748
Lerner Index 407
leveraged buyout market see LBO market
Levine, R. 758–60
LGD parameters 372
liberalization, of economic policy 677
LIBOR 104, 105, 107, 122, 140, 273, 567, 568, 592
liquid demand deposits 72
liquid deposits 116–19
liquidation 301, 302
liquidity 19
aggregate 279, 287, 296, 310, 333
and asset prices 47
and Bank of England 240
Bank of England Special Liquidity Scheme 823
bank liquidity and GDP 123
and bank runs 119–20
and banking crises 44–5, 681–4
banks as providers of 60, 73–5
cash holding 121
and Central Bank 122
central bank policy 641
and central banks 252, 253
constraints 268, 271, 308, 924
as core function of banking 113
creation 72–82, 681
crises 234, 242, 289, 300, 651
(p. 982) of debts 235
definition 112–13
demand 137, 138
and deposits 114–15, 284–5
effective 301
emergency assistance 118, 280, 282, 286, 299
from loans 115–19
funding 113, 114–24, 649
funding demand and supply 136–9
funding trends 123–4
and global crunch 681
guarantees 59, 67
hoarding 106, 108, 137, 308, 634
illiquid assets 72, 282–3, 694
illiquid banks 297–301
illiquid loans 73, 116–19
illiquidity and solvency 74, 297–301
insurance 74, 651
in interbank market 288
and interest rates 837
liquid loans 116–19
and LOLR 287–9
management 113, 121–3, 310
market 113, 124–32, 649
market/funding interplay 649
potential 301
preferences 46
production 112–41
provision 925
and risk 60, 67, 68, 92, 93, 119–23, 129–30, 132–40, 278, 653, 662
savings mechanisms 723
of securities 262
and securitization 621
shocks 46, 47–8, 120, 279, 281, 282, 284, 287–9, 298, 644, 651, 695
and solvency shocks 297
sources of funding risk 119–21
spirals 296
stock market 50
supply to US banks 138
support 74–5, 303
support by Bank of England 687, 840
and systemic risk 721–3
underprovision of aggregate 333
in US Civil War 238
livre tournois 249
Lloyds TSB 4, 7, 8, 822, 823, 830, 840
Loan Pricing Corporation 132–3
loan securitization 783
loan-loss harmonization 838
loans
business originations collapse 132
certificates 289
certification 71
collateral principle 928
commitments 115
consumer see consumer loans
defaults 928
losses 476
modifications 572
non-performing 928
offer curve 556
quality control 475–6
sales and syndication 127–30
share of securitized 131
supply curve 557
supply shock 267, 268
local contagion 701–2
London Inter-Bank Offered Rate see LIBOR
Long-Term Capital Management 122, 258
Long-Term Credit Bank of Japan 913, 927
Long-Term Credit Banking Law (1952) 913
loss given default see LGD
Lowndes, William 250
LTCM 122, 242, 297, 656
LTV ratio 569
Lucas critique 391
Lucius Caecilius Jucundus 756–7, 771
Luxembourg see European Union
LVPS 719, 720, 722, 723, 724, 725, 726
M&A 2, 13–16, 24, 165, 210–12, 421–2, 479, 817, 823, 830, 833, 841, 869, 869–73, 884, 884–6, 885
and competitiveness 541
efficiency gains 422–3
European banks 808
horizontal mergers 419–20
pricing effects 412
Maastricht Treaty 243, 831
McAndrews, James 26, 711–27
McFadden Act (1927) 153, 779, 784, 785
Mcorp 207
macroeconomic fragility 297
macroeconomic perspectives in banking 25–6
Madhavpura Mercantile Cooperative Bank 295
Madof, Bernard 676
main banking system (Japan) 51, 903, 923–6
Maksimovic, V. 50
(p. 983) Malaysian property boom 677
managerial efficiency 476
managerial ownership 480
managerial utility maximization model 477
managerial utility model 478
managers
and shareholders 202–4
and takeovers 481
Manufacturers Hanover Corporation 211, 794
manufacturing and growth 50
Marchetti, Juan A. 23, 430–58
mark-to-market accounting 649
mark-to-market valuations 600, 614
mark-to-model valuations 600, 614
market
competition and profitability 766
concentration 887–90
contestability 330
definition 420–1
discipline 377–400, 738
aspects/elements of 380, 388
eicacy 396–400
ex ante 379, 390
ex post 379
information
in bank supervision 388–94
best uses for 392–4
closure rules 390–1
endogenous prices 391–2
limitations of 388–92
supervisory effects 388–90
monitoring 380–8
failure to predict finanancial crisis 398
power
concentration 764
and entrepreneur selection 765
and NEIO 409–12
and spatial location 763–4
segmentation, and competition 416
structure
and antitrust policy 426
barriers to entry 408
and HHI rule 421–2
value frontier 473, 474
values 399–400
markets
banks and industry dynamics in 764–70
geographical scope 411, 420, 763–4
integration with banks 58–83
structural estimation 412–18
Markowitz, Harry 94
Marquéis Ibáñez, David 25, 599–625
Martin, John 679
Martinez-Peria, Maria Soledad 29, 941–61
Martin's Bank 679
Mastercard 725, 726
maturities transformation 43, 282–4, 681
MBS 4, 602–6, 611, 783
mechanics liens 572
Mediobanca 820
mediums of exchange 115
mega-mergers 794
Mellon Bank 202
mercy norm 326–7
Merger Guidelines 419
mergers and acquisitions see M&A
Meridien BIAO 677
Merrill Lynch 4, 14, 93, 96, 139, 186, 199, 395, 397, 838
Merton models of risk 152, 368, 370
Merton, R.C. 152
Mester, Loretta J. 23, 463–82
metallic standards 249–51
Mexico see Latin America
mezzanine tranche 126
MFN 432
microcredit 746
microfinance 736, 746–7
Millennium bcp 825
Mitchell, Charles E. 176
Mitsubishi UFJ 933
Mitsubishi-Tokyo UFJ 909, 932, 933
Mitsui-Sumimoto 909, 933
Mizuho Bank 909, 913, 932, 933
Mizuho Corporate Bank 909, 913, 916, 932
Mizuho Trust Bank 932
MMDAs 784
MMMFs 272–3, 781, 784
Mojon, Benoit 20, 233–55
Molyneux, Philip 807–41
monetary aggregates 251
monetary policy 20–1, 243–53, 273
bank lending channel 261–3
and bank loan supply 258, 263–7, 268, 271
and bank risk 653
broad credit channel 260
conduct of 253
and credit channel 257
failure 928
instruments 251–2
interest rate, or money, view 259–60
and LOLR 307–8
and payments systems 717, 727
and regulation 280, 281
and risk 248, 663
and securitization 622–3
transmission by banks 257–75
transmission mechanism 260
(p. 984) monetary systems, fiat 251–3, 682
money
creation instruments 251
laundering 10
market deposit accounts see MMDAs
market mutual funds see MMMFs
supply
contractions of 695
and convertability 246
and price adjustment 261
theory 245
transmitters 725
trusts 913
monitoring 41, 70, 349, 622
monoliners 72
Monte Carlo exercise 614
Monte Carlo simulations 661
Moody's 109, 307, 370, 382, 584
Moody's Magazine 702
moral hazard 653, 654
Morgan, J.P. 174, see also JP Morgan Chase
Morgan Stanley 4, 14, 139, 177, 199, 395, 803, 933
Morrison, Alan D. 19, 171–91
mortgage backed securities see credit risk transfer
Mortgage Bankers Association 581
Mortgage Insurance Corporation of America 371
mortgage-backed securities see MBS
mortgages 2
amortization 567, 577
appraisals 569
ARM (adjustable rate) 102, 108, 567, 575, 592
asset duration 581
backend ratios 570
balloon payment 568
borrower solvency default 579
caps 567, 578
CLTV ratios 491–2
collateral seizure 571
collateralized mortgage obligation see CMO
competing hazards model 578
conduit sales 333
conforming loan limit 583
contract features 573–8
convexity 582
credit extension decision 568–71
credit risk and house prices 586
debt demand 107–8
default probability (PD) 586, 593
defaults 3, 499, 512, 572, 578, 579, 586, 802
definition 565
double trigger default 579
DTI ratios 570
exposure at default (EAD) 586
FICO score 570, 592, 593
finance companies 778
foreclosure 3, 565, 571
FRM (fixed rate) 567, 574, 575, 582–3, 592
FRM (fixed-rate) amortized 489–90
funding 566
GSEs 587
high-risk 680
house auctioning 569
house prices/mortgage debt growth 574
household decision making 573–80, 595
hybrid 567, 593
hypothetical examples 575, 576
insurance 570
interest rate protection 574
interest tax relief 574
Japanese 930–2
jumbo 273, 623
lending 24–5, 783
lending in transition countries 861
loan securitization 783
low-doc loans 570
LTV ratio 569–70, 571, 573, 592
market turmoil 2006–2008 587–94
maturity 568
MBS (mortgage-backed securities) 583–5, 589
mechanics liens 572
modifications 572
mono-line strategies 800
Mortgage Bankers Association refinancing index 581
negative amortization 567
negative carry 582
negative convexity 582
negative equity 492
no-doc loans 570
non-jumbo 127
note rate 567, 578
origination 566
outstanding 588
payments 566–8
payments example 569
PDV (present discounted value) 575
piggyback 570, 592
prepayment penalties 577
rate/term inancing 569
recast 567
refinancing/remortgaging 577, 578–80, 581
regulation 585–7
REMICs 213
residential 11, 107, 131, 565–95, 829, 931
residential mortgage debt holders 585
ruthless default model 580
securitization 126, 166, 605, 783, 804, see also securitization
subprime default/delinquency rates 586, 591
teaser rate 568, 592
underwriting 568
US 2, 3
US subsidization 335
valuation 569
valuing 580–3
variable maturity 567
variable rate 567
most-favoured nation principle (MFN) 432
multi-stage budgeting approach 413
multilateral clearing systems 236–9
multiple bank lending 52–3
multiple domestic regulators 303
multiple equilibria 694
multiple international regulators 308–9
multiple money centers 293
mutual funds 44, 272–3, 555, 778, 781
mutual insurance 290
Nafin 748
NAFTA 874
NASDAQ 166, 382
Nat West 822
National Association of Securities Dealers Automated Quotations see NASDAQ
National Automated Clearing House Association 496
National Bank Act (1863) 238
National Bank of Greece 825
National Bank of Yugoslavia (NBY) 846
National Banking Act (1863) 769
National City Bank 176, 177
National City Company 177, 178
National Life Finance Corporation 915
National Treatment 435
National Westminster (Nat West) 822
nationalistic norm 327
nationalization 326
Nationally Recognized Statistical Rating Organization see NRSRO
Nations Bank 188
Nationwide 823
NEIO and market power 409–12
net negative positions 239
net operating revenue 147
net regulatory beneit see NRB
net settlement 647
Netherlands see European Union
New Basel Capital Accord see Basel II
New Century Financial 107, 800
New Deal legislation 176
New Empirical Industrial Organization see NEIO
New York Clearing House Association 290
Electronic Payments Network 496
New York Fed 242
New York State safety fund 340
New York Stock Exchange (NYSE) 382
New Zealand, and foreign banking 16
9/11 terrorist events 107, 122, 241, 282, 288, 289
Nippon Credit Bank 913, 927
Nolle, Daniel E. 23, 430–58
Nomura 225
Nomura Securities 933
non-escalation norm 327
non-installment credit 551
non-interest income 789, 798–800
non-performing loans (NPL) 898
non-structural and structural approachs to bank efficiency 465–82
Nordea 523, 823
Norinchukin Bank 932
Northern Rock 3, 43, 92, 108, 120, 283, 302, 303, 306, 307, 324, 326, 347–8, 351, 383, 390, 682, 687, 822, 823, 840
Norway see European Union
NRB 319
NRSRO classification 72
NYSE 382
obligor ratings 371–2
observed price-cost margin 407
OCC 20, 215, 238, 308, 658, 778–9, 792, 798
OʼConnor 188
OECD 10, 359, 770
off-balance sheet banking 67, 637
Office of the Comptroller of Currency see OCC
Offshore Financial Centres 214
Ohio fund failure 340, 344, 347
OIS 273
OMO 252, 261, 288, 289, 300, 309
on-balance sheet banking 67, 95
online banking see banking, Internet
open-market operations see OMO
open-system prepaid cards 494–5
operating environment 464
options contract 101
Organization for Economic Cooperation and Development see OECD
organizational forms 500
(p. 986) originate-to-distribute lending 133
origination 67
OTS 4, 350
out-of-market borrowing 537
overnight index swap see OIS
ownership structure of banks 770–1
Padoa-Schioppa, Tommaso 74
pan-European banking groups 834–6
panic and contagion 681–4
panics, and CBCs 289
Panzar-Rosse approach 410–11
Paraguay see Latin America
Parigi, Bruno M. 21, 47, 278–311
Paulson, Treasury Secretary Henry (Hank) 3, 4, 395
payment rules 235
payment theory 712–13
payments systems 711–27
ATM networks 415, 423, 492, 495, 713, 716, 718, 782, 794, 798, 829, 878
automated clearing houses (ACH) 495–6, 711, 782
card privacy issues 726
centralization 234–43
checks (cheques) 711, 713, 714, 715, 780, 782
CHIPS 292, 647, 661, 712
CLS Bank 648, 722, 723–4
credit cards 551, 711, 713, 714, 718, 725–6
data availability 717–18
debit cards 24, 493, 713, 714, 718, 725–6
Depository Trust and Clearing Corporation 724
direct and indirect pricing 716–17
electronic 713, 780
Electronic Benefit Transfer 719
ETAs 748
Euro1 712
and fraud 717
giro/ACH 711, 713, 714, 715
interbank payments 719
and Internet 715, 780, 782
liquidity savings mechanisms 723
LVPS 719, 720, 722, 723, 724, 725, 726
and monetary policy 717, 727
money transmitters 725
non-banks payment activities 725–6
payment costs 715–16
payment instrument types 711
payment structures 713–15
PIN numbers 717
policy issues 718–19, 725
production structure 711–12
retail payments 26, 712–19
RTGS 646, 647, 720–1, 721, 722, 724
Single Euro Payments Area policy 716, 718
stored-value cards 726
SWIFT 712
systemic risk and liquidity 648–50, 721–3
wholesale payments 719–25
wire transfers 711, 720, 723
see also banking; banks
payroll cards 495
PCA 350, 351, 352, 801, 836
PE 11, 51, 59, 69–70
Pecora committee 176, 177
Pecora, Ferdinand 176
Peek, Joe 20, 257–75
Penn Central 241, 258
Penn Square Bank 656
Pension Benefit Guaranty Corp. 224
People's Bank of China 251
Pereire Brothers 235
perfect competition 410
perfect contestability 330
performance and technology 465–76
Peru see Latin America
Peydro, Jose; Luis 25, 633–64
Philadelphia National Bank 405
Philippines see Asian developing nations
PIN numbers 717
Pinochet, General Augusto 874
Pittsburg Plate Glass 174
PKO (zloty savings bank) 853
Ponzi finance 652, 676
portfolio
allocation 40, 42
as asymptotically fine-grained 365–6, 367
diversification 620
holdings connections 48
lending 799
return volatility 160–1
risk 365–6, 370
theory 94, 150
unexpected loss 364
VAR 365
Portfolio Manager model 370–1
Portugal see European Union
Postal Savings Bank 826
Postal Services Agency (Japan) 914
potential liquidity 301
potential performance 468
pound sterling 249–50
pre-contract information 61
precautionary savings 254
(p. 987) Prefectural Banking Federations of Agricultural Cooperatives 933
Prefectural Banking Federations of Fishery Cooperatives 933
prepaid cards 494–5
price rationing 651
price-concentration studies 409
Primary Dealer Credit Facility 135, 224
Primary Reserve Fund 136
Prince, Chuck 679
prioritized bank debt 66
private equity (PE) 11, 51, 59, 69–70
private LOLR 289–91
privatization 28, 743, 820
product market diversification 160
production processes 495–500
profit maximizing 471, 765
Prompt Correction Action framework (proposed) 836
prompt corrective action see PCA
proprietary trading 59
proprietary trading desks 381
Pujo Committee (1912) 176
Q ratio 23, 387, 407, 472, 479–80
Qatar Investment Authority 14
QSPV 210
qualifying SPV see QSPV
quantity rationing 651
quantity theory of money 245
R&D 50
Rabobank 824
Raiffeisen Zentralbank Osterreich 825
Rajan, R.G. 177–8, 187
RAROC 95
rate of return 407
rate/term financing 569
rating agencies see CRAs
rating triggers 72
Rational Expectation School 246
RBCR 359, 361
RBI 951, 952, 953
RBS 7, 8, 199, 688, 822, 823, 824, 830, 950
real estate
investment trusts (REITS) 11, 211
mortgage investment conduits (REMICs) 213
prices 3
transactions 561
Real Plan (1994) 876
real-time gross settlement see RTGS
Reconstruction Finance Corporation (RFC) 700, 701
regulated investment companies (RICs) 213
regulation 301
accountability 329, 336
authorities 20, 21, 60
and bank insolvency 281, 300, 357–74, 791
and banks' risk management 365
benefits 319
bond market deregulation 269
by clearing houses 705
capital regulation 266, 595
in China 950
conflicts 322
constraints 214–16, 217, 378
consumer lending 560–2
coordination 77–8
Core Principles for Effective Banking Supervision 10, 888
cost minimisation 302
country-specific in EU 833
cross-border 76–9, 217–21
decentralization 301, 310
and deposit insurance 81
deregulation 19, 23, 58, 59, 153–5, 269, 331, 380, 760–1, 768, 784–5, 807, 916, 952, 955, 956
commercial bank expansion 798
major events 154
and new business 766–7
and state income growth 761
in developing countries 742
dynamic 689–90
and efficiency 81, 742–3
elimination of 801
enforcement 266–7, 317, 320
and entrepreneurship 766
ethical perspective 315–37
exchange rate 678
exploitive 336
failings of 3
failures 741
financial deregulation 331
focus on individual bodies 81
government role 740–1, 747, 748
Hegelian model 332
implications 75–6
and incentives 690
inducing crises 318, 326–9
information sharing by regulators 306
interest 560
and international financial conglomerates 196–7
international jurisdiction 217, 281, 319, 335, 358, 522
in Japan 922
Lamfalussy report 78
in Latin America 874–5, 878
legislation 153, 154
and limited Financial access 747
and liquidity 72–82, 300
loopholes 317, 323
and market discipline 79–80
market power 319
and monetary policy 280, 281
mortgages 585–7
multiple domestic regulators 303
multiple international regulators 308–9
net regulatory burdens 337
non-discriminatory 336
objectivity 301
powers allocated 305
private empowerment in 741
reform 76–83
regulators' attributes 320–1
regulatory competition 320, 334–7
and crises 334–7
regulatory distortion 364
regulatory subsidies 321–6
responsibilities 349–52
restrictions 302
role re-examination 273
securities 215
seen as service 319
seen as tax on bank income 318
strategic elements 323
structures 82, 282, 318–21
subsidies 328, 335
and supervision 315–37
in transition countries 847
transparency 560, 561
US interstate banking 780
US restrictive government regulations 779–81
variations among 78, 335
voluntary acceptance of 319
see also Basel; supervision
Regulation Q 780, 781, 784, 799
regulatory culture 322–3
REITs 11, 211
relationship banking 52–4, 61, 62, 66
banking strategy 786–7
lending 62
relative market hypothesis 409
REMICs 213
renegotiation 53–4, 63
repo markets 224, 279, 284, 287, 306
repo transactions 650
repurchase agreements 92
reputation 93, 128, 186
Reserve Bank of Australia 719
Reserve Bank of India (RBI) 951, 952, 953
Reserve Capital 49
Reserve Primary Fund 224
reserve requirements 251–2
residential-mortgage-backed securities (RMBS) 107
Resolution and Collection Bank 927
Resona Bank 909, 932
restrictive government regulations 779–81
resurrection risk taking 706
retail banking 2
retail payments 26, 712–19
return
on assets (ROA) 96, 800–1
efficiency 471–2
on equity (ROE) 96, 801
inefficiency 471–2
reverse factoring 748
Review of Network Economics 713
Revised Framework 362, 367
revolvers 115
revolving credit 551
RFC 700, 701
Rhineland Funding 837
Rhode Island fund failure 340
RICs 213
Riegle-Neal Interstate Banking and Branching Efficiency Act (1994) 155, 785
Rijecka Banka 865
risk
bankruptcy 75, 151
beta measurement (β) 94
borrowers as bank stakeholders 152
and CDS tranch value 610
and competition 768
credit risk and house prices 586
CreditMetrics 98
default 559–60
default risk premiums 387
and diversification 68, 157–65
and E-money 253–4
excessive risk taking 673–4
FDIC formula for assessing 393
and geographical diversification 521
high-risk mortgages 680
insolvency 75, 151
internal risk management 82
intertemporal smoothing by banks 43
KMV models 152
and liquidity 60, 67, 68, 92, 93, 119–23, 129–30, 132–40, 278, 653, 662
management 18, 99–106, 150–1, 499–500
(p. 989) and securitization 619
techniques 294
managers' aversion to 151–2, 202
market
effects on banks 75–6
investors 400
liquidity 129–30
marketability of 151
measurement 94–9
Merton models 152, 368, 370
and monetary policy 248, 663
non-diversifiable 42
operational risk exposure 98–9
portfolio 365–6, 370
and portfolio diversification 620
processing 67
RAROC 95
re-selling 93
refusal by banks 93
and return 800–4
and return in equity markets 163
and return framework 155, 156
RiskMetrics 95, 96, 97
(Rule 415 model) 97
and securitization 623–4
sensitivity 364
sharing 42–3
sources of 92–3
subsidiaries 202
systemic see systemic risk
to households 42
underwriter 130
VAR measurement see VAR
weight 359
weight formulas 368–73
weighted assets see RWA
risk-adjusted returns 12, 95
risk-based capital ratio (RBCR) 359, 361
RMBS 107
ROA 96, 800–1
Rochet, J. 47
ROE 96, 801
rogue traders 109, 676
Rokinren Bank 933
Roosevelt, President Franklin D. 700, 706
Rosengren, Eric S. 20, 257–75
Rothschilds 235
Royal Bank of Scotland see RBS
RTGS 646, 647, 720–1, 721, 722, 724
Russia
in 19th century 173
crises 242, 659
Soviet see Soviet Union
Russia (post-Soviet) see transition countries
RWA 361
external rating 362
internal rating 362
IRB approach 362
Revised Framework 362
Salomon Brothers 96, 102–3
Sanpaolo IMI 817, 820
Santander 4, 512, 821, 822, 823, 824, 840
Saunders, Anthony 18, 90–110
Sawangngoenyuang, Wanvimol 23, 430–58
Sberbank 854, 855
SBI 951, 952
scale economies 469, 793–4
Scandinavian banking 823–4
Scheicher, Martin 25, 599–625
Schumer, Senator Charles 3
Schumpeter, Joseph 757, 761
Schwartz, Anna 344
scope diseconomies 470
scope economies 469
Scottish Widows 822
SCP paradigm in banking 407–9
Second Bank Directive 770
Second Bank of the United States 238
secondary trading 129
Section 20 subsidiaries see BHCs
securities
agency securities 583
brokerage fees 799–800
liquidity 262
low quality 177–8
MBS (mortgage-backed securities) 583–5
private label 583, 587
regulation 215
Securities and Exchange Law (1948) 922
securitization 2, 10–11, 12, 25, 59, 60, 65–72, 91, 108, 109, 113, 124–7, 130, 131–2, 166, 189, 208, 210, 272, 273, 324, 329–32, 330, 333, 359, 399, 497–9, 584, 599–625, 680–1, 747, 783, 804, 808, 829, 837
activity table 615
and bank monitoring 622
banks' change of business model 619–20
benefits of 621
by geographical area 617
credit risk transfer see credit risk transfer
and credit supply 622
(p. 990) definition 599, 602
and the euro 616
and financial stability 620–2
and general risk management 619
Growth of 600–1
impact
on credit 622–3
monetary policy transmission mechanism 622–3
risk taking 623–4
implications of 619–24
issuance table 618
issues to be strengthened 621–2
and liquidity 621, 622
loan 783
and loan supply 622
motivations for 618–19
process 602
public market for 617
synthetic 619
true-sale 619
volumes 615–18
securitized lending 782–3, 799
securitized loans share 131
Security Investor Protection Corporation see SIPC
SEIR 218, 347
self-fulfilling systemic events 638–40
semi-public institutions 291
senior notes 126
sequential service 682
sequential service constraint 118, 694
serfdom 172
servicing 67
shadow banking sector 189
Shadow Financial Regulatory Committee 332
shareholders 201–4
shareholders' payoffs 384
Sharpe, Bill 94
Sherman Antitrust Act (1890) 419
Shinkin Central Bank 933
Shinkumi Federation Bank 933
Shinsei Bank 913, 932
Shoko Chukin Bank 915
silent run see runs
single banking passports 830
Single Euro Payments Area policy 716
Single European Act (1986) 831
Single Market Programme (EU) 9
SIPC 225
SIV-lites 2
small business credit scoring 496–7, 535
Small Business Finance Scheme 840
small business lending 15, 24, 64, 531–45
and bank consolidation 538–41
bank funding 531
credit availability 532, 538, 539
credit scoring 537
fixed-asset lending 534–5, 537
hard-information 534, 542–5
and lending distances 542–3, 544–5
and non-depository institutions 543
research 532, 535, 538–41
single/multi-market banks 540–1
small business credit scoring 496–7, 535
soft-information 534, 535, 536, 540
and technology 532–8, 542, 545
small and medium enterprise see SME
SME borrowers 371
SME loans 909, 915
SOCBs 847, 848, 850, 851
Societas Europaea 523
Société Générale 109, 199, 676, 817, 824
soft-budget constraints 52
solvency
and bank runs 119
contagion 291–7
and recapitalization 298
shocks 279, 298
see also bankruptcy
South Eastern Europe see transition countries
South Sea Bubble 679
Soviet Union 845, 847, 852
Spain see European Union
Sparkassen (savings banks) 818
special purpose entity see SPEs
special purpose vehicles see SPVs
speculative inance 652
SPEs 208, 213
SPVs 91, 125, 126, 208, 209–10, 284, 602–3, 606
see also QSPV
SSNIP 420
stages in banking crisis 327
Standard & Poor 307, 382, 584
Standard Bank (South Africa)