European Banks after the Global Financial Crisis: Peak Accumulated Losses, Twin Crises and Business Models

32 Pages Posted: 30 Jul 2018

See all articles by Jan Kakes

Jan Kakes

De Nederlandsche Bank - Monetary and Economic Policy Department

Leo de Haan

De Nederlandsche Bank

Date Written: July 3, 2018

Abstract

This paper takes stock of European banks’ accumulated losses since 2007 and relates these to bank characteristics. In line with previous studies, we find that large, market-oriented banks were particularly hit by the 2007-2009 global financial crisis whereas smaller, retail-oriented banks weathered these years relatively well. In subsequent years, however, the picture reversed and retail-oriented banks were most affected. Over the entire period, medium-sized banks suffered most losses and often needed state aid. This suggests that measures to contain systemic risk, such as capital surcharges and bail-in requirements, are as relevant for these institutions as they are for the largest banks.

Keywords: Bank profitability, Business model, Financial crisis

JEL Classification: G01, G21

Suggested Citation

Kakes, Jan and de Haan, Leo, European Banks after the Global Financial Crisis: Peak Accumulated Losses, Twin Crises and Business Models (July 3, 2018). De Nederlandsche Bank Working Paper No. 600. Available at SSRN: https://ssrn.com/abstract=3211303 or http://dx.doi.org/10.2139/ssrn.3211303

Jan Kakes (Contact Author)

De Nederlandsche Bank - Monetary and Economic Policy Department ( email )

Westeinde 1
1017 ZN Amsterdam
Netherlands

Leo de Haan

De Nederlandsche Bank ( email )

P.O. Box 98
1000 AB Amsterdam
Netherlands
+31 20 5243539 (Phone)
+31 20 5242514 (Fax)

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