Banking supervisory architecture and sovereign risk

This paper investigates whether the design of the banking supervisory architecture impacts sovereign risk. Exploiting the implementation of the Single Supervisory Mechanism (SSM) in Europe, we provide evidence that sovereign risk – measured by sovereign ratings – is lower after the largest banks shi...

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Detalles Bibliográficos
Autores: Cuadros-Solas, Pedro J., Salvador, Carlos, Suárez Suárez, Nuria
Tipo de recurso: artículo
Fecha de publicación:2024
País:España
Institución:Universidad Autónoma de Madrid
Repositorio:Biblos-e Archivo. Repositorio Institucional de la UAM
Idioma:inglés
OAI Identifier:oai:repositorio.uam.es:10486/721042
Acceso en línea:http://hdl.handle.net/10486/721042
https://dx.doi.org/10.1016/j.jfs.2024.101365
Access Level:acceso abierto
Palabra clave:Banking supervision
Bank stability
Sovereign risk
Economía
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spelling Banking supervisory architecture and sovereign riskCuadros-Solas, Pedro J.Salvador, CarlosSuárez Suárez, NuriaBanking supervisionBank stabilitySovereign riskEconomíaThis paper investigates whether the design of the banking supervisory architecture impacts sovereign risk. Exploiting the implementation of the Single Supervisory Mechanism (SSM) in Europe, we provide evidence that sovereign risk – measured by sovereign ratings – is lower after the largest banks shift from national to supranational supervision. The impact of SSM implementation is shaped by the characteristics of the banking sector and the country’s institutional setting. Using specific bank-level data, we also find that increased bank resilience (banking stability) and reduced volatility of bank credit (credit stability) in the economy underlie the relationship between banking supervision and sovereign risk. The results hold when considering CDS spreads as an alternative measure of sovereign risk and after conducting several robustness testsAll the authors acknowledge financial support from the Regional Government of Madrid– UAM Research Project for Young Researchers (SI3-PJI-2021–00276). Pedro J. CuadrosSolas acknowledges financial support from the Spanish Ministry of Science and Innovation, Project PID2021-128994NA-I00 and TED2021132896A-100. N. Su´ arez acknowledges financial support from the Spanish Ministry of Economy and Competitiveness, Projects PID2020–118064 GB-I00 and PID2023- 149010NB-I00, and the Professorship Excellence Program through the multi-year agreement signed by the regional government of Madrid and the Universidad Aut´ onoma de Madrid (Line #3)ElsevierDepartamento de Financiación e Investigación ComercialFacultad de Ciencias Económicas y Empresariales20242024-12-13research articlehttp://purl.org/coar/resource_type/c_2df8fbb1AMhttp://purl.org/coar/version/c_ab4af688f83e57aainfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10486/721042https://dx.doi.org/10.1016/j.jfs.2024.101365reponame:Biblos-e Archivo. Repositorio Institucional de la UAMinstname:Universidad Autónoma de MadridInglésengopen accesshttp://purl.org/coar/access_right/c_abf2Attribution-NonCommercial-NoDerivatives 4.0 Internationalhttp://creativecommons.org/licenses/by-nc-nd/4.0/info:eu-repo/semantics/openAccessoai:repositorio.uam.es:10486/7210422026-06-23T12:46:27Z
dc.title.none.fl_str_mv Banking supervisory architecture and sovereign risk
title Banking supervisory architecture and sovereign risk
spellingShingle Banking supervisory architecture and sovereign risk
Cuadros-Solas, Pedro J.
Banking supervision
Bank stability
Sovereign risk
Economía
title_short Banking supervisory architecture and sovereign risk
title_full Banking supervisory architecture and sovereign risk
title_fullStr Banking supervisory architecture and sovereign risk
title_full_unstemmed Banking supervisory architecture and sovereign risk
title_sort Banking supervisory architecture and sovereign risk
dc.creator.none.fl_str_mv Cuadros-Solas, Pedro J.
Salvador, Carlos
Suárez Suárez, Nuria
author Cuadros-Solas, Pedro J.
author_facet Cuadros-Solas, Pedro J.
Salvador, Carlos
Suárez Suárez, Nuria
author_role author
author2 Salvador, Carlos
Suárez Suárez, Nuria
author2_role author
author
dc.contributor.none.fl_str_mv Departamento de Financiación e Investigación Comercial
Facultad de Ciencias Económicas y Empresariales
dc.subject.none.fl_str_mv Banking supervision
Bank stability
Sovereign risk
Economía
topic Banking supervision
Bank stability
Sovereign risk
Economía
description This paper investigates whether the design of the banking supervisory architecture impacts sovereign risk. Exploiting the implementation of the Single Supervisory Mechanism (SSM) in Europe, we provide evidence that sovereign risk – measured by sovereign ratings – is lower after the largest banks shift from national to supranational supervision. The impact of SSM implementation is shaped by the characteristics of the banking sector and the country’s institutional setting. Using specific bank-level data, we also find that increased bank resilience (banking stability) and reduced volatility of bank credit (credit stability) in the economy underlie the relationship between banking supervision and sovereign risk. The results hold when considering CDS spreads as an alternative measure of sovereign risk and after conducting several robustness tests
publishDate 2024
dc.date.none.fl_str_mv 2024
2024-12-13
dc.type.none.fl_str_mv research article
http://purl.org/coar/resource_type/c_2df8fbb1
AM
http://purl.org/coar/version/c_ab4af688f83e57aa
dc.type.openaire.fl_str_mv info:eu-repo/semantics/article
format article
dc.identifier.none.fl_str_mv http://hdl.handle.net/10486/721042
https://dx.doi.org/10.1016/j.jfs.2024.101365
url http://hdl.handle.net/10486/721042
https://dx.doi.org/10.1016/j.jfs.2024.101365
dc.language.none.fl_str_mv Inglés
eng
language_invalid_str_mv Inglés
language eng
dc.rights.none.fl_str_mv open access
http://purl.org/coar/access_right/c_abf2
Attribution-NonCommercial-NoDerivatives 4.0 International
http://creativecommons.org/licenses/by-nc-nd/4.0/
dc.rights.openaire.fl_str_mv info:eu-repo/semantics/openAccess
rights_invalid_str_mv open access
http://purl.org/coar/access_right/c_abf2
Attribution-NonCommercial-NoDerivatives 4.0 International
http://creativecommons.org/licenses/by-nc-nd/4.0/
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Elsevier
publisher.none.fl_str_mv Elsevier
dc.source.none.fl_str_mv reponame:Biblos-e Archivo. Repositorio Institucional de la UAM
instname:Universidad Autónoma de Madrid
instname_str Universidad Autónoma de Madrid
reponame_str Biblos-e Archivo. Repositorio Institucional de la UAM
collection Biblos-e Archivo. Repositorio Institucional de la UAM
repository.name.fl_str_mv
repository.mail.fl_str_mv
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