Non-Core Banking, Performance, and Risk
Series
School of Finance Working Paper Sieres
Type
working paper
Date Issued
2014-10
Author(s)
Abstract
One of the most dramatic trends in banking since 2000 has been the secular movement away from core banking and interest generating activities towards enhanced reliance on non-interest-generating activities that focus largely on fees and trading profits. This has changed the banking model from traditional asset formation, such as deposit taking and lending, towards a model built on fees and non-banking activities. In this paper, we draw on a dataset covering over 10,000 US banks and 542 bank holding companies and find no evidence that this shift in the bank business model harms bank profitability and / or increases failure rates, idiosyncratic risk, or systemic risk.
Language
English
Keywords
Core-Banking Activity
Non-traditional Income
Bank Size
Financial Crises
Systemic Risk
HSG Classification
contribution to scientific community
Refereed
No
Publisher
SoF - HSG
Publisher place
St. Gallen
Number
2014/17
Subject(s)
Division(s)
Eprints ID
236531
File(s)![Thumbnail Image]()
Name
14_17_Schmid et al_Non-Core Banking, Performance, and Risk.pdf
Size
2.21 MB
Format
Adobe PDF
Checksum (MD5)
63bc9d873130bf5a62de3d4c90517cca