Dear colleagues,

we are pleased to invite you to another Seminar in Empirical Economics taking place at the library of the Institute of Economic Research of the Slovak Academy of Sciences (IER SAS), on: April 10, 2024 (Wednesday) at 10:30 – 12:00

This time, the invitation has been accepted by: Michael Sigmund (Oesterreichische Nationalbank, Austria), delivering a presentation titled: “Restoring Confidence in Systemically Important Banks: SSM Effects on Bank Performance”

Abstract: Under the Single Supervisory Mechanism (SSM), introduced in 2014, the European Central Bank directly supervises over 110 major euro area banks. We examine the impact of SSM on profitability and risk-taking of these banks. We find positive direct SSM effects on return on assets and return on risk-weighted assets, indicating increased confidence in banks’ soundness and risk management. The SSM also positively influences income and lending growth while reducing risk-taking. Overall, our results suggest that direct supervision by the ECB increased the stability of the European banking sector, offsetting higher supervisory costs with benefits in terms of profitability and risk taking.

The seminar will be organized in a hybrid form – for those interested, the speaker and a couple of discussants will be present in the library of IER SAS.