PALGRAVE MACMILLAN STUDIES IN BANKING AND FINANCIAL INSTITUTIONS SERIES EDITOR: PHILIP MOLYNEUX The Business of Banking Models, Risk and Regulation Edited by Giusy Chesini, Elisa Giaretta and Andrea Paltrinieri Palgrave Macmillan Studies in Banking and Financial Institutions Series editor Philip Molyneux University of Sharjah Sharjah, UAE The Palgrave Macmillan Studies in Banking and Financial Institutions series is international in orientation and includes studies of banking systems in particular countries or regions as well as contemporary themes such as Islamic Banking, Financial Exclusion, Mergers and Acquisitions, Risk Management, and IT in Banking. The books focus on research and practice and include up to date and innovative studies that cover issues which impact banking systems globally. More information about this series at http://www.springer.com/series/14678 Giusy Chesini Elisa Giaretta (cid:129) Andrea Paltrinieri Editors The Business of Banking Models, Risk and Regulation Editors GiusyChesini AndreaPaltrinieri Department ofEconomics Department ofEconomic and Statistical University ofVerona Sciences Verona, Italy University ofUdine Udine, Italy Elisa Giaretta Department ofBusinessAdministration University ofVerona Verona, Italy Palgrave Macmillan Studiesin Banking andFinancial Institutions ISBN978-3-319-54893-7 ISBN978-3-319-54894-4 (eBook) DOI10.1007/978-3-319-54894-4 LibraryofCongressControlNumber:2017943467 ©TheEditor(s)(ifapplicable)andTheAuthor(s)2017 Thisworkissubjecttocopyright.AllrightsaresolelyandexclusivelylicensedbythePublisher,whether thewholeorpartofthematerialisconcerned,specificallytherightsoftranslation,reprinting,reuseof illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmissionorinformationstorageandretrieval,electronicadaptation,computersoftware,orbysimilar ordissimilarmethodologynowknownorhereafterdeveloped. Theuseofgeneraldescriptivenames,registerednames,trademarks,servicemarks,etc.inthispublication doesnotimply,evenintheabsenceofaspecificstatement,thatsuchnamesareexemptfromtherelevant protectivelawsandregulationsandthereforefreeforgeneraluse. Thepublisher,theauthorsand theeditorsaresafe toassumethattheadvice andinformationinthis book are believed to be true and accurate at the date of publication. Neither the publisher nor the authorsortheeditorsgiveawarranty,expressorimplied,withrespecttothematerialcontainedhereinor for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictionalclaimsinpublishedmapsandinstitutionalaffiliations. Coverimage:©MaciejBledowski/AlamyStockPhoto Coverdesign:TomHowey Printedonacid-freepaper ThisPalgraveMacmillanimprintispublishedbySpringerNature TheregisteredcompanyisSpringerInternationalPublishingAG Theregisteredcompanyaddressis:Gewerbestrasse11,6330Cham,Switzerland Acknowledgements First and foremost, we would like to thank all our contributors, whose biographies are provided in this volume, without which the edited book would not have been possible. Also, we want to express our gratitude to all participants of the 2016 — Wolpertinger Conference organized by the European Association of University Teachers of Banking and Finance in September 2016 at the — UniversityofVerona fortheirinsightfulcommentsaboutallthepapers included in this volume. We would also like to show our gratitude to Professor Philip Molyneux(ProfessorofBankingandFinanceandDeanoftheCollegeof Business, Law, Education and Social Sciences), editor in chief of the Palgrave Macmillan Studies in Banking and Financial Institution Series, for approving our book proposal and for his support during the process. Also, many thanks to the Palgrave Macmillan team, Aimee Dibbens and Natasha Denby, for their support during the publishing process. Special thanks to the institutions which kindly supported the Wolpertinger Conference in Verona and so contributed to make it a pleasant and fruitful event: Banco Popolare, Unicredit (Verona), and S&P Global Market Intelligence. v vi Acknowledgements Finally, as conference organizers, we would like to thank Steven Ongena, Professor at the University of Zurich, for giving a plenary “ ” speech at the conference on Relationship Lending Reloaded and the “ otherspeakersattheJackRevellSessionon TheFinancialSysteminthe ” Macroeconomy (Cesare Bisoni, University of Modena; Maurizio Faroni, General Director at Banco Popolare; Phil Molyneux, Bangor Business School; and Greg Udell, Indiana University). Contents 1 Introduction 1 Giusy Chesini, Elisa Giaretta and Andrea Paltrinieri 2 Interest Rates and Net Interest Margins: The Impact of Monetary Policy 5 Paula Cruz-García, Juan Fernández de Guevara and Joaquín Maudos 3 The Swedish Mortgage Market: Bank Funding, Margins, and Risk Shifting 35 Viktor Elliot and Ted Lindblom “ 4 Incapability or Bad Luck? Testing the Bad ” Management Hypothesis in the Italian Banking System 55 Fabrizio Crespi and Mauro Aliano vii viii Contents 5 Why Do US Banks React Differently to Short Selling Bans? 79 Daniele Angelo Previati, Giuseppe Galloppo, Mauro Aliano and Viktoriia Paimanova 6 Reputational Risk in Banking: Important to Whom? 109 Ewa Miklaszewska and Krzysztof Kil 7 The Business Model of Banks: A Review of the Theoretical and Empirical Literature 131 Stefano Cosma, Riccardo Ferretti, Elisabetta Gualandri, Andrea Landi and Valeria Venturelli 8 On European Deposit Protection Scheme(s) 169 Milena Migliavacca 9 A Technical Approach to Deposit Guarantee Schemes 203 Francesca Arnaboldi Index 235 Notes on Contributors Mauro Aliano is an Assistant Professor of Banking and Finance at the University of Cagliari, Faculty of Economics, Law and Political Sciences. fi He is a specialist in applying statistics techniques for analyzing nancial fi markets, in methods for analyzing nancial instruments and in portfolio models. In 2012, he was a research fellow at the University of Rome Tor Vergata. Francesca Arnaboldi is Associate Professor of Banking and Finance at the University of Milan, Italy. She holds an MSc in Financial Management from the University of London, CeFIMS, and a Ph.D. in Finance from the University of Bologna. She has been a visiting scholar at Stern School of Business, New York University. She is a member of the CEFIN (Centre for Research in Banking and Finance), University of Modena and Reggio Emilia and of the Centre for Banking Research, Cass Business School, City University. Her main areas of interest are fi international banking, bank competition and performance, nancial innovation, bank regulation, and supervision. ix