IS UNCONVENTIONAL MONETARY POLICY MEDIATED BY BANKS’ LIQUIDITY AND SOLVENCY RATIOS? EVIDENCE FROM THE EUROPEAN BANKING SECTOR

We try to answer the following research question: Is unconventional monetary policy (UMP) mediated by European banks’ liquidity and solvency ratios? Starting from micro-prudential tools (unconventional monetary policy), this paper focuses on the micro-prudential perspective and contributes in different ways to the existing literature. First, using supervisory reporting data from European banks (European Central Bank (ECB), Statistical Data Warehouse), provides insights into the UMP (in terms of long term refinancing operation (LTRO)) during the first phase of the COVID-19 pandemic. Second, it empirically investigates the impacts of the LTRO on the liquidity and solvency of European banks, during the Q3 2016‒Q2 2021 period. We argue that the impacts of UMP (in terms of LTRO) are strictly related to banks‘ solvency and liquidity, thus favouring the stability of the banking system. These results suggest that authorities may want to monitor the bank‘s capital ratio and the liquidity position of financial institutions, also to better understand the effects of unconventional monetary tools on lending volume. The topic of our paper is scarcely explored by similar studies;therefore, we believe that our work may fill this gap and significantly contribute to enriching the related empirical literature. © 2022 The Authors.

Managing the COVID-19 pandemic: Preliminary evidence from global banks

The COVID-19 pandemic represents the most complex test for financial institutions since the global crisis of 2007. During this period, the boards of financial institutions, especially banks, had to make strategic decisions quickly, to address the effects of this crisis efficiently and effectively. Boards had to make the right decisions to withstand the shocks caused by the pandemic. The role of the board (or supervisory board) in managing banks has been under scrutiny by academic researchers and professionals during the current pandemic crisis. Since the outbreak of covid-19, boards have faced many tough decisions. Boards promptly facilitated the introduction of a number of COVID-19 response policies, including the establishment of specific teams to prevent and control the effects of the pandemic, to support the community, and to the protect and support employees and clients. The objective of this paper is to understand the role of boards of global banks during the COVID-19 pandemic, in particular to determine which were the most effective policy decisions and to outline the related underlying trends. The results of this research may allow the identification of best practices for the management of financial institutions and provide a useful reflection for the various stakeholders, including regulatory and supervisory authorities. © Henry Stewart Publications.