The research activity of the Institute covers a wide range of topics in banking and financial services. The main areas of expertise include:
- 1. Risk measurement and management in banks
The Institute is continuously involved in analyses aimed at understanding trends, drivers and implications of banking risk with a particular focus on the European market. Recent projects include an assessment of European bank exposure to systemic shocks and a comparative assessment of alternative tools to quantify the contribution to systemic risk by banks.
- 2. Corporate governance
We conduct research on the role of executive compensation on risk and performance in the financial industry and on the interplay between internal and external governance mechanisms in banking. Recent studies have investigated the role of bonuses on bank risk taking in Europe and the US and the impact of equity-based incentives on bank investment policies.
- 3. The structure of the banking industry
The Institute is involved and has managed research projects on the effect of mergers and acquisitions on bank default risk, on the behaviour of systemically large banks during banking crises and on the interplay between bank size, business models and financial stability. Our research in this area contributes to shedding light on the implications of the structure of the banking industry, on financial stability and, in particular, on the influence of very large financial institutions on systemic risk.
- 4. Banking regulation and supervision
We conduct research related to trends in the international regulation of the financial industry such as the adoption of new capital rules (Basel III) and the design of business restrictions on banks as in the banking bill in the UK. Recent studies from our members have focused on the risk-sensitivity of capital requirements, as defined under the Basel framework, and the impact of income diversification on risk and performance during the recent financial crisis.