Structural changes in the financial industry - Banks adaptation to regulatory changes

Important results from the project

This PhD-student project aims at studying banks’ adaptation to regulatory changes in capital adequacy and liquidity requirements on banks following the implementation of Basel III. It focuses primarily on savings banks. The aim is also to increase public awareness and knowledge of the savings bank as a financial institution, contribute to research and education concerning savings banks, and create a forum for cooperation between the School of Business, Economics and Law at the University of Gothenburg and Savings banks in western Sweden.

Expected long term effects

The project has hitherto resulted in four conference articles of which two are published as chapters in books (Palgrave Macmillan). Eventually, the project is expected to result in a doctoral dissertation consisting of five essays on banks adaptation to their new regulatory environment. As for the objective to contribute to increased cooperation with savings banks, a special education program for managers in savings banks was executed in 2016. In addition, a network of banking researchers and bank practitioners have recently been established to study bank supervision development.

Approach and implementation

The relationship developed with the savings banks has provided a platform for collecting unique data regarding the communication between the Financial Supervisory Authority and the individual banks. Internal reports from all Sweden´s savings banks have been collected to study the effects of regulation on banks’ lending to small and medium-sized companies. In addition, structured and unstructured data on covered bonds have been compiled. Finally, a comprehensive survey has been sent to all banks in the Nordic countries regarding their adaptation to the Basel III regulations.