آیا ما نیاز به بانک های بزرگ داریم؟ مدارک و شواهد در عملکرد، استراتژی و نظم و انضباط در بازار

For an international sample of banks, we construct measures of a bank’s absolute size and its systemic size defined as size relative to the national economy. We then examine how a bank’s risk and return on equity, its activity mix and funding strategy, and the extent to which it faces market discipline depend on both size measures. We show that bank returns increase with absolute size, yet decline with systemic size, while neither size measure is associated with bank risk as implicit in the Z-score. These results are consistent with the view that growing to a size that is systemic is not in the interest of bank shareholders. We also find that systemically large banks are subject to greater market discipline as evidenced by a higher sensitivity of their funding costs to risk proxies, consistent with the view that they can become too large to save. A bank’s interest costs, however, are estimated to decline with bank systemic size for all banks apart from those with very low capitalization levels. This suggests that market discipline, exercised through funding costs, does not prevent banks from attaining larger systemic size.

In the last several decades, banks have greatly increased in size. Many institutions have become very large in absolute terms and relative to their national economies. During the recent financial crisis, it has become apparent that countries with large banks can run large risks to their public finances. Large bank failures in Iceland in 2008 triggered a national bankruptcy, and large-bank distress forced Ireland to seek EU and IMF financial assistance in 2010. A possible reaction to the public-finance risks posed by banking systems that include large banks is to force these to downsize or split up. In the UK, the Bank of England has been active in a debate on whether major UK banks should be split up to reduce risks to the British treasury.1 In the US, the Wall Street Reform and Consumer Protection Act (or Dodd-Frank Act) passed in July 2010 prohibits bank mergers that result in a bank with total liabilities exceeding 10% of the aggregate consolidated liabilities of all financial companies to prevent the emergence of an oversized bank.2

Given the recent policy interest in understanding the costs and benefits of bank size, this paper examines how a bank’s size – defined both as absolute size and systemic size relative to the size of its economy – is associated with its performance, business strategy and the market discipline it faces. For an international sample of banks, we find that banks with large absolute size tend to be more profitable as indicated by the return on assets and the return on equity. Banks with large systemic size, in contrast, tend to be less profitable, as reflected in lower returns on assets and equity. We do not find that the Z-score, proxying for bank stability, reflects bank absolute or system size. These results regarding accounting measures of bank risk and return are consistent with the view that systemic bank size per se is not in the interest of bank shareholders.