Special Theme:

Emerging Risks, Innovation and Regulatory Developments in International Banking

Guest Editors:

Claudia Girardone, University of Essex, United Kingdom

Alessandra Mongiardino, Triodos Bank, United Kingdom

Banks engage in many international activities, facilitating the flows of capital across borders, supporting global trade finance and investments, and managing foreign exchange trading. Recent decades have witnessed increased integration of international financial systems, facilitated by the rapid pace of innovation and digitalisation. However, greater interconnectedness and common exposure to risks makes the banking sector less resilient to shocks and crises. There are also new, emerging risks that pose potential threats to the stability and functioning of the global financial system. These include, for example, technological disruptions, cybersecurity attacks, climate change and environmental risks. Moreover, regulatory fragmentation across jurisdictions may present compliance challenges and operational complexities for international banks, resulting in higher costs and potential legal risks.

In the aftermath of the Global Financial Crisis (GFC), changes in bank supervision and regulations were implemented to promote the safety and soundness of individual banking institutions and to ensure financial stability. Basel III, introduced by the Basel Committee in December 2010, aimed to make banks more resilient and protect the financial system (Borio et al., 2020). The new framework meant that many central banks around the world expanded their role to include the macroprudential function (e.g. Mester, 2017). However, implementation of these measures remains incomplete as of Q2 2024. In the US, the regulatory framework of the Dodd-Frank Act is “still unsettled” with outstanding issues (Tarullo, 2019); in Europe, the banking union remains “unfinished” (Beck et al., 2022) and macroprudential authorities in many jurisdictions lack powers and tools (IMF, 2017). In some instances, there have also been questions on the adequacy of the new prudential framework for preserving financial stability, for example in relation to the bank failures in the United States and Switzerland in 2023 (Carstens, 2023). In addition, an ongoing challenge in the post crisis environment is recognising and mitigating regulatory capture that contributed to the accumulation of risk leading up to the GFC and, when associated with the influence of banks’ lobbyists, magnifies the moral hazard problem (Lambert, 2019).

More theoretical and empirical research is needed in these areas. This Special Issue of Economia Internazionale / International Economics invites submissions of high-quality research articles relevant to topics in international banking, including (but not limited to):

• Risks associated with banks’ international activities
• Banks’ international interdependence
• Banking regulation, supervision and compliance
• Regulatory fragmentation
• International banking crises
• Macroprudential policy, monetary policy and stability
• Regulatory capture and financial crises
• Fragmentation risk and the European banking union project
• Cross-country financial innovation and banks risks
• Tokenisation and cross-border payments
• Comparisons of financial innovation systems
• Central banks, digital currencies and risks
• Banking markets integration and inequalities across countries
• International banking and sustainable growth in the global economy

Paper submission procedure:

Interested authors should submit their paper here: https://www.iei1946.it/author-dash/login, specifying “Economia Internazionale/ International Economics Special Issue Submission” in the subject line. The submission deadline is December 31, 2024.

Economia Internazionale is a double blind peer-reviewed Journal. It is open access and no fee is due for publication.

Any further inquiry may be directed to: economia.internazionale@ge.camcom.it .

Cited references:

Beck, T., Krahnen, J.P., Martin, P.J., Mayer, F.C., Pisani-Ferry, J., Tröger, T., Weder, B., Véron, N. and Zettelmeyer, J. (2022), “Completing Europe’s Banking Union: Economic Requirements and Legal Conditions”, Bruegel Policy ContributionIssue 20/2022.

Borio, C., Farag M., Tarashev N. (2020), “Post-Crisis International Financial Regulatory Reforms: A Primer”, BIS Working Paper No. 859.

Carstens, A. (2023), “Some Lessons for Crisis Management from Recent Bank Failures”, BIS Speech, October 2023

IMF (2018), A Decade after the Global Financial Crisis: Are we Safer?, IMF Global Financial Stability Report.

Lambert, T. (2019), “Lobbying on Regulatory Enforcement Actions: Evidence from US Commercial and Savings Banks”, Management Science, 65(6), 2545-2572.

Mester, L.J. (2017), “The Nexus of Macroprudential Supervision, Monetary Policy, and Financial Stability”, Journal of Financial Stability, 30, 177-180.

Tarullo, D.K. (2019), “Financial Regulation: Still Unsettled a Decade after the Crisis”, Journal of Economic Perspectives, 33(1), 61-80.