A well-functioning financial system is fundamental to a modern economy, and banks perform important functions for society. Banks ameliorate the information problems between investors and borrowers by monitoring and ensuring a proper use of the depositors’ funds; they provide intertemporal smoothing of risk and insurance to depositors; banks also contribute to the growth of the economy and they play an important role in corporate governance.
If banks fail to perform these tasks, the entire system would be exposed to large shocks. It is therefore important that banks are able to absorb losses and meet their current payment obligations. To ensure this, banks must comply with strict regulatory requirements (i.e., capital and liquidity requirements).Markets respond to changes in regulatory or governance framework, and these can be linked for example to changes in standards related to bank liquidity, or capital regulation. These changes could be driven by multilateral institutions (i.e., Bank for International Settlements) or local government regulations.
A prospective PhD candidate is expected to analyse the impact of regulations (e.g. Basel Accords) on returns, risk taking, and/or stability of banks.
Supervisors: Dr Vineet Agarwal and Dr Nemanja Radic
Application Details: The PhD candidate should hold a minimum 2.1 class undergraduate degree in a related discipline and have passed, or be expected to have passed by autumn, a master’s degree or equivalent research experience in a work setting. See admission and English language requirements.