Given the special role played by banking sector and the potential „spill-over“ of its problems to the real economy, it is important that determinants of bank performance are well known and understood. This research project aims to contribute to a relatively scarce body of literature on bank performance using panel data from different countries. Our main goal is to enhance our understanding of how bank performance varies within different macroeconomic, institutional, regulatory and market-structure realities. To this purpose, geographical scope of our research concerns Switzerland and the new economies of the CEE region, in particular the V4, with its distinctive banking markets characteristics. Switzerland serves as a benchmark market (highly developed, providing for a great variety of banks) against which performance of the V4 banks will be tested. Such approach enables us to comprehend the complexities of relationships among particular bank performance drivers.
Besides our main goal, the project aims to address in more-details two up-to-date issues: 1.) impacts of financial crisis in developed and new economies; and 2.) procyclical and countercyclical impacts of capital requirements under the Basel regulation.
The first part of the project (bank performance determinants) is aimed at completing the objectives of the PhD thesis of the fellow, the subsequent research parts (impacts of financial crisis, pro- and counter-cyclicality of Basel, “soft” vs. “hard” profitability drivers) represent a joint research work of the Slovak-Swiss team. The methodology of the research is based on a dynamic econometric model and personal interviews with bank managers and regulators. Other expected outcomes are: at least 2 joint articles in peer-reviewed journals, presentations at conferences and development of a sustainable co-opeartion among the involved universities.