Template-Type: ReDIF-Paper 1.0
Author-Name: Nicolò Pecora
Author-X-Name-First: Nicolò
Author-X-Name-Last: Pecora
Author-Email: nicolo.pecora@unicatt.it
Author-Workplace-Name: Università Cattolica del Sacro Cuore
Author-Name: Alessandro Spelta
Author-X-Name-First: Alessandro
Author-X-Name-Last: Spelta
Author-Email: alessandro.spelta@unicatt.it
Author-Workplace-Name: Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore
Title: Shareholding Network in the Euro Area Banking Market
Abstract: Analyzing the topological properties of the network of shareholding relationships
among the Euro Area banks we evaluate the relevance of a bank in the ?nancial
system respect to ownership and control of other banks. We ?nd that the degree
distribution of the European banking network displays power laws in both the binary
and the weighted case. We also ?nd that the exponents are linked by a scaling
relation revealing a direct connection between an increase of control diversi?cation
and an increase of market power.
Results also reveal Single Supervisory Mechanism, recently introduced by the
European Central Bank and based on banks? total assets is a good proxy for the
systemic risk associated to a particular ?nancial institution.
Moreover we study how control and wealth are structured and concentrated
within the banking system. Interestingly, our analysis reveals that control is highly
concentrated at banking level, namely, lying in the hands of very few important
shareholders that have weak relationships between them. This means that each
main holder controls approximately a separate subset of banks.
Length: 19
Creation-Date: 2014-06
File-URL: http://dipartimenti.unicatt.it/economia-finanza-def014.pdf
File-Format: Application/pdf
File-Function: First version, 2014
Number: def014
Classification-JEL: D85, E58, L14. 
Keywords: Shareholding network, European banking system, Weighted graph, Power law
Handle: RePEc:ctc:serie1:def014