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The present dissertation includes three research papers dealing with the following banking topics: (dis-) incentives and risk taking, earnings management and the regulation of supervisory boards.
„Do cooperative banks suffer from moral hazard behaviour? Evidence in the context of efficiency and risk“:
We use Granger-causality techniques to evaluate the intertemporal relationships among risk, efficiency and capital. We use two different measures of bank efficiency, i.e., cost and profit efficiency, since these measures reflect different managerial abilities. One is the ability to manage costs, and the other is the ability to maximize profits. We find that lower cost and profit efficiency Granger-cause increases in liquidity risk. We also identify that credit risk negatively Granger-causes cost and profit efficiency. Most importantly, our results show a positive relationship between capital and credit risk, thus displaying that moral hazard (due to limited liability and deposit insurance) does not apply to our sample of cooperative banks. On the contrary, we find evidence that banks with low capital are able to improve their loan quality in subsequent periods. These findings may be important to regulators, who should consider banks’ business models when introducing new regulatory capital constraints.
„Earnings Management Modelling in the Banking Industry – Evaluating valuable approaches“:
Accounting research has separately studied the field of Earnings Management (EM) for non-financial and financial industries. Since EM cannot be observed directly, it is important for every research question in any setting to find a verifiable proxy for EM. However, we still lack a thorough understanding of what regressors can add value to the estimation process of EM in banks. This study tries to close this gap and analyses existing model specifications of discretionary loan loss provisions (LLP) in the banking sector to identify common pattern groups and specific patterns used. Thereupon, we use an US-dataset from 2005-2015 and apply prevalent test procedures to examine the extent of measurement errors, extreme performance and omitted-variable biases and predictive power of the discretionary proxies of each of the models. Our results indicate that a thorough understanding about the methodological modelling process of EM in the banking industry is important. The currently established models to estimate EM are appropriate yet optimizable. In particular, we identify non-performing asset patterns as the most important group, while loan loss allowances and net charge offs can add some value, though do not seem to be indispensable. In addition, our results show that non-linearity of certain regressors can be an issue, which should be addressed in future research, while we identify some omitted and possibly correlated variables that might add value to specifications in identifying non-discretionary LLP. Results also indicate that a dynamic model and endogeneity robust estimation approach is not necessarily linked to better prediction power.
„Board Regulation and its Impact on Composition and Effects – Evidence from German Cooperative Bank“:
This study employs a system GMM framework to examine the impact of potential regulatory intervention regarding the occupations of supervisory board members in cooperative banks. To achieve insights the study proceeds in two different ways. First, the author investigates the changes in board structure prior and following to the German Act to Strengthen Financial Market and Insurance Supervision (FinVAG). Second, the author estimates the influence of Ph.D. degree holders and occupational concentration on bank-risk changes in consideration of the implementation of FinVAG. Therefore, the sample consists of 246 German cooperative banks from 2006-2011. Regarding bank-risk the author applies four different measures: credit-, equity-, liquidity-risk and the Z-Score, with the former three also being addressed in FinVAG. Results indicate that the implementation of FinVAG results in structural changes in board composition, especially at the expense of farmers. In addition, the implementation affects all risk-measures and relations between risk-measures and supervisory board characteristics in a risk-reducing and therefore intended way.
To disentangle the complex relationship between board characteristics and risk measures the study utilizes a two-step system GMM estimator to account for unobserved heterogeneity, and simultaneity in order to reduce endogeneity problems. The findings may be especially relevant for stakeholders, regulators, supervisors and managers.
Family studies suggest a genetic component to the etiology of chronic kidney disease (CKD) and end stage renal disease (ESRD). Previously, we identified 16 loci for eGFR in genome-wide association studies, but the associations of these single nucleotide polymorphisms (SNPs) for incident CKD or ESRD are unknown. We thus investigated the association of these loci with incident CKD in 26,308 individuals of European ancestry free of CKD at baseline drawn from eight population-based cohorts followed for a median of 7.2 years (including 2,122 incident CKD cases defined as eGFR < 60ml/min/1.73m(2) at follow-up) and with ESRD in four case-control studies in subjects of European ancestry (3,775 cases, 4,577 controls). SNPs at 11 of the 16 loci (UMOD, PRKAG2, ANXA9, DAB2, SHROOM3, DACH1, STC1, SLC34A1, ALMS1/NAT8, UBE2Q2, and GCKR) were associated with incident CKD; p-values ranged from p = 4.1e-9 in UMOD to p = 0.03 in GCKR. After adjusting for baseline eGFR, six of these loci remained significantly associated with incident CKD (UMOD, PRKAG2, ANXA9, DAB2, DACH1, and STC1). SNPs in UMOD (OR = 0.92, p = 0.04) and GCKR (OR = 0.93, p = 0.03) were nominally associated with ESRD. In summary, the majority of eGFR-related loci are either associated or show a strong trend towards association with incident CKD, but have modest associations with ESRD in individuals of European descent. Additional work is required to characterize the association of genetic determinants of CKD and ESRD at different stages of disease progression.
Background:
We determined antibodies to the pandemic influenza A (H1N1) 2009 virus in children to assess: the incidence of (H1N1) 2009 infections in the 2009/2010 season in Germany, the proportion of subclinical infections and to compare titers in vaccinated and infected children.
Methodology/Principal Findings:
Eight pediatric hospitals distributed over Germany prospectively provided sera from in-or outpatients aged 1 to 17 years from April 1(st) to July 31(st) 2010. Vaccination history, recall of infections and sociodemographic factors were ascertained. Antibody titers were measured with a sensitive and specific in-house hemagglutination inhibition test (HIT) and compared to age-matched sera collected during 6 months before the onset of the pandemic in Germany. We analyzed 1420 post-pandemic and 300 pre-pandemic sera. Among unvaccinated children aged 1-4 and 5-17 years the prevalence of HI titers (>= 1:10) was 27.1% (95% CI: 23.5-31.3) and 53.5% (95% CI: 50.9-56.2) compared to 1.7% and 5.5%, respectively, for pre-pandemic sera, accounting for a serologically determined incidence of influenza A (H1N1) 2009 during the season 2009/2010 of 25,4% (95% CI : 19.3-30.5) in children aged 1-4 years and 48.0% (95% CI: 42.6-52.0) in 5-17 year old children. Of children with HI titers >= 1: 10, 25.5% (95% CI: 22.5-28.8) reported no history of any infectious disease since June 2009. Among vaccinated children, 92% (95%-CI: 87.0-96.6) of the 5-17 year old but only 47.8% (95%-CI: 33.5-66.5) of the 1-4 year old children exhibited HI titers against influenza A virus (H1N1) 2009.
Conclusion:
Serologically determined incidence of influenza A (H1N1) 2009 infections in children indicates high infection rates with older children (5-17 years) infected twice as often as younger children. In about a quarter of the children with HI titers after the season 2009/2010 subclinical infections must be assumed. Low HI titers in young children after vaccination with the AS03(B)-adjuvanted split virion vaccine need further scrutiny.