Author(s): Rym Ayadi
Subject: Business models
Date of publication: December 2016
In the book “Institutional Diversity in Banking: Small Country, Small Bank Perspectives”, Rym Ayadi contributes with the chapter: “Banks’ Business Models in Europe: Are Cooperative Banks Different?”.
The previous decades have seen a frenetic race to high returns on equity coupled with excessive risk-taking, encouraged by a lax monetary policy and accommodating banking regulations. This has led to major changes in the way banks conduct business. The failures of several large banks with unsustainable business models has spurred contagion and contributed to the global financial and Eurozone economic crises. However, not all types of banks face the same challenges and respond to crises in the same way. This chapter on business models attempts to address the diversity of banks in Europe and to better understand the response function of each category in a crisis situation in terms of performance and risk.