Main Research - Banking markets and networked banking organizations (Prof. Dr. Andreas Hackethal)
In some of Europe’s banking markets networked organizations of non-profit maximizing, regional banks still play a substantial role. By construct, these banking organizations face a number of trade-offs in finding an ideal structure and governance. For example, decentralization typically improves local market knowledge and speeds up decision making but makes it more difficult to exploit scale economies and diversify borrower risk. We empirically analyze the trade-offs inherent in networked banking organizations and devise ways of how to strike a sound balance between the advantages and disadvantages of decentralization.