With this paper Erika Bragaglia won the Special Prize of the CEO of the 9th edition of the EACB Award for Young Researchers on Co-operative Banks. She was awarded during a ceremony organised on the occasion of the EACB event Apropos Coop Banking "The Future of the Co-operative Business Model".
Erika Bragaglia received her Ph.D. in Banking and Finance with excellence from University of Rome "Tor Vergata". Her research interests include banking, regulation, risk management and liquidity risk. She has presented at many international conferences and she is author of two publications.
In 2010 the Basel Committee on Banking Supervision (BCBS) introduced new liquidity rules phased in under Basel III and, specifically, defined the Net Stable Funding Ratio (NSFR) with the aim of making the financial system more stable and resilient. The aim of this analysis is to examine the relationship between the NSFR and banks’ stability with a particular focus on cooperative industry. Based on a panel dataset of 1,173 cooperative banks from Austria, Germany and Italy, observed over the years 2011-2018, I find that stability improves for cooperative banks that have higher NSFRs, but there is a point at which increasing further the NSFR diminishes their stability. The marginal impact of the NSFR on cooperative banks’ stability increases as the banks efficiency increases, and diminishes as the income diversification and the size increase. Results remain robust after some robustness tests.