INTERNATIONAL BANKING REGULATION
IMPLICATIONS FOR EUROPEAN BANKS
INTERNATIONALIZATION OF
BANKING IN EUROPE
LESSONS FROM BANCO SANTANDER
SUSANA
CRISTINA
DAWID
CARLO
MARCEL
TOBIAS
International Project Week 2012
structure
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Banking regulation
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European banking sector in trouble
Lehman Brothers (2008)
Reasons for the crisis
Changes because of the crisis
Banking internationalization
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Steps of internationalization in Retail Banking
Banco Santander‘s growth (1985-2005)
Banks in comparison
Net Present Value
European banking sector in trouble
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Dexia
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Northern Rock
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U.K.
Fortis
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France, Belgium, Luxembourg
Netherlands, Belgium, Luxembourg
Hypo Real Estate
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Germany
Lehman Brothers
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First bank not rescued by the government
Beginning of the international financial
problem
Reasons for the crisis
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Subprime mortgage
Rating agencies
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Fitch
Moody‘s
Standard and Poors
Highly complex financial products
Monetary policy
Interest rates
Greed
Changes because of the crisis
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Basel Accords
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European Authorities
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Increase the level of capital and quality
Introduce control over liquidity
European Banking Authority (EBA)
European stress tests
Increase in the level of deposit guarantees
Steps of internationalization in Retail
Banking
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Step 1: Development capabilities
Step 2: Creating options
Step 3: Quick Roll-Out & implications
Banco Santander’s growth
(1985-2005)
Net profit
(EUR)
Market capitalization
(EUR)
Number of
costumers
1985
133 million
2,455 million
750.000
2005
6,220 million
69,735 million
66 million
Banks in comparison (1985-2005)
Bank
Country
Asset Growth
International
Business
Profit
Banco
Santander
Spain
24%
24%
68%
Deutsche
Bank
Germany
15%
12%
71%
Citigroup
U.S.
13%
15%
41%
Bank of
America
U.S.
14%
24%
6%
Barclays
U.K.
16%
13%
38%
Net Present Value

Simple instrument to measure investments
NPV=
𝐶𝑓𝑡
𝑛
𝑡=0 1+𝑖 𝑡
NPV>0 
Net Present Value Example
𝐶𝑓0 = −9500
𝐶𝑓1 = 𝐶𝑓2 = 𝐶𝐹3 = 4000
NPV=−9500 +
4000
4000
4000
+ 2 + 3
1.1
1.1
1.1
-9500+9950
=+450
… the next one please
gracias por su atención
Thank you for your attention
Danke für eure Aufmerksamkeit