Professor Dr Melina Ludolph

Professor Dr Melina Ludolph
Current Position

since 1/23

Head of the Research Group Banking, Regulation, and Incentive Structures

Halle Institute for Economic Research (IWH) – Member of the Leibniz Association

since 9/21

Economist in the Department of Laws, Regulations and Factor Markets

Halle Institute for Economic Research (IWH) – Member of the Leibniz Association

since 9/21

Assistant Professor

Otto von Guericke University Magdeburg

Research Interests

  • banking regulation
  • financial stability
  • financial crises
  • applied econometrics

Melina Ludolph joined the institute in September 2021. She is Assistant Professor at Otto von Guericke University Magdeburg. Her research focuses on banking regulation, financial stability, financial crises, and applied econometrics.

Melina Ludolph received her master's degree and her PhD from Humboldt-Universität zu Berlin.

Your contact

Professor Dr Melina Ludolph
Professor Dr Melina Ludolph
Mitglied - Department Laws, Regulations and Factor Markets
Send Message +49 345 7753-773

Publications

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The Nexus between Loan Portfolio Size and Volatility: Does Bank Capital Regulation Matter?

Franziska Bremus Melina Ludolph

in: Journal of Banking and Finance, June 2021

Abstract

This paper analyzes the effects of bank capital regulation on the link between bank size and volatility. Using bank-level data for 27 advanced economies over the 2000–2014 period, we estimate a power law that relates the volume of a bank’s loan portfolio to the volatility of loan growth. Our analysis reveals, first, that more stringent capital regulation weakens the size-volatility nexus. Hence, in countries with more stringent capital regulation, large banks show, ceteris paribus, lower loan portfolio volatility. Second, the effect of tighter capital requirements on the size-volatility nexus becomes stronger for the upper tail of the bank size distribution. This is in line with capitalization decreasing with bank size, such that larger banks tend to be more affected by increasing capital requirements. Third, in countries with higher sectoral capital buffers, the size-volatility nexus is weaker.

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Working Papers

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Distributional Income Effects of Banking Regulation in Europe

Lars Brausewetter Melina Ludolph Lena Tonzer

in: IWH Discussion Papers, No. 24, 2023

Abstract

We study the impact of stricter and more harmonized banking regulation along the income distribution using household survey data for 25 EU countries. Exploiting country-level heterogeneity in the implementation of European Banking Union directives allows us to control for confounders and identify effects. Our results show that these regulatory reforms aimed at increasing financial system resilience affected households heterogeneously. More stringent regulation reduces income growth for low-income households due to employment exits. Yet it tends to increase growth rates at the top of the distribution both for employee and self-employed income.

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The Adverse Effect of Contingent Convertible Bonds on Bank Stability

Melina Ludolph

in: IWH Discussion Papers, No. 1, 2022

Abstract

This paper examines the effect of CoCo bonds that qualify as additional tier 1 capital on bank fundamentals. The results reveal a significant reduction in the distance to insolvency following the hybrid bond issuance due to increased earnings volatility. Further analyses suggest a link between CoCo issuance and more active earnings management, evidenced by a higher standard deviation of loan loss provisions and impairment charges. The findings substantiate long-standing theoretical hypotheses suggesting that the regulatory design requirements for going-concern CoCos adversely affect bank stability. Furthermore, they correspond to the notion that private monitoring is largely absent as a corrective measure due to prevailing uncertainties and information frictions.

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