Professor Enrico Onali
Head of Department - Finance and Accounting (Business School) and Professor of Finance
+44 (0) 1392 72-
Streatham Court, University of Exeter, Rennes Drive, Exeter, EX4 4PU, UK
I joined the University of Exeter Business School in January 2020 as a Professor of Finance and Head of Finance and Accounting Department. I am a member of the Leadership Team of the University of Exeter Business School, the Executive Board of the Faculty of Environment, Science and Economy, and the University Senate. Before my appointment, I held a Chair in Finance at the University of Nottingham, where I was the Research Director of the Finance, Risk and Banking Division.
I serve as an Associate Editor for The British Accounting Review and I am a Fellow of the Higher Education Academy (UK).
I have received funding for my research from the European Commission (SHIFT project), ESRC (UKRI project) and the Deutsche Bundesbank.
I have published in leading academic journals, such as the Review of Financial Studies, the Journal of Financial and Quantitative Analysis, the Journal of Financial Intermediation, the Journal of Money, Credit and Banking, and the Journal of Corporate Finance.
My work has been presented at global prestigious conferences, such as the annual meetings of the European Finance Association, the SFS Finance Cavalcade, the Financial Management Association, and the Royal Economic Society. Output from my research has also been disseminated in discussion papers of the Deutsche Bundesbank and the European Central Bank.
I have been a member of the scientific committee for international conferences organised by the International Finance and Banking Society (IFABS), the Financial Engineering and Banking Society (FEBS), the Financial Intermediation Network of European Studies (FINEST) and the International Rome Conference in Money, Banking and Finance.
- Fellow of the Higher Education Academy
My research focuses on three main themes:
1. Bank regulation and supervision, and the role of banks in the real economy.
My research on banks addresses the following research questions:
a) How managerial risk incentives and monitoring from the board of directors or other bank stakeholders can affect banks.
For example, my research on bank dividend policy suggests that, contrary to the theoretical and empirical literature on dividend policy in non-financial firms, bank payout ratios tend to be higher for banks with higher default risk (Onali, 2014), and in a more competitive environment (De Cesari et al., 2023), while they are lower for banks with entrenched CEOs (Onali et al., 2016). I also contribute to the market discipline literature by providing evidence supporting the view that non-depositors may influence bank cost of funding, bank soundness (Danisewicz et al., 2018a), and bank earnings opacity (Danisewicz et al., 2020). Finally, my research also shows that a higher proportion of female directors on bank boards can lead to a lower probability of a public bailout, plausibly because of stronger monitoring efforts from female directors than their male counterparts (Cardillo et al., 2020).
b) How banking regulation and supervision affects bank shareholders, creditors, and customers.
The first strand of this body of research investigates the market reaction to announcements related to international bank regulation (Bruno et al., 2018) and international accounting standards on credit losses (Onali et al., 2021). Thus, these studies investigate how these rules may affect bank shareholders' wealth. The second strand of this research is related to question a): my research on depositor preference laws suggest that they can affect non-depositors' monitoring incentives and, in turn, bank conduct. Finally, the third strand of research focuses on the impact on bank lending policies and liquidity creation and, thus, bank borrowers. These studies highlight that enforcement actions (Danisewicz et al., 2018b) and stress tests (Nguyen et al., 2020) can affect bank lending decisions and liquidity creation.
c) How banks affect, via their lending and liquidity creation, the local economy.
This research question is related to the importance of bank lending for the real economy. In particular, drops in bank lending and liquidity creation, for example because of enforcement actions, can lead to a reduction in local economic growth (Danisewicz et al., 2018b). I have also studied the impact of bank market structure on local economic growth after a natural disaster (Duqi et al., 2021).
2. The impact of International Financial Reporting Standards (IFRS) on European capital markets.
This strand of research focuses on two research questions:
a) How IFRS have affected value relevance
This strand of research highlights the heterogeneous impact of the introduction of IFRS in the European Union in terms of "value relevance", i.e., the degree to which accounting numbers are reflected in stock prices (Devalle et al., 2010). I also study methodological issues related to estimating value relevance models (Onali et al., 2017).
b) How investors have reacted to the introduction of new IFRS
This body of work estimates the market reaction to changes in accounting standards, using event-study methodology. In particular, I have concentrated on the impact of announcements related to the standard-setting process of IFRS 9. For example, one of my articles suggests that the pre-adoption market reaction to IFRS 9 was driven by cross-country differences in terms of strength of the rule of law and the extent to which the local GAAPs diverged from IAS 39 (Onali and Ginesti, 2014). Another article, which concentrates on bank stocks, suggests that the potential benefits of IFRS 9 (and the related Expected Loss Model) may depend on bank size, systemic risk, and other bank-specific characteristics (Onali et al., 2021).
3. Asset-pricing: time-series properties of stock returns
I have investigated the extent to which equity markets exhibit behaviour inconsistent with that of a random walk process, using a range of estimators of long memory and multifractality (Onali and Goddard, 2009). I have also examined econometric issues related to estimating long memory in the presence of short memory (Onali and Goddard, 2011; Goddard and Onali, 2012a), and infinite higher-order moments in the returns distribution (Goddard and Onali, 2012b).
De Cesari, A, Gilder, D, Huang, W, Onali, E (2023). Competition and Bank Payout Policy. Journal of Money, Credit and Banking, forthcoming.
Duqi, A, McGowan, D, Onali, E, Torluccio G (2021). Natural Disasters and Economic Growth: The Role of Banking Market Structure. Journal of Corporate Finance, 71, 102101.
Onali E, Ginesti G, Cardillo G, Torluccio G (2021). Market reaction to the expected loss model in banks. Journal of Financial Stability, forthcoming.
Cardillo G, Onali E, Torluccio G (2020). Does gender diversity on banks' boards matter? Evidence from public bailouts. Journal of Corporate Finance, 71, 101560.
Onali E, Schaeck K, McGowan D, Danisewicz P (2020). Debtholder Monitoring Incentives and Bank Earnings Opacity. Journal of Financial and Quantitative Analysis, 1-38.
Nguyen TVH, Ahmed S, Chevapatrakul T, Onali E (2020). Do stress tests aﬀect bank liquidity creation?. Journal of Corporate Finance, 64, 101622.
Danisewicz P, McGowan D, Onali E, Schaeck K (2018a). Debt priority structure, market discipline, and bank conduct. Review of Financial Studies, 31(11), 4493-4555.
Bruno B, Onali E, Schaeck K (2018). Market Reaction to Bank Liquidity Regulation. Journal of Financial and Quantitative Analysis, 53(2), 899-935.
Danisewicz P, McGowan D, Onali E, Schaeck K (2018b). The real effects of banking supervision: Evidence from enforcement actions. Journal of Financial Intermediation, 35, 86-101.
Onali E, Ginesti G, Vasilakis C (2017). How should we estimate value-relevance models? Insights from European data. British Accounting Review, 49(5), 460-473.
Onali E, Galiakhmetova R, Molyneux P, Torluccio G (2016). CEO power, government monitoring, and bank dividends. Journal of Financial Intermediation, 27, 89-117.
Onali E (2014). Moral Hazard, Dividends, and Risk in Banks. Journal of Business Finance and Accounting, 41(1-2), 128-155.
Onali E, Ginesti G (2014). Pre-adoption market reaction to IFRS 9: a cross-country event-study. Journal of Accounting and Public Policy, 33(6), 628-637.
Goddard J, Onali E (2012a). Short and long memory in stock returns data. Economics Letters, 117(1), 253-255.
Goddard J, Onali E (2012b). Self-affinity in financial asset returns. International Review of Financial Analysis, 24, 1-11.
Onali E, Goddard J (2011). Are European equity markets efficient? New evidence from fractal analysis. International Review of Financial Analysis, 20(2), 59-67.
Devalle A, Onali E, Magarini R (2010). Assessing the Value Relevance of Accounting Data After the Introduction of IFRS in Europe. Journal of International Financial Management & Accounting, 21(2), 85-119.
Onali E, Goddard J (2009). Unifractality and multifractality in the Italian stock market. International Review of Financial Analysis, 18(4), 154-163.
My current research focusses on: the impact of financial regulation and government interventions on capital markets, firms and banks; climate risk and related regulations; corporate governance.
- 2020 UKRI (ESRC)
The project deals with the impact of policy on businesses in the UK. The main objectives of this project are: 1) to quantify the pandemic risk exposure of SMEs by introducing a novel Pandemic Risk Index (PRI); and 2) to assess SMEs’ credit risk accurately and efficiently by developing a novel Python programme suite (AI_CREDIT).
- 2017 Erasmus Plus
Leader of the SHIFT project (Erasmus+/European Commission: start date - Nov 2017, end date - Oct 2019). SHIFT (Strengthen HE through Innovative Financial Tools) aims to create an innovative funding model for both Higher Education students who receive grants/loans and Higher Education Institutions that manage public resources.
Publications by category
Publications by year
Awards and Honours
- Young Economist Session Best Paper Award
20th Tor Vergata Conference on Money Banking and Finance, 5-7 December 2011
- Institute of Advanced Studies, University of Bologna
Senior Visiting Fellow, October 2019
- Associate Editor: British Accounting Review (November 2018 - present)
- Leader of the SHIFT project (Erasmus+) (Nov 2017- Oct 2019)
- Co-investigator for UKRI (ESRC) project: "UK SMEs: quantifying their pandemic risk and credit risk exposures in the wake of the COVID-19 crisis". Leader of the Pandemic Risk Index package. (Oct 2020 - April 2022)
- Institute of Advanced Studies, University of Bologna (21 October 2019)
My teaching portfolio comprises modules both at the undergraduate and postgraduate level in topics related to banking, corporate finance, capital markets, derivatives, and financial econometrics. I have held visiting teaching appointments at universities in France, Italy, and China.
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