Jonathan Williams

Professor Jonathan Williams

Professor of Banking and Finance
+44 (0)1483 682039
09 MS 02

Academic and research departments

Department of Finance and Accounting.


Areas of specialism

Executive compensation; Corporate governance; FinTech; CEO behaviour; Empirical banking; Financial deregulation; Competition; Efficiency; M&A

University roles and responsibilities

  • Director of Postgraduate Research

    My qualifications

    PhD Economics
    University of Wales
    MA Banking and Finance
    University of Wales, Bangor
    BA (Hons) Economics
    University of Wales, Bangor


    Research interests


    Postgraduate research supervision



    Piotr Łasak, Jonathan Williams (2024)Digital transformation and the economics of banking, In: Introduction Routledge

    "The book provides deep insight into the processes of digital transformation of banking according to economic, institutional, and social dimensions. Together with the transformation of incumbent banks, the processes result in changes in the scope of existing banking services. Moreover, new entities (FinTech firms) partner with incumbent banks and reshape the banking sector and its financial environment. The far-reaching transformation of banks and the banking sectors is accompanied by some institutional and socioeconomic processes. Regarding institutional processes, the book provides insight into the digitalization of the banking sector from a legal point of view. Traditionally, banking is strongly regulated by norms and rules and this status should be maintained when new entities are entering the sector and/or when new technological solutions contribute to the provision of banking services. Regarding socioeconomic processes, it must be highlighted that digitalization is exerting a powerful impact on societies. One significant example, among others, is the increase in the financial inclusion of disadvantaged groups (especially customers either underserved by the traditional financial sector or unbanked). The socioeconomic aspect, however, has a much greater dimension and its selected aspects are described in this book. The principal audience of the book will be scholars in the fields of banking and finance, but also other related disciplines in the social sciences that are of particular relevance to the banking sector's digital transformation. This includes legal science, management, and psychology. The book also targets professionals in the financial industry interested in the impact of new financial technologies on banking sectors and bank services, particularly with a main focus on legal and socioeconomic dimensions"--

    Timothy King, Francesco Saverio Stentella Lopes, Abhishek Srivastav, Jonathan Williams (2021)Introduction, In: Disruptive Technology in Banking and Financepp. 1-8 Palgrave Macmillan

    FinTech has garnered the interest of the public, industry practitioners, regulators, researchers and policy makers worldwide. Its disruptive and transformative potential transcends country borders and is having real impact on the way financial services are provided and forcing existing financial institutions to adapt. FinTech can enhance competition and financial inclusion to deliver tailored financial services at more affordable prices and at greater convenience. The emergence of FinTech directly challenges the business models of incumbent financial intermediaries like banks, which are adapting through in-house patents, acquisition of emerging FinTech firms and partnering with FinTech and large technology firms. This chapter provides the reader with a short overview of key trends and a preview of the content in the reminder of the book, organized according to chapters.

    Livia Pancotto, Owain ap Gwilym, Jonathan Williams (2024)The evolution and determinants of the non-performing loan burden in Italian banking, In: Pacific-Basin Finance Journal84102306 Elsevier

    We investigate the factors influencing Non-Performing Loans (NPLs) in the Italian banking sector from 2011 to 2017, a period marked by significant challenges. Using dynamic panel data methods and considering both bank-specific and macroeconomic variables, our empirical analysis reveals the complexity of NPL volumes in Italy. Our findings highlight that better capitalised banks tend to exhibit lower levels of NPLs, indicating reduced incentives for engaging in riskier practices. We document an inverse relationship between credit growth and NPLs, suggesting a potential outcome of demand-driven credit expansion. Additionally, the countercyclical nature of NPL stocks is evident, with banks' NPL volumes influenced by the economic conditions of the country. •We investigate the non-performing loan issue in the Italian banking sector during a period of severe challenges.•We employ a robust empirical analysis and account for both bank-specific and macroeconomic variables.•We find that bank capitalization and loan growth contribute the most in explaining the variation of NPL levels across banks.•We confirm the countercyclical nature of NPL stocks.

    Jonathan Williams, Christine Smith, Thurston Powers, Bob Williams (2019)Unaccountable and Unaffordable 2018, In: Policy File American Legislative Exchange Council

    Unfunded liabilities in public pension plans continue to loom over state governments nationwide. If net pension assets are determined using more realistic investment return assumptions, pension funding gaps are significantly wider than even the large sums reported in state financial documents. Unfunded liabilities of state-administered pension plans, using a proper, risk-free discount rate, now total over $5.96 trillion. The average state pension plan is funded at a mere 35 percent. This amounts to $18,300 of unfunded pension liabilities for every resident of the United States. Unaffordable and Unaccountable 2018 surveys the more than 280 state-administered public pension plans, detailing their assets and liabilities. The unfunded liabilities (the amount by which the present value of liabilities exceeds current assets) are reported using the investment return assumptions used by states, along with alternative measures more consistent with prudent risk management and more reasonable long-term market performance expectations. This report clearly illuminates the pervasive pension underfunding across the nation and details the assumptions and trends contributing to this crisis.

    Piotr Łasak, Jonathan Williams (2024)Introduction, In: Piotr Łasak, Jonathan Williams (eds.), Digital transformation and the economics of banking Routledge

    The current phase of banking development is under the great impact of digital technologies. Digital transformation in banking can be defined as the structural changes in bank economics and the banking sector driven by financial technologies. The past decade has borne witness to the transformative power of digitalization as new, enabling financial technologies continue to shape competition and existing market structures in financial services. Digitalization is impacting banks, banking sectors, and the financial system at large as newly unleashed competitive forces force incumbents to reassess opportunities and threats, and strengths and weaknesses, all leading to a transformation of business models. To survive, banks and other incumbent financial firms have embraced digitalization and suitably revised their business models. Moreover, the main focus should not only be placed on the economic dimension of banking transformation but also present institutional (mainly legal) and socio-economic results. The discussion embraces the legal conditions of the new entrants to the banking sector and the regulatory barriers for such entrants, the regulations of the digital ways of providing banking services, such as cybersecurity, and the intellectual property rights (e.g., the division of intellectual property rights between banks and technology providers). The social dimension of these sector-level considerations should refer to the market structure and the inclusion of disadvantaged firms and customers, as well as to the impact of artificial intelligence on the structure of human resources in banking.

    Fernando J. Cardim De Carvalho, Luiz Fernando De Paula, Jonathan Williams (2019)Banking in Latin America, In: Allen N Berger, John O. S Wilson, Philip Molyneux (eds.), The Oxford Handbook of Bankingpp. 1152-1189 Oxford University Press

    This chapter offers a unique portrayal of the evolution of banking in Latin America. We contextualize our analysis by providing a detailed assessment of how financial policy has evolved across the region beginning with development models of the post-1945 period. Events of the 1980s and 1990s are a source of recent developments, which we succinctly summarize as the financial deepening and growth of a market-oriented and more competitive environment. Specific developments include the repeal of state involvement in banking, and bank privatization including wider penetration of domestic banking by foreign banks. We examine the effects of consolidation on banking activity before considering the special role development banks have come to play, especially following the global financial crisis. Throughout the chapter, we present data to inform our comparative analysis across regional banking sectors, and between Latin America and other economies.

    Livia Pancotto, Owain ap Gwilym, Jonathan Williams (2019)The European Bank Recovery and Resolution Directive: A market assessment, In: Journal of financial stability44 Elsevier B.V

    •The Bank Recovery and Resolution Directive is a crucial development in European banking;•The sovereign-bank nexus has been a substantial recent policy concern;•We analyse the CDS market response to the implementation of the BRRD;•The results imply a lack of perceived market credibility for the BRRD;•We offer several policy considerations regarding the shortcomings of the BRRD. This paper provides evidence of the impact of the new European bank resolution regime on the sovereign-bank nexus. The implementation of the Bank Recovery and Resolution Directive (BRRD) is considered as an exogenous shock which provides the setting for a natural experiment. This investigation tests the financial markets’ perception of the effectiveness of the new rules in weakening the tight interconnectedness between sovereign and bank risk. A Difference-in-Differences (DiD) approach is adopted, building evidence from the Credit Default Swap (CDS) market for banks and non-financial corporates over the period 2011-18. The main findings do not indicate a significant weakening in the interaction between bank and sovereign CDS spreads, compared to the corresponding evidence for the non-financial corporate sector. An overall narrowing of the gap between bank and sovereign risk occurs, which initially implies a lack of credibility of the BRRD in financial markets. However, substantial cross-country variations are identified, particularly for Italy and non-euro area countries. These insights make a significant contribution to the policy debate on effective regulation of the sovereign-bank nexus, in the light of recent developments in the EU post-crisis reform agenda.

    Jannine Poletti-Hughes, Jonathan Williams (2019)The effect of family control on value and risk-taking in Mexico: A socioemotional wealth approach, In: International review of financial analysis63pp. 369-381 Elsevier Inc

    We construct an analytical framework to incorporate agency and stewardship perspectives, and the concept of socioemotional wealth (SEW), to analyse the effect of family participation on firm value and corporate risk-taking in Mexico. We find family firms enjoy higher value and tolerate higher levels of risk than non-family concerns. This differential becomes more important in more highly valued firms and more risk tolerant firms. Whereas the differential is also positively associated with the cash ownership of controlling families, the observed value/risk effects entrench at higher levels of family ownership (i.e. above 40%–50%). We test whether the risk-taking preference of family firms is a mixture of two types of risk, performance hazard risk, which captures the familial desire to preserve SEW; and venturing risk, which firms take in expectation of improving future performance. Family firms seem to take more performance hazard risk independently of their cash flow ownership, which suggests that family firms perceive patrimony as a means of safeguarding resources for heirs, which raises tolerance to performance hazard risk. Firm value increases when firms follow good corporate governance practices. •We construct an analytical framework to incorporate agency and stewardship perspectives, and the concept of socioemotional wealth to determine the effect of family ownership on firm value and risk-taking.•The application is to Mexico as an example of a country where patrimony is perceived as a means to safeguard resources for heirs.•Family firms have greater value than non-family concerns, due in part to compliance with best practice corporate governance norms.•Family firms take a mixture of performance hazard risk and venturing risk.•Family firms assume performance hazard risk independently of their cash flow ownership, inferring that family firms view patrimony as a means of safeguarding resources for heirs, which raises tolerance to performance hazard risk.•Family firms also take greater venturing risk than non-family firms do.

    Livia Pancotto, Owain ap Gwilym, Jonathan Williams (2020)Market reactions to the implementation of the Banking Union in Europe, In: The European journal of finance26(7-8)pp. 640-665 Taylor & Francis

    How did announcements about the implementation of the Banking Union (BU) in Europe impact on financial markets? This paper investigates the effect of the overall bank regulatory reform, considering each associated individual announcement, on Credit Default Swaps (CDS), bank stocks and stock futures during 2012-14. Announcements related to the implementation of the supervisory mechanism, as well as those on the new resolution framework, led to a surge in bank CDS spreads, while having a detrimental effect on the wealth of banks' shareholders. The CDS market response to sub-events associated with the ECB's 2014 Comprehensive Assessment (CA) was positive and reflected in a decrease in bank CDS spreads. Furthermore, CDS of Global Systemically Important Banks (G-SIBs) demonstrated a significant reaction to the implementation steps in the BU. Banks' stock prices reacted in a consistent manner with the CDS market. The stock futures market did not reveal any strong reaction to the changes in the European regulatory landscape. Cross-sectional analysis reveals that bank capitalization is positively associated with responses of G-SIBs' CDS spreads, but is inversely related to responses of CDS spreads for other bank groups. Weak underlying credit quality is also a relevant factor in explaining abnormal increases in CDS spreads. For the stock market, positive associations of the cumulative abnormal returns (CARs) with capital levels and with the business model orientation are revealed.

    Eleni Chatzivgeri, Panagiotis Dontis-Charitos, Sheeja Sivaprasad, Jonathan Williams (2023)Internationalization and zero leverage, In: The European journal of finance Routledge

    Despite growing attention on the role of internationalization in capital structure and the increasing adoption of zero-leverage policies by multinationals (MNC), no study examines the effect of internationalization on zero leverage. Using data from the United Kingdom (UK), we present the first empirical evidence of a positive and significant relationship that increases in the level of internationalization both statistically and economically. We find that the motivation for zero leverage differs between MNC and domestic firms (DOM). Whilst the major driving factor for MNC is the maintenance of financial flexibility, financial constraints motivate DOM.

    Fatima Cardias Williams, Jonathan Williams (2023)Compensation Policy in Banking: The Case of Tournament Incentives, In: Santiago Carbó-Valverde, Pedro J. Cuadros-Solas (eds.), New Challenges for the Banking Industrypp. 9-46 Springer Nature Switzerland

    We consider the impact of tournament incentives on firm performance. To proxy high-powered tournament incentives, we construct a CEO pay gap as the difference in pay between the highest-earning executive and other officers. Our robust empirical evidence unambiguously demonstrates that high-powered tournament incentives lead to higher levels of firm profitability after controlling for the level of pay and other executive and firm-level characteristics. This result can inform the design of firms’ compensation policy and we recommend firms use vertical pay practices to motivate effort and realise firms’ organisational goals. We fail to support the opposing conjecture that large pay gaps could fuel tensions among executives that could retard firm performance.

    Guadalupe del Carmen Briano Turrent, Jannine Poletti-Hughes, Jonathan Williams (2023)Transparency on Corporate Governance and board of directors’ strategies, In: Revista mexicana de economía y finanzas = Mexican journal of economics and finance : REMEF18(2)e684pp. 1-22

    Based on agency and asymmetric information theories, the objective of this paper is to investigate whether the transparency on corporate governance is determined by strategies followed by the board of directors (liquidity, investment, capital structure, innovation and board composition impact on the corporate governance transparency). The study sample is composed by 826 observations from Latin American firms during the period 2004-2010 (128 unique firms). A two-way cluster standard errors and GMM methods have been adopted to perform the econometric analysis. Results suggest that corporate governance disclosure is attributable to changes on firm’s decisions made by the board with respect to financial aspects and innovation. However, the impact upon transparency of board composition with regards to female directors, independence and size of boards are attributable to industry and/or country effects. Although the main limitation of the study is focused on the period of analysis, the results provide important implications for the business sector, demonstrating that the board composition and the financial and innovation strategies adopted by the board encourage greater corporate transparency, thus increasing confidence in the markets.

    Jonathan Williams (2021)Conclusion: Fintech—A Perfect Day or Walk on the Wild Side?, In: Disruptive Technology in Banking and Financepp. 283-313 Springer Nature Switzerland AG

    This chapter examines the light and dark sides of fintech through the lens of the supranational agencies responsible for monitoring the impact of developments in market structure on the stability of the global financial system. While fintech is fast growing and offers opportunities to enhance quality of financial services, improve customer satisfaction, increase financial inclusion, support economic growth and welfare gains, the potential exists for known and new risks to emerge and threaten financial stability, economic growth, and social welfare. This chapter discusses how fintech is challenging incumbent financial institutions and identifies benefits and risks associated with the democratisation of financial services. Assessing the effect of fintech on market structures is rendered difficult by a paucity of established data; therefore, the second part of this chapter syntheses relevant data from various sources with predictions from theoretical models alongside empirical and survey evidence to shed light on how markets are evolving and participants are behaving.

    Francesco Saverio Stentella Lopes, Timothy King, Jonathan Williams, Abhishek Srivastav (2021)Disruptive technology in banking and finance: an international perspective on FinTech Palgrave Macmillan

    This book exemplifies the potential of FinTech to deliver important economic and societal gains, such as enhancing competition and financial inclusion to deliver tailored financial products and services at more affordable prices and at greater convenience. The emergence of FinTech directly challenges the business models of incumbent financial intermediaries like banks, which are adapting by developing their own FinTech offerings and partnering with FinTech and large technology firms. FinTech also constitutes both known and unknown risks to financial stability and challenges regulators to evaluate whether existing regulations are sufficient. The emergence of FinTech as a global phenomenon requires insightful cross-country analysis and different perspectives to evaluate its development and associated opportunities and challenges. This book will be of interest to practitioners, regulators and students of this essential enabling technology that is a major component of the Fourth Industrial Revolution.

    Malek El Diri, Timothy King, Laima Spokeviciute, Jonathan Williams (2021)Hands in the cookie jar: Exploiting loan loss provisions under bank financial distress, In: Economics letters209110098 Elsevier

    We investigate earnings management (EM) behaviour at failed banks by examining the intensity and direction of EM around FDIC-insured commercial bank failures. Our empirical analysis indicates that failing banks engage in EM to a significantly greater extent than non-failing banks. Our results show that failing banks’ discretion over loan loss provisions ranges from aggressive (upwards EM) to conservative (downwards EM).

    Alessio Bongiovanni, Alessio Reghezza, RI Santamaría, Jonathan Williams (2021)Do negative interest rates affect bank risk-taking?, In: Journal of empirical finance63pp. 350-364 Elsevier B.V

    We offer early evidence on the impact of negative interest rate policy (NIRP) on banks’ risk-taking. Our primary result shows banks in NIRP-adopter countries reduce holdings of risky assets by around 10 percentage points following implementation of NIRP in comparison to banks in non-adopter countries. We augment this result by identifying NIRP’s impact on other aspects of banks’ risk-taking behaviour; NIRP is associated with reductions in banks’ loan growth and average loan price (by 3.7 percentage points and 59 basis points) and a rebalancing of asset portfolios towards safer assets. Secondly, we find the NIRP-effect is heterogeneous; post-NIRP risk-taking increases at strongly capitalised banks and at banks operating in less competitive markets that exploit market power to insulate net interest margins and profitability. Our robust empirical evidence supports the “de-leverage” hypothesis which suggests that banks acquire safer, liquid assets to bolster their capital positions rather than searching for value by acquiring riskier assets. We base our evidence on a sample of 2,584 banks from 33 OECD countries across 2012 to 2016, and from models that employ a difference-in-differences framework. •Negative interest rate policy per se does not increase bank risk-taking.•In NIRP adopting countries banks constrain risk-taking preferring safer liquid assets.•The NIRP effect is heterogeneous.•Better capitalised banks increase risk-taking post NIRP.•Banks operating in less competitive markets increase risk-taking post NIRP.

    Philip Molyneux, Alessio Reghezza, Chiara Torriero, Jonathan Williams (2021)Banks' noninterest income and securities holdings in a low interest rate environment: The case of Italy, In: European Financial Management27(1)pp. 98-119 Wiley

    Using a sample of 440 Italian banks over the period 2007-2016, we find that low interest rates motivate banks to expand their fee and commission income and to restructure their securities portfolios. A granular breakdown suggests that banks grow noninterest income in various ways, including portfolio management, brokerage and consultancy services and increase fee income from current account and payment services. In addition, banks rebalance securities portfolios away from those "held for trading" to securities "available for sale" and "held to maturity." Our findings allude to different behavior between large and small banks: while larger banks increase brokerage, consultancy and portfolio management services, smaller banks generate fees from customer current accounts.

    Additional publications