Lemonade or lemon?: Riegel-Neal and the consolidation of American banking

Riegle-Neal altered the American banking landscape by eliminating the prohibitions against banking and branching, thus paving the way for banking mergers and interstate acquisitions across state lines. The law's proponents expected that it would lead to fewer but stronger banks more able to compete with domestic, nonbanking financial institutions and with foreign banks both at home and overseas. Detractors feared that fewer but larger banks would reduce services to individuals, small businesses, farmers, and small communities or increase the cost of these services. This paper finds that fears associated with Riegle-Neal have become mute because branching networks and de novo banks filled niches created or left vacant by large banks' expansionism.     

The riegle-neal act and local banking market concentration

The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 greatly transformed the American banking system by allowing the widespread establishment of interstate bank branching networks. This paper examines possible effects on local banking market concentration that resulted from the provision in the Riegle-Neal Act that allowed states to opt-in to the establishment of de novo interstate branches. Regression analysis using data from more than seven hundred cities does not provide any evidence that allowing the establishment of de novo interstate branches caused increases in local banking market concentration. These results may help alleviate some concerns that passage of the Financial Services Regulatory Relief Act currently pending in Congress will result in lessened competition in local banking markets. The author would like to thank discussant Janice Breuer and other participants of the International Atlantic Economic Conference, held in Quebec City from October 16–19, 2003 for helpful comments and suggestions. The author would also like to thank Trevor Lyon for his valuable research assistance.     

Winners and losers from financial derivatives use: evidence from community banks

This article provides empirical evidence on how profitability of small community banks was affected by derivatives use before and after the 2008 crisis. We use an endogenous switching regressions model to estimate the sensitivity of bank profitability to risks and control for the endogenous choice to use or not to use derivatives. We then compute counterfactual effects and show how profitability would have looked without derivatives use for banks that used derivatives and how it would have looked with derivatives for banks that did not use derivatives. The results show that derivatives helped reduce the sensitivity of profitability to credit risks and improved profitability for most specialists. However, for the largest number of banks which are non-user non-specialists, devivates use would have resulted in lower return on assets had they used derivatives post 2008. Therefore, our evidence suggests that implementation of the Volcker Rule, imposing high compliance costs on community banks and, thus, discouraging hedging, may have a negative impact on profits of specialists banks but, overall, a neutral effect on profits in the community banks industry as a whole.     

国有股权重、政策性负担与绩效——国有银行战略引资方案探析

We present a mixed oligopoly model for private banks and a public bank with mixed ownership and policy burden to research the program of strategic investor importing for state-owned banks. We find that close relationships exist among the equilibrium equity structure following strategic investor importing, the policy burden of state-owned banks and the number of private banks; that the policy burden of state-owned banks has positive relationships with the performance of private banks, with overall negative effect on social welfare; that the policy burden would not affect the maximum market capacity number of private banks but would affect the equity structure of state-owned banks with such a number.     

国有股权重、政策性负担与绩效——国有银行战略引资方案探析

本文结合当前国有银行战略引资的改革背景,构建银行业混合寡占、国有银行混合持股的古诺竞争均衡模型,研究认为战略引资后的均衡股权结构与国有银行所承担的政策性负担及私有银行数量密切相关;国有银行政策性负担与私有银行的经营绩效正相关,但从整体来看则损害了社会总福利.另外,政策性负担不影响市场可容纳的最大银行数量,但会影响达到这一数量时国有银行的股权结构.     

银行商誉资本与货币竞争性发行——来自中国白银风潮前夕银行微观数据的经验证据

1976年哈耶克提出了货币非国家化理论 ,主张赋予私人银行独立的货币发行权以约束政府滥发货币的行为 ,但反对者认为追求私利的发钞行必将无限增发货币引致通胀.文章将银行的发行和信贷统一起来分析银行声誉如何影响其发行行为,研究表明:在竞争性发行条件下 ,声誉机制能够有效地约束发钞行的行为,银行因追求长远收益而稳健发行.进而,文章以银行的生存历史和是否为上海银行公会会员度量声誉 ,利用白银风潮前夕中国34家发钞行和150家银行的微观数据检验声誉机制的作用 ,研究发现:声誉越好的银行,兑换券发行越稳健;声誉为银行带来了诸多经营优势,如更多的实收资本、盈余积累和存款 ,以致声誉好的银行贷款规模更大 ,利润水平更高 ;发钞行确实是因追求长远收益而稳健发行.根据民国时期银行竞争性发行的历史经验 ,文章首次为货币非国家化理论提供了微观证据 ,也为当前的货币政策制定和人民币国际化提供了启示.     

对解决国有银行资本金问题的思考--吸存能力角度分析

本文从银行业吸存能力角度研究发现 ,银行资本金层面上的国家声誉担保作用存在差异 ,再联系基于国有银行改革前提下带有前瞻性的竞争分析 ,认为国有银行改革不能暂避资本结构 ,通过各种途径提高国有银行资本充足率实属必要。     

Comment on ‘Competition Tests with a Non‐Structural Model: The Panzar–Rosse Method Applied to Germany's Savings Banks’

Abstract. In a recent issue of this journal Gischer and Stiele (2009) applied the ‘Test for “Monopoly” Equilibrium’ advanced by Panzar and Rosse (1987) to German savings banks and came up with the claim that savings banks maximize profits under conditions of monopolistic competition in the meaning of Edward Chamberlin. Their proposition is not conclusive since it would require free entry and for savings banks to operate under increasing returns to scale. Available evidence, however, shows them being subject to constant or decreasing returns to scale. The empirical findings of Gischer and Stiele can more convincingly be explained by assuming savings banks abide by their legal goals to pursue the public interest.     

机构投资者持股和企业银行借款关系研究

近年来,机构投资者在中国资本市场蓬勃发展。通过分析机构投资者持股变化对公司治理的影响,可以发现机构投资者持股和企业新增银行借款比例呈倒U型关系:机构投资者持股比例的增加有助于企业获得银行借款,但当机构投资者持股达到一定比例后,机构投资者持股的增加又会抑制企业银行借款的增加。机构投资者持股对于企业获取银行借款的影响依赖于持股比例的变化。     

利率市场化能解决小微企业融资难问题吗*——基于行为金融学视角的分析

本文研究了银行信贷集中问题的成因,讨论了利率市场化背景下小微企业融资问题难的解决思路。本文首先以行为前景理论和心理账户理论为基础,考察授信者行为因素对银行授信决策的影响,以探讨小微企业融资困境形成和银行信贷集中问题产生的机制。然后本文讨论了分析信贷集中和小微企业融资问题所依赖的假设和变量,从收益和风险两个方面对商业银行信贷决策做出了研究。研究发现利率市场化改革可以有效缓解小微企业融资难和信贷资金集中于大中型企业的问题。     

国库现金转存商业银行的货币政策效应研究——基于Hollenhorst扩展框架的分析

本文构建了国库现金转存商业银行对货币政策影响的分析框架,研究表明,国库现金转存商业银行的货币政策效应主要取决于存款扩张乘数、国库现金抵押需求、公众贷款需求和国库现金存款形成的贷款对国内商品和服务的需求水平等因素。存款扩张乘数越大,国库现金对商业银行信贷水平的影响就越强。国库现金存款的抵押债券需求比例对信贷供给造成了反向影响,抵押比例越高,商业银行必须留出越多的储备购买债券,从而政府国库现金存款的增加可能导致信贷增量的下降。在平滑国库现金影响的政策选择上,中央银行表现出一定的被动性,通过制定国库现金存款的区别法定准备金率是中央银行调控国库现金影响货币政策的重要手段。     

战略引资和网点规模对银行信贷竞争的影响

以网点规模表征银行规模,从网点吸收存款以支撑贷款业务的角度构建有信贷资金约束的贷款竞争模型,研究外资银行入股对引资银行以及本地信贷竞争的影响。结果表明:只要外资银行改善引资银行的技术水平,贷款市场竞争就会加剧;大银行的市场份额较多,贷款市场竞争加剧对其利润的负面影响较大,大银行为避免这种影响不会过度参与竞争。最后指出,决策层应制定政策以引导优质外资银行入股本地小银行以促进贷款竞争。     

The effect of underreporting on LIBOR rates

On May 29, 2008, the Wall Street Journal reported that several large international banks were reporting unjustifiably low LIBOR rates. Since then two large banks, Barclays and UBS, have paid significant fines for manipulating their LIBOR rates, and additional banks are expected to be fined. This paper investigates whether the underreporting of LIBOR rates by some banks significantly affected the reported LIBOR rate by testing whether there was a significant change in the relationship between the LIBOR rate and another rate that reflects the default risk of banks.     

Credit creation under multiple banking regulations: The impact of balance sheet diversity on money supply

Since the recent financial crisis along with more concentration of banking supervision, we have stepped into a new regulatory regime where multiple regulations are at play simultaneously. In this paper, we study the collective impacts of multiple regulations on credit creation in a heterogeneous banking system. Each single regulation imposes a constraint on credit creation for each bank, while with multiple regulations, only the most stringent one plays the determinant role on money supply. For the homogeneous banking system with identical balance sheets, they share the same binding regulation. In contrast, for the heterogeneous banking system with diverse balance sheets, the binding regulation for each bank may be different from other's. Those banks, who are bound by different regulatory constraints from homogeneous banks, would bring about an overall reduction in money supply, because those binding regulations impose a lower capacity (compared with the one in the case of homogeneous banks) for the banks to extend their balance sheets in this condition. We put forward an agent-based model of commercial banks integrated with two processes: credit creation and fund transfer, to demonstrate the reduction effect. The results facilitate the understandings of the transmission mechanism of monetary policy via banks and its interaction with prudential regulations.     

Performance of Thailand banks after the 1997 East Asian financial crisis

The performance of commercial banks and government-owned specialized banks in Thailand is estimated after the 1997 East Asian financial crisis. Commercial banks exhibit increasing returns to scale, whereas government-owned specialized banks exhibit decreasing returns to scale, implying further increases in bank size and market concentration in the commercial bank sector but not for government specialized banks. Cost inefficiency varies by bank and is a function of the ratio of nonperforming loans (NPLs) to total loans, equity to total assets and liquid assets to total assets, as well as the number of branches. On average, banks with fewer NPLs, that are well capitalized and with adequate liquidity are efficient. Thus, stricter rules to regulate credit risk management and ensure capital and liquidity adequacy would enhance efficiency in the banking sector. Although estimated input substitutability appears to be low, labour and loanable fund are substitutes. However, labour and physical capital as well as physical and loanable funds are complements in commercial banks. All the three inputs of labour, physical capital and loanable funds are substitutes for the government specialized banks.     

The Efficiency of China's Banking Industry and the Determinants

The recent global financial crisis highlights the importance of a sound financial sector for economic development. This paper evaluates the economic efficiency of China's banking industry and investigates the determinants of this efficiency. Our analysis shows that the average economic efficiency of joint-stock commercial banks is highest, followed by the ‘Big Four’ state-owned commercial banks and city commercial banks. The economic inefficiency of these banks during the past 15 years was mainly caused by technical inefficiency, and this technical inefficiency was mainly caused by scale inefficiency. Using the scores of efficiency as dependent variables, the paper also comprehensively studies the impact of (1) the characteristics of individual banks, (2) the characteristics of the whole banking industry and (3) macroeconomic factors on banking efficiency. The results suggest a number of factors that banks can work on to improve efficiency and lend support to deepening reforms in the Chinese banking industry, including regulatory reforms that require capital adequacy in a more strict way, reforms that introduce more competition and, more broadly, reforms that aim at establishing institutions that can truly commercialize Chinese banks. Last but not least, the efficiency of banking depends on healthy growth of the overall economy.     

The recourse rule,regulatory arbitrage,and the financial crisis

In November 2001, regulators finalized the “Recourse Rule.” The rule lowered risk weights, and therefore commercial bank holding company capital requirements, to 0.2 for holdings of AAA- and AA-rated “private label” securitization tranches, created by investment banks and securitizing commercial bank holding company subsidiaries; risk weights for A-rated holdings equaled 0.5. The rule’s aim was to encourage securitization, but not risk-taking. Regulators indicated that the rule would apply to larger holding companies, without identifying them. Using bank holding companies with subsidiaries that commented on the proposed rule-makings as a treatment variable, average treatment effects from a fully flexible difference-in-differences model indicate that treated banks increased their holdings of the highly rated tranches relative to total assets, while other holding companies, on average, did not. Holding companies with greater highly rated tranche holdings also experienced greater increases in risk after Q1 2008, which suggests that poor performance may have been unanticipated.     

中国银行业效率的实证分析

中国于 2 0 0 1年 1 2月加入WTO ,5年之后必须对外全面开放国内银行业市场。中国的银行一直以大量不良贷款和效率低下而著称。尽管在逐步改革 ,中国的银行体系仍由国有银行主导并形成垄断控制。怎样提高效率是国内银行尤其是国有商业银行生存和成功的关键。以下两个重要因素可能有助于提高中国的银行效率 :所有制改革和硬预算约束。本文使用了 2 2家银行 1 995— 2 0 0 1年期间的一组数据 ,利用随机前沿生产函数研究了所有制结构和硬预算约束对银行效率的影响。经验结果表明 ,非国有银行比国有银行效率高 1 1 %— 1 8% ;面临硬预算约束的银行的绩效比国家和地方政府投入大量资本的银行好。本文结论的重要意义是 :在加入WTO 3年后的今天 ,中国银行业的改革面临着更为严峻的挑战     

银行业竞争、客户筛选与村镇银行二元绩效：传导机制与实证研究*

村镇银行承担着支持“三农”和发展普惠金融的重要使命,但关于银行业竞争对村镇银行经营绩效的影响及其传导机制的研究较少。利用江苏省县域村镇银行2008年至2013年的面板数据,在数理模型分析的基础上实证检验了银行业竞争对村镇银行财务绩效和社会绩效的影响。结果表明,银行业竞争显著降低了村镇银行的财务绩效,但显著提升了社会绩效。进一步分析发现,银行业竞争通过改变村镇银行市场定位和客户筛选行为的作用机制,影响村镇银行经营绩效。因此,应坚持金融改革的市场化方向并建立更加精准的补贴机制,促进村镇银行在可持续发展的同时提升社会绩效。     

The impact of foreign capital on the Chinese banking market

In China, the foreign capital share of banks was restricted to 25% until 2006. Does such a relatively low share of foreign capital have any impact on the banking sector? In this paper, we use panel data on 19 major banks during 1996–2004 to shed light on the impact of foreign capital participation on the Chinese banking industry. We find that although the operating performance of foreign-owned banks is basically worse than that of domestic banks, as the market share of foreign-owned banks rises, they improve. For domestic banks, non-interest income decreases, while interest income increases. Therefore, the net effect of the foreign-owned banks' share on the profitability of domestic banks is small.