The determinants of Islamic bank capital decisions

We report new evidence on the bank and institutional determinants of Islamic bank capital ratios in 28 countries between 1999 and 2013. Overall, we find that smaller, more profitable, and highly liquid Islamic banks are more highly capitalized. Additionally, improvements in the economic and financial environments and market discipline within a country correspond with higher Islamic bank capitalization. The results shed light on the impact that Sharia'a law restrictions have on Islamic banking capitalization. Our findings are most robust to banks that choose to hold capital well in excess of that required by regulators, consistent with traditional capital structure theory. Our results highlight the role that stable economic and political systems play in improving bank capitalization and reducing financial sector risk. By reducing political instability and corruption, improving legal systems, and encouraging access to capital markets, policymakers may incentivize managers to make financing decisions that increase the capitalization of the Islamic banking industry in developing countries.     

Competitiveness, resources, and capabilities: empirical evidence from retail banking

This research aims to identify and measure bank employee perceptions of the determinants of competitiveness in terms of resources, skills, and capabilities within the retail banking sector. All the 40 branches of a leading Portuguese bank—the Caixa Geral de Depósitos—operating in two Portuguese districts were surveyed. Our results show that bank competitiveness differs according to performance evaluation, human resource (HR) planning, the system of incentives, and managerial motivation. They also demonstrate that human capital is a source of success in the business of banks, which relies heavily on stable and enduring relationships with customers. The study also provides recommendations for retail bank managers seeking to refine their HR strategies as a means of improving their competitiveness.     

Financial service sector performance measurement model: AHP sensitivity analysis and balanced scorecard approach

This study applies the balanced scorecard in building a framework of wealth management (WM) banks' performance criterion and, using the Delphi method, a sub-criteria framework. The organisational performance of WM banks in Taiwan is evaluated by applying an analytic hierarchy process and sensitivity analysis. The proposed model can assist the banking sector in assessing the organisational performance of WM banks, making it highly applicable for bank managers.     

How to support the management of intangibles

The main objective of this work is the application of the concept of intellectual capital to management for business development and innovation. Concretely, we propose strengthening the ‘Intellectus’ model of intellectual capital by combining it with a multicriteria methodology called the ‘analytic hierarchy process’. The proposed methodology seeks to facilitate decision making by managers in focusing actions and resources to innovate and improve the value of their services to their clients. In particular, an application was made to the banking service sector in Chile, to identify the intangibles of greater importance in loyalty-building of clients. We identified technological capital, human capital and business capital as the intangibles with the highest priorities.     

Banking sector reforms and corporate leverage in emerging markets

Using a large panel of non-financial firms in emerging markets, we study the relation between detailed measures of banking sector reforms and corporate leverage. We find that banking sector reforms are associated with lower corporate debt in emerging market firms, consistent with the notion that these reforms improve banks' risk management and result in tighter lending standards, leading firms to use less bank debt in their capital structure. These effects are less pronounced for financially constrained firms, suggesting a relative increase in the supply of bank credit to firms which were rationed prior to the banking sector reforms.     

Credit Union Determinant Attributes as Discriminating Factors in the Consumer's Financial Institution Choice Process

Deregulation has created a very competitive financial services industry. Of particular concern to the dominant banking sector has been the growth in the quantity and quality of credit union members. In an effort to understand thrs trend, this paper seeks to identify which determinant attributes in the financial institutional ,choice process significantly discriminates bank patrons from credit union members. Factor scores generated by a Principal-axis factor analysis of eighteen determinant attributes are used as input into a Multiple Discriminant Analysis. Results indicate that three factors significantly discriminate bank patrons from credit union members. Implications for credit union marketing managers is discussed.     

Incentive pay and bank risk-taking: Evidence from Austrian,German, and Swiss banks

We use payroll data in the Austrian, German, and Swiss banking sector to identify incentive pay in the critical banking segments of treasury/capital market management and investment banking for 67 banks. We document an economically significant correlation of incentive pay with both the level and volatility of bank trading income—particularly for the pre-crisis period 2003–2007, in which incentive pay was strongest. This result is robust if we instrument the bonus share in the capital market divisions with the strength of incentive pay in unrelated bank divisions like retail banking. Moreover, pre-crisis incentive pay appears too strong for an optimal trade-off between trading income and risk, which maximizes the net present value of trading income. Further analyses indicate that the bonus moderation during the crisis has removed excessive pre-crisis incentive pay.     

Establishment of a performance-evaluation model for service quality in the banking industry

The study addresses the problem of service quality in the banking industry by modifying an importance–satisfaction (I–S) model in order to develop an integrated performance-measurement model for the banking industry, which would enable the priority of items for improvement to be determined. An importance and satisfaction questionnaire has been provided to determine which items do not fall into the appropriate performance-control zone of the performance-control matrix of the model. The performance-control matrix index provided enables the value of certain improvement objectives to be calculated. Finally, quality loss function is then adopted to rank the improvement objectives in terms of priority. A case study of a Taiwanese bank is then presented to demonstrate the applicability of the model in practice. The study thus presents a complete assessment model that helps managers to identify items for improvement, while simultaneously promoting cost and time efficiencies in service processes.     

Commercial Bank Lending to SMEs in Poland

This paper explores the processes of financial intermediation that are used by commercial banks in their interactions with SMEs in Poland. The paper develops an argument for examining the empirical realities of commercial bank involvement with the SME sector within the context of economic transformation by suggesting that the connection between them influences the trajectories of economic change within transition. The paper provides a history of re-organisation of the commercial banking sector in Poland, paying particular attention to the involvement of foreign capital and foreign banks as the trend towards increasing foreign participation is apparent in the Central European transition economies. The findings from this research suggest that there are some significant variations within the commercial banking sector in the approach to, and practices for, lending to the SME sector.     

Bank Performance and Credit Availability in the Bulgarian Banking Sector, 1997-2001

Abstract

The 1997 financial crisis wiped out 30% of the Bulgarian banking sector and created severe strains on corporations. With the establishment of the currency board in 1997 and the new Banking Law, which set the legal framework for proper bank supervision, major Bulgarian banks were rapidly privatized through sales to foreigners, now controlling around 80% of bank assets. Since 1997, the Bulgarian banking sector has recovered from the crisis by improving its profitability and efficiency and adopted a legal framework compatible with the European Union standards. Based on a regression analysis of bank balance sheets and income statements, this paper shows that low level of credit volume during 1997-1999 derived from banks' cautious stance towards credit making reflecting both the ongoing risks in the real sector, and the stringent new banking regulations. Large banks, however, benefited from scale economies in improving profitability in the same period.     

Lending Relationships,Bank Default and Economic Activity

The paper reviews contributions in the literature, which lend theoretical and empirical credibility to the idea that the banking relationship is valuable and important for the firm. Banks offer a lending relationship as the solution to the firm's ongoing credit needs. Bank default disrupts this relationship. Hence risk in the banking sector influences the value of the relationship, the cost of corporate finance, and the level and growth of real activity. As bank default is often the result of fraud and internal irregularities, it is hard to predict. Bank default affects the economy through a number of different channels. The loss of the relationship, benefit for the firm is an important route through which the health of the banking sector influences real activity.     

Cost efficiency and the effect of mergers on the Taiwanese banking industry

This study addresses the cost efficiency, economies of scale and scope of the Taiwanese banking industry, specifically focusing on how bank mergers affect cost efficiency. Adopting stochastic frontier analysis, we employ a translog cost function for efficiency estimation. Composite error terms are used to account for managerial inefficiency and environmental effects. Empirical results suggest that economies of scale and scope exist at small and medium-sized banks. Meanwhile, government-owned or -controlled banks are the most cost efficient. Non-performing loans increase the inefficiency of the banking sector by just under 10 per cent. Further analysis reveals that bank merger activity is positively related to cost efficiency. Mergers can enhance cost efficiency, even though the number of bank employees does not decline. The banks involved in mergers are generally small and were established after the banking sector was deregulated.     

‘The computer says no’: the demise of the traditional bank manager and the depersonalisation of British banking, 1960–2010

This article examines the role of the British bank branch manager in the context of the transformation of banking since the 1980s, and discusses its implications for British banking. The analysis was based on interviews with retired bank managers and suggests that they viewed their role as being based on skill, authority and autonomy. The centralisation of authority and increasing targets deskilled and disempowered their profession. Drawing on Weber’s theory of bureaucratisation, this article argues that the loss of agency of managers depersonalised service provision as they could no longer base their decisions on personal considerations.     

我国商业银行应对资本监管的经营管理策略

银行监管的核心问题是资本监管问题。本文依据巴塞尔协议构建的全球银行监管框架,分析了我国商业银行资本监管日趋严格的现状和国外商业银行针对资本监管采用的经营管理策略。在深入剖析资本监管对我国商业银行经营管理影响的基础上,提出了我国商业银行应采取资本筹集、资产证券化和改变经营管理模式等3个策略来应对新的资本监管标准。     

Origins,Growth and Concentration of Bank Capital in South Africa, 1860–92

This article quantifies the growth of banking capital and reserves in South Africa from the time of the arrival of the first London-based banks in 1860 to their total dominance of banking in the Cape Colony in 1892. Their better management was responsible for this development. Outside the Cape, in Natal and in the Orange Free State, local banks, favoured by their respective governments, continued to exist; but their capital was only a fraction of that employed in the Cape Colony. There was no local bank in the Transvaal before the discovery of gold in 1886. The rapid economic development triggered by the discovered of the Witwatersrand gold then enabled Kruger's government to set up a local bank in the Transvaal, though he was forced to rely on overseas capital to make it viable. At no time, however, did the bulk of the banking capital in South Africa come from overseas. Before 1870 it originated in the Cape Colony: after 1870 it came more and more from reserves of the imperial banks, which had been earned in the Cape, supplemented by share exchanges when local banks were taken over.     

我国国际流动资本结构与银行体系稳定性的关系研究

国际资本流动可以促进区域经济的发展,同时也给该地区的经济发展带来一些不稳定因素.本文通过构建IBSS体系对银行体系稳定性进行测度后,采用GRANGER因果关系检验分析了国际资本结构对银行体系稳定性的影响,分析得出我国的国际资本流动结构未对银行体系稳定性产生明显的影响,加强银行体系的稳定性还需要从稳定宏观经济发展和完善银行体系自身入手.     

Institutional framework and capital structure of microfinance institutions

This article addresses the question of whether institutional frameworks matter in the capital structure of microfinance institutions. We studied a sample of 292 MFIs between 2004 and 2009. Our findings suggest that creditor rights, a country's legal tradition, and the level of financial sector development are significantly related to MFIs' level of external finance. Furthermore, the positive relationship between banking sector development and borrowings enables us to conclude that the microfinance sector and the formal banking sector are complementary. In addition, a split sample technique is used in order to assess the external validity of the model. Findings from this cross-validation strengthen the results obtained from the whole sample and indicate that our model seems to predict well the effect of institutional variables on the capital structure of MFIs.     

Capital adequacy and asset securitization: an assessment of the world's central banks

National banking systems around the world are subject to disruption through the failure of a single institution. To lessen this risk, regulations governing bank definition, capital adequacy, overdraft operations, and asset securitization are needed. This article reports on these four issues and concludes that (1) the definition of a bank varies widely between nations; (2) some central banks do not require that sufficient capital be maintained to attenuate the effect of internal or external shocks; (3) overdraft operations, where allowed, often result in a high degree of system risk; and (4) off-balance sheet financing operations may not be as risky as first was reported.     

中国银行业信息化问题探讨

中国金融业和银行业的发展举世瞩目。中国银行业的信息化之路走过了20年,实现了信息大集中、运营集约化、管理现代化和服务电子化。随着全球经济一体化、金融一体化的深入推进,中国的商业银行必须从银行信息化走向信息化银行,即在银行信息化的基础上真正实现融汇、贯通,促使银行业经营管理产生根本变化。具体说来,就是要集中、整合、共享、挖掘。一要转变为规模化、标准化的作业模式,实现业务集中处理,最终达到经营管理的全面集中和集约,使银行在业务量快速增长、业务复杂性大幅提高的情况下,依然保证业务运营的高质量、高效率,有效降低生产运营成本,控制经营风险;二要按照统一的信息技术架构将银行内部各管理系统全部整合到一个系统管理平台,实现各系统互联互通;三要突破信息传导和查控的限制,提高可用性和易用性;四要对银行或者企业非常需要的管理信息、客户信息、产品信息等进行收集、储存和处理,进行挖掘和归纳性梳理,充分利用有价值的信息,帮助管理者判断市场,发现价格,评估风险,配置资源,提供决策支持。中国银行业应在全球银行业剧变之时,为银行信息化建设走出一条新路。     

Does Bank Diversification Improve Output Growth? Evidence from the Recent Global Crisis

This study examines whether the diversity of activities conducted by the banking sector in the years approaching the recent global financial crisis alleviated the adverse impact of the crisis. Using data for 28 industries in 66 countries, we find that bank diversification has strengthened country resilience to the crisis, as measured by industry growth over the period 2008–2009. However, we find that while both bank‐based and market‐based economies have been affected negatively by the crisis, the contribution of bank diversification in mitigating the real impact of the crisis is pronounced only in bank‐based economies. Overall, our findings suggest that countries with significant bank diversification have also been the most resilient to the recent global crisis.