Predicting bank failures using a hazard model: the Venezuelan banking crisis

This paper uses a proportional-hazard model with time-varying covariates to determine the financial indicators that could have predicted the bank failures during the 1994–1995 Venezuelan banking crisis. A proportional-hazard model is an adequate econometric tool to analyze this case of limited cross-sectional financial information. I find that both a bank's ability to generate sound profits and the support of low risk government bonds were the key to not failing in a crisis that took down more than half of the system. These results can be extended to a general case of bank failures under volatile economic environments.     

Interstate banking,bank consolidation,and bank lending to small business

Proponents and critics of interstate banking argue over the implications of nationwide banking for bank lending to small business. This study explores the patterns of (1) bank consolidation at the national level and (2) the share of domestic-bank commercial lending extended to small firms, specifically, small manufacturing firms, over the period 1976–90. The evidence indicates that despite the trend toward fewer banking organizations and increased aggregate bank concentration due largely to cross-state expansion by superregional banking organizations, no significant downtrend is observed in the share of domestic-bank credit extended to small manufacturing firms. Nor is there any discernible downtrend in banks' share of borrowing by small manufacturing firms. These results are consistent with the thesis that banking industry consolidation hasnot led to a reduction in the supply of bank credit to small firms, at least within the manufacturing sector.     

The effect of stimulus policy on lending behavior and bank risk: Evidence from the Chinese banking sector

Considering China's stimulus policy in 2008 as a quasi-natural experiment, our study attempts to provide evidence to understand how expansionary monetary policy is likely to influence bank risk-taking in emerging markets, specifically in China. Using data on Chinese counties from 2006 to 2011, we theoretically discuss and empirically observe a positive relationship between the stimulus policy and bank risk-taking, as measured by nonperforming loans. Such a nexus stems from the negative effect of the stimulus policy on banks' lending standards and the positive effect on banks' credit support to small and medium sized enterprises. In addition, our study is enriched by estimating the moderating effects of bank capitalization based on the “risk-shifting” effect and “search for yield” effect caused by the stimulus policy. Specifically, we find important differences across banking groups, such that small and medium-sized banks with low capitalization increase their exposure to risk, while large state-owned banks with high capitalization notably reduce their risk tolerance. The results of this study may help to characterize monetary policy and macro prudential regulation, especially for emerging economies.     

Bad bank(s) and the recapitalisation of the banking sector

With banking sectors worldwide still suffering from the effects of the financial crisis, public discussion of plans to place toxic assets in one or more bad banks has gained steam in recent weeks. The following paper presents a plan how governments can efficiently relieve ailing banks from toxic assets by transferring these assets into a publicly sponsored workout unit, a so-called bad bank. This plan effectively addresses three key challenges. It provides for the transparent removal of toxic assets and gives the banks a fresh start. At the same time, it offers the chance to keep the cost to taxpayers low. In addition, the risk of moral hazard is curtailed.     

Islamic financing and bank risks: The case of Malaysia

We examine whether Islamic financing can explain three important bank risks in a country with a dual banking system: credit risk, interest‐rate risk, and liquidity risk. Using Malaysian data, we find that commercial banks with Islamic financing have significantly lower credit and liquidity risks but significantly higher interest‐rate risk than banks without Islamic financing. There is also evidence that bank size is significantly related to credit risk; the proportion of loan sales to total liabilities and bank size are significant determinants of interest‐rate risk; and off‐balance‐sheet financing, the extent of securitization, loan volatility, bank capital, and bank size are statistically significantly related to liquidity risk. © 2005 Wiley Periodicals, Inc.     

Microenterprises and multiple bank relationships: The case of professionals

The present paper focuses on professionals as a special group of microenterprises. It explains their characteristics and financial relationships, using data from a survey conducted in Germany in 2002. Consistent with the theory of asymmetric information and relationship lending, we find that these firms maintain a small number of bank relationships, which increases in firm size and age. They tend to choose multiple banking relationships to overcome credit rationing and finance larger loans. Credit risk and the structure of the banking market do not seem to matter.     

Ethical myopia: The case of “framing” by framing

The behavioural decision-theoretic concepts of mental accounting, framing and transaction utility have now been employed in marketing models and techniques. To date, however, there has not been any discussion of the ethical issues surrounding these significant developments. In this paper, an ethical evaluation is structured around three themes: (i) utilitarian justification (ii) the strategic exploitation of cognitive habits, and (iii) the claim of scientific status for the techniques. Some recommendations are made for ethical practices. Alan E. Singer is a senior lecturer in Strategic Management at the Department of Management, University of Canterbury. He has previously authored papers in the Journal of Business Ethics and in several other journals including Decision Sciences, Accountancy, International Journal of Forecasting and International Journal of Research in Marketing. Steven Lysonski is an Associate Professor at Marquette University, Milwaukee, Wisconsin. He is a former member of the marketing faculty at the University of Canterbury. He has published widely in such journals as the Journal of Marketing, The European Journal of Marketing, International Journal of Advertising and the Journal of Product Innovation Management. Ming Singer is a senior lecturer in Psychology at the University of Canterbury. Her research interests lie in the area of organisational and personnel psychology, particularly organisational justice. She has published numerous research articles including papers in Personnel Psychology, The British Journal of Psychology and the International Journal of Psychology.David Hayes is currently an East-West Center graduate student at the University of Hawaii, studying energy resources through the Geography Department. He is also a member of the Energy Program of the Resource Systems Institute, East-West Center. He has an Engineering and Commerce degree from Canterbury University.     

Problems and challenges facing the islamic banking system in the west: The case of the UK

This study investigates the main problems, challenges, and opportunities facing Islamic banking in the United Kingdom. The study reports the results of interviews that were undertaken with senior officials of several key financial institutions who have had many years of experience in dealing with Islamic banking. Our interviews revealed that, although by strict definition Islamic banks do not currently exist in the UK, London is one of the major centers for Islamic banking and finance. It is apparent that the experience of previously established Islamic institutions, such as Al‐Baraka, has made other institutions realize that it is possible to provide Islamic banking services in the UK under nonbanking regulations. The interviews also revealed that the main problem that Islamic banking faces in the UK is heterogeneous clients and potential clients. Moreover, regulatory hurdles, competition from conventional banks, and lack of adequately qualified and trained personnel exacerbate the situation. The study concludes by identifying opportunities such as e‐banking that may have a significant impact on the future of Islamic banking in the UK. © 2004 Wiley Periodicals, Inc.     

Role of off-balance sheet operations on bank scale economies: Evidence from China's banking sector

This paper investigates product-specific scale economies of banks with respect to off-balance sheet operations. The cost benefits from the non-separability of outputs available to banks that imply the role of OBS activities on bank scale economies are also examined. We further test whether the role of OBS operations on bank scale economies changes across heterogeneous banks. Results suggest that banks can realize more scale economies by increasing OBS operations and that scale economies can be reaped particularly for non-state-owned banks. Therefore, diversification and deregulation should be included in the policy agenda for the subsequent marketization reform of China's banking sector.     

The internationalization of an Arab bank: The case of Ahli United Bank of Bahrain

Ahli United Bank of Bahrain (AUB) has “leapfrogged” over early stages of internationalization by means of multiple rapid acquisitions of competitors. Use of this high‐cost, high‐risk strategy is well known among companies with the resources to invest in international expansion, but its application has not yet been studied in depth among companies based in the Middle East. This theory‐driven case study examines the growth record of AUB, its place in the regional banking industry in the Gulf, and its successful internationalization as an Arab bank. The article concludes with a detailed assessment of managerial and theoretical implications arising from the case study, and proposes further research to understand better the process of internationalization by companies expanding from a base in the Middle East. © 2011 Wiley Periodicals, Inc.     

Consumer behaviour in the credit card market: a banking case study

This paper analysed the demographic, socio‐economic and banking‐specific determinants that influence the choice of credit cards. A multinomial logit model was run on a recent portfolio of banking customers based in Italy. The model incorporates the type of credit cards as the dependent variable and a set of explanatory variables. The empirical results provided useful insight into the structural characteristics of the card payment system and offered a microeconomics perspective to analyse consumers' behaviour and preferences. Overall, women, older people, residents in the centre of Italy and secondary card owners are more likely to acquire a classic card. Gold cards are preferred by older customers, whereas younger clients have a higher probability to choose a revolving card, which is also preferred by the residents in the North‐east. The analysis on the continuous variables highlighted that Italy can be regarded as a ‘conservative’ market with room for credit card upgrading and expansion into more sophisticated products.     

Investment banking in the gulf: A case study of investcorp in bahrain

Investcorp is a low-profile investment banking company that was originally founded on the tiny island of Bahrain in the Arabian Gulf. Although little known to the general public, the company is a major player in North American and European investment markets. This case study presents a profile of the company, its founder, Nemir Kirdar, and his three “founding friends.” It relates details of the company's successes and explores how these were achieved. As most of the original Management Committee members are preparing to retire, efforts are being made to ensure the continuing prosperity of the company. This requires the risky step of appointing an almost completely new management team. Readers are invited to reflect on the likely success of this strategy and whether Investcorp's focus on North America and Europe remains appropriate in a global marketplace.     

Ethical statements as smokescreens for sectional interests: The case of the UK accountancy profession

The UK accountancy industry has traded upon its professional status as a means of expanding and legitimating its activities. Extensive appeals are made to ethical codes and disciplinary arrangements as part of its claim to professional status. This study examines some recent events relating to audit failures and alleged unprofessional conduct by accountancy firms and their partners in the UK with a view to assessing the validity of the claims to professional status. It concludes that the rhetoric of the claims is belied by the failure/inability of the professional accountancy bodies to take effective action against the offending firms or their partners.Austin Mitchell After an early career as a university lecturer he became a television journalist and since 1983 has been a Member of Parliament. He was the Labour Party's Trade and Industry spokesman from 1987–1989. He published a number of books and many articles in the press.Anthony Puxty has since 1987 been professor of Accounting and Finance at the University of Strathclyde. He has published some seven books and more than seventy papers and articles.Prem Sikka is a professionally qualified accountant. He is currently a Principal Lecturer at the University of East London. He has published two research monographs and more than seventy five articles.Hugh Willmott is currently a Senior Lecturer in the Manchester School of Management, having worked previously at the University of Aston and the Copenhagen Business School. He has published seven books and contributed numerous articles to leading management, accounting, finance, and social science journals.     

Customer-driven philosophy in the banking industry under different ownership status: the case of Greece

Relationship banking (RB) philosophy has become a topic of increasing importance in strategic marketing management. RB concerns inter alia the applying of customer-driven strategies using advanced information technology. This study investigates RB in the Greek banking industry overall and also under different ownership status (privately owned vs. stated-controlled vs. foreign banks). Based on a wide field of research during the period 2005–2006, indeed, we find that banks in Greece apply the philosophy of RB; however, privately owned and foreign banks implement RB strategies more systematically and effectively in comparison with state-controlled banks. The usefulness of our results is twofold: they satisfactorily justify the considerable growth of the private banking sector in the Greek economy and significantly enrich the service-profit chain of this specific industry.     

网上银行发展分析

完整的电子商务一般包括商情沟通、资金支付和商品配送三个阶段,分别表现为信息流、资金流和物流的发出、传递和接收.     

电子银行发展探析

电子银行的发展已经是各个国家不可回避的问题.文章分析了在我国发展电子银行的原因和制约条件,并指出我国要克服各种障碍,促进电子银行的发展.     

The empirics of banking regulation

This paper empirically assesses whether banking regulation is effective at preventing banking crises. We use a monthly index of banking system fragility, which captures almost every source of risk in the banking system, to estimate the effect of regulatory measures (entry restriction, reserve requirement, deposit insurance, and capital adequacy requirement) on banking stability in the context of a Markov-switching model. Our methodology is less prone to selection and simultaneity bias which are common in this type of study. We apply this method to the Indonesian banking system, which has been subject to several regulatory changes over the last couple of decades, and at the same time, has experienced a severe systemic crisis. We draw the following findings from this research: (i) entry restriction reduces crisis duration as well as the probability of such an occurrence; (ii) larger reserve requirements reduce crisis duration, but increase banking instability; (iii) deposit insurance increases banking system stability and reduces crisis duration; (vi) capital adequacy requirement improves stability and reduces the expected duration of banking crises. Finally, we find that previous studies present a negative simultaneity bias for deposit insurance and a negative selection bias for capital adequacy requirement. We can infer from these findings that any relevant assessment of the impact of a regulation, which has been introduced during the recent period of banking instability, should account for simultaneity.     

Foreign direct investment in the banking sector: the case of Italian banks in the '90s

The present paper addresses the issue of the determinants of the growth of multinational banks upon foreign markets at a micro individual level. Theories and approaches suggested so far about globalisation of the banking sector basically relate banks' international growth to the theory of the multinational enterprise. Accordingly, this paper relies on the eclectic paradigm, which views the foreign direct investment decision to be a combination of ownership, internalisation and location advantages. Empirical evidence is provided through an econometric model based on count data techniques, with reference to the Italian case in the decade 1989–1999. Results show that the availability of resources and international experience already gathered by the parent banks have positive effects on their decision to undertake direct investments abroad. Multinational banks are also proved to grow internationally in order to internalise their pre-existing bank–client relationships, and to locate their foreign units where they can exploit positive externalities related to the presence of important international financial centres.     

电子银行发展探析

电子银行的发展已经是各个国家不可回避的问题.文章分析了在我国发展电子银行的原因和制约条件,并指出我国要克服各种障碍,促进电子银行的发展.