This paper explores the lessons to be learned from why the neighbouring banking systems of Canada and the United States, that share numerous commonalities, fared so differently during two major ...financial crises. The explanations are deeply rooted in different tolerances for industry concentration and state involvement, and the divergent routes of the development of their financial systems, founding institutions, on-going governance and regulation, and competitive structures. Canada's success during the more recent 2007-09 financial crisis is attributed to more effective regulation and conservative banking practices, including (self-) imposed stricter limits on bank leverage, much stricter limits on unconventional mortgages, and less reliance on the use of more 'creative' investment types (e.g. subprime lending) and structured products.
Regional banks are closer to the real economy, their relationship with the companies have a long-term basis, they take into account the interests of small enterprises in full measure, without which ...the balanced economic development of regions is impossible. ...the main activities and prospects for further development of the regional banks are directly related to their active involvement in lending to manufacturing, small and medium-sized businesses, financial support of the programs for the economic development of the regions (Naveh, M.H., Torosyan, T., Jalaee, S.A., 2012. Concerning "star", "profit-oriented" and "capitalized" systems, for them the value of reliability index reaches 24,37%, 18,45% and 24,19%, respectively. ...we can differentiate two trends in the activity of the regional banking systems of the VFD: loss of functioning and reduction of capitalization.
In the US and many other countries, bank checks are preprinted with the account number and the check number in special ink and format; as such, these two numeric fields can be easily read and ...processed using automated techniques. However, the amount fields on a filled-in check is usually read by human eyes, and involves significant time and cost, especially when one considers that over 50 billion checks are processed per annum in the US alone. The system described in this paper uses the scanned image of a bank check to ‘read’ the check. It includes three main modules that allow for fully automated bank check processing.
These three modules are described in the paper; they focus sequentially on: the detection of strings within the image; the segmentation and recognition of string in a feedback loop; and the post-processing issues that help to ensure higher accuracy of recognition. The major benefit of the integrated system is the ability to address the complex problem of reading handwritten bank checks by implementing efficient algorithms for each processing step. All modules have been implemented and subsequently tested for reading the value of the check using different image databases. Due to the particular requirements of this application, the system can be tuned to yield low levels of incorrect readings; this, in turn, leads to higher levels of rejection than the levels encountered in other handwritten recognition applications. A ‘rejected’ check can be read subsequently by human eyes or other more advanced automated approaches. However, a check ‘read’ incorrectly is more difficult to deal with, in terms of costs and time involved to rectify the mistake. As such, our architecture can be geared towards producing the most suitable balance between inaccurate readings and rejection level, in accordance with user preferences. The experimental results presented in the paper do not focus on the best possible results for a particular database of checks; instead, they show the benefits attained independently by each of the modules proposed.
This study assesses the relationship between concentration and financial fragility in the EU banking systems between 2001 and 2009. We investigate if the idea of increasing competition in EU as a ...result of a single European market it fits with the issue of financial stability of the European financial system. We test the competition implications on financial stability during the crisis and pre-crisis period, too. We use as proxy for competition two structural indicators - Herfindahl-Hirschman Index (HHI) and the concentration rate of the top five largest banks (CR5). The banks’ financial stability is represented by Z-score. The model is estimated on a panel of 923 commercial banks from 27 countries members of European Union for the 2001–2009 periods. Because we work with a large number of cross-sections and a short times series, we will use Generalized Method of Moments (GMM) Dynamic Panel Data models. The results validate both views, depending on group of countries and pre-crisis /crisis period. In the case of CR5, all results are statistically relevant, less for the euro zone and, except for the new member states, increased concentration has a negative impact on financial stability, so it confirms the competition stability theory. The results for the Herfindahl-Hirschman Index (HHI) are statistically relevant only for the countries outside the euro zone and the new members and it is validated the competition-fragility vision: the greater the concentration in the system, measured by the HHI index (i.e. less competition), the higher the Z-score indicator, therefore the bank financial stability increases.
This paper deals with the problem of increase the efficiency of the integration of regional banking systems. Today, small and medium regional banks are not able to ensure the regional economy banking ...products and services. In this regard, there is a need of the integration of regional credit institutions and regional banking systems. At the same time there is the inefficiency of joint banks associated with incorrect assessment of candidates for integration. To solve this problem, we tested a methodology of the rating agency «Expert» on the example of regional banking systems of the Volga Federal District. By results of the implementation of this methodological approach we revealed two trends in activity of regional banking systems, namely reduction in efficiency of operation and reduction of capitalization. And the most attractive for integration regional banking systems are the Perm Krai, the Republic of Mari El, Mordovia, Ulyanovsk region, the Chuvash Republic.
I use the stochastic cost frontier approach to investigate efficiency of banks operating in the Third Federal Reserve District, accounting for the quality and riskiness of bank output. In addition to ...the mean and mode of the conditional distribution of the one-sided error term, I calculate confidence intervals for the inefficiency measures based on the conditional distribution. The results indicate that Third District banks are operating at cost-efficient output levels and product mixes, but are not efficiently using their inputs. The second part of the article relates the inefficiency measures to several correlates.
This article discusses the significance of the recent growth in household credit across a range of middle-income economies. This growth is understood primarily as a result of policy, including the ...promotion of individual borrowing as a means to fund access to housing, education and health. A formal model of credit extension and allocation is developed, establishing that consumption lending makes a comparatively stronger contribution to aggregate profitability as well as financial fragility than production lending. Consumption lending may be understood to create distinctive endogenous tendencies to credit-market instability. The findings point to the need for a critical reconsideration of reliance on this lending for social and macroeconomic policy.
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