The German Government refused to accept the development of a European Deposit Insurance Scheme (EDIS) for Banking Union member states. Publicly, the German Government was preoccupied with the ...creation of a moral hazard that common funds would create for banks in those participating countries that had weak banking systems. This paper argues that to understand German moral hazard concerns it is necessary to look beyond the ideational - notably concerns stemming from German Ordo-liberalism - and focus on the existing national institutional arrangements that the German Government sought to protect. German moral hazard concerns stemmed from the fear that well-funded German deposit guarantee schemes (DGS) - especially those of small savings and cooperative banks - could be tapped to compensate for underfunded (and largely ex post funded) DGS in other member states. We thus demonstrate that the difficulties facing the construction of an EDIS owe to the weakness of the previously agreed harmonization of national DGS. This failure to harmonize schemes beyond a low minimal standard can be explained through an analysis focused on national systems. Different existing national DGS stem from the different configuration of national banking systems, the longstanding relationships among national banks and well-entrenched regulatory frameworks.
This study intends to provide a descriptive analysis of the efficiency of the credit institutions from Central and Eastern European ́s emerging countries during 2004-2013. To this purpose, we have ...used a series of indicators to quantify efficiency, but at the same time we focused on determining the risk level undertaken by the credit institutions, and on the macroeconomic characteristics of the analysed countries. The results have shown a high level of heterogeneity for the banking systems included in our study. Thus, significant differences were observed between the efficiency of the credit institutions, and also between the levels of risk undertaken by these.
The article discusses the problems encountered by enterprises in the financial sector in the context of the COVID-19 pandemic. The paper gives examples of management actions of the largest banks in ...Italy, Brazil, South Korea, China, Portugal, Singapore, the USA, the Philippines and Russia. World Health Organization has advised the population to use contactless payments and reduce the turnover of banknotes to a minimum. The coronavirus has increased the desire of customers to use digital services, making it an urgent need. In fact, the pandemic has led to the fact that Bank customers, who are increasingly afraid to spend time in public places, should be able to conduct banking operations without physical interaction with Bank offices. By implementing fully digital remote customer service, banks must ensure that both routine and unique (one-time, specific) banking processes will be performed without loss or disruption. Under these circumstances, financial institutions will be required to disclose information about the impact of the coronavirus pandemic on their operations in financial statements based on the relevant disclosure standards (Generally Accepted Accounting Principles, GAAP and United States Securities and Exchange Commission, SEC). Disclosure of financial statements may include risk factors such as Fund depreciation, reduced liquidity, and other aspects.
The downward trend in interest rates as required by governments and national banking regulators may affect the profitability of banks. Along with a General decline in business activity, this will lead to a decrease in Bank profits. Analysts’ concerns have already resulted in a sharp drop in the share prices of many firms, which creates another problem because some deferred tax assets, such as net operating losses (NOL), are not fully accounted for in the Bank’s regulatory capital requirements. National governments impose industry-specific tax requirements on capital market enterprises, but the challenges they will face when filing and paying direct and indirect taxes are likely to be similar to those faced by other industries.
Well-being impact on banking systems Iuga, Iulia Cristina; Dragolea, Larisa-Loredana
Journal of risk and financial management,
03/2021, Letnik:
14, Številka:
3
Journal Article
Recenzirano
Odprti dostop
The present research focuses on the influence of the well-being indicators, more specifically, the indicators reflecting the life quality on the banking systems evolution from the EU member states. ...The study offers a unique approach to comparing the two country groups: the eurozone countries and the EU noneuro countries during the 2008-2019 period. The model is estimated with the help of the OLS method by using panel data. The study aims to identify which life quality indicators significantly influence the EU member states' banking systems evolution and develop models dividing the countries into two groups. Our conclusions show that, among all the determinant factors analysed in this study, household consumption and internet users strongly influence all EU countries' banking systems.
The research aimed to analyze the stability of Islamic banking industry and its determinants in Indonesia. The same analysis was also done to the conventional banking industry as Indonesia practices ...dual banking systems. Using monthly data on Indonesian Banking Statistics for 2008-2013, this research implemented the Banking Stability Index (BSI) model for predicting the bank's stability. The analysis began with measuring BSI then using VECM to examine the effect of variables on BSI. The result showed that the BSI of both banking system was exhibiting the moderate level of stability though Islamic banking is more stable and safe way of financing than conventional banking. The shocks of inflation, exchange rate, efficiency, income diversity, liquidity, and Industrial Production Index responded positively by Islamic Bank' stability, while interest rate and market share responded negatively. In another hand, conventional bank' stability responded positively the shock of the exchange rate, income diversity, interest rate, liquidity, and market share, while other variables responded negatively. The results of shocking variables strongly indicated that the conventional banking is more vulnerable than Islamic banking. Islamic banking looked tend to the shock resistance and less volatile. This conclusion, however, might be still questioned as the BSI was not designed specifically for Islamic banking. Therefore, constructing an Islamic BSI (under Islamic banking characters) was important to measure the banking stability more appropriate and to develop a proper early warning system for Islamic banking industry.
The relationship between interlocking directorates and corporate finance patterns is a widely-researched aspect of the literature on national financial systems. This literature often considers the ...United Kingdom to be analogous to the United States, without directly investigating the nature and impact of finance-industry relationships. Based on a hand-collected data set covering eight benchmark years between 1950 and 2010, the authors start filling this gap by combining historical narratives, social network analysis, and regression analysis. They investigate whether finance-industry relations affect corporate borrowing patterns differently across time periods. The authors find that network-embedding had an impact on corporate borrowing from the 1950s to 1970s, but not thereafter. They also find that network structure and its function do not always evolve in parallel, highlighting limitations of purely structural approaches to understanding the link between corporate networks and firm behaviour and the importance of the historical idiosyncrasies of each country case.
This research attempted to evaluate Business Intelligence criteria accelerating further development of Core Banking System with creating meaningful analysis, decision support environment and ...optimizing the investments. By reviewing the related literature, Business Intelligence criteria were determined and the importance and priority of each criterion specified on the basis of questionnaire and doing Friedman and Binomial tests. This research presented an evaluation model based on the fuzzy multi-criteria decision making (Fuzzy TOPSIS) method. In the fuzzy-based method, weight of each criterion and results of assignable intelligence were described using linguistic terms, which can also be expressed as triangular fuzzy numbers. According to the findings, Risk Management System ranked as the first module with the largest distance from the negative ideal which indicated that this system had appropriate Business Intelligence capabilities to fortify decision support environment.
Purpose
This paper aims to analyse the implications of globalisation and the adoption of international standards (International Financial Reporting Standards IFRS) for accounting information quality.
...Design/methodology/approach
This paper uses a sample of 329 banks across 29 countries leading up to and beyond the implementation of IFRS to test for related hypotheses.
Findings
First, banks’ financial statements are prepared on the basis of international standards as national economies are integrated when social norms are diffused. Building on these results, the second test suggests that the relatively high-quality earnings among banks in Africa during the period is attributable to the adoption of and interaction of IFRS with globalisation and the strategy of banks to diversify within and across interest and non-interest income.
Originality/value
The authors investigate how globalisation and the adoption of IFRS affect accounting information quality.
Purpose
The purpose of this paper is to check if there is a procyclical lending behaviour in dual banking systems of the Golf Cooperation Council (GCC) countries. The study also tries to control for ...the role of Islamic banks in amplifying or mitigating the procyclicality of dual banking systems.
Design/methodology/approach
Estimation of a dynamic panel model using annual observations on a sample of 81 banks based in the GCC countries between 2005 and 2018. The study uses two business cycle indicators as dependent variables, namely, output gap and oil price gap.
Findings
The system generalilzed method of moments (GMM) estimator and robustness checks confirm the procyclical lending pattern of dual banking systems in the GCC. Estimation outputs also indicate that this procyclicality is more pronounced during economic slowdowns. However, it is found that Islamic banks’ lending is less procyclical, giving support for the stability view of Islamic banking systems. The authors think that the implementation and conduct of macroprudential policies are very challenging for banking authorities when Islamic banks and conventional banks operate under the same regulatory framework.
Research limitations/implications
The research paper may suffer from some limitations. Indeed, exploring panel data instead of country-case data may lead to a problem of heterogeneity that may underpin the credibility of the econometrical estimations. To deal with this problem by introducing a set of bank-specific and time-specific dummies. Furthermore, small N samples (N = number of individuals) may affect the reliability of the tests for the validity of instruments and autocorrelation used under the GMM estimator, leading to inefficient results. Consequently, the number of selected banks is extended as much as possible (81 banks), becoming important comparing to the time dimension of the panel.
Practical implications
Policymakers and regulators are incited to embed the perspectives of Islamic finance regarding lending cyclicality in dual banking systems, which promote the efficiency of resource allocation to the financing of assets and by consequence enabling financial stability. The stability view of the Islamic banking system could prompt policymakers and regulators to encourage the implementation and development of Islamic banks.
Originality/value
The present paper tries to overcome the lack of empirical studies on the procyclicality of dual banking. The study contributes to this novel literature in two ways. First, it focuses exclusively on GCC banking systems. In fact, compared to other emerging markets, business cycles characterizing GCC are specific because of the role played by the oil and gas revenues in the economic growth and financial system is crucial. Second, this paper brings into evidence the procyclicality of GCC banking systems also when the oil price is taken as a business cycle indicator.
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