Economics, Econometrics and Finance › Finance

Banking stability, regulation, efficiency

Works Count: 139720

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This cluster of papers explores various aspects of banking and finance, including liquidity, credit crunch, systemic risk, regulatory policies, monetary policy, small business lending, and the impact of financial crises on economic systems.

Keywords

Banking; Finance; Liquidity; Credit; Regulation; Systemic Risk; Monetary Policy; Small Business Lending; Financial Crises; Interbank Market

Financial Intermediation and Credit Policy in Business Cycle Analysis

2010-01-01

Mark Gertler , Nobuhiro Kiyotaki

We develop a canonical framework to think about credit market frictions and aggregate economic activity in the context of the current crisis. We use the framework to address two issues … We develop a canonical framework to think about credit market frictions and aggregate economic activity in the context of the current crisis. We use the framework to address two issues in particular: first, how disruptions in financial intermediation can induce a crisis that affects real activity; and second, how various credit market interventions by the central bank and the Treasury of the type we have seen recently, might work to mitigate the crisis. We make use of earlier literature to develop our framework and characterize how very recent literature is incorporating insights from the crisis.

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This Time Is Different

2009-12-31

Carmen Reinhart , Kenneth Rogoff

Throughout history, rich and poor countries alike have been lending, borrowing, crashing--and recovering--their way through an extraordinary range of financial crises. Each time, the experts have chimed, time is different--claiming … Throughout history, rich and poor countries alike have been lending, borrowing, crashing--and recovering--their way through an extraordinary range of financial crises. Each time, the experts have chimed, time is different--claiming that the old rules of valuation no longer apply and that the new situation bears little similarity to past disasters. With this breakthrough study, leading economists Carmen Reinhart and Kenneth Rogoff definitively prove them wrong. Covering sixty-six countries across five continents, This Time Is Different presents a comprehensive look at the varieties of financial crises, and guides us through eight astonishing centuries of government defaults, banking panics, and inflationary spikes--from medieval currency debasements to today's subprime catastrophe. Carmen Reinhart and Kenneth Rogoff, leading economists whose work has been influential in the policy debate concerning the current financial crisis, provocatively argue that financial combustions are universal rites of passage for emerging and established market nations. The authors draw important lessons from history to show us how much--or how little--we have learned. Using clear, sharp analysis and comprehensive data, Reinhart and Rogoff document that financial fallouts occur in clusters and strike with surprisingly consistent frequency, duration, and ferocity. They examine the patterns of currency crashes, high and hyperinflation, and government defaults on international and domestic debts--as well as the cycles in housing and equity prices, capital flows, unemployment, and government revenues around these crises. While countries do weather their financial storms, Reinhart and Rogoff prove that short memories make it all too easy for crises to recur. An important book that will affect policy discussions for a long time to come, This Time Is Different exposes centuries of financial missteps.

Credit Rationing in Markets with Imperfect Information.

1981-01-01

Joseph E. Stiglitz , Andrew Weiss

According to basic economics, if demand exceeds supply, prices will rise, thus decreasing demand or increasing supply until demand and supply are in equilibrium; thus if prices do their job, … According to basic economics, if demand exceeds supply, prices will rise, thus decreasing demand or increasing supply until demand and supply are in equilibrium; thus if prices do their job, rationing will not exist. However, credit rationing does exist. This paper demonstrates that even in equilibrium, credit rationing will exist in a loan market. Credit rationing is defined as occurring either (a) among loan applicants who appear identical, and some do and do not receive loans, even though the rejected applicants would pay higher interest rates; or (b) there are groups who, with a given credit supply, cannot obtain loans at any rate, even though with larger credit supply they would. A model is developed to provide the first theoretical justification for true credit rationing. The amount of the loan and the amount of collateral demanded affect the behavior and distribution of borrowers. Consequently, faced with increased credit demand, it may not be profitable to raise interest rates or collateral; instead banks deny loans to borrowers who are observationally indistinguishable from those receiving loans. It is not argued that credit rationing always occurs, but that it occurs under plausible assumptions about lender and borrower behavior. In the model, interest rates serve as screening devices for evaluating risk. Interest rates change the behavior (serve as incentive mechanism) for the borrower, increasing the relative attractiveness of riskier projects; banks ration credit, rather than increase rates when there is excess demand. Banks are shown not to increase collateral as a means of allocating credit; although collateral may have incentivizing effects, it may have adverse selection effects. Equity, nonlinear payment schedules, and contingency contracts may be introduced and yet there still may be rationing. The law of supply and demand is thus a result generated by specific assumptions and is model specific; credit rationing does exist. (TNM)

The Financial Accelerator and the Flight to Quality

1996-02-01

Ben Bernanke , Mark Gertler , Simon Gilchrist

Adverse shocks to the economy may be amplified by worsening credit-market conditions-- the financial 'accelerator'. Theoretically, we interpret the financial accelerator as resulting from endogenous changes over the business cycle … Adverse shocks to the economy may be amplified by worsening credit-market conditions-- the financial 'accelerator'. Theoretically, we interpret the financial accelerator as resulting from endogenous changes over the business cycle in the agency costs of lending. An implication of the theory is that, at the onset of a recession, borrowers facing high agency costs should receive a relatively lower share of credit extended (the flight to quality) and hence should account for a proportionally greater part of the decline in economic activity. We review the evidence for these predictions and present new evidence drawn from a panel of large and small manufacturing firms.

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Chapter 21 The financial accelerator in a quantitative business cycle framework

1999-01-01

Ben Bernanke , Mark Gertler , Simon Gilchrist

This chapter develops a dynamic general equilibrium model that is intended to help clarify the role of credit market frictions in business fluctuations, from both a qualitative and a quantitative … This chapter develops a dynamic general equilibrium model that is intended to help clarify the role of credit market frictions in business fluctuations, from both a qualitative and a quantitative standpoint. The model is a synthesis of the leading approaches in the literature. In particular, the framework exhibits a “financial accelerator”, in that endogenous developments in credit markets work to amplify and propagate shocks to the macroeconomy. In addition, we add several features to the model that are designed to enhance the empirical relevance. First, we incorporate money and price stickiness, which allows us to study how credit market frictions may influence the transmission of monetary policy. In addition, we allow for lags in investment which enables the model to generate both hump-shaped output dynamics and a lead-lag relation between asset prices and investment, as is consistent with the data. Finally, we allow for heterogeneity among firms to capture the fact that borrowers have differential access to capital markets. Under reasonable parametrizations of the model, the financial accelerator has a significant influence on business cycle dynamics.

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Chapter 12 Finance and Growth: Theory and Evidence

2005-01-01

Ross Levine

This paper reviews, appraises, and critiques theoretical and empirical research on the connections between the operation of the financial system and economic growth. While subject to ample qualifications and countervailing … This paper reviews, appraises, and critiques theoretical and empirical research on the connections between the operation of the financial system and economic growth. While subject to ample qualifications and countervailing views, the preponderance of evidence suggests that both financial intermediaries and markets matter for growth and that reverse causality alone is not driving this relationship. Furthermore, theory and evidence imply that better developed financial systems ease external financing constraints facing firms, which illuminates one mechanism through which financial development influences economic growth. The paper highlights many areas needing additional research.

A Mathematical Theory of Saving

1928-12-01

Frank Plumpton Ramsey

Non-Monetary Effects of the Financial Crisis in the Propagation of the Great Depression

1983-01-01

Ben Bernanke

This paper examines the effects of the financial crisis of the 1930s on the path of aggregate output during that period.Our approach is complementary to that of Friedman and Schwartz, … This paper examines the effects of the financial crisis of the 1930s on the path of aggregate output during that period.Our approach is complementary to that of Friedman and Schwartz, who emphasized the monetary impact of the bank failures; we focus on non-monetary (primarily creditrelated) aspects of the financial sector--output link and consider the problems of debtors as well as those of the banking system.We argue that the financial disruptions of 1930-33 reduced the efficiency of the credit allocation process; and that the resulting higher cost and reduced availability of credit acted to depress aggregate demand.Evidence suggests that effects of this type can help explain the unusual length and depth of the Great Depression.

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Asymmetric Information, Bank Lending, and Implicit Contracts: A Stylized Model of Customer Relationships

1990-09-01

Steven A. Sharpe

ABSTRACT Customer relationships arise between banks and firms because, in the process of lending, a bank learns more than others about its own customers. This information asymmetry allows lenders to … ABSTRACT Customer relationships arise between banks and firms because, in the process of lending, a bank learns more than others about its own customers. This information asymmetry allows lenders to capture some of the rents generated by their older customers; competition thus drives banks to lend to new firms at interest rates which initially generate expected losses. As a result, the allocation of capital is shifted toward lower quality and inexperienced firms. This inefficiency is eliminated if complete contingent contracts are written or, when this is costly, if banks can make nonbinding commitments that, in equilibrium, are backed by reputation.

Bank-specific, industry-specific and macroeconomic determinants of bank profitability

2006-08-15

Panayiotis P. Athanasoglou , Sophocles N. Brissimis , Matthaios Delis

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The Finance-Growth Nexus: Evidence from Bank Branch Deregulation

1996-08-01

Jith Jayaratne , Philip E. Strahan

This paper provides evidence that financial markets can directly affect economic growth by studying the relaxation of bank branch restrictions in the United States. We find that the rates of … This paper provides evidence that financial markets can directly affect economic growth by studying the relaxation of bank branch restrictions in the United States. We find that the rates of real, per capita growth in income and output increase significantly following intrastate branch reform. We also argue that the observed changes in growth are the result of changes in the banking system. Improvements in the quality of bank lending, not increased volume of bank lending, appear to be responsible for faster growth.

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What's different about banks?

1985-01-01

Eugene F. Fama

The Effect of Credit Market Competition on Lending Relationships

1995-05-01

Mitchell A. Petersen , Raghuram G. Rajan

This paper provides a simple framework showing that the extent of competition in credit markets is important in determining the value of lending relationships. Creditors are more likely to finance … This paper provides a simple framework showing that the extent of competition in credit markets is important in determining the value of lending relationships. Creditors are more likely to finance credit-constrained firms when credit markets are concentrated because it is easier for these creditors to internalize the benefits of assisting the firms. The paper offers evidence from small business data in support of this hypothesis.

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Financial Intermediation, Loanable Funds, and The Real Sector

1997-08-01

Bengt Holmström , J. Tirole

Journal Article Financial Intermediation, Loanable Funds, and The Real Sector Get access Bengt Holmstrom, Bengt Holmstrom Department of Economics, Massachusetts Institute of Technology Search for other works by this author … Journal Article Financial Intermediation, Loanable Funds, and The Real Sector Get access Bengt Holmstrom, Bengt Holmstrom Department of Economics, Massachusetts Institute of Technology Search for other works by this author on: Oxford Academic Google Scholar Jean Tirole Jean Tirole IDEI and GREMAQ (CNRS URA 947), Toulouse, and CERAS (CNRS URA 2036), Paris Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 112, Issue 3, August 1997, Pages 663–691, https://doi.org/10.1162/003355397555316 Published: 01 August 1997

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Insiders and Outsiders: The Choice between Informed and Arm's‐Length Debt

1992-09-01

Raghuram G. Rajan

ABSTRACT While the benefits of bank financing are relatively well understood, the costs are not. This paper argues that while informed banks make flexible financial decisions which prevent a firm's … ABSTRACT While the benefits of bank financing are relatively well understood, the costs are not. This paper argues that while informed banks make flexible financial decisions which prevent a firm's projects from going awry, the cost of this credit is that banks have bargaining power over the firm's profits, once projects have begun. The firm's portfolio choice of borrowing source and the choice of priority for its debt claims attempt to optimally circumscribe the powers of banks.

It's Baaack: Japan's Slump and the Return of the Liquidity Trap

1998-01-01

Paúl Krugman , Kathryn M. Dominquez , Kenneth Rogoff

s Slump and the Return of the Liquidity Trap THE LIQUIDITY TRAP-that awkward condition in which monetary policy loses its grip because the nominal interest rate is essentially zero, in … s Slump and the Return of the Liquidity Trap THE LIQUIDITY TRAP-that awkward condition in which monetary policy loses its grip because the nominal interest rate is essentially zero, in which the quantity of money becomes irrelevant because money and bonds are essentially perfect substitutes-played a central role in the early years of macroeconomics as a discipline.John Hicks, in introducing both the IS-LM model and the liquidity trap, identified the assumption that monetary policy is ineffective, rather than the assumed downward inflexibility of prices, as the central difference between Mr. Keynes and the classics.' It has often been pointed out that the Alice in Wonderland character of early Keynesianism-with its paradoxes of thrift, widows' cruses, and so on-depended on the explicit or implicit assumption of an accommodative monetary policy; it has less often been pointed out that in the late 1930s and early 1940s it seemed quite natural to assume that money was irrelevant at the margin.After all, at the end of the 1930s interest rates were hard up against the zero constraint; the average rate on U.S. Treasury bills during 1940 was 0.014 percent.Since then, however, the liquidity trap has steadily receded both as a memory and as a subject of economic research.In part, this is because in the generally inflationary decades after World War II nominal interest rates have stayed comfortably above zero, and therefore central banks have no longer found themselves "pushing on a string."Also, the experience of the 1930s itself has been reinterpreted, most notably by 1. Hicks (1937).137 Table 1.Second Year Effects on the U.S. Exchange Rate and Current Account after a Monetary Expansion to Raise Real GNP by 1 Percent Percent Modela Exchange rate Current accountb DRI -8.1 -0.02 EEC -4.0 -0.07 EPA -5.3 -0.03 LINK -2.3 -0.01 LIVERPOOL -39.0 -3.1 MCM -4.0 -0.05 MINIMOD -5.7 -0.07 MSG -6.7 -0.21 OECD -1.6 -0.13 VAR -7.6 -0.04 WHARTON -1.4 -0.17 Summary statistic Median -5.3 -0.03 Source: Frankel (1988).a. Models are fully identified by Frankel.

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The Determinants of Banking Crises in Developing and Developed Countries

1998-03-01

Aslι Demirgüç-Kunt , Enrica Detragiache

Big Bad Banks? The Winners and Losers from Bank Deregulation in the United States

2010-09-21

Thorsten Beck , Ross Levine , Alexey Levkov

ABSTRACT We assess the impact of bank deregulation on the distribution of income in the United States. From the 1970s through the 1990s, most states removed restrictions on intrastate branching, … ABSTRACT We assess the impact of bank deregulation on the distribution of income in the United States. From the 1970s through the 1990s, most states removed restrictions on intrastate branching, which intensified bank competition and improved bank performance. Exploiting the cross‐state, cross‐time variation in the timing of branch deregulation, we find that deregulation materially tightened the distribution of income by boosting incomes in the lower part of the income distribution while having little impact on incomes above the median. Bank deregulation tightened the distribution of income by increasing the relative wage rates and working hours of unskilled workers.

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The Theory of Bank Risk Taking and Competition Revisited

2005-05-03

John H. Boyd , Gianni De Nicoló

ABSTRACT There is a large body of literature that concludes that—when confronted with increased competition—banks rationally choose more risky portfolios. We argue that this literature has had a significant influence … ABSTRACT There is a large body of literature that concludes that—when confronted with increased competition—banks rationally choose more risky portfolios. We argue that this literature has had a significant influence on regulators and central bankers. We review the empirical literature and conclude that the evidence is best described as “mixed.” We then show that existing theoretical analyses of this topic are fragile, since there exist fundamental risk‐incentive mechanisms that operate in exactly the opposite direction, causing banks to become more risky as their markets become more concentrated. These mechanisms should be essential ingredients of models of bank competition.

Financial Intermediation and Delegated Monitoring

1984-07-01

Douglas W. Diamond

This paper develops a theory of financial intermediation based on minimizing the cost of monitoring information which is useful for resolving incentive problems between borrowers and lenders. It presents a … This paper develops a theory of financial intermediation based on minimizing the cost of monitoring information which is useful for resolving incentive problems between borrowers and lenders. It presents a characterization of the costs of providing incentives for delegated monitoring by a financial intermediary. Diversification within an intermediary serves to reduce these costs, even in a risk neutral economy. The paper presents some more general analysis of the effect of diversification on resolving incentive problems. In the environment assumed in the model, debt contracts with costly bankruptcy are shown to be optimal. The analysis has implications for the portfolio structure and capital structure of intermediaries.

Small Business Credit Availability and Relationship Lending: The Importance of Bank Organisational Structure

2002-02-01

Allen N. Berger , Gregory F. Udell

Journal Article Small Business Credit Availability and Relationship Lending: The Importance of Bank Organisational Structure Get access Allen N. Berger, Allen N. Berger Board of Governors of the Federal Reserve … Journal Article Small Business Credit Availability and Relationship Lending: The Importance of Bank Organisational Structure Get access Allen N. Berger, Allen N. Berger Board of Governors of the Federal Reserve System and Wharton Financial Institutions Center, Philadelphia Indiana University Search for other works by this author on: Oxford Academic Google Scholar Gregory F. Udell Gregory F. Udell Board of Governors of the Federal Reserve System and Wharton Financial Institutions Center, Philadelphia Indiana University Search for other works by this author on: Oxford Academic Google Scholar The Economic Journal, Volume 112, Issue 477, February 2002, Pages F32–F53, https://doi.org/10.1111/1468-0297.00682 Published: 12 March 2002

The journal of financial economics

1993-06-01

G. William Schwert

Data for the 516 papers published in volumes 1–30 of the Journal of Financial Economics in the period 1974–91 are analyzed. 477 authors from 136 institutions contributed papers, and these … Data for the 516 papers published in volumes 1–30 of the Journal of Financial Economics in the period 1974–91 are analyzed. 477 authors from 136 institutions contributed papers, and these papers received 16,231 citations according to the Social Science Citation Index. Lists of authors and institutions who have contributed the most papers to the JFE and a list of the mostly highly-cited JFE papers show why the Journal has been successful in influencing the finance and economics literature during its first 18 years.

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Monitoring and Reputation: The Choice between Bank Loans and Directly Placed Debt

1991-08-01

Douglas W. Diamond

This paper determines when a debt contract will be monitored by lenders. This is the choice between borrowing directly (issuing a bond, without monitoring) and borrowing through a bank that … This paper determines when a debt contract will be monitored by lenders. This is the choice between borrowing directly (issuing a bond, without monitoring) and borrowing through a bank that monitors to alleviate moral hazard. This provides a theory of bank loan demand and of the role of monitoring in circumstances in which reputation effects are important. A key result is that borrowers with credit ratings toward the middle of the spectrum rely on bank loans, and in periods of high interest rates or low future profitability, higher-rated borrowers choose to borrow from banks.

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Relationship Banking: What Do We Know?

2000-01-01

Arnoud W. A. Boot

What Do a Million Observations on Banks Say About the Transmission of Monetary Policy?

2000-06-01

Anil Kashyap , Jeremy C. Stein

We study the monetary-transmission mechanism with a data set that includes quarterly observations of every insured U.S. commercial bank from 1976 to 1993. We find that the impact of monetary … We study the monetary-transmission mechanism with a data set that includes quarterly observations of every insured U.S. commercial bank from 1976 to 1993. We find that the impact of monetary policy on lending is stronger for banks with less liquid balance sheets—i.e., banks with lower ratios of securities to assets. Moreover, this pattern is largely attributable to the smaller banks, those in the bottom 95 percent of the size distribution. Our results support the existence of a “bank lending channel” of monetary transmission, though they do not allow us to make precise statements about its quantitative importance. (JEL E44, E52, G32)

Incentive-Compatible Debt Contracts: The One-Period Problem

1985-10-01

Douglas Gale , Martin Hellwig

In a simple model of borrowing and lending with asymmetric information we show that the optimal, incentive-compatible debt contract is the standard debt contract. The second-best level of investment never … In a simple model of borrowing and lending with asymmetric information we show that the optimal, incentive-compatible debt contract is the standard debt contract. The second-best level of investment never exceeds the first-best and is strictly less when there is a positive probability of costly bankruptcy. We also compare the second-best with the results of interest-rate-taking behaviour and consider the effects of risk aversion. Finally we provide conditions under which increasing the borrower's initial net wealth must reduce total investment in the venture.

Stock Markets, Banks, and Economic Growth

1999-11-30

Ross Zervos Levine

Using data on 49 countries from 1976 to 1993, the authors investigate whether measures of stock market liquidity, size, volatility, and integration in world capital markets predict future rates of … Using data on 49 countries from 1976 to 1993, the authors investigate whether measures of stock market liquidity, size, volatility, and integration in world capital markets predict future rates of economic growth, capital accumulation, productivity improvements, and private savings. They find that stock market liquidity-as measured by stock trading relative to the size of the market and economy - is positively and significantly correlated with current and future rates of economic growth, capital accumulation, productivity growth, even after controlling for economic and political factors. Stock market size, volatility, and integration are not robustly linked with growth. Nor are financial indicators closely associated with private savings rates. Significantly, banking development -as measured by bank loans to private enterprises divided by GDP -when combined with stock market liquidity predicts future rates of growth, capital accumulation, and productivity growth when entered together in regressions. The authors determine that these results are consistent with views that (1)financial markets and institutions provide important services for long-run growth, and (2)stock markets and banks provide different financial services.

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Bank Runs, Deposit Insurance, and Liquidity

1983-06-01

Douglas W. Diamond , Philip H. Dybvig

This paper shows that bank deposit contracts can provide allocations superior to those of exchange markets, offering an explanation of how banks subject to runs can attract deposits. Investors face … This paper shows that bank deposit contracts can provide allocations superior to those of exchange markets, offering an explanation of how banks subject to runs can attract deposits. Investors face privately observed risks which lead to a demand for liquidity. Traditional demand deposit contracts which provide liquidity have multiple equilibria, one of which is a bank run. Bank runs in the model cause real economic damage, rather than simply reflecting other problems. Contracts which can prevent runs are studied, and the analysis shows that there are circumstances when government provision of deposit insurance can produce superior contracts.

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This time is different: eight centuries of financial folly

2010-02-01

Deposit Insurance, Risk, and Market Power in Banking

1990-01-01

Michael C. Keeley

A fixed-rate deposit insurance system provides a moral hazard for excessive risk taking and is not viable absent regulation. Although the deposit insurance system appears to have worked remarkably well … A fixed-rate deposit insurance system provides a moral hazard for excessive risk taking and is not viable absent regulation. Although the deposit insurance system appears to have worked remarkably well over most of its fifty-year history, major problems began to appear in the early 1980s. This paper tests the hypothesis that increases in competition caused bank charter values to decline, which in turn caused banks to increase default risk through increases in asset risk and reductions in capital. Copyright 1990 by American Economic Association.

Determinants of Commercial Bank Interest Margins and Profitability: Some International Evidence

1999-05-01

Aslι Demirgüç-Kunt , Harry Huizinga

Using bank-level data for 80 countries in the years 1988–95, this article shows that differences in interest margins and bank profitability reflect a variety of determinants: bank characteristics, macroeconomic conditions, … Using bank-level data for 80 countries in the years 1988–95, this article shows that differences in interest margins and bank profitability reflect a variety of determinants: bank characteristics, macroeconomic conditions, explicit and implicit bank taxation, deposit insurance regulation, overall financial structure, and underlying legal and institutional indicators. A larger ratio of bank assets to gross domestic product and a lower market concentration ratio lead to lower margins and profits, controlling for differences in bank activity, leverage, and the macroeconomic environment. Foreign banks have higher margins and profits than domestic banks in developing countries, while the opposite holds in industrial countries. Also, there is evidence that the corporate tax burden is fully passed onto bank customers, while higher reserve requirements are not, especially in developing countries.

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Financial Constraints Risk

2006-01-01

Toni M. Whited , Guojun Wu

Journal Article Financial Constraints Risk Get access Toni M. Whited, Toni M. Whited University of Wisconsin Address correspondence to Toni M. Whited, Department of Finance, University of Wisconsin, 975 University … Journal Article Financial Constraints Risk Get access Toni M. Whited, Toni M. Whited University of Wisconsin Address correspondence to Toni M. Whited, Department of Finance, University of Wisconsin, 975 University Avenue, Madison, WI 53706-1323, or email: [email protected]. Search for other works by this author on: Oxford Academic Google Scholar Guojun Wu Guojun Wu University of Houston Search for other works by this author on: Oxford Academic Google Scholar The Review of Financial Studies, Volume 19, Issue 2, Summer 2006, Pages 531–559, https://doi.org/10.1093/rfs/hhj012 Published: 18 January 2006

Stock Markets, Banks, and Economic Growth

1998-01-01

Ross Levine , Sara Zervos

Do well-functioning stock markets and banks promote long-run economic growth? This paper shows that stock market liquidity and banking development both positively predict growth, capital accumulation, and productivity improvements when … Do well-functioning stock markets and banks promote long-run economic growth? This paper shows that stock market liquidity and banking development both positively predict growth, capital accumulation, and productivity improvements when entered together in regressions, even after controlling for economic and political factors. The results are consistent with the views that financial markets provide important services for growth and that stock markets provide different services from banks. The paper also finds that stock market size, volatility, and international integration are not robustly linked with growth and that none of the financial indicators is closely associated with private saving rates. Copyright 1998 by American Economic Association.

Bank governance, regulation and risk taking

2009-05-05

Luc Laeven , Ross Levine

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Bank regulation and supervision: what works best?

2003-11-23

James R. Barth , Patrick Honohan , Ross Levine

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Nonmonetary Effects of the Financial Crisis in the Propagation of the Great Depression

2024-01-09

This paper examines the effects of the financial crisis of the 1930s onthe path of aggregate output during that period. Our approach is complementary to that of Friedman and Schwartz, … This paper examines the effects of the financial crisis of the 1930s onthe path of aggregate output during that period. Our approach is complementary to that of Friedman and Schwartz, who emphasized the monetary impact of the bank failures; we focus on non-monetary (primarily credit-related) aspects of the financial sector--output link and consider the problems of debtors as well as those of the banking system. We argue that the financial disruptions of 1930-33 reduced the efficiency of the credit allocation process; and that the resulting higher cost and reduced availability of credit acted to depress aggregate demand. Evidence suggests that effects of this type can help explain the unusual length and depth of the Great Depression.

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The Financial Accelerator in a Quantitative Business Cycle Framework

1998-03-01

Ben Bernanke , Mark Gertler , Simon Gilchrist

This chapter develops a dynamic general equilibrium model that is intended to help clarify the role of credit market frictions in business fluctuations, from both a qualitative and a quantitative … This chapter develops a dynamic general equilibrium model that is intended to help clarify the role of credit market frictions in business fluctuations, from both a qualitative and a quantitative standpoint. The model is a synthesis of the leading approaches in the literature. In particular, the framework exhibits a accelerator, in that endogenous developments in credit markets work to amplify and propagate shocks to the macroeconomy. In addition, we add several features to the model that are designed to enhance the empirical relevance. First, we incorporate money and price stickiness, which allows us to study how credit market frictions may influence the transmission of monetary policy. In addition, we allow for lags in investment which enables the model to generate both hump-shaped output dynamics and a lead-lag relation between asset prices and investment, as is consistent with the data. Finally, we allow for heterogeneity among firms to capture the fact that borrowers have differential access to capital markets. Under reasonable parametrizations of the model, the financial accelerator has a significant influence on business cycle dynamics.

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Private and Public Supply of Liquidity

1998-02-01

Bengt Holmström , Jean Tirole

This paper addresses a basic, yet unresolved, question: Do claims on private assets provide sufficient liquidity for an efficient functioning of the productive sector? Or does the state have a … This paper addresses a basic, yet unresolved, question: Do claims on private assets provide sufficient liquidity for an efficient functioning of the productive sector? Or does the state have a role in creating liquidity and regulating it either through adjustments in the stock of government securities or by other means? In our model, firms can meet future liquidity needs in three ways: by issuing new claims, by obtaining a credit line from a financial intermediary, and by holding claims on other firms. When there is no aggregateuncertainty, we show that these instruments are sufficient for implementing the socially optimal (second‐best) contract between investors and firms. However, the implementation may require an intermediary to coordinate the use of scarce liquidity, in which case contracts with the intermediary impose both a maximum leverage ratio and a liquidity constraint on firms. When there is only aggregate uncertainty, the private sector cannot satisfy its own liquidity needs. The government can improve welfare by issuing bonds that commit future consumer income. Government bonds command a liquidity premium over private claims. The government should manage debt so that liquidity is loosened (the value of bonds is high) when the aggregate liquidity shock is high and is tightened when the liquidity shock is low. The paper thus suggests a rationale both for government‐supplied liquidity and for its active management.

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Liquidity and leverage

2008-12-25

Tobias Adrian , Hyun Song Shin

Does function follow organizational form? Evidence from the lending practices of large and small banks

2005-02-08

Allen N. Berger , Nathan H. Miller , Mitchell A. Petersen +2 more

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Liquidity Risk, Liquidity Creation, and Financial Fragility: A Theory of Banking

2001-04-01

Douglas W. Diamond , Raghuram G. Rajan

Loans are illiquid when a lender needs relationship‐specific skills to collect them. Consequently, if the relationship lender needs funds before the loan matures, she may demand to liquidate early, or … Loans are illiquid when a lender needs relationship‐specific skills to collect them. Consequently, if the relationship lender needs funds before the loan matures, she may demand to liquidate early, or require a return premium, when she lends directly. Borrowers also risk losing funding. The costs of illiquidity are avoided if the relationship lender is a bank with a fragile capital structure, subject to runs. Fragility commits banks to creating liquidity, enabling depositors to withdraw when needed, while buffering borrowers from depositors' liquidity needs. Stabilization policies, such as capital requirements, narrow banking, and suspension of convertibility, may reduce liquidity creation.

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Liberalization, Moral Hazard in Banking, and Prudential Regulation: Are Capital Requirements Enough?

2000-03-01

Thomas Hellmann , Kevin Murdock , Joseph E. Stiglitz

In a dynamic model of moral hazard, competition can undermine prudent bank behavior. While capital-requirement regulation can induce prudent behavior, the policy yields Pareto-inefficient outcomes. Capital requirements reduce gambling incentives … In a dynamic model of moral hazard, competition can undermine prudent bank behavior. While capital-requirement regulation can induce prudent behavior, the policy yields Pareto-inefficient outcomes. Capital requirements reduce gambling incentives by putting bank equity at risk. However, they also have a perverse effect of harming banks' franchise values, thus encouraging gambling. Pareto-efficient outcomes can be achieved by adding deposit-rate controls as a regulatory instrument, since they facilitate prudent investment by increasing franchise values. Even if deposit-rate ceilings are not binding on the equilibrium path, they may be useful in deterring gambling off the equilibrium path. (JEL G2, E4, L5)

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Bank lending during the financial crisis of 2008

2009-12-17

Victoria Ivashina , David Scharfstein

The real effects of financial constraints: Evidence from a financial crisis

2010-02-15

Murillo Campello , John R. Graham , Campbell R. Harvey

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Legal Determinants of External Finance

1997-07-01

Rafael La Porta , Florencio Lopez-de-Silanes , Andrei Shleifer +1 more

Using a sample of 49 countries, we show that countries with poorer investor protections, measured by both the character of legal rules and the quality of law enforcement, have smaller … Using a sample of 49 countries, we show that countries with poorer investor protections, measured by both the character of legal rules and the quality of law enforcement, have smaller and narrower capital markets. These findings apply to both equity and debt markets. In particular, French civil law countries have both the weakest investor protections and the least developed capital markets, especially as compared to common law countries.

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Does Distance Still Matter? The Information Revolution in Small Business Lending

2002-12-01

Mitchell A. Petersen , Raghuram G. Rajan

The distance between small firms and their lenders is increasing, and they are communicating in more impersonal ways. After documenting these systematic changes, we demonstrate they do not arise from … The distance between small firms and their lenders is increasing, and they are communicating in more impersonal ways. After documenting these systematic changes, we demonstrate they do not arise from small firms locating differently, consolidation in the banking industry, or biases in the sample. Instead, improvements in lender productivity appear to explain our findings. We also find distant firms no longer have to be the highest quality credits, indicating they have greater access to credit. The evidence indicates there has been substantial development of the financial sector, even in areas such as small business lending.

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Deciphering the Liquidity and Credit Crunch 2007–2008

2009-01-01

Markus K. Brunnermeier

The financial market turmoil in 2007 and 2008 has led to the most severe financial crisis since the Great Depression and threatens to have large repercussions on the real economy. … The financial market turmoil in 2007 and 2008 has led to the most severe financial crisis since the Great Depression and threatens to have large repercussions on the real economy. The bursting of the housing bubble forced banks to write down several hundred billion dollars in bad loans caused by mortgage delinquencies. At the same time, the stock market capitalization of the major banks declined by more than twice as much. While the overall mortgage losses are large on an absolute scale, they are still relatively modest compared to the $8 trillion of U.S. stock market wealth lost between October 2007, when the stock market reached an all-time high, and October 2008. This paper attempts to explain the economic mechanisms that caused losses in the mortgage market to amplify into such large dislocations and turmoil in the financial markets, and describes common economic threads that explain the plethora of market declines, liquidity dry-ups, defaults, and bailouts that occurred after the crisis broke in summer 2007.

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Agency Theory: An Assessment and Review

1989-01-01

Kathleen M. Eisenhardt

CoVaR

2016-06-30

Tobias Adrian , Markus K. Brunnermeier

We propose a measure of systemic risk, Δ CoVaR, defined as the change in the value at risk of the financial system conditional on an institution being under distress relative … We propose a measure of systemic risk, Δ CoVaR, defined as the change in the value at risk of the financial system conditional on an institution being under distress relative to its median state. Our estimates show that characteristics such as leverage, size, maturity mismatch, and asset price booms significantly predict Δ CoVaR. We also provide out-of-sample forecasts of a countercyclical, forward-looking measure of systemic risk, and show that the 2006:IV value of this measure would have predicted more than one-third of realized Δ CoVaR during the 2007–2009 financial crisis. (JEL C58, E32, G01, G12, G17, G20, G32)

Financial Contagion

2000-02-01

Franklin Allen , Douglas Gale

Financial contagion is modeled as an equilibrium phenomenon. Because liquidity preference shocks are imperfectly correlated across regions, banks hold interregional claims on other banks to provide insurance against liquidity preference … Financial contagion is modeled as an equilibrium phenomenon. Because liquidity preference shocks are imperfectly correlated across regions, banks hold interregional claims on other banks to provide insurance against liquidity preference shocks. When there is no aggregate uncertainty, the first‐best allocation of risk sharing can be achieved. However, this arrangement is financially fragile. A small liquidity preference shock in one region can spread by contagion throughout the economy. The possibility of contagion depends strongly on the completeness of the structure of interregional claims. Complete claims structures are shown to be more robust than incomplete structures.

Bank capital and liquidity risk: Influence of crisis and regulatory intervention

2025-06-25

Mamiza Haq , Nikhil Srivastava , Zihe Wang | Review of Quantitative Finance and Accounting

The relationship between bank capitalization and socio-economic development: Evidence from European countries

2025-06-25

Аnzhela Kuznyetsova , Alina Yefimenko , Iryna Didenko +4 more | Banks and Bank Systems

Bank capitalization is a key factor in the banking system’s resilience to economic shocks, as outlined in the Basel Accords on banking regulation. The paper aims to empirically evaluate the … Bank capitalization is a key factor in the banking system’s resilience to economic shocks, as outlined in the Basel Accords on banking regulation. The paper aims to empirically evaluate the connection between bank capitalization and the socio-economic development level. The study uses World Bank data across 34 European countries of varying income levels (high, upper-middle, and lower-middle) for the years 2010, 2015, and 2020 as periods of financial and socio-economic turbulence. The study applies principal component analysis and correlation methods to identify relevant indicators. Countries were grouped using hierarchical clustering and K-means clustering methods. The results of the variance analysis revealed that only two indicators of bank capitalization – the share of non-performing loans and return on assets, and three socio-economic indicators – the Gini index, inflation, and unemployment, were statistically significant. As a result of both qualitative and quantitative changes between clusters, countries were reallocated from four clusters in 2010 and 2015 to three clusters by 2020: high-income countries, including Austria, Belgium, Denmark, Ireland, Iceland, Latvia, and others, consolidated into a single stable cluster (Cluster 3) in terms of both bank capitalization and socio-economic development. The primary drivers of inter-cluster movements were the positive dynamics of non-performing loans and bank assets, superior bank capitalization ratios, and improvements in inflation and unemployment levels. Based on the study’s findings, a matrix of transformational sustainability among European countries has been developed. The analysis confirms a relationship between the components of the chain: “level of bank capitalization – level of socio-economic development”.

A market-shaping strategy takes root in Rourkela, India, that has lessons for cities worldwide

2025-06-25

Bruce N. Smith , Ashutosh Kulkarni | Nature Cities

The cost of financial intermediation in Australia

2025-06-24

Indeewari U Colombage , Dirk G. Baur , Yihui Lan | Australian Journal of Management

This article finds a negative trend in the unit cost of financial intermediation in Australia. The result is remarkable given the seemingly low competition in the Australian banking system and … This article finds a negative trend in the unit cost of financial intermediation in Australia. The result is remarkable given the seemingly low competition in the Australian banking system and contrasts the relatively constant costs identified for the United States. However, the negative trend is related to falling interest rates highlighting the fact that Australian loans are generally more exposed to interest rate changes than US loans. We also compare the cost of financial intermediation across five types of financial institutions in Australia: shareholder-owned deposit-taking institutions, customer-owned deposit-taking institutions, non-deposit-taking lending institutions, deposit-taking and non-deposit-taking FinTechs. Our analysis suggests that the costs of financial intermediation could decrease through improved operational efficiency and profits passed on to consumers instead of shareholders. JEL Classification: G21, G23, G32

Account transfer and digital banking

2025-06-24

Woosik Moon | Routledge eBooks

Impact of capital buffer and type of ownership on bank profitability and cost of financial intermediation: evidence from Bangladesh

2025-06-24

Kazi Afsara Tasnim , K.M. Zahidul Islam , Md. Nahid Alam | Journal of Financial Economic Policy

Purpose The purpose of this paper is to investigate the impact of capital buffer and type of ownership on bank profitability and costs of financial intermediation. The study presents a … Purpose The purpose of this paper is to investigate the impact of capital buffer and type of ownership on bank profitability and costs of financial intermediation. The study presents a more comprehensive understanding of how capital buffers contribute to stabilizing the banking industry and how they may be beneficial or detrimental to profitability in developing nations such as Bangladesh during financial crises. Furthermore, banks differ in their ownership structures with regard to shareholders, guidelines and operations. Consequently, the study intends to address both the consistency and recommendations in this regard by determining how these structural disparities among banks may manifest in banks’ performance. This study provides empirical data to understand Bangladesh’s banking situation and evaluate the effectiveness of policy implications in a developing nation, considering both macroeconomic and bank-specific factors. Design/methodology/approach The two-step generalized method of moments (GMM) estimation method is applied to explore the impact of capital buffer and type of ownership on profitability estimated by return on assets (ROA) and cost of financial intermediation measured by net interest margin (NIM). Other control variables that have been used to conduct the study are NLTA, leverage, bank size and risk. Two macroeconomic variables (GDP and inflation) have been included in the model to find out the overall macroeconomic impact. Findings The result shows that the capital buffer has no significant impact on bank profitability, although its impact on the cost of financial intermediation is statistically significant. On the contrary, all types of ownership structures have shown a significant relationship with bank profitability and financial intermediation. Research limitations/implications The extension of this study can explore the impact of capital buffer and ownership structure on the stability of bank performance. Practical implications The findings of this study might have important implications for banking regulators and investors. The result indicates that maintaining an additional level of capital does not account for profitability. However, a well-capitalized bank might charge higher intermediation fees and register a higher interest margin because of a positive association between capital buffer and net interest margin. All types of ownership having a significant relationship with bank profitability and the cost of financial intermediation suggest that banking regulations for differently structured banks are well implemented. Originality/value This study is original in nature and includes an analysis of the banking performance of Bangladeshi Banks. The findings of this study will be beneficial to banks and policymakers.

Architectures and Challenges of AI Multi-Agent Frameworks for Financial Services

2025-06-24

Satyadhar Joshi | Current Journal of Applied Science and Technology

Artificial Intelligence (AI) multi-agent frameworks are enabling autonomous decision-making, intelligent collaboration, and the automation of complex workflows. These frameworks leverage Large Language Models (LLMs) and distributed AI systems to optimize … Artificial Intelligence (AI) multi-agent frameworks are enabling autonomous decision-making, intelligent collaboration, and the automation of complex workflows. These frameworks leverage Large Language Models (LLMs) and distributed AI systems to optimize operations across diverse sectors, with finance emerging as one of the most impacted domains. AI agents are increasingly employed in risk assessment, regulatory compliance, algorithmic trading, fraud detection, and customer service, fundamentally altering how financial institutions operate and manage market dynamics. This paper presents a review of AI multi-agent frameworks, evaluating their architectures, applications, and deployment challenges within financial services. We conduct an in-depth comparative analysis of prominent frameworks, including LangChain, CrewAI, and OpenAI Swarm, assessing their strengths, limitations, and suitability for different financial applications. Furthermore, we examine how these frameworks integrate into financial ecosystems, facilitating automated decision-making, enhancing operational efficiency, and mitigating systemic risks. Despite the transformative potential of AI agents, their widespread adoption introduces critical challenges, such as data quality inconsistencies, lack of model explainability, regulatory concerns, and ethical dilemmas. This paper explores these issues, emphasizing the necessity for transparency, accountability, and robustness in AI-driven financial solutions. Additionally, we highlight the role of AI governance and risk mitigation strategies in ensuring regulatory compliance and alignment with financial industry standards. We also outline future research directions, advocating for the development of interpretable, scalable, and resilient AI agent frameworks. As financial automation continues to evolve, a deeper understanding of multi-agent AI systems is essential for leveraging their full potential while mitigating associated risks.

Systemic Risk and Commercial Bank Stability in the Middle East and North Africa (MENA) Region

2025-06-24

Rim Jalloul , Mahfuzul Haque | Risks

Using panel data spanning 2004–2023 of 21 countries in the MENA (Middle East and North Africa) region, we measure systemic risk and assess its influence on key banking sector performance … Using panel data spanning 2004–2023 of 21 countries in the MENA (Middle East and North Africa) region, we measure systemic risk and assess its influence on key banking sector performance indicators, including financial stability (proxied by commercial bank branches per 100,000 adults), providing evidence from the emerging market context. One of the key findings of the study is the pivotal role played by financial access in promoting banking stability. In particular, the density and outreach of commercial banking branches were shown to have a stabilizing effect on the banking system. Also, findings reveal that systemic risk significantly undermines bank stability and operational efficiency while constraining financial depth. The study contributes to the literature by offering empirical evidence on the adverse effects of systemic risk in a region characterized by financial volatility and structural vulnerabilities. These findings align with existing global evidence that links financial development with reduced systemic risk, yet they also offer new empirical insights that are contextually relevant to the MENA region. The findings provide actionable recommendations for policymakers. Regulatory authorities in the MENA region should consider strategies that not only enhance the robustness of financial institutions but also promote inclusive access to banking services. The dual focus on institutional soundness and outreach could serve as a cornerstone for sustainable financial stability. Tailored policies that encourage branch expansion in underserved areas, coupled with incentives for inclusive banking practices, may yield long-term benefits by reducing the concentration of risk and improving the responsiveness of the financial system to external shocks.

Central Banking and Bank Supervision:

2025-06-24

| Princeton University Press eBooks

Kur Korumalı Mevduat Sisteminin Bankaların Performansları Üzerine Etkisi

2025-06-24

Oktay Kızılkaya , Ahmet Şit , Nazan GÜNGÖR KARYAĞDI | Karadeniz Sosyal Bilimler Dergisi

Bu çalışmanın amacı Türkiye’de Kur Korumalı Mevduat (KKM) Sisteminin bankaların finansal performansları üzerindeki etkisini araştırmaktır. Kur Korumalı Mevduat Sistemi, 2021 yılı Aralık ayında Hazine ve Maliye Bakanlığı tarafından Türk Lirası’na … Bu çalışmanın amacı Türkiye’de Kur Korumalı Mevduat (KKM) Sisteminin bankaların finansal performansları üzerindeki etkisini araştırmaktır. Kur Korumalı Mevduat Sistemi, 2021 yılı Aralık ayında Hazine ve Maliye Bakanlığı tarafından Türk Lirası’na olan talebi arttırmak ve böylece Türk Lirası’nın döviz karşısındaki değerini arttırmak amacıyla çıkarılmıştır. Bu amaçla çalışmaya ilişkin veriler sistemin çıktığı 2021 Aralık 2023 Ekim ayı döneme ait olup haftalık veriler kullanılmıştır. Bağımsız değişken olarak Kur Korumalı Mevduata yatırılan mevduatın, bankalara yatırılan toplam mevduata oranı, Kur Korumalı Mevduat toplam tutarının logaritmik hali; bağımsız değişken olarak da bankaların finansal performansını temsilen BIST Bankacılık Endeksi kullanılmıştır. Her iki bağımsız değişken ile bağımlı değişken arasında uzun vadede eşbütünleşik ilişki olduğu, gerek kur korumalı mevduat toplam tutarının gerekse de kur korumalı mevduatın toplam mevduat tutarına oranının BIST bankacılık endeksi üzerinde pozitif etkisinin olduğu sonucuna ulaşılmıştır.

Accounting Treatment of Financial Instruments Under the Algerian Financial System and International Standards: An Analytical Case Study of the SAIDAL Group

2025-06-24

Loudjani Aziz Guentri Amel | European Economic Letters (EEL)

Financial instruments constitute a fundamental component of contemporary accounting reports due to their role in representing and assessing the financial resources and obligations of economic institutions. With the ongoing development … Financial instruments constitute a fundamental component of contemporary accounting reports due to their role in representing and assessing the financial resources and obligations of economic institutions. With the ongoing development of the international accounting environment, it has become essential to examine the extent to which the Algerian Financial Accounting System aligns with international standards, particularly regarding the recognition, measurement, and disclosure of financial instruments. This study aims to analyze the accounting treatment of financial instruments within the SAIDAL Group by comparing the practices adopted under the Algerian Financial Accounting System with the requirements of relevant international accounting standards, specifically IFRS 9. The study adopts a comparative analytical approach based on the official financial data of the Group, with the objective of identifying areas of convergence and divergence, and proposing mechanisms to enhance financial disclosure in line with international transparency requirements.

Evaluating Subsidized Credit Policy in Kazakhstan with SME and Spatial Panel Data: First- and Second-Best Policy

2025-06-23

Michael Beenstock | Comparative Economic Studies

Abstract If financial intermediation margins were competitive, there would be no prima facie case for subsidized credit. Using a method that bounds default risk premia, we show that bank intermediation … Abstract If financial intermediation margins were competitive, there would be no prima facie case for subsidized credit. Using a method that bounds default risk premia, we show that bank intermediation margins are uncompetitive in Kazakhstan. Two evaluations are carried out to determine whether subsidized credit policy in Kazakhstan increased SME value-added and profits. The first uses observational data on individual SMEs, which show that subsidized credit increased SME profits. The second uses regional panel data on SMEs, which shows that subsidized credit increased SME value-added. These evaluations serve as background to a discussion of capital market policy in transition countries such as Kazakhstan, where domestic capital markets are dominated by oligopolistic commercial banks. Second-best theory suggests that positive evaluations do not necessarily justify the continuation of subsidized credit policy. Paradoxically, second-best policy may be inimical to first-best policy, which seeks to remedy the problem of excessive margins of intermediation through capital market reform.

Stablecoin devaluation risk

2025-06-23

Barry Eichengreen , My T. Nguyen , Ganesh Viswanath-Natraj | European Journal of Finance

Bank stability and liquidity creation in India: Does excess liquidity matter?

2025-06-23

Md Gyasuddin Ansari | Journal of Banking Regulation

BASEL III CAPITAL REQUIREMENTS AND LENDING: THE CASE OF THE D‐SIB CAPITAL BUFFER IN THAILAND

2025-06-22

Attavit Prachakseranee | The Developing Economies

This study attempts to measure the endogeneity‐prone effects of the implementation of the domestic systemically important bank (D‐SIB) capital buffer in Thailand by creating a synthetic control for each D‐SIB. … This study attempts to measure the endogeneity‐prone effects of the implementation of the domestic systemically important bank (D‐SIB) capital buffer in Thailand by creating a synthetic control for each D‐SIB. The main findings suggest that the D‐SIBs responded to the D‐SIB capital buffer differently, depending on the relative size of the portfolios with higher risk weights. Specifically, the D‐SIB with the highest proportion of business loans in its portfolio decreased lending growth more than the other two D‐SIBs, whereas the D‐SIB with the highest proportion of retail loans did not significantly decrease lending growth. In addition, the state‐owned commercial bank behaved differently from other banks such that synthetic controls cannot be created to replicate the unique behavior. While this study finds no significant effects on capital and risk‐weighted assets in the short run, it cannot rule out the possibility of the D‐SIBs raising more capital in the longer run.

The collapse of silicon valley bank: a critical analysis of regulatory shortcomings and risk management under Basel III

2025-06-21

Ali Al-Sari | Journal of Banking Regulation

Abstract Silicon Valley Bank's (SVB) collapse exposes fundamental problems in risk management, regulatory control, and governance models even after Basel III and Interest Rate Risk in the Banking Book (IRRBB) … Abstract Silicon Valley Bank's (SVB) collapse exposes fundamental problems in risk management, regulatory control, and governance models even after Basel III and Interest Rate Risk in the Banking Book (IRRBB) standards. The main reasons for SVB’s failure were too much exposure to long-term fixed-income securities, inefficient liquidity management, and high concentration of deposits. Consequently, the extended absence of a Chief Risk Officer (CRO) led to governance problems. Additionally, SVB was subject to interest rate fluctuations and liquidity shocks due to regulatory exemptions granted under the 2019 Basel III tailoring. This study provides a critical inquiry into the nexus of SVB’s risk management failures, regulatory loopholes, and changing financial stability risks similar to that of Lehman Brothers (2008), Washington Mutual (2008), and Credit Suisse (2023) in the banking sector. The key finding is that social media-driven bank runs have become a well-known phenomenon, contributing to large-scale withdrawals at breakneck speeds. However, this is a departure from the traditional liquidity risk framework. This highlights the need for tighter securities implies of Basel III and more prescriptive governance mechanisms with reactions to the evolving financial risks associated with the digital era. To avoid collapses similar to the one that occurred and thus ensure that banking becomes less complex while at the same time maintaining financial stability, risk assessment models must be strengthened, stress testing carried out robustly, and supervisory measures implemented proactively.

A Merger in the Banking Industry and Its Impact on the General Economy

2025-06-21

Rakhi Singh | INTERANTIONAL JOURNAL OF SCIENTIFIC RESEARCH IN ENGINEERING AND MANAGEMENT

Bank mergers are a strategic approach adopted by financial institutions to strengthen their financial standing, increase market share, and improve efficiency. The banking industry, being a backbone of the economy, … Bank mergers are a strategic approach adopted by financial institutions to strengthen their financial standing, increase market share, and improve efficiency. The banking industry, being a backbone of the economy, directly influences economic health through credit availability, employment, financial inclusion, and customer services. This research paper examines the causes behind banking mergers, their process, and the resulting impact on the general economy. Through case studies and data analysis, the paper identifies both the positive and negative consequences of such consolidations.

REFINANCEMENT DES BANQUES PARTICIPATIVES ET TRANSMISSION DE LA POLITIQUE MONETAIRE

2025-06-21

Mezine Anass , Yaacoubi Abdelhak | European Journal of Economic and Financial Research

Cette recherche examine l'impact des variations du taux directeur sur les banques participatives marocaines dans le cadre de leur refinancement à travers la Wakala bil istithmar, ainsi que leur rôle … Cette recherche examine l'impact des variations du taux directeur sur les banques participatives marocaines dans le cadre de leur refinancement à travers la Wakala bil istithmar, ainsi que leur rôle dans la transmission des impulsions de la politique monétaire. La parution des banques participatives au Maroc a créé un écosystème financier dual, caractérisé par la coexistence de deux modèles bancaires aux fondements distincts mais complémentaires. Malgré leur croissance soutenue, ces établissements de jeune âge évoluent dans un écosystème incomplet, caractérisé par l'absence d'un marché monétaire participatif et le manque d'instruments de refinancement sharia compliant. L'étude adopte une approche méthodologique rigoureuse qui combine tests de stationnarité, de causalité et de cointégration, suivis de l'estimation d'un modèle vectoriel à correction d'erreur, appliqués sur des données réelles mensuelles couvrant la période de janvier 2020 à juin 2024. Les résultats obtenus révèlent l'existence d'une relation d'équilibre significative à long terme entre le taux directeur, l’encours Wakala bil istithmar et la charge financière des banques participatives, affirmant ainsi leur sensibilité aux orientations de la politique monétaire malgré leurs spécificités opérationnelles. Les résultats de l’étude mettent en évidence une vulnérabilité structurelle des banques participatives aux changements du taux directeur, exprimée notamment par la sensibilité marquée de leurs charges financières aux variations de ce dernier. Cette vulnérabilité s'explique, par ailleurs, par leur position de taux défavorable marquée par des actifs générateurs de rendements fixes, financés par des ressources Wakala Bil Istithmar à taux révisable. Le test de causalité de Granger confirme une relation de cause à effet unidirectionnelle statistiquement significative entre le taux directeur et la charge financière des banques participatives. Notre étude démontre le rôle pivot que joue le mécanisme de Wakala bil istithmar dans la transmission de la politique monétaire, mais révèle également la dépendance critique de ces établissements à leurs banques mères conventionnelles. Cette dépendance, conjuguée à l'absence d'instruments de couverture conformes à la charia, limite leur capacité à gérer efficacement leur exposition aux risques de variation du taux de référence du marché monétaire et menace leur stabilité financière. L'étude conclut que les banques participatives marocaines, malgré leurs spécificités fonctionnelles, demeurent fortement intégrées dans le système financier global, et se voient sensibles aux orientations de la politique monétaire nationale. Le développement futur de ces établissements dépendra de leur capacité à renforcer leur résilience face aux chocs monétaires, notamment par la diversification de leurs sources de refinancement et l'évolution du cadre institutionnel. This research examines the impact of policy rate fluctuations on Moroccan participative banks within their refinancing framework through Wakala Bil Istithmar contracts, as well as their contribution to monetary policy transmission impulses. The emergence of participative banks in Morocco has created a dual financial ecosystem characterized by the coexistence of two banking models with distinct but complementary theoretical foundations. Despite their sustained growth, these nascent institutions evolve in an incomplete ecosystem, characterized by the absence of an Islamic money market and the lack of sharia-compliant refinancing instruments. The study adopts a rigorous methodological approach that combines tests of stationarity, causality and cointegration, followed by estimation of a vector model with error correction, applied on monthly real data covering the period from January 2020 to June 2024. The results obtained reveal the existence of a significant long-term equilibrium relationship between the policy rate, the outstanding Wakala bil istithmar and the financial burden of participative banks, thus affirming their sensitivity to monetary policy guidelines despite their operational specificities. The results of the study highlight a structural vulnerability of participative banks to changes in the policy rate, expressed notably by the marked sensitivity of their financial charges to variations in the latter. This vulnerability is explained, moreover, by their unfavourable rate position marked by fixed-yield generating assets, financed by Wakala Bil Istithmar resources at revisable rates. The Granger causality test confirms a statistically significant unidirectional cause-and-effect relationship between the policy rate and the financial burden of participative banks. Our study demonstrates the pivotal role played by the Wakala bil istithmar mechanism in the transmission of monetary policy, but also reveals the critical dependence of these institutions on their conventional parent banks. This dependence, together with the lack of Sharia-compliant hedging instruments, limits their ability to effectively manage their exposure to risks from changes in the money market reference rate and threatens their financial stability. The study concludes that Moroccan participative banks, despite their functional specificities, remain strongly integrated into the global financial system, and are sensitive to the orientations of national monetary policy. The future development of these institutions will depend on their ability to strengthen their resilience in the face of monetary shocks, notably through the diversification of their refinancing sources and the evolution of the institutional framework. JEL : E58 ; Z12 ; G28 Article visualizations:<img src="/-counters-/soc/0782/a.php" alt="Hit counter" />

STUDY ON COMPARATIVE ANALYSIS OF CAPTIAL STRUCTURE OF PROMINENT BANKS IN INDIA

2025-06-20

B. Lalith kumar , N. Ramanjaneyulu | International journal of management research and business strategy.

The capital structure of a bank plays a crucial role in determining its financial health, profitability,and ability to manage risks. This project focuses on the comparative analysis of the capital … The capital structure of a bank plays a crucial role in determining its financial health, profitability,and ability to manage risks. This project focuses on the comparative analysis of the capital structureof five leading banks in India: HDFC Bank Ltd, ICICI Bank Ltd, Axis Bank, Kotak MahindraBank, and IDBI Bank. These banks represent a mix of private and public sector institutions, eachwith unique financial strategies and market positions.The study explores the components of capital structure, including debt, equity, and retainedearnings, to evaluate how these banks finance their operations and achieve their growth objectives.Key financial ratios such as the debt-to-equity ratio, capital adequacy ratio, and are analysed to understand the level of leverage and the balance between risk and returns for each bank.Theproject also considers regulatory requirements, particularly the Basel norms, which influence thecapital structure decisions of banks in India.Through this analysis, we aim to uncover patterns and differences in how these banks’ structuretheir capital to optimize profitability while maintaining stability. For instance, private sector banks like HDFC Bank and ICICI Bank are known for their efficient capital management and robust profitability, while public sector banks like IDBI Bank often face challenges due to higher levelsof debt and non-performing assets.Kotak Mahindra Bank and Axis Bank fall in between, withtheir capital strategies reflecting a blend of caution and growth orientation. This comparative studyhighlights the advantages and drawbacks of different capital structures, offering insights into thefinancial resilience of these banks in a competitive and regulated environment.

Open data and API adoption of U.S. banks

2025-06-20

Xiangyu Lin , S. Sarah Zhang , Markos Zachariadis | Journal of Financial Intermediation

ХАЛҚАРО ТАЖРИБА АСОСИДА “OPEN BANKING” БИЗНЕС МОДЕЛИНИ ЖОРИЙ ЭТИШ ИСТИҚБОЛИ ВА САМАРАДОРЛИГИ

2025-06-20

Хавахон Рахимова , Умид Номозов | Ilgʻor iqtisodiyot va pedagogik texnologiyalar.

Мазкур мақола иқтисодиётнинг рақамли трансформациясини таъминловчи стратегик механизмлардан бири сифатида “Оpen banking” бизнес моделини Ўзбекистон молиявий секторига жорий этишни ўрганишга қаратилган. Ушбу модел инновацияларни ривожлантириш, банк хизматлари бозорида рақобатни ошириш … Мазкур мақола иқтисодиётнинг рақамли трансформациясини таъминловчи стратегик механизмлардан бири сифатида “Оpen banking” бизнес моделини Ўзбекистон молиявий секторига жорий этишни ўрганишга қаратилган. Ушбу модел инновацияларни ривожлантириш, банк хизматлари бозорида рақобатни ошириш ҳамда аҳолига тақдим этилаётган молиявий хизматлар сифатини яхшилаш имконини беради. “Open Banking” концепцияси жаҳон амалиёти ва Буюк Британия тажрибасига урғу берган ҳолда ўрганилди, бунда очиқ тизимда ишлайдиган банкларнинг фаолияти таҳлил қилинди. Шунингдек, унинг ишончли норматив асосни яратиш, хавфсизлик ва махфийлик чораларини кучайтириш, банклар, финтех компаниялари ва регуляторлар ўртасида ҳамкорликни ривожлантириш қаби масалалар ўрганилди. Мақолани мақсади “Open banking” бизнес-моделини босқичма-босқич жорий қилиш жараёнида уни иқтисодий имкониятларини кўрсатиш билан бир қаторда кутилаётган хавфларга ҳам эътиборни каратиш ҳисобланади.

The Interplay between Fiscal Deficits, Market Capitalization, and Turnover in Financial Markets: Evidence from India using VAR Model

2025-06-20

Rajneesh Kler | Deleted Journal

This article analyses the dynamic relationship between fiscal deficit, market capitalization, and equity derivatives turnover. Using Vector Autoregressive (VAR) modelling and Granger causality tests, we analyse the two-way dynamics between … This article analyses the dynamic relationship between fiscal deficit, market capitalization, and equity derivatives turnover. Using Vector Autoregressive (VAR) modelling and Granger causality tests, we analyse the two-way dynamics between these variables over time. Our findings reveal that fiscal deficit levels reduce market capitalization, suggesting that high deficits reduce investors' confidence and reduce market values. On the other hand, turnover of equity is highly sensitive to past levels of market capitalization, suggesting that market activity tends to linger in the long term. However, the size of the fiscal deficit does not appear to affect turnover much. The results shows that fiscal policy is significant in market conditions and fiscal stability plays a significant role in financial markets. Policymakers should be sensitive to shortfalls in their finances so that markets do not fail and investors still have faith.

Regulated distribution sector facing the future: the GB experience

2025-06-19

Cloda Jenkins | Edward Elgar Publishing eBooks

Innovation in Banking and Financial Intermediaries

2025-06-19

Enrico Geretto , Egidio Palmieri | Routledge eBooks

Financial constraints in lines of credit: the role of growth opportunities for vulnerable European SMEs

2025-06-19

Ana Mol-Gómez-Vázquez , Cristina Martínez‐Sola , Ginés Hernández‐Cánovas | International Journal of Bank Marketing

Purpose We aim to compare the effect of borrower discouragement and credit rejections associated with lines of credit (LOC) on growth opportunities for small- and medium-sized enterprises (SMEs). We also … Purpose We aim to compare the effect of borrower discouragement and credit rejections associated with lines of credit (LOC) on growth opportunities for small- and medium-sized enterprises (SMEs). We also intend to improve the knowledge about overdrafts and credit lines whose problems and benefits are yet to be fully understood. Finally, we aim to determine whether growth opportunities of vulnerable firms are, compared to those of non-vulnerable firms, more deeply affected by financing constraints. Design/methodology/approach We analyze the effect of credit rejected and discouraged LOC borrower on the likelihood of firms’ growth opportunities and the moderating effect of the vulnerability of the firm using a two-level random intercept logistic regression model. We use a sample of more than 13,000 SMEs operating in 25 European countries. Findings Our results show that firms without access to LOC facilities are less likely to experience growth. We show that current employment growth is especially sensitive to credit rejections while future turnover growth reacts more intensely to borrower discouragement. We also find that employment growth deteriorates more intensely due to credit rejections in vulnerable firms than in non-vulnerable ones. Originality/value To the best of our knowledge, this is the first contribution that compares the effect that credit rejection and borrower discouragement have on growth opportunities for SMEs. We also contribute to the limited knowledge about discouraged LOC borrowers. This knowledge is of great value for credit institutions because the flow of debt capital toward SMEs depends on these companies not being discouraged from applying for the resources they need.

Funding Cost and Bank Liquidity Creation: Evidence from the U.S.

2025-06-18

Dung Viet Tran , Ashraf Khan , M. Kabir Hassan | Asian Academy of Management Journal of Accounting and Finance

Recent academic research shows that banks with a high amount of deposits are inclined toward creating more liquidity and taking more risk. However, little is known about the puzzle of … Recent academic research shows that banks with a high amount of deposits are inclined toward creating more liquidity and taking more risk. However, little is known about the puzzle of liquidity creation and how it is influenced by the cost of funding. This article aims to study the impact of the cost of funding on liquidity creation in the U.S. banking industry. Using comprehensive quarterly data for the period 2001 to 2019, we find that the cost of funding negatively relates to the bank’s ability to create liquidity and the bank creates less liquidity and takes less risk when the cost of funding is high. Moreover, we show that large and public banks are more responsive to depositors’ behaviour, arising from changes in the cost of deposits. Our results are robust to alternative econometric approaches including addressing the endogeneity concerns, the measure of funding cost and liquidity creation, bank size and different crisis periods.

The Dynamics of Financial Innovation and Bank Performance: Evidence from the Tunisian Banking Sector Using a Mixed-Methods Approach

2025-06-18

Tarek Sadraoui | Journal of risk and financial management

This study investigates the interactive link between bank performance and financial innovation in Tunisian banking using a mixed-methods research framework that combines econometric approaches and institutional factors. The empirical analysis … This study investigates the interactive link between bank performance and financial innovation in Tunisian banking using a mixed-methods research framework that combines econometric approaches and institutional factors. The empirical analysis uses a panel data of 11 commercial banks from the period of 2000–2024 and employs an Autoregressive distributed lag (ARDL) model to estimate short- and long-run impacts of innovation on return on equity (ROE). A composite indicator of Fintech investment, digital service adoption, and innovation productivity characterizes financial innovation. Governance factors like the presence of risk management departments and executive compensation are taken into account. The results reveal a robust positive impact of financial innovation on bank performance in the long run, especially in more concentrated market settings. Risk management supports performance, while inefficient executive compensation is negatively associated with profitability. These findings are confirmed by robustness tests with HAC standard errors. This research contributes to the literature by situating financial innovation in the context of an emerging North African market and produces practitioner-relevant information for policymakers and bank executives interested in ensuring that performance results are consistent with innovation strategy.

Negative interest rate policy and bank lending channel: evidence from the Swedish experience

2025-06-18

Önder Özgür , Erdal Tanas Karagöl , Fatih Cemil Özbuğday | International Economics and Economic Policy

Systematic optimization of bank deposit value and capital structure under inflation uncertainty

2025-06-18

Haifeng Pan , Chen Fei , Yi C. Huang +1 more | International Journal of General Systems

The Impact of Cross-border capital flows macro-prudential management policy on Bank Credit

2025-06-18

Yuntao Cui , Fang Xia , Xiao Hu +2 more | Journal of Asian Economics

TÜRKİYE’DE KREDİ HACMİ VE EKONOMİK BÜYÜME ARASINDAKİ İLİŞKİ: GRANGER NEDENSELLİK VE ADRL SINIR TESTLERİ İLE ANALİZ

2025-06-18

Gökhan Sümer | Politik Ekonomik Kuram

Bu çalışma, Türkiye'de kredi hacmi ve ekonomik büyüme arasındaki ilişkiyi incelemektedir. Araştırma, 2007:4-2023:4 dönemini kapsayan üçer aylık verileri kullanarak gerçekleştirilmiştir. Analizde, finansal gelişme göstergesi olarak banka kredileri, ekonomik büyüme göstergesi … Bu çalışma, Türkiye'de kredi hacmi ve ekonomik büyüme arasındaki ilişkiyi incelemektedir. Araştırma, 2007:4-2023:4 dönemini kapsayan üçer aylık verileri kullanarak gerçekleştirilmiştir. Analizde, finansal gelişme göstergesi olarak banka kredileri, ekonomik büyüme göstergesi olarak ise GSYİH kullanılmıştır. Çalışmada hem kısa hem de uzun dönemli ilişkiler incelenmiştir. Kısa dönemli ilişki VAR modeli tabanlı Granger nedensellik testi ile analiz edilirken, uzun dönemli ilişki ARDL sınır testi yaklaşımıyla değerlendirilmiştir. Bu metodolojik çeşitlilik, analizin derinliğini artırmaktadır. Araştırma bulguları, kredi büyümesi ve ekonomik büyüme arasında anlamlı bir ilişkinin varlığını ortaya koymaktadır. Granger nedensellik testi sonuçları, değişkenler arasında kısa dönemli bir ilişkinin mevcut olduğunu gösterirken, ARDL sınır testi sonuçları uzun dönemli bir ilişkinin varlığına işaret etmektedir. Çalışma, 2008-2009 küresel finansal krizi ve 2020 COVID-19 pandemisi gibi önemli ekonomik olayların hem kredi büyümesi hem de ekonomik büyüme üzerindeki etkilerini de incelemiştir. Bu dönemlerde her iki değişkende de keskin düşüşler gözlemlenmiştir. Sonuç olarak, bu araştırma Türkiye'de finansal gelişme ve ekonomik büyüme arasındaki karmaşık ilişkiyi anlamak için önemli öngörüler sunmaktadır. Elde edilen bulgular, politika yapıcılar ve araştırmacılar için değerli bilgiler sağlamakta ve gelecekteki ekonomik politikaların şekillendirilmesinde yol gösterici olabilecek niteliktedir.

Macroprudential assessment framework and firms’ access to bank credit: Evidence from China

2025-06-17

Guanchun Liu , Hangjuan Liu , Jiaqi Wu +1 more | Journal of Economic Behavior & Organization

Subsidizing Business Entry in Competitive Credit Markets

2025-06-17

Vincenzo Cuciniello , Claudio Michelacci , Luigi Paciello | Journal of Political Economy

Savings Bank Revolution

2025-06-17

| The MIT Press eBooks

Elective Stock Dividends

2025-06-16

Luc Renneboog , Isabel Feito-Ruiz | Oxford Research Encyclopedia of Business and Management

The elective stock (or scrip) dividend gives investors the choice between receiving shares as a dividend or receiving the equivalent value in cash. If an investor opts for the former, … The elective stock (or scrip) dividend gives investors the choice between receiving shares as a dividend or receiving the equivalent value in cash. If an investor opts for the former, their equity stake is not diluted but they forego the cash. If the investor opts for the cash dividend, the investor faces some dilution of their share stake in the company. Financial constraints are the most likely reason why firms offer an elective stock dividend: Firms turn to this payout channel to preserve cash. This is especially important when a firm’s cash holdings and free cash flow are low, when the firm is highly leveraged, when access to bank debt and capital markets is limited and hence the cost of capital is high, or when a firm faces high debt repayments in the near future and intends to make large investments (e.g., when the acquisition value of a target firm exceeds the retained earnings). Cash preservation is indeed the most important corporate incentive to use elective stock dividends because they tend to be offered in combination with dividend cuts. This also hints at the possibility that firms are offering an elective stock dividend to camouflage (partial) dividend omissions. Dividend reductions would be received negatively by the shareholders, but they may not fully comprehend the cut if this were presented in combination with the complexity of an elective stock dividend.

Bank non-performing loans research around the world

2025-06-16

Peterson K Ozili | Asian Journal of Economics and Banking

Purpose This article presents a literature review of bank non-performing loans (NPLs) research around the world and suggests directions for future research. Design/methodology/approach The study used the thematic and bibliometric … Purpose This article presents a literature review of bank non-performing loans (NPLs) research around the world and suggests directions for future research. Design/methodology/approach The study used the thematic and bibliometric literature review methodologies to present a review of the recent NPL literature that have emerged since 2020. Findings Significant NPL research has emerged from the European, Asian and African regions, while fewer research studies have emerged from the Asia–Pacific, North America, Latin America and Caribbean regions as well as from the South Asian Association for Regional Cooperation and Organization for Economic Cooperation and Development countries. The new NPL determinants in the recent literature are corporate governance, fintech, financial inclusion, country risks, regulatory quality, political risks, shadow banking activity, the COVID-19 pandemic, public and/or external debt, country risks, real house prices and the independence of the central bank. The common regional NPL determinants are corruption, gross domestic product (GDP), debt, loan growth, inflation, capital adequacy ratio, lending rate, competition, the regulatory environment and GDP growth. The common theories used in the recent literature to explain the behavior of NPL are agency theory, stakeholder theory, information asymmetry theory and moral hazard theory, while the common empirical methodologies used are the panel regression and system generalized method of moments regression methods. Practical implications Financial regulators, bank supervisors and banking scholars should pay attention to the new emerging determinants of NPL. They should also understand the effect of NPL on financial and/or banking stability so that safeguards can be put in place to minimize the adverse effect of NPLs. More research is needed to provide insights into this area. Originality/value To date, no study has presented an overview of the post-2020 NPL literature to identify the new determinants and effects of NPL across several contexts and regions.

A Postcolonial Card Cartel: How European Companies Sold Biometric Voting in Africa

2025-06-16

Marielle Debos | Development and Change

ABSTRACT Biometrics companies see Africa as the ‘ultimate frontier’ — a relatively untapped market, yet to be fully captured. Although there is now a substantial critical literature on identification technologies … ABSTRACT Biometrics companies see Africa as the ‘ultimate frontier’ — a relatively untapped market, yet to be fully captured. Although there is now a substantial critical literature on identification technologies in Africa and the Global South, little attention has been paid to one set of key actors, namely, the companies that sell the technologies. To explore this issue, the author uses a case study involving the biometric identification of voters. Building on the work of David Lyon, the article introduces the notion of the postcolonial card cartel and analyses how this cartel came to be. First, the analytical framework brings vendors, who are central but often neglected actors, back into the study of identification technologies. Second, it reflects on the postcolonial dimension of the market. It explains the dominance of European companies, with a particular focus on French companies in the former French Empire, and analyses how African actors navigate these unequal global power structures. The article concludes that while anti‐imperialist mobilizations have recently politicized the role of foreign companies, African states have become increasingly dependent on corporate actors for both election management and citizen identification.

Non -Performing Assets

2025-06-15

TISHA SHARMA | INTERANTIONAL JOURNAL OF SCIENTIFIC RESEARCH IN ENGINEERING AND MANAGEMENT

ABSTRACT Non-Performing Assets (NPAs) have emerged as a major challenge for the Indian banking sector, particularly affecting public sector banks. This paper examines the causes of NPAs, their implications on … ABSTRACT Non-Performing Assets (NPAs) have emerged as a major challenge for the Indian banking sector, particularly affecting public sector banks. This paper examines the causes of NPAs, their implications on the economy and banking operations, and evaluates the effectiveness of policy measures such as the Insolvency and Bankruptcy Code (IBC) and SARFAESI Act. Using a mixed-methods approach—including survey data and secondary sources like RBI reports—the study finds that poor credit appraisal, delayed legal processes, and weak monitoring are key drivers of NPAs. The paper suggests technology-based solutions, stronger governance, and borrower accountability as effective steps to reduce NPAs and ensure financial stability.

Monetary policy and bank risk-taking: what role for regulatory and macroprudential policies?

2025-06-15

Saibal Ghosh | Macroeconomics and Finance in Emerging Market Economies

Le coût du crédit et son impact sur l'investissement privé en République Démocratique du Congo : une analyse empirique

2025-06-15

Daniel Médard | International Journal For Multidisciplinary Research

Ce travail examine l’impact du coût du crédit réel sur l’investissement privé en République Démocratique du Congo (RDC), dans un contexte caractérisé par une instabilité macroéconomique et une faible profondeur … Ce travail examine l’impact du coût du crédit réel sur l’investissement privé en République Démocratique du Congo (RDC), dans un contexte caractérisé par une instabilité macroéconomique et une faible profondeur de l’intermédiation financière. En recourant à une analyse de séries temporelles couvrant la période 2006–2024, l’étude intègre plusieurs variables clés : l’investissement privé (en % du PIB), le coût du crédit réel, le crédit bancaire au secteur privé, les investissements directs étrangers (IDE) et le Produit Intérieur Brut (PIB) réel. Après avoir vérifié la stationnarité des séries via le test ADF et validé l’existence d’une relation de long terme par le test de co-intégration d’Engle et Granger (1987), un modèle à correction d’erreur (ECM) a été estimé. Les résultats montrent qu’en dépit d’un effet direct à court terme du coût du crédit non significatif, le crédit au secteur privé présente une influence négative et significative, tandis que le PIB réel exerce un effet procyclique manifestement positif. Le coefficient du terme de correction d’erreur (–1,121) révèle par ailleurs une réactivité rapide de l’investissement privé pour rétablir l’équilibre de long terme. Ces constats offrent des éclairages pertinents pour l’élaboration de réformes visant à améliorer l’allocation du crédit et à stabiliser le coût du financement en vue de stimuler l’investissement productif.

Comparative Financial Performance Analysis of State Bank of India and HDFC Bank

2025-06-15

RATNASEN YADAV | INTERANTIONAL JOURNAL OF SCIENTIFIC RESEARCH IN ENGINEERING AND MANAGEMENT

Abstract: This study presents a comparative analysis of the financial performance of State Bank of India (SBI), India’s largest public sector bank, and HDFC Bank, the largest private sector bank. … Abstract: This study presents a comparative analysis of the financial performance of State Bank of India (SBI), India’s largest public sector bank, and HDFC Bank, the largest private sector bank. The objective is to assess and compare key financial indicators such as profitability, liquidity, asset quality, and efficiency over a period of three financial years (2017-18 to 2019-20). The methodology is based on ratio analysis using secondary data from annual reports, supplemented by statistical validation through t-tests. Results highlight HDFC Bank's consistent performance across most metrics, particularly in profitability and asset quality, while SBI shows strengths in liquidity but faces challenges with high leverage and non-performing assets.

Influence of Loan Approval Practice on Financial Performance of Commercial Banks in Kisii County, Kenya

2025-06-14

Rodgers Nyanumba Nyabuti , Andrew Nyangau , Mactosh Onwonga | American Journal of Finance and Business Management

Aim: This study examined how specific digital loan approval practices such as automated credit scoring, digital customer onboarding, electronic Know Your Customer (e-KYC) procedures and the use of mobile and … Aim: This study examined how specific digital loan approval practices such as automated credit scoring, digital customer onboarding, electronic Know Your Customer (e-KYC) procedures and the use of mobile and online banking platforms impact the financial performance of commercial banks in Kisii County. Methods: A descriptive survey design was employed. Stratified random sampling was used to select a sample size of 107 employees. Closed-ended questionnaires were used in collecting primary data from 107 employees across 16 banks. Annual reports were extracted from the Central Bank of Kenya (CBK). Financial performance data was triangulated from the responses given from 2016 to 2020. The study used descriptive and inferential statistics, including multiple and hierarchical regression analysis. Results: The results revealed a significant negative relationship between loan approval practices and financial performance. This indicating that inefficient or overly strict approval processes contributed to lower financial outcomes for the banks. Recommendation: The study recommended strengthening digital loan approval processes by enhancing the integration of credit rating assessments and credit bureau checks. Improvements to technological infrastructure are needed to ensure smooth access to updated credit data, addressing concerns about transparency and fairness.

Digital Transformation in Greek Banking: Historical Insights, User Behavior, and Technological Prospects

2025-06-14

Michalis Boumpis , Petros Lois , Spyros Repousis | Business Management and Strategy

This paper investigates the progression, current dynamics, and future trajectory of electronic banking (e-banking) in Greece, emphasizing both historical developments and contemporary challenges.Beginning with foundational advancements such as the introduction … This paper investigates the progression, current dynamics, and future trajectory of electronic banking (e-banking) in Greece, emphasizing both historical developments and contemporary challenges.Beginning with foundational advancements such as the introduction of ATMs and credit cards in the 1970s, the study traces the sector's evolution through pivotal milestones like the advent of internet and mobile banking in the late 1990s. Using a quantitative survey of 243 Greek e-banking users, it explores customer preferences, transaction patterns, and attitudes toward security.Results indicate a significant shift from branch-dependent banking to digital platforms, driven by convenience, efficiency, and accessibility, although security concerns persist. The analysis also evaluates the influence of regulatory frameworks and emerging technologies like blockchain and artificial intelligence on the sector. While Greek banks have made substantial progress in digital transformation, the study underscores the need for sustained innovation and enhanced security measures to align with global trends.This research provides valuable insights into customer behavior, operational efficiencies, and strategic opportunities for the future of e-banking in Greece.

Exchange rate pass-through and importers’ credit constraints: Evidence from China

2025-06-14

Yao Amber Li , Lingfei Lu , Tengyu Zhao | Journal of Economic Behavior & Organization

Financial capital

2025-06-13

Claudio Scardovi | Routledge eBooks

An assessment of the impact of non-performing loans and macroeconomic indicators on bank performance

2025-06-13

Abraham Nii Adu Okine , David Kwashie Garr | International Journal of Economics and Financial Modelling

The purpose is to explores the impact of NPLs and macroeconomic indicators on bank performance in Ghana. Non-performing loans pose significant challenge to banks, with detrimental implications for financial and … The purpose is to explores the impact of NPLs and macroeconomic indicators on bank performance in Ghana. Non-performing loans pose significant challenge to banks, with detrimental implications for financial and economic stability. This study used secondary data obtained from financial reports of nine firms in Ghanaian, covering 2007 to 2021. The investigation focused on bank’s ROA and ROE as proxies for measuring performance, while NPLs, GDP, bank size, and inflation were adopted as predictor factors. The random effects model was employed, using Ordinary Least Squares and autoregressive methods. The outcomes show insignificant direct, and negative connection between NPLs and bank ROA and ROE respectively. Additionally, the study demonstrates that inflation rate and bank size posit statistically important inverse, and direct influence on ROA and ROE respectively. NPL does not influence bank’s ROE and ROA. Inflation and bank size have impact on performance. Considering the diverse influences of NPLs on financial metrics, and the significant impact of inflation and bank size on performance, policymakers and institutional managers must prioritize effective risk management, rigorous customer screening and close monitoring of macroeconomic conditions to ensure that strategic financial planning aligns with current economic environment for sustainable performance.