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Banks in the South Asian region are the fulcrum of economic growth and development as they provide means to development credit and working capital, trade and infrastructure finance and are seen as custodians of the trust in the financial system. This paper aims to study the nature of banking sector linkages for the region.

The dependence structure between deposits and lending rates individually for the banks of the South Asian countries are studied using time invariant and time varying family of copula functions. The degree of connectedness is further studied by Diebold and Yilmaz methodology.

Results indicate poor levels of banking integration in the region as the dependence parameter for both deposits and lending rates was around 0 for the sample countries, thereby confirming poor banking sector integration in the region.

Policymakers of the region are interested in the co-movements of the interest rates to understand the cross-sector risk management and any systemic risk pressures for the regional economies. Corporates in these countries are scouting out for competitive borrowing rates to lower their cost of capital.

Rationale for examining the banking sector linkages is that the South Asian countries are at different stages of economic growth and development and this region in particular is the fastest growing region in the world and has largely increased its trade integration with the world albeit having lowest levels of intra-regional trade integration.

This is a first of a kind of studies to examine the banking sector linkages in South Asia.

This paper aims to construct a measure of integration among global banks and examine its impact on bank insolvencies and bank crises.

The authors apply principal component analysis to measure a bank’s degree of integration to the global banking market. Moreover, they test whether bank integration affects bank insolvency risk, in which they treat the equity of individual banks as a call option.

The authors find that the banking industry has become more globally integrated over the past two decades. At the individual bank level, results indicate that banks with higher integration levels have more assets, more nontraditional banking services and more interbank businesses. Overall, they find that a bank’s integration level is negatively associated with insolvency risk, which suggests that greater integration with global markets diversifies a bank’s risk. At the country level, banking systems with less integrated big banks, or more integrated smaller banks, are more stable and hence less likely to suffer a banking crisis.

The authors construct a novel measure of integration among global banks and examine its impact on bank insolvencies and bank crises.

In the euro’s initial years, Greece, Ireland, Italy, Portugal and Spain observed capital flow bonanzas and credit-booms, two cycles known to precede banking crises. Domestic banks fuelled those cycles via funding obtained from foreign financial institutions. Yet, these countries’ banking and financial crises have unfolded in different modes. In Ireland and Spain, credit-booms propelled real-estate bubbles, which dragged banks into crises, with governments’ accounts later being affected when rescuing banks (Spanish regional banks, and all Irish major banks). In Greece and Italy, extra monetary means perpetuated government imbalances (e.g. debt levels above 100% of GDP, large yearly deficits). More severely in Greece, banks were brought into crises by sovereign crises. In Portugal, a mixture of private and public sector–led crises have occurred. Our comparative study finds that these crises: (1) are connected to shocks and imbalances caused by dangerous banking sector cycles during the monetary integration process; (2) were not mere expansions of the US subprime crisis; (3) were not only caused by country-specific features and institutions; and (4) followed distinct paths, therefore, a uniform model encompassing all post-euro crises cannot exist.

Assessment of African financial development dynamic convergences in money, credit, efficiency and size. The paper aims to discuss these issues.

The empirical evidence is premised on 11 homogenous panels based on regions (Sub-Saharan and North Africa), income-levels (low, middle, lower-middle and upper-middle), legal-origins (English common-law and French civil-law) and religious dominations (Christianity and Islam). The paper examines convergence in financial intermediary dynamics of depth, efficiency, activity and size.

Findings suggest that countries with small-sized financial intermediary depth, efficiency, activity and size are catching-up countries with large-sized financial intermediary depth, efficiency, activity and size, respectively. The paper also provide the speeds of convergence and time necessary to achieve a full (100 percent) convergence.

The presence of strong links among African banking sectors may present little opportunity for portfolio diversification. The convergence patterns show positive steps toward regional integration. As a policy implication, African governments should not relent in structural and institutional reforms.

It is the first critical assessment of convergence in financial intermediary development dynamics in the African continent.

Cross-border investment has been a large part of merger and acquisition activity in the Latin American banking sector. Spain and the United States have been the largest investors, participating in almost 70% of the total transaction value. After an explanation of the importance of foreign direct investment and implications for cross-border investment, this paper focuses on the largest investor in the region's banking sector and attempts to find an explanation for the increasing participation of Spanish banks. The paper alludes to a potential new reality: Latin America could be the geographical location where major contenders in banking will be engaged in battles for global dominance.

A major lesson of the European Monetary Union (EMU) crisis is that serious disequilibria result from regional monetary arrangements not designed to be robust to a variety of shocks. The purpose of this paper is to assess these disequilibria within the Economic and Monetary Community of Central Africa (CEMAC), West African Economic and Monetary Union (UEMOA) and Financial Community of Africa (CFA) zones.

In the assessments, monetary policy targets inflation and financial dynamics of depth, efficiency, activity and size while real sector policy targets economic performance in terms of GDP growth. The author also provides the speed of convergence and time required to achieve a 100 percent convergence.

But for financial intermediary size within the CFA zone, findings, for the most part, support only unconditional convergence. There is no form of convergence within the CEMAC zone.

The broad insignificance of conditional convergence results has substantial policy implications. Monetary and real policies, which are often homogenous for member states, are thwarted by heterogeneous structural and institutional characteristics, which give rise to different levels and patterns of financial intermediary development. Therefore, member states should work towards harmonizing cross‐country differences in structural and institutional characteristics that hamper the effectiveness of monetary policies.

The paper provides warning signs to the CFA zone in the heat of the Euro zone crises.

The purpose of this paper is to incorporate risk in technical efficiency of ASEAN banks in a panel data framework for the period 2000 to 2015.

The directional distance function and semi-parametric framework are employed to estimate efficiency scores for two scenarios, one with only good outputs and the other with a combination of good and bad outputs.

The findings show there is no evidence of technological progress for banks in ASEAN and concerns about the outperformance of Vietnam’s banks. In addition, performance of Vietnam’s banks tends to be distorted by low level of loan loss reserves.

To reflect the true performance and shorten the period of removing bad assets, the State Bank of Vietnam can request banks in Vietnam to book more loan loss reserves.

By examining such a new approach, this study makes an early attempt to incorporate credit risk into the banking efficiency in ASEAN region.

This paper aims to highlight the new regulatory framework established by Basel III.

This paper provides a critical review of the existing literature concerning bank supervision while providing an overview of the transition from Basel I to Basel III rules and critical appraisal of the current regulatory framework. Review of the existing literature.

Basel III introduces new measures in favor of bank stability and in order to mitigate the propagation of financial shocks. But on the other hand the new regulatory framework adds an extra burden to banks’ business plans affecting credit policies and thus the real economy. Another issue that is not properly addressed is the rising of financial innovations that are able to pass by the new regulations. Overall Basel III rules are moving to the right direction but need to stay always up-to-date in order to catch up with the modern ever-evolving financial system. Pros and cons. Need for improvement.

The paper presents an up-to-date review of Basel rules with future prospects.

This study aims to analyze how recent regulation changes, namely, Basel II and the New Turkish Commercial Code, affect small and medium-sized enterprises (SMEs) and the relationship between SMEs and banks in Turkey through the eyes of SME managers. The author believes that the answers could differ for various types of SME.

In-depth interviews enabled a refined analysis of the effects of regulations in the eyes of firms’ representatives. The study was conducted for SMEs in the Anatolia Organized Industrial Zone.

One of the important conclusions of the paper is the fact that the loan approval process has been standardized and centralized. The results also show that regulations have different effects on larger and already stable firms than on smaller and/or start-up SMEs that do not have sufficient resources for the transformation required by regulations.

First, this study is a qualitative study that has the advantage of reaching richer and more plausible information that cannot be obtained by analyzing the numbers. Second, this study tries to analyze the perceptions of SMEs’ financial representatives rather than the perspectives of bank representatives. Finally, to the author’s knowledge, there has been no other study that analyzed a developing country on this topic.