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1 – 10 of over 8000Rudra P. Pradhan, Mak B. Arvin, Neville R. Norman and John H. Hall
The purpose of this paper is to examine the nature of causal relations between banking sector maturity, stock market maturity, and four aspects of performance and operation of the…
Abstract
Purpose
The purpose of this paper is to examine the nature of causal relations between banking sector maturity, stock market maturity, and four aspects of performance and operation of the economy: economic growth, inflation, openness in trade, and the degree of government involvement in the economy.
Design/methodology/approach
The authors look for possible links between the variables by conducting panel cointegration and causality tests, using a large sample of Asian countries over the period 1960-2011. Novel panel data estimation methods allow for robust estimates, using both variation between countries and variation over time.
Findings
The study identifies interesting causal links among the variables deriving uniquely from our innovations. In particular, The paper finds that for all regions considered, banking sector maturity and stock market maturity are causally linked, sometimes in both directions. Furthermore, stock market maturity may lead to economic growth, both directly and indirectly through indicators such as inflation and trade openness. The findings also support the notion that economic growth affects the maturity of the stock market in most regions.
Practical implications
The results lend support to the notion that a mature financial sector is a key contributor to generating economic growth. Furthermore, economic growth itself has the potential to bring about maturity in the financial sector.
Originality/value
The paper uses sophisticated principal-component analysis, panel cointegration, and Granger causality tests, methods not used in this literature before. The method was applied to recent data pertaining to 35 Asian countries – a group of countries that has previously not been adopted in this literature.
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Tadele Shimels and Lemma Lessa
Information systems' security is more critical than ever before since security threats are rapidly growing. Before putting in place information systems' security measures…
Abstract
Purpose
Information systems' security is more critical than ever before since security threats are rapidly growing. Before putting in place information systems' security measures, organizations are required to determine the maturity level of their information security governance. Literature review reveals that there is no recent study on information systems' security maturity level of banks in Ethiopia. This study thus seeks to measure the existing maturity level and examine the security gaps in order to propose possible changes in Ethiopian private banking industry's information system security maturity indicators.
Design/methodology/approach
Four private banks are selected as a representative sample. The system security engineering capability maturity model (SSE-CMM) is used as the maturity measurement criteria, and the measurement was based on ISO/IEC 27001 information security control areas. The data for the study were gathered using a questionnaire.
Findings
A total of 93 valid questionnaires were gathered from 110 participants in the study. Based on the SSE-CMM maturity model assessment criteria the private banking industry's current maturity level is level 2 (repeatable but intuitive). Institutions have a pattern that is repeated when completing information security operations but its existence was not thoroughly proven and institutional inconsistency still exists.
Originality/value
This study seeks to measure the existing maturity level and examine the security gaps in order to propose possible changes in Ethiopian private banking industry's information system security maturity indicators. This topic has not been attempted previously in the context of Ethiopian financial sector.
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Kasim Randeree, Ashish Mahal and Anjli Narwani
Organisations utilise Business Continuity Management (BCM) to support sustained performance of electronic systems on which their core activities are based. These organisations…
Abstract
Purpose
Organisations utilise Business Continuity Management (BCM) to support sustained performance of electronic systems on which their core activities are based. These organisations require a tool that can be used to assess the maturity of their existing BCM processes. Through the examination of the banking sector of the United Arab Emirates, the purpose of this paper is to address the need for a BCM maturity model.
Design/methodology/approach
A tailored BCM maturity model was developed using a two‐stage approach; the first stage was developing a model based on the analysis of five existing models; and the second stage was validation of the developed model against the formulated objectives through the use of focus groups with ten UAE banks, comprising of three BCM experts for each bank.
Findings
The research found that the provision of a standard maturity model for BCM as a situational analysis tool for the banking sector is functional and can be the basis of a tool to address the gap in organisations in general to assess the maturity level of their BCM processes.
Research limitations/implications
The developed model is limited to validation within a specific sector and geographically, with generic model validation being outside the scope of this research.
Practical implications
The framework provides different areas to which maturity can be assigned, various levels across quality and scope and how an overall BCM maturity of an organisation can be determined.
Originality/value
The development of a maturity model which could be used as a BCM self analysis tool is a significant addition to the BCM knowledge base.
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Kailash Pradhan and Vinay Kumar
This study attempts to examine the relationship between the banking sector and stock market development in India.
Abstract
Purpose
This study attempts to examine the relationship between the banking sector and stock market development in India.
Design/methodology/approach
To analyze the relationship between banks and stock market development, the ratio of stock market capitalization to GDP is proxied by stock market development. The determinants of the stock market development are used for analysis namely domestic credit to the private sector as a ratio of GDP is used as a proxy for the development of banks, saving rate, per capita real GDP, and inflation. The autoregressive distributed lag (ARDL)-Bounds testing approach is used for the analysis. The paper also used the unrestricted error correction model and CUSUM and CUSUM square test to check the stability of the model.
Findings
The ARDL bounds test found that there is a long-run relationship between stock market development and bank-centered financial development. The results also revealed that the stock market is positively influenced by the development of banks, savings, and per capita real GDP in the short-run as well as long-run.
Research limitations/implications
This paper suggests that improvement of banking sector plays an important role to increase liquidity of the capital market development in India. This paper also suggests that the economic growth and savings rate have positive impact to induce the capital market growth in both short run and long run.
Originality/value
The study has investigated the empirical relationship between the banking sector and the stock market development in a different methodological approach by using an ARDL model which is appropriate for a small sample size. There are few studies related to bank-centered financial development and stock market development in the context of India.
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Mukund Narayanamurti and Jonathan A. Batten
Post-crisis policy measures in Asia have focussed on banking sector and market reform. The paper argues that in order to propel growth, banking and market reform in Asia must be…
Abstract
Post-crisis policy measures in Asia have focussed on banking sector and market reform. The paper argues that in order to propel growth, banking and market reform in Asia must be undertaken with the view that they are not mutually exclusive competitive tradeoffs. Rather banks and markets must be viewed as complementary supportive pillars in a financial system. Additionally, legal and functional reform must be undertaken simultaneously. The paper proposes that a likely consequence of doing so will enable creating a four-pillared multi-dimensional growth paradigm in the region to help restore and promote growth.
Introduces the Fuzzy Industry Maturity Grid as an extension of theIndustry Maturity Grid for diagnosing an industry, to identifyfast‐growing sectors and to map out growth…
Abstract
Introduces the Fuzzy Industry Maturity Grid as an extension of the Industry Maturity Grid for diagnosing an industry, to identify fast‐growing sectors and to map out growth strategies for sectors showing signs of maturity. By incorporating fuzzy set theory and aggregation models in decision making, the conventional Industry Maturity Grid is enhanced from a qualitative analysis to a semi‐quantitative method which captures an expert′s knowledge of the industry, inclusive of his judgement. It does this via using a linguistic scale describing the characteristics under each of the three main dimensions of the IMG to form fuzzy sets; a hierarchical aggregation of information based on fuzzy aggregation operators; and a conceptual cube to determine the rank and ranking size of the prescribed strategies. Illustrates the application of the Fuzzy Industry Maturity Grid with an example on the Singapore banking industry.
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Jamshaid Anwar Chattha, Syed Musa Alhabshi and Ahamed Kameel Mydin Meera
In line with the IFSB and BCBS methodology, the purpose of this study is to undertake a comparative analysis of dual banking systems for asset-liability management (ALM) practices…
Abstract
Purpose
In line with the IFSB and BCBS methodology, the purpose of this study is to undertake a comparative analysis of dual banking systems for asset-liability management (ALM) practices with the duration gap, in Islamic Commercial Banks (ICBs) and Conventional Commercial Banks (CCBs). Based on the research objective, two research questions are developed: How do the duration gaps of ICBs compare with those of similar sized CCBs? Are there any country-specific and regional differences among ICBs in terms of managing their duration gaps?
Design/methodology/approach
The research methodology comprises two-stages: stage one uses a duration gap model to calculate the duration gaps of ICBs and CCBs; stage two applies parametric tests. In terms of the duration gap model, the study determines the duration gap with a four-step process. The study selected a sample of 100 banks (50 ICBs and 50 CCBs) from 13 countries for the period 2009-2015.
Findings
The paper provides empirical insights into the duration gap and ALM of ICBs and CCBs. The ICBs have more variations in their mean duration gap compared to the CCBs, and they have a tendency for a higher (more) mean duration gap (28.37 years) in comparison to the CCBs (11.79 years). The study found ICBs as having 2.41 times more duration gap compared to the CCBs, and they are exposed to increasing rate of return (ROR) risk due to their larger duration gaps and severe liquidity mismatches. There are significant regional differences in terms of the duration gap and asset-liability management.
Research limitations/implications
Future studies also consider “Off-Balance Sheet” activities of the ICBs, with multi-term duration measures. A larger sample size of 100 ICBs with 10 years’ data after the GFC would be more beneficial to the industry. In addition, the impact of an increasing benchmark rate (e.g. 100, 200 and 300 bps) on the ICBs as per the IFSB 20 per cent threshold can also be established with the duration gap approach to identify the vulnerabilities of the ICBs.
Practical implications
The study makes profound contributions to the literature and suggests various policy recommendations for Islamic banks, regulators, and standard setters of the ICBs, for identifying and measuring the significance of the duration gaps; and management of the ROR risk under Pillar 2 of the BCBS and IFSB, for financial soundness and stability purposes.
Originality/value
To the best of the authors’ knowledge, this is a pioneer study in Islamic banking involving a sample of 100 banks (50 ICBs and 50 CCBs) from 13 countries. The results of the study provide original empirical evidence regarding the estimation of duration gap, and variations across jurisdictions in terms of vulnerability of ICBs and CCBs in dual banking systems.
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