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The purpose of this paper is to identify the effect of induced capital regulatory pressure on banks’ charter value and risk-taking, and the influence of bank’s charter value on its risk-taking under such a capital regulatory pressure.

The authors use two different estimations to check the robustness of the results. First, they apply a two-stage least squares mode to estimate the impact of capital requirements and bank charter value on bank risk-taking, with the influence of capital regulatory and market-force variables on bank charter value. Second, to reduce the problem of unobserved heterogeneity, the authors use dynamic panel data techniques as a check for robustness.

The empirical results show that higher capital requirements pressure brings about a lower charter value for banks, which in turn increases their risk-taking. The issue of banks’ risk-taking is also affected by their size: large banks seem to be more stable than their smaller counterparts.

The authors’ findings suggest that regulatory pressure has had the desired impact on insolvency risk for Chinese banks due to the expected penalty triggered by a breach of capital requirements.

It is the first paper that investigates the impact of capital regulatory pressure on risk-taking of the Chinese banking system, which sheds light on concerns about regulatory monitoring of bank risk and capital regulatory framework.

This paper measures the impact of capital regulation on Chinese bank charter value and risk-taking and offers some support for the implementation of Basel III in China.

The authors have constructed different measures of regulatory pressure to investigate the influence of new capital regulatory regime on banks’ behavior. Most importantly, the exogenous changes of banks’ capital ratio induced by capital regulatory pressure during the past decade that provides a unique opportunity to directly analyze the impact of capital regulatory pressure on bank charter value and risk-taking.

The purpose of the paper is to investigate the legal status of business entities in the Republic of Azerbaijan. The Azeri government intends to establish a suitable environment for local and foreign companies working in the country.

The paper presents a scientific investigation aimed at discovering and interpreting facts related to legal entities in the Azeri context. The goal of the research process is to produce new knowledge, through the exploratory research, which structures and identifies new problems, and the constructive research, which develops solutions to a problem.

The main finding is that constructing the legal entities within the legal frameworks and in compliance with the European standards play a substantial role in overall economic growth and in attracting foreign investments in the local economy as well as in implementing measures for continuing economic reforms, further improving business climate and developing the non‐oil sector in line with the oil sector.

As a result of this research paper some changes may be made in the local legislation in order to develop the company incorporation procedure in the Republic of Azerbaijan in the most effective way and to provide the integration of the local economy into the world economy.

The originality of this paper is that it describes for the first time the legal status of legal entities in the Republic of Azerbaijan, and discusses the advantages and disadvantages of the company incorporation system. The paper addresses the international business community, particularly those involved in all aspects of commercial and corporative law.

The purpose of this paper is to investigate how several key risk factors, including capital-to-asset ratio (CAR), franchise value and lobbying, affect various measures of risk in the US banking industry before, during and after the financial crisis. The empirical analysis covers the period 2004-2013.

Using recent bank holding company data, this research explores several factors driving risk in the US banking industry. The authors follow recent regulatory models and use a cross-sectional approach that can be employed as a complement to established regulatory bank failure and early warning models to detect and prevent bank crisis and to guide policy intervention over time.

The findings provide evidence that the CAR has a negative relationship with bank risk. The authors also show that banks’ franchise values exhibit a positive relationship with bank risk in non-crisis years and a negative relationship during the crisis. The authors further find evidence suggesting that lobbying decreases bank risk in non-crisis years and increases risk during the crisis.

Previous studies have controversially discussed the effect of factors driving bank risk. The authors contribute to the discussion and provide the first empirical study to analyze the effects of lobbying activities by bank holding companies on bank risk before, during and after the financial crisis.

This paper examines the effect of restrictions on executive pay and high CEOs’ compensation on bank performance following the “2008 UK bank rescue policy”.

Using the difference-in-difference estimation technique we assess the relationship between executive compensation and financial performance of rescued banks relative to non-rescued banks over the period 1999–2019.

Our main finding indicates that the relationship between executive compensation and financial performance declines in rescued banks relative to non-rescued banks. Further, we document that performance continues to deteriorate in rescued banks relative to non-rescued banks. Our results are robust to different estimation techniques.

This study contributes to the literature that examines the efficacy of government bailouts during the 2008 crisis. To the best of the author’s knowledge, this study is among the first to examine the long-term implications of bank rescue and pay restrictions on executive compensation and performance post–rescue.

The past decade has witnessed rapid change in many areas of life and business has been at the forefront of this change. Technological change, globalisation and the opening of markets (both internationally and within national boundaries) are arguably the most significant change factors impacting on the business environment.

The purpose of this paper is to study whether the characteristics of the Shariah Supervisory Board (SSB) can influence the risk-taking behaviors of Islamic banks.

The data on governance were collected from 70 Islamic banks’ annual reports across 18 countries for the period from 2000 to 2011 to investigate the relationship between SSB’s characteristics including size, busyness and foreign board and the Islamic banks’ risk activities.

The size of SSB and the proportion of busy board in SSB positively and significantly influence Islamic banks’ asset return and insolvency risks. Foreign members are more effective in monitoring banks’ Shariah compliance. Further analysis provides some evidence that most of the findings on the associations between the SSB structure and bank risk are derived from countries in the Gulf Cooperation Council where Shariah governance is ruled internally at the bank level.

There is a need for better Shariah board characteristics in place that complement with other governance mechanisms to well comprehend the main purpose of Islamic banks.

SSB board busyness and foreign characteristics appear to influence the risk-taking behaviors of Islamic banks.

The Omnibus Budget Reconciliation Act of 1993 included depositor preference legislation intended to reduce Federal Deposit Insurance Corporation (FDIC) resolution costs. However, depositor preference might induce an offsetting reaction by general creditors and may affect resolution type.

We examine the empirical impact of state-level depositor preference laws on resolution type and costs with call-report data and FDIC data for all operating FDIC-BIF insured commercial banks that were closed or required FDIC financial assistance from January 1986 through December 1992. Our major findings are that depositor preference has: (1) tended to increase resolution costs; and (2) induced the FDIC to choose assisted mergers over liquidations.

Using a two bank, two-period game-theoretic model, this chapter shows that contingent purchase and assumption policy under which the choice of acquirer for a failed bank is contingent on the surviving banks’ risk-taking behavior is generally most effective in reducing moral hazard problems, particularly for countries with low levels of competition and high regulatory barriers. Moreover, we find that to minimize the probability of future bank failures, the choice of acquiring bank should be based not only on the short-term goal of resolving the insolvencies of financial institutions, but also on the long-term effects of ex ante risk-taking incentives.

Sabaf, a world‐leading manufacturer of components for domestic gas cooking appliances, went through a transformation process between 1993 and 2005 to develop a strategic approach to corporate responsibility that embedded social, environmental and governance issues into its organisation, its approach to business and its overall performance. This case describes the learning and change process within the company that set the ground for today's success.

This teaching case builds on data gathered through sites visits, interviews and company materials. The case research protocol explored the notion that the company was learning how to interact, and respond to its changing context, while its responses were creating the ground for internal organisational change that in turn would impact the relationship between the company and its context.

While on the surface the change process which Sabaf experienced can be regarded as a move from an implicit to a more explicit approach to corporate responsibility, it is also possible to take the view that the company was engaged in developing a more “humanistic” approach to management that permeated the whole organization. What became explicit at Sabaf was not corporate responsibility but rather the term “corporate responsibility” used to describe much older concepts of business that valued people and the natural environment alongside economics. The case also shows the process of organizational leadership for learning, management innovation and change that supported the processes through which this approach was developed and integrated into the company.

This case provides unique insights into the approach Sabaf adopted in its pioneering transformation to become a leading corporate responsibility company and a world leader in its sector. This case can be used as a benchmark for other companies that might embark on the process of integrating corporate responsibility and business performance as a strategic process that has effects that cut across the business as a whole.