Search results
1 – 10 of over 3000Sana Rhoudri and Lotfi Benazzou
The purpose of this study is to examine the factors affecting deposit withdrawal intentions among Moroccan profit-sharing investment account holders.
Abstract
Purpose
The purpose of this study is to examine the factors affecting deposit withdrawal intentions among Moroccan profit-sharing investment account holders.
Design/methodology/approach
Applying the push-pull-mooring (PPM) theory, a quantitative survey, based on insights brought to light by a previous qualitative study, was developed and administered to 166 depositors from five participatory banks at branches located in Morocco. Structural equation modeling was then used to evaluate the significance of relationships between the various variables under study.
Findings
Empirical findings showed that the PPM model with a second-order construct structure exhibited a better representation of the observed variables as compared to a first-order factor model. The results of the structural analysis indicated a significant direct relationship between withdrawal intention and each of the PPM model constructs: push and pull factors were found to have a positive impact on withdrawal intention, while mooring factors had a significant inverse relationship with withdrawal intention. The results of this study also revealed that the moderating role of the mooring construct was found in both relationships between push and withdrawal intention and between pull and withdrawal intention.
Research limitations/implications
The absence of a longitudinal study measuring the actual withdrawal behavior is the main limitation of this study. Furthermore, withdrawal intention was examined without differentiating between individual and corporate depositors. Finally, despite being insightful, the empirical findings should be generalized with caution, as the sample was purposely chosen by the banks’ management.
Practical implications
This study implied that participatory banks should stress the importance of mooring factors, as they strongly inhibit depositors’ intention to shift their funds to the conventional banking system. Moreover, this study provides great indications to Moroccan regulators and policymakers on a number of issues that can be used to develop policies that could improve the participatory banking system.
Originality/value
To the best of the authors’ knowledge, this study represents the first attempt to confirm the effectiveness of the PPM model in examining depositor-withdrawal intentions. This study is also the first of its kind to address profit-sharing investment depositors’ apprehensions in the Moroccan context, to the best of the authors’ knowledge.
Details
Keywords
Ayesha Afzal, Nawazish Mirza and Saba Firdousi
Market discipline is an important part of financial regulation, under Basel II and III. This paper aims to provide evidence on market discipline in Pakistan. Specifically, the…
Abstract
Purpose
Market discipline is an important part of financial regulation, under Basel II and III. This paper aims to provide evidence on market discipline in Pakistan. Specifically, the authors have analyzed the impact of CAMEL variables on costs of funds and deposit switching.
Design/methodology/approach
This study has used panel data related to different banking and macroeconomic variables. The sample period is 2004–2017 so it has covered the changing regulations that became binding for banks under Basel II and III. Quarterly data has been collected from the financial disclosure of publicly listed banks. The total number of banks in the sample is 26. Among these, 24 are publicly listed. Foreign banks have not been included because their activities in Pakistan are quite limited.
Findings
It has been found that efficiency, liquidity, asset quality and capital adequacy are negatively related to costs of funds for banks. Capital adequacy, liquidity and profitability are negatively related to deposit switching.
Research limitations/implications
These results indicate the presence of market discipline and have generated valuable implications for bank managers and regulators.
Originality/value
In this study, the case of Pakistan is interesting. The country has experienced financial liberalization that sought to avoid government intervention and encourage a more “market-based” approach. This change in the system was made more pronounced by the privatization of nationalized banks, improvement in the market structure, reduction in barriers to entry and consolidation of smaller banks. As a result, the banking system has emerged as an important source of financing and it provides us motivation to look deeper into depositor discipline in banking sector.
Details
Keywords
Ayesha Afzal and Saba Fazal Firdousi
This research is designed to investigate the presence of market discipline in the banking sector, across Balkan states in Europe. Specifically, the effects of CAMEL variables on…
Abstract
Purpose
This research is designed to investigate the presence of market discipline in the banking sector, across Balkan states in Europe. Specifically, the effects of CAMEL variables on the cost of funds and deposit-switching have been assessed.
Design/methodology/approach
The CAMEL method of bank evaluation has been applied as well as two measures for market discipline (costs of funds and deposit-switching behaviour). Data have been obtained for 10 Balkan states for the 2006–2019 period. For data analysis, ordinary least squares (OLS) and fixed effects models have been utilized. The generalized method of moments (GMM) method has been deployed as well as a dynamic panel model.
Findings
Evidence of market discipline has been found, in the form of a higher cost of funds in the context of capital adequacy (but not for other CAMEL variables). Evidence of market discipline in the form of deposit-switching, however, has not been found. In addition, it has been discovered that bank size and gross domestic product (GDP) growth lower the costs of funds for banks.
Originality/value
In the wake of the pandemic, banks need to prepare themselves for very difficult situations and relevant studies can provide help. Therefore, this research has contributed to the developing literature on this topic. In addition, the findings have important practical implications. Results show that banks should maintain adequate levels of capital if they want to control their costs of funds. Results also show that market discipline, in the form of higher costs of funds, can be imposed on banks to discourage excessive risk-taking. Findings highlight the value of appropriate policies and strong supervision of the financial industry. Findings also underline the importance of offering financial incentives to banks. For example, if banks know they will be able to avoid higher costs of funds by controlling their risk levels, they will avoid unrestrained risk-taking.
Details
Keywords
The central bank depleted its foreign-exchange reserves and enticed savers to switch to lira deposits to stabilise the currency. Rising interest rates globally, after two years of…
Details
DOI: 10.1108/OXAN-DB266775
ISSN: 2633-304X
Keywords
Geographic
Topical
Marcos Fernández-Gutiérrez and John Ashton
This paper examines the relationships between bank switching and both customer vulnerability and consumer-oriented policies (financial education and disclosure practices).
Abstract
Purpose
This paper examines the relationships between bank switching and both customer vulnerability and consumer-oriented policies (financial education and disclosure practices).
Design/methodology/approach
The analysis employs microdata from the Special Eurobarometer on Financial Products and Services, for 24 European nations. It carries out a probit estimation on the factors explaining propensity of bank switching, focusing on three characteristics associated with customer vulnerability: an advanced age, low educational attainment and residence in a rural or a relatively poor region.
Findings
The authors report that the probability of bank switching is significantly lower for three groups of vulnerable customers: the elderly, the less educated and those living in deprived regions. Further the authors identify that national financial education policies and disclosure practices have no significant effects on bank switching.
Research limitations/implications
Based on these results, the authors propose more targeted policies recognising customers' heterogeneity are required to increase bank switching behaviour.
Originality/value
This paper exploits a unique source of information on bank switching behaviour and customer characteristics across European nations. These data are complemented with information about consumer financial education policies and disclosure practices from the World Bank and geographical, market and regulatory factors at the regional and national levels. The paper contributes to two academic areas. First, it presents further evidence on heterogeneity of bank customer switching behaviour, addressed at improving the understanding of customer vulnerability in banking services. Second, it examines the efficacy of consumer-oriented policies (financial literacy and disclosure practices) in encouraging bank switching.
Details
Keywords
Chris Baumann, Greg Elliott and Suzan Burton
The loyalty literature has investigated the association between customer satisfaction and customer loyalty and revealed mixed results. Some studies have indicated that the…
Abstract
Purpose
The loyalty literature has investigated the association between customer satisfaction and customer loyalty and revealed mixed results. Some studies have indicated that the relationship is linear, whereas others have found it to be non‐linear. This study examines the nature of this association in retail banking, an issue that has not been tested empirically.
Design/methodology/approach
A survey study examined bank customers' attitudes, perceptions, and behavior. Bivariate and multivariate testing was applied to develop two loyalty models: one based only on variables typically known to a bank, such as demographics and recent consumer behavior, and the other based on additional survey data.
Findings
A non‐linear relationship between customer satisfaction and customer loyalty was found, and a model explaining 56.9 percent of the variation in customer loyalty was developed. Predictors of loyalty beyond the attitudinal dimensions traditionally tested for their association with loyalty were found to be associated with customers' intentions to remain with their bank. In particular, market conditions such as switching costs and benefits as well as recent consumer behavior were found to add explanatory power. Further, this study contrasted a full model explaining 56.9 percent of the variation in loyalty with a model based only on variables known to banks, which explained only 8.4 percent. Profiling customers based on survey data can thus provide additional explanatory power compared to data mining models
Originality/value
The models can be used by bankers to profile customers who are likely to remain loyal, allowing practitioners to implement proactive marketing action to reward such loyalty. Customers least likely to defect have high satisfaction levels, perceive switching as an unattractive option, and typically have a long‐established banking relationship.
Details
Keywords
This chapter explains dollarization process in Turkey by an extended portfolio model where dollarization is determined by the relative rates of return of domestic and foreign…
Abstract
This chapter explains dollarization process in Turkey by an extended portfolio model where dollarization is determined by the relative rates of return of domestic and foreign currencies denominated assets, expected change in the exchange rate, exchange rate risk, and credibility of current economic policies. The econometrics results are in line with the intuitive predictions of the model. We have found that interest rate differential and the expected exchange rates are the dominant variables in determining dollarization. This chapter also provides evidence of inertia in the process of dollarization in Turkey.
Stephanie Hui-Wen Chuah, Philipp A. Rauschnabel, Ming-Lang Tseng and T. Ramayah
The purpose of this paper is to propose a dedication-constraint-temptation (DCT) model to study the factors influencing customers’ loyalty to mobile data service (MDS) providers…
Abstract
Purpose
The purpose of this paper is to propose a dedication-constraint-temptation (DCT) model to study the factors influencing customers’ loyalty to mobile data service (MDS) providers. The DCT model explicitly explores the important yet overlooked role of alternative attractiveness (the temptation-based mechanism) as a mediator and the boundary condition of their interrelationships (e.g. relationship length). The model also integrates new and established antecedents of customer-based brand equity (C-BBE) (the dedication-based mechanism) and switching barriers (the constraint-based mechanism).
Design/methodology/approach
The proposed model is tested using partial least squares–structural equation modeling with a sample of 331 MDS users.
Findings
The results indicate that C-BBE has an indirect effect on customer loyalty (via alternative attractiveness) in both relationship groups (shorter- vs longer-term). However, the indirect effect of switching barriers on customer loyalty only exists in longer established relationships. The results from multi-group analysis reveal that the effect of switching barriers on alternative attractiveness significantly differs across groups. In addition, customer value anticipation and procedural switching costs appear to be the most salient antecedents of C-BBE and switching barriers for both groups.
Originality/value
This study makes an incremental contribution by incorporating the temptation-based mechanism as a mediator and relationship length as a moderator into the dedication-constraint model. This study also extends the information systems and brand management literatures by demonstrating the strategic importance of customer value anticipation in the information and communication technology brand equity-building.
Details
Keywords
The purpose of this paper is to assess liquidity risk management (LRM) practices in Indonesian Islamic banking industry during the period 2000‐2007.
Abstract
Purpose
The purpose of this paper is to assess liquidity risk management (LRM) practices in Indonesian Islamic banking industry during the period 2000‐2007.
Design/methodology/approach
The paper constructs the LRM index (100 scale) which is composed of individual index of asset side; liability side; LRM policies; and the overall LRM index.
Findings
The index produces a “good” grade for the liquidity management practices in the Indonesian Islamic banking industry, represented by three Islamic banks which capture 82 percent of the total market share of the industry. However, the breakdown of the index of every Islamic bank suggests various achievements.
Research limitations/implications
It is found that the practices of LRM are not optimal yet based on some considerations explained in this paper. Further progressive actions have to be taken by the regulators and all industry's players to improve the LRM practices.
Originality/value
To the best of the author's knowledge, this is the first paper trying to assess how good the LRM in Indonesian Islamic banking is.
Details
Keywords
Andrew Campbell, John Raymond LaBrosse, David G. Mayes and Dalvinder Singh
The purpose of this paper is to explore the arrangements that have been used in the present crisis and their relative success and to look to the post‐crisis situation.
Abstract
Purpose
The purpose of this paper is to explore the arrangements that have been used in the present crisis and their relative success and to look to the post‐crisis situation.
Design/methodology/approach
The paper examines and explains the crisis and the roles of deposit insurance and government guarantees. It deals with coverage, funding, institutional structure, speed of payout, incentives, accountability and, in particular, considers how such systems should function in a world of cross‐border institutions.
Findings
The paper suggests how such principles and standards should be set either through International Association of Deposit Insurers or some more efficient means to complement an international approach to financial stability being addressed by the Basel institutions.
Originality/value
There is no widely accepted standard over what the reformed financial system safety net should look like with respect to the protection of deposits and the wider guaranteeing of creditors and other stakeholders. This paper, therefore, makes an attempt to fill that gap.
Details