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Academic research has intensively analyzed the relationship between market concentration or market power and banking stability but provides ambiguous results, which are summarized under the concentration-stability/fragility view. We provide empirical evidence that the mixed results are due to the difficulty of identifying reliable variables to measure concentration and market power.

Using data from 3,943 banks operating in the European Union (EU)-15 between 2013 and 2020, we employ linear regression models on panel data. Banking market concentration is measured by the Herfindahl–Hirschman Index (HHI), and market power is estimated by the product-specific Lerner Indices for the loan and deposit market, respectively.

Our analysis reveals a significantly stability-decreasing impact of market concentration (HHI) and a significantly stability-increasing effect of market power (Lerner Indices). In addition, we provide evidence for a weak (or even absent) empirical relationship between the (non)structural measures, challenging the validity of the structure-conduct-performance (SCP) paradigm. Our baseline findings remain robust, especially when controlling for a likely reverse causality.

Our results suggest that the HHI may reflect other factors beyond market power that influence banking stability. Thus, banking supervisors and competition authorities should investigate market concentration and market power simultaneously while considering their joint impact on banking stability.

This study aims to examine the influence of ownership structure and board characteristics on the performance of Indonesian Islamic rural banks (IRB) using the system generalized method of moment model.

This research uses Indonesian IRB unbalanced annual panel data from 2016 to 2022. IRB performance is measured by return on assets (ROA), return on equity (ROE) and nonperforming financing (NPF). The ownership structure is represented by controlling shareholders, ownership of the board of directors (BD) and ownership of the board of commissioners (BC). Meanwhile, board characteristics are represented by the size of the BC, the proportion of female board directors and female president directors.

The results show that the ownership structure and board characteristics play an important role in improving the IRB’s performance. Technically, the results show that the size of the BC and the ownership of the BD increase all IRB performance measures. Female president directors and controlling shareholders improve IRB’s performance as measured by ROA and ROE. Women’s boards of directors improve IRB performance as measured by NPF. Meanwhile, the ownership of the BC does not show its effect on all IRB performance measures.

This study fills a literature gap on the influence of ownership structure and board characteristics on IRB Indonesia’s performance. In addition, it adds understanding and insight for Islamic bank regulators, management and IRB depositors in Indonesia.

To the best of the authors’ knowledge, this study is one of the first to provide an empirical survey on the influence of controlling shareholders and board characteristics on IRB performance, particularly in Indonesia.

The purpose of this paper is to construct an investment account holders' transparency and disclosure (IAH-T&D) index based on the new and revised accounting standard for investment accounts of the Accounting and Auditing Organization for Islamic Financial Institutions Standards (AAOIFI) (2020). It also aims to measure and compare the compliance level with IAH-T&D over years and between countries.

This study uses the content analysis method to analyze the content of 270 annual reports across 30 Islamic banks (IBs) in 10 Middle East and North Africa countries during the period from 2010 to 2019.

This study introduces a new IAH-T&D index which consists of 27 items representing four categories: investment accounts disclosure (11 items), incentive earnings disclosure (1 item), allocations and reserve disclosure (4 items) and general requirements for disclosure (11 items). The analysis shows that the level of IAH-T&D is 51%. The level of compliance varies over the years and across countries.

To the best of the authors’ knowledge, this is the first study that offers an original self-constructed-T&D index that could enhance future research related to determinants and consequences of IAH-T&D practice in IBs.

This study examines the impact of intellectual capital efficiency and corporate governance mechanisms on the annual report readability of Oman's financial sector companies.

The study uses a sample of 150 firm-year observations of listed financial sector companies in the Muscat Securities Market, Oman, from 2014 to 2018. Flesch Reading ease and Flesch Kinkaid Index are used as proxies for annual report readability. As part of sensitivity analysis, the study also uses the natural logarithm of annual report pages as alternative readability measures. The investigation is conducted using random effects regression analysis and supported with system GMM estimation for robustness.

The findings of this study demonstrate a decrease in intellectual capital efficiency associated with better readability of annual reports for the financial sector firms. Alternatively, banks report a positive association of intellectual capital efficiency with the Flesch Reading ease score of the annual report. The structural capital and capital employed efficiency are also found to be negatively associated with annual report readability. Corporate governance mechanisms such as dispersed ownership and audit committee size also result in easy-to-read annual reports that support agency theory.

The research was conducted for financial firms of Oman, and thereby the findings can be generalized to the financial sector of countries with similar settings, such as the Gulf Cooperation Council (GCC) region.

The policy implications arising from this study suggest a strengthening of the intellectual capital efficiency and corporate governance mechanisms to improve the readability of the firms and thereby increase investor confidence.

This paper's uniqueness is in the model used to investigate the impact of intellectual capital efficiency and corporate governance mechanisms on the annual report readability of an emerging market.

The purpose of this paper is to examine whether board characteristics moderate the relationship between capital adequacy regulation and bank risk-taking of universal banks in Sub-Saharan Africa (SSA).

The paper uses 700 bank-year observations of universal banks in SSA between 2009 and 2019. The paper further uses the two-step generalized method of moments as the baseline estimator.

The paper finds that capital adequacy regulation is positively related to overall bank and liquidity risks. Nonetheless, capital adequacy regulation increases credit risk in the sampled banks. The paper further reports that board characteristics individually and significantly moderate the relationship between capital adequacy regulation and risk-taking.

The findings have implications for regulators of universal banks that board characteristics matter for capital adequacy regulation to impact risk-taking behavior.

The paper extends the existing literature on the effect of board characteristics on the capital adequacy regulations and risk-taking behavior nexus of universal banks.

The purpose of this article is to determine how terrorist financiers have continued to exploit hawala banking in German-speaking countries, despite regulations in place to prohibit this.

The first author interviewed compliance officers and suspected criminals on hawala banking mechanisms. Formal interviews with compliance officers were recorded, but interviews with suspected criminals were not, to maximize their potential forthrightness. The number of interviews totaled to 70 and a questionnaire was based on this that was sent to 200 compliance officers. The interviews were analyzed with a qualitative analysis and developed a system of categories that, in turn, was assessed by means of triangulation. These interviews enabled the first author to translate the empirical findings into his own recommendations for improving regulatory procedures prohibiting the financing of terrorism.

The paper finds that it is possible to circumvent compliance measures and exploit hawala banking to finance terrorism. Compliance officers consider the chances of detecting terrorist financing to be “low,” which is illustrated by mapping out the individual steps of the asset transfer. The conducted interviews enabled the first author to translate the empirical findings into his own recommendations for improving regulatory procedures prohibiting the financing of terrorism.

The scope of application of results was duly considered.

Whilst the existing literature sufficiently connects hawala banking to terrorist financing, this article details how existing compliance measures are circumvented. Emergent policies must consider the current vulnerabilities to improve their effectiveness.

Despite the vulnerability of rapidly developing and emerging market economies, researchers have paid less attention to the determination of the size of money laundering (ML) in these economies, including the United Arab Emirates (the UAE). Therefore, this paper aims to estimate the magnitude of ML in the UAE between 1975 and 2020 based on the currency demand approach (CDA).

The study uses the Gregory–Hansen cointegration technique alongside the autoregressive distributed lag bounds testing procedure to estimate the CDA model.

The results illustrate that an amount equivalent to about 19.034% of the GDP is laundered in the UAE between 1975 and 2020, on average, with the value lying between 15.129% and 23.121%. In addition, the results demonstrate the importance of the real estate market, gold trade, remittance channels and the size of the underground economy in facilitating the laundering of illicit funds in the country.

To the best of the authors’ knowledge, the study is the pioneering attempt at estimating the amount of illicit funds laundered in the UAE. Besides, the adoption of a novel, yet robust, approach based on the modification of the CDA technique also sets the study apart as it ensures a correct, clear, unambiguous and indisputable estimate of the magnitude of ML is obtained. In addition, it is expected that the outcome of the study will expand the frontiers of knowledge among policy makers and relevant agencies and ensure the adoption of the most efficient and effective measures to curb the ML menace in the country.

This paper investigates income convergence using different convergence concepts and methodologies for 72 countries over the period between 1960 and 2010.

This study applies beta (β), sigma (s), stochastic and club convergence approaches. For β-convergence analysis, it derives the cross-country growth regressions of the Solow growth model under the basic and augmented Cobb–Douglass (CD) production functions and estimates them using cross-section and panel data estimators. While it employs both the widely used coefficient of variation and recently developed weak s-convergence approaches for s-convergence, it applies three different unit root tests for stochastic convergence. To test club convergence, it estimates the log-t regression.

The results reveal that (1) there exists conditional β-convergence, meaning that poorer countries grow faster than richer countries; (2) income per worker is not (weakly) s-converging, and cross-sectional variation does not tend to fall over the years; (3) stochastic convergence is not found and (4) countries in the sample do not converge to the unique equilibrium, and there exist five distinctive convergence clubs.

The results clearly show that heavily relying on one of the convergence techniques might lead researchers to obtain misleading results regarding the existence of convergence. Therefore, to draw reliable inferences, the results should be checked using different convergence concepts and methodologies.

Contrary to the previous literature, which is generally restricted to testing the existence of absolute and conditional β-convergence between countries, to the best of the author’s knowledge, this is the first study to consider and compare all originally and recently developed fundamental concepts of convergence altogether. Besides, it uses the Penn World Table (PWT) 9.1 and extends the period to 2010. From this point of view, this study is believed to provide the most up-to-date empirical evidence.

This paper aims to illustrate how illegally obtained funds are laundered through raw diamonds in Austria, Germany, Liechtenstein and Switzerland.

To identify specific money laundering techniques involving raw diamonds, this study used a qualitative content analysis of data collected from 60 semi-standardized interviews with both criminals and prevention experts and a quantitative survey of 200 compliance officers.

Raw diamonds are extraordinarily suitable for money laundering in European German-speaking countries. In particular, they may be used in all three stages of the laundering process, namely, placement, layering and integration.

Because the qualitative findings are based on semi-standardized interviews, their insights are limited to the perspectives of the 60 interviewees.

Identifying gaps in existing anti-money laundering mechanisms should provide compliance officers, law enforcement agencies and legislators with valuable insights into how criminals operate.

While prior studies focus on the methods used by organizations to combat money laundering and how to improve anti-money laundering measures, this paper investigates how money launderers operate to avoid detection, thereby illustrating authentic experiences. Its findings provide valuable insights into the minds of money launderers and combines criminal perspective with that of prevention experts.

The Russian invasion of Ukraine generated unprecedented panic in the European financial system. As expected, the European Union (EU) felt most of the negative effects of the war due to geographical proximity to Ukraine and energy dependence on Russia. This study aims to investigate the influence of Brent crude oil (BCO), Dutch Title Transfer Facility Natural Gas, and CBOE Volatility Index (VIX) on Deutscher Aktien Index (DAX), Austrian Traded Index (ATX) and Milano Indice di Borsa (FTSEMIB). The German, Austrian and Italian equity indexes were chosen due to the heavy dependence of these countries on Russian gas and oil.

The data cover the period from November 24, 2021, to June 24, 2022, including five months of the Russia–Ukraine war. To generate the intended results, vector autoregressive, structural vector autoregressive, vector error correction model, Johansen test and Granger causality test were used.

The results highlight that natural gas and the VIX carried negative effects on DAX, ATX and FTSEMIB. The BCO was expected to have influenced three selected equity indexes, while the results suggest that it was priced only in ATX.

This research provides modest evidence for the policymakers on the systemic risk that Russian gas has for the EU equity markets. From a managerial perspective, changes in oil and gas prices are a permanently integral part of portfolio risk analysis.