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Article
Publication date: 16 February 2021

Diana López Avilés, Paula Piñeira, Víctor Andrés Roco Cáceres, Felipe Vergara and Nicolas Araya

The Financial Stability Board (FSB) determined that entities classified as shadow banking are of a credit nature because they are capable of affecting the financial system…

Abstract

Purpose

The Financial Stability Board (FSB) determined that entities classified as shadow banking are of a credit nature because they are capable of affecting the financial system through the entry and exit of capital. This study aims at measuring the impact of shadow banking in the systemic risk in Chile. A sample of 91 institutions (Run) belonging to the mutual funds was used, with a series showing a continuous behaviour between 2004 and 2018.

Design/methodology/approach

The measurement is carried out using the conditional value at risk (CoVaR) methodology, which analyses the behaviour of an institution in a regular state against the same institution in a state of stress.

Findings

The results obtained reflect that liquidity mismatches do not have a relevant effect on the systemic risk, while the 2008 crisis does contribute to its decline.

Originality/value

There are less number of literature studies that apply statistical models regarding shadow banking, at least at a quantitative level, so this research is a beginning for other studies, supporting future authors in their new research as a basis.

Propósito

El Consejo de Estabilidad Financiera determinó que las entidades clasificadas como Shadow Banking son de carácter crediticio debido a que son capaces de afectar al sistema financiero mediante la entrada y salida de capitales. Este estudio tiene como objetivo medir el impacto del Shadow Banking en el Riesgo Sistémico de Chile. Para esto se utilizó una muestra de 91 instituciones (Run) pertenecientes a los Fondos Mutuos, con series que muestran un comportamiento continuo entre 2004 y 2018.

Diseño/metodología/enfoque

La medición se lleva a cabo mediante la metodología CoVaR, la cual analiza la conducta de una institución en estado normal versus la misma institución en estado de estrés.

Hallazgos

Los resultados obtenidos reflejan que los desajustes de liquidez no tienen un efecto relevante en el Riesgo Sistémico, mientras que la crisis del 2008 si contribuye a la disminución de este.

Originalidad/Valor

Existe muy poca literatura que aplica modelos estadísticos respecto al Shadow Banking, al menos a nivel cuantitativo, por lo que esta investigación es un inicio para otros estudios, apoyando como base a futuros autores en sus nuevas investigaciones.

Details

Academia Revista Latinoamericana de Administración, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1012-8255

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Article
Publication date: 30 April 2021

Achille Dargaud Fofack, Serge Djoudji Temkeng and Clement Oppong

This paper aims at analyzing the asymmetries created by the Great Recession in the US real estate sector.

Abstract

Purpose

This paper aims at analyzing the asymmetries created by the Great Recession in the US real estate sector.

Design/methodology/approach

This paper uses a Markov-switching dynamic regression model in which parameters change when the housing market moves from one regime to the other.

Findings

The results show that the effect of real estate loans, interest rate, quantitative easing and working age population are asymmetric across bull and bear regimes. It is also found that the estimated parameters are larger in bull regime than bear regime, indicating a tendency to create house price bubbles in bull market.

Practical implications

Since three of those asymmetric variables (real estate loans, interest rate and quantitative easing) are related to monetary policy, the Fed can mitigate their impact on an interest-sensitive sector such as housing by engaging in a countercyclical monetary policy.

Originality/value

The estimated intercept and the variance parameter both vary from one regime to the other, thus justifying the use of a regime-dependent model.

Details

Journal of Economic and Administrative Sciences, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1026-4116

Keywords

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Book part
Publication date: 18 January 2021

Yusuf Kaya and Mehmet Utku

Financial crises in the international markets, which have global effects, have increased the importance of internal auditing especially in the banking sector in recent…

Abstract

Financial crises in the international markets, which have global effects, have increased the importance of internal auditing especially in the banking sector in recent years. Minimizing the negative effects of crises is closely related to the establishment and functioning of an effective internal control system. International internal audit standards (IIAS) issued by the International Internal Audit Standards Boards are internationally applicable standards that contain the basic requirements for the professional implementation and evaluation of the effectiveness of internal auditing. In developing countries where the effects of crises are intensely felt, public banks are one of the most important actors of the financial system. An effective internal control structure in public banks and in compliance with international standards is necessary for a strong and fragile financial system. The purpose of this study is to examine the internal audit activities in public banks in terms of compliance with international standards. In this study conducted at one of the leading state-owned bank in Turkey, the bank’s internal control procedures and internal control activities reports were examined. In addition, the Bank’s internal audit activities were analyzed by conducting interviews with bank officials for a better understanding of the internal control system. The IIAS, which are grouped under two main headings, are related to the internal audit activities of the related bank. It is thought that the study will guide banks and auditors in terms of demonstrating the application of IIAS, which usually consist of abstract statements.

Details

Contemporary Issues in Public Sector Accounting and Auditing
Type: Book
ISBN: 978-1-83909-508-5

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Article
Publication date: 5 September 2016

Sougata Ray and Sushanta Mahapatra

The Indian microfinance industry witnessed one of the fastest growths in the recent times. However, the striking feature of this growth is that the Microfinance…

Abstract

Purpose

The Indian microfinance industry witnessed one of the fastest growths in the recent times. However, the striking feature of this growth is that the Microfinance Institutions (MFIs) are concentrated only in some specific regions of the country. There is a huge geographical skew in the distribution of the MFIs. In this paper, an attempt has been made to explain these geographical skew by using the macro variables of the states. The objective of the study is to identify the causes for this regional disparity in the growth of MFIs.

Design/methodology/approach

We try to explain the level of penetration of microfinance in the states by using regression models.

Findings

Our analysis suggests that state-level macro factors are significant in explaining the geographical skew. MFIs in India have concentrated in states which are richer, have good rural infrastructure, but lack in adequate banking facility, and have low human capital.

Originality/value

The study provides an insight which would help in framing the necessary regulations to ensure that MFIs operate in all regions of the country.

Details

International Journal of Development Issues, vol. 15 no. 3
Type: Research Article
ISSN: 1446-8956

Keywords

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Article
Publication date: 8 May 2017

Semir Ibrahimovic and Ulrik Franke

This paper aims to examine the connection between information system (IS) availability and operational risk losses and the capital requirements. As most businesses today…

Abstract

Purpose

This paper aims to examine the connection between information system (IS) availability and operational risk losses and the capital requirements. As most businesses today become increasingly dependent on information technology (IT) services for continuous operations, IS availability is becoming more important for most industries. However, the banking sector has particular sector-specific concerns that go beyond the direct and indirect losses resulting from unavailability. According to the first pillar of the Basel II accord, IT outages in the banking sector lead to increased capital requirements and thus create an additional regulatory cost, over and above the direct and indirect costs of an outage.

Design/methodology/approach

A Bayesian belief network (BBN) with nodes representing causal factors has been used for identification of the factors with the greatest influence on IS availability, thus helping in investment decisions.

Findings

Using the BBN model for making IS availability-related decisions action (e.g. bringing a causal factor up to the best practice level), organization, according to the presented mapping table, would have less operational risk events related to IS availability. This would have direct impact by decreasing losses, related to those events, as well as to decrease the capital requirements, prescribed by the Basel II accord, for covering operational risk losses.

Practical implications

An institution using the proposed framework can use the mapping table to see which measures for improving IS availability will have a direct impact on operational risk events, thus improving operational risk management.

Originality/value

The authors mapped the factors causing unavailability of IS system to the rudimentary IT risk management framework implied by the Basel II regulations and, thus, established an otherwise absent link from the IT availability management to operational risk management according to the Basel II framework.

Details

Journal of Financial Regulation and Compliance, vol. 25 no. 2
Type: Research Article
ISSN: 1358-1988

Keywords

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Book part
Publication date: 19 December 2016

Mohammad Ashraful Ferdous Chowdhury and Mohamed Eskandar Shah Mohd Rasid

The main objective of this study is to identify the main determinants of the Islamic banks’ performance in Gulf Cooperation Council (GCC) regions.

Abstract

Purpose

The main objective of this study is to identify the main determinants of the Islamic banks’ performance in Gulf Cooperation Council (GCC) regions.

Methodology/approach

The research uses both static model (fixed effects and random effects) and Generalized method of Moments (GMM). The data for this study are obtained from the annual reports of 29 Islamic banks from GCC countries using Bankscope database for the period from 2005 to 2013.

Findings

The empirical findings reveal that Islamic banks’ specific factors such as the equity financing and bank size are positive and statistically significant to the profitability of Islamic banks. The operating efficiency ratio is negatively and statistically significant to return on asset. It is also found that macroeconomic variables such as money supply and inflation are negatively and statistically significant to the performance of Islamic banks whereas oil price has been found positive and statistically significant to the performance of Islamic banks in the GCC region.

Research implications

The present study seeks to fill a demanding gap in the literature by providing new empirical evidence on the factors that influence the profitability of the Islamic banking sector in GCC regions.

Originality/value

These findings have significant contribution to the literature by comprehensively clarifying and critically analyzing the current state of profitability among the Islamic banks in GCC regions.

Details

Advances in Islamic Finance, Marketing, and Management
Type: Book
ISBN: 978-1-78635-899-8

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Article
Publication date: 10 July 2020

Dolly Gaur and Dipti Ranjan Mohapatra

In recent years, the Indian banking sector is facing a major cause of concern in the form of Nonperforming Assets (NPA), and the priority sector lending (PSL) is generally…

Abstract

Purpose

In recent years, the Indian banking sector is facing a major cause of concern in the form of Nonperforming Assets (NPA), and the priority sector lending (PSL) is generally recognized as the major factor contributing to it. Thus, the present study has been carried out with the objective of examining the relationship between priority sector lending and GDP growth. Thereafter, the role of PSL and certain other bank-specific, industry-specific and macroeconomic variables in determining NPA has been studied.

Design/methodology/approach

Taking a sample of 45 scheduled commercial banks, the study has been carried out for 14 years (2004–2018). Granger causality between PSL and GDP has been examined by applying the Dumitrescu-Hurlin test. For the purpose of investigating the impact of PSL and other determinants on NPA, both static and dynamic panel regression have been performed. Under the dynamic panel, system generalized methods of moments (S-GMM) approach has been followed.

Findings

The findings show that there exists a positive correlation and bidirectional causal relationship between PSL and GDP, which implies that PSL brings additional growth for the whole economy. In addition to it, PSL is found to be insignificant for the NPA ratio, and thus, it can be inferred that credit extended to government-specified sectors does not bring any major increase in the bad loan portfolio of banks.

Practical implications

The policymakers and bank management can take a cue from the findings of this study to decrease the exposure to loan nonrepayment issue. The priority sectors are in need of formal credit for their growth, and since the rising population of the country can find employment in these sectors, banks should meet their credit needs while securing their position with regard to the NPA problem.

Originality/value

The issue of NPA determinants, and in particular, the contribution of priority sector lending in it has not been much explored for Indian banking sector. Also, the present study adds to the literature by using the causality approach for examining the importance of directed credit schemes for economic growth.

Details

South Asian Journal of Business Studies, vol. 10 no. 1
Type: Research Article
ISSN: 2398-628X

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Article
Publication date: 8 May 2018

Miguel Angel Moliner-Tena, Juan Carlos Fandos-Roig, Marta Estrada-Guillén and Diego Monferrer-Tirado

The purpose of this paper is to analyze consumer trust during a financial crisis, studying its antecedents and consequences. The perceptions of older and younger consumers…

Abstract

Purpose

The purpose of this paper is to analyze consumer trust during a financial crisis, studying its antecedents and consequences. The perceptions of older and younger consumers are also compared.

Design/methodology/approach

The theoretical model of trust formation is tested on a random sample of 634 individuals from the three largest Spanish cities, Madrid, Barcelona and Valencia, in a period of economic crisis. Structural equation models were used to verify the global hypothesized relationships. Additionally, the total sample was divided into two groups (younger and older consumers) in order to test the moderating effect of age in the proposed relationships.

Findings

In a period of financial crisis, older consumers’ trust is protected by an emotional and experiential shield from the effects of negative news in the surrounding environment. In contrast, trust, although important, is not the core variable for the younger segment, whose preferences are the consequence of a broad range of cognitive and emotional variables.

Research limitations/implications

This research was carried out on financial services. Emotional, relational and experience-linked variables acquire greater importance as the individual gets older, in contrast to more cognitive evaluations. The difference between the younger and the older segments is that the cornerstone of older consumers’ attitudinal loyalty is trust, whereas for younger people, it is positive switching costs or rewards. Further research on the proposed conceptual model across different industries and countries is needed to determine the generalizability and consistency of the findings from this study.

Practical implications

This paper has significant managerial implications. The authors believe that the best strategy for a bank during a period of crisis is to follow a customer-friendly orientation, as in the case of banks that took a long-term vision to look after their brand image. The study draws banking companies’ attention to the importance of using age as a segmentation criterion.

Originality/value

Based on the life-course paradigm, a theoretical model of trust formation is performed. In a period of economic crisis, trust becomes the key variable in determining older consumers’ preferences.

Details

International Journal of Bank Marketing, vol. 36 no. 3
Type: Research Article
ISSN: 0265-2323

Keywords

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Article
Publication date: 1 January 1991

REGINALD CLARKE

The foundation of a programme for the documentation of oral and pictorial records (OPReP) in the University of the West Indies, its objectives, organisation and methods…

Abstract

The foundation of a programme for the documentation of oral and pictorial records (OPReP) in the University of the West Indies, its objectives, organisation and methods are described, and the publication of its Newsletter.

Details

Journal of Documentation, vol. 47 no. 1
Type: Research Article
ISSN: 0022-0418

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Book part
Publication date: 19 March 2018

Daniel Broby

Academic institutions are under increasing pressure to show that their research output has impact. As this concept is easier to quantify in science-based disciplines, this…

Abstract

Academic institutions are under increasing pressure to show that their research output has impact. As this concept is easier to quantify in science-based disciplines, this chapter reviews how one interprets what “impact” is in finance. It suggests how best to incorporate it into academic research through the use of a simple to understand impact ratio. It provides an overview of the leading academic publications and their role in this process. It asks how impact within finance is understood, appreciated and subject to critique. It concludes that academics should demonstrate how they can facilitate the development of capital markets through evidence-based policy and enhancing capital market efficiency.

Details

Global Tensions in Financial Markets
Type: Book
ISBN: 978-1-78714-839-0

Keywords

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