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The purpose of this paper is to develop a capped barrier option framework to consider the politically preferential treatment for bank loans incentivized by government capital injections and calculate loan-risk sensitive insurance premiums.

This paper takes a capped barrier option approach to the market valuation of the equity of the bank and the liability of the deposit insurer. The cap demonstrates the dynamics of a politically connected borrowing firm’s asset and highlights the truncated nature of loan payoffs. The barrier addresses that default can occur at any time before the maturity date. The bank participating in a government capital injection program is required to fund the politically connected firm that has preferential access to financing.

Political connection as such makes the bank more prone to risk taking at a reduced interest margin, produces greater safety for the bank owing to government capital injections, and leads to increasing the fair deposit insurance premium. The positive effect of political connection on the deposit insurance premium, which ignores the cap and the barrier yields significant over-estimation.

The study on the politically connected borrowing firm shows that political connection is likely to affect the distressed bank’s performance, yielding the political-connection cost of a reduced bank interest margin and the political-connection benefit of a reduced bank equity risk, contributing the literature on political connection and bank bailout.

The purpose of this paper is to examine the implicit subsidies received, in the form of stock market returns, from the perception that large banking organizations are too big to fail, and implications for financial regulation.

The empirical analysis focuses on the responses of stock prices of various size groups of banking organizations to announcement of government capital injections to banks (troubled assets relief program) during the 2008 financial crisis, and summarizes responses of regulatory authorities to the crisis.

The paper finds positive and statistically significant stock return reactions both for a portfolio of the large banking organizations that are part of the initial capital injection plan and a portfolio of the large banking organizations that are not part of the initial capital injection plan, implying a too‐big‐to‐fail (TBTF) effect, especially for the latter group of institutions.

The paper focuses on a short time frame of stock price reactions to specific events, for the largest US banks. Further examination of longer‐term stock price effects on US as well as foreign banks may be of interest.

The results have implications for the manner and scope of financial regulatory actions and changes in regulators' approaches to systemic risk and individual bank regulation.

The paper examines TBTF bank subsidy effects in response to a rapidly unfolding financial crisis. These have implications for longer term responses, particularly in the regulatory sphere.

The purpose of this paper is to analyze the rationale for Bank Recovery and Resolution Funds (BRRFs) in the context of the present European Union's (EU) decentralized safety net.

The paper makes some reflections on the governance aspects of BRRFs that would require minimum harmonization in the EU, emphasizing that BRRFs are only one institutional component of financial institutions' effective and credible resolution regime. This paper focuses on depository institutions, but the rationale of BRRFs could be extended to other credit institutions.

BRRFs contribute to shifting the government's trade‐off between bailing out and restructuring in favour of restructuring, to the extent that there is also an effective bank resolution legal framework. In turn, banks' contributions to BRRFs aim at discouraging their excess systemic risk creation, particularly through financial system leverage.

The paper provides input in the current regulatory debate to develop new measures for the reform of the regulatory framework of financial services in the EU.

The purpose of this paper is to consider in the light of the post August 2007 banking crises, how “fair” access to retail banking services for British households and small‐ and medium‐sized enterprises (SMEs) can be assured.

The current responsibility for assuring the bank customers are “treated fairly” belongs to the Financial Services Authority (FSA). The paper argues for the establishment of a banking commission to regulate retail banks as utilities, leaving the FSA to concentrate on prudential (“risk based”) supervision of bank and non‐bank financial institutions.

If access to payments services is infrastructural and access to finance is regarded as essential in a modern society, then retail banks should be regulated as utilities.

The banking crisis led to calls for banks to maintain lending to SMEs and households (especially mortgages). This implies that access to finance, like access to water and electricity, should be assured and that customers should be protected against the “monopoly” powers of large suppliers. Hence, retail banks are utilities and should be regulated as such.

The purpose of this viewpoint paper is to bring attention to the declining rate of entrepreneurship, its effect on the broader economy, the need for public policy solutions and to offer several such solutions. Government intervention is needed to address the stagnation trends discussed throughout the paper. It is up to academic scholars, researchers and think tanks to make government leaders aware of the trends and possible solutions.

A literature review was performed and the need to increase entrepreneurship through public policies was discussed.

The current ten-year economic expansion is suffering from secular stagnation as a result of diminishing new venture creation and slower adoption of technological innovations. Economic policies are heavily tilted toward large, established firms even as new entrepreneurial ventures have greater impact on job creation. The importance of using public policies to spur economic growth through greater opportunity-based entrepreneurship is discussed. Unique tax policy changes are suggested as well as a proposed national business plan competition.

This paper makes a contribution to the entrepreneurship and public policy literature by discussing how the declining rate of entrepreneurship and slower adoption of new technology are related to the relatively tepid pace of economic expansion seen over the last decade in the US. The proposed policies focus on increasing new ventures based on opportunity-based entrepreneurship, and it is hoped that this will help in the development of other policies and spur new lines of research and knowledge that lead to increased economic growth.

This study aims to examine the joint impact of the COVID-19 pandemic and the government response on the performance of Islamic and conventional banks.

Data were collected from a sample of 94 conventional and 14 Islamic banks in Indonesia from March 2020 to September 2021. The system generalized methods of moments estimation is used to analyze the data.

This study finds robust results regarding the negative impact of the COVID-19 pandemic and the positive effects of government responses to COVID-19 pandemic on bank performance in Indonesian banking. Moreover, in line with the rise in confirmed COVID-19 cases, a higher government policy responses index improves bank performance, both in conventional and Islamic banks.

This paper highlights the importance of the government policy responses index to absorb the negative impact of the COVID-19 outbreak on banking performance.

This paper provides novel insights into the joint impact of the COVID-19 pandemic and government responses to COVID-19 pandemic on bank performance between conventional and Islamic banks.

The purpose of this paper is to investigate the relationship between the characteristics of the incubation industry, government funding, and the intensity of funding for different services. Because the incubation industry has particular characteristics, government funding varies for different services, and its intensity varies with service.

Government funding is classified as incubation subsidy and incubation incentive. Besides, incubation services include property management, business mentoring as well as investment and financing. Based on this, this study examines the influence mechanism of different subsidy and incentive on incubation services by using the generalized propensity score matching method.

The empirical results show that subsidy and incentive have an inverse-U shape effect on property management service, but a linear effect on business guidance service. Furthermore, subsidy does not affect investment and financing service, but incentive that can have a significant impact.

The theme of government funding and incubator services plays an important role in helping entrepreneurs expand their businesses. Incubation subsidy and incentive can provide important support to help enterprises obtain more preferential loans, technical services and technical support in the incubator. Applying it to incubator services can provide better technology and entrepreneurship guidance. These services can help new entrepreneurs understand products and markets, and how to develop more successfully in the early stage. In short, incubators supported by government funds can provide important support to entrepreneurs to help them successfully realize their business plans.

Reforms in corporate governance in selected Asian countries were introduced after the financial crisis of 1997–1998. After the financial collapse, several crisis-affected economies overhauled their corporate governance, strengthening market forces, implementing tougher regulations and focusing on transparency in decision-making and accountability. Since then, a commitment to improving corporate governance has grown as governments recognised the need to protect investors’ interests, reduce systemic market risks, maintain financial stability and enhance investors’ confidence to encourage the return of capital to the region through better accountability and transparency. The incentive for corporations to follow best practice is to boost their corporate performance and attract investment. Effective corporate governance is also recognised as essential for economic growth. Governments are realising that good governance of corporations is a source of competitive advantage and critical to economic and social progress.

Since the financial crisis, corporate governance has become a key policy issue in most of Asia. Progress in reforming corporate governance, however, has been uneven across Asia. This paper documents that progress.