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The purpose of this paper is to evaluate and compare bank efficiency between the two Maghreb countries, Tunisia and Morocco, over the period 2005–2014.

The authors follow the stochastic frontier analysis, where the preferred cost model is determined via various hypothesis tests based on the maximum likelihood estimation. Then, the first and the second derivates of the cost function are employed to determine scale elasticities, scale inefficiencies and technological progress.

Specification tests indicate that the Fourier Flexible form provides better fit to the data set. Further, the estimated model shows that Tunisian and Moroccan banks’ efficiency is positively affected by banking service quality, but negatively influenced by both bank capitalization and GDP growth. Overall, Moroccan banks are found to be the most efficient despite the decrease of efficiency levels in both countries. Additionally, foreign banks have a higher scale inefficiency and, therefore, a lower cost efficiency. Equally, the technical progress raises banking costs in both countries, providing a decrease in efficiency scores.

The findings of this study provide novel insights to Tunisian and Moroccan policy makers on the relevance of the smaller banks’ consolidation to improve bank efficiency by achieving unrealized economies of scale. Also, more reforms should be implemented in Tunisia to reduce non-performing loans.

To the best of the authors’ knowledge, this study is the first which offers a comparison between Tunisian and Moroccan banks to clarify the sources of inefficiency and to make strategic decisions.

In late July 1993, the European Monetary System threatened to unravel. The Exchange Rate Mechanism (ERM), which ties European Community members′ currencies together, faced the possibility of collapse as the French franc and other currencies pushed perilously close to the permissible bounds of fluctuation despite massive intervention by central banks. Similar conditions had forced the British pound sterling and Italian lira out of the ERM in September 1992. The short‐term resolution of the crisis was the decision to widen the permissible bounds of fluctuation. Examines the events leading to the ERM crisis, and the implications of the crisis and its resolution on the future of European economic integration are also examined. Finally, discusses the likely future of European economic and monetary union given the current economic and political climate of member countries.

Purpose: Thanks to the Fourth Industrial Revolution and the digital economy, digital banking has become an attractive business trend. Moreover, the spreading of the Covid-19 virus worldwide over the past two years has boosted the digitalisation of banking services. The development of digital banking is now becoming an uncontroversial issue that will attract the concern of scholars, bank managers, and policy-makers.

Methodology: As an emerging country with a young population having significant digital appliance joy, Vietnam will be a perfect case study to research the development of digital banking. Besides, digital banks, as well as the appliances of artificial intelligence (AI) in the banking sector, have appeared in Vietnam’s banking system at several different levels.

Findings: Moreover, most commercial banks in Vietnam are now in the race to complete their digital services to provide innovative digital banking services that add more value to their clients. Hence, the chapter will describe the overall picture of Vietnam’s current digital banking market.

Implications: Based on the crucial features of the operations of several digital banks and the appliances of AI in the digital banking sector in Vietnam during the chosen period, the author would like to give information on the potential of the Vietnamese digital banking market and suggest the key policies which the Vietnamese government should consider to support the digital transformation of the banking sector in Vietnam.

Library management is struggling to improve productivity without reducing the quality of service to its users. With downsizing continuing to be a trend, the implementation of self‐checkout circulation systems may be an important technological investment for libraries to consider. In most large academic institutions, such circulation functions as checking out and renewing library materials have traditionally been performed by staff members. The climate may, however, be right to rethink the mode of service delivery systems and shift from providing full‐service to self‐service models, whereby the patron takes responsibility for checking out his or her own library materials.

This paper examines how small firms that produce “e‐learning” materials collaborate and communicate with their clients, external agencies and end users. Our premise is this: given increased demands for more sophisticated and “learning‐led” products, it is becoming increasingly crucial for e‐learning firms to source and exploit content, education, knowledge and expertise that is extrinsic to the traditional boundaries of the “firm”. These shifts raise a set of problems related to how firms can effectively interact and collaborate with others in order to create, distribute and evolve effective e‐learning tools and products. Based on our own case study research and building on the existing literature on “communities of practice”, we argue that the formation of new “learning communities” is a strategy now being undertaken by leading firms in order to meet demands for “learning‐led” products.

This paper aims to examine the interaction between fair-value accounting, asset sales and banks’ lending in booms and busts. Throughout, the author uses “fair value” and “mark-to-market” interchangeably, to denote an accounting regime where changes in the prices of banks’ assets affect regulatory capital. “Historic-cost accounting” has been used in the paper to denote an accounting regime where changes in asset prices do not affect regulatory capital.

The author built a model that examines how the accounting regime affects banks’ incentives to sell assets and how the impact of the accounting regime on asset sales affects lending.

In a bust, fair value strengthens banks’ incentives to sell assets. The resulting increase in sales increases banks’ lending capacity. Consequently, lending can be higher under fair value. Conversely, in a boom, historic cost strengthens banks incentives to sell assets. The resulting increase in sales increases banks’ lending capacity. Hence, lending can be higher under historic cost.

This paper identifies a new channel through which the accounting regime could affect lending. The accounting regime can affect banks’ incentives to sell assets. The resulting difference in sales can affect banks’ ability to make new loans. Hence, in a boom, although banks book mark-to-market gains under fair value, asset sales could be higher under historic cost. Lending, thus, could be higher under historic cost. Conversely, in a bust, although banks book mark-to-market losses under fair value, sales could be higher under fair value. Lending, thus, could be higher under fair value.

The purpose of this study is to examine how the Islamic banks fix their mark-up for Murabaha contract strategically when traditional banks also co-exist in a country. This study also aims to investigate what role the varying degree of Iman (faith) plays in shaping the preferences of the consumers to choose between the services of Islamic banks and the traditional banks.

This paper constructs a mathematical model like the Bertrand competition in neo-classical economic theory. A religiosity parameter for the consumers has been inserted into their demand functions for their products. A simple optimization technique from mathematics has been used to arrive at the results.

This paper applies game theory to analyze how Islamic banks determine their mark-up when they are facing competition with traditional banks. It considers the demand functions of the consumers for the products of Islamic banks and traditional banks. The demand functions depend on the mark-up, as well as on the interest rate with the difference that they also depend on the religiosity of the consumers. The paper shows that Islamic, as well as the conventional banks charge lower prices for their loans if there is consideration of religiosity aspect of the consumers. Further, it shows that as religiosity increases in a country, the lending rates decrease. The theoretical result is also consistent with the real practices of the banks. Therefore, the dual banking system is welfare enhancing for the customers.

The Islamic banks can leverage the religiosity aspect of the consumers and expand their business competitively by charging them lower mark-up. The adherence of religious customers to the services of Islamic banks creates some kind of loyalty premium for them. This could lead to the reduction of mark-up price triggering competition between both types of banks to attract more customers. Therefore, it is prudent for the government to develop a system for furthering the quality of honesty that is an integral part of Islam.

To the best of author’s knowledge, this is the first paper where it has been analyzed theoretically how the Islamic banks determine their mark-up for Murabaha contract strategically. This approach explains why the rate of return of Islamic banks hinges on the interest rates of traditional banks. One of the novel feature of this paper is that religiosity character of the consumer is good for banks because religiosity prohibits the people to default on their loans.

The purpose of this paper is to study the impact of the relaxation of mark-to-market (MTM) standards on community banks’ share prices. Mark-to-market valuation of securities became increasingly common in the late 1990s and 2000s, as regulators sought to create more transparent and more current depictions of bank financial positions. However, MTM accounting may be sub-optimal in the presence of severe market frictions, such as those experienced during the financial crisis of the late 2000s. To comply with capital requirements associated with MTM accounting, banks of the late 2000s dramatically liquidated portfolios with potentially solvent assets in illiquid markets, taking huge losses. During the financial crisis, mortgage-backed securities held by banks began to plummet in value. Banks were forced to either liquidate these assets even though there were no buyers or dramatically reduce the values of their portfolios based on fire-sale prices. On a cash-flow basis, these securities had value, as many mortgages bundled in these securities continued to be paid on time; however, with markets frozen, market prices did not reflect this value.

This study shows that, for a sample of 134 community banks, share prices increased after the MTM relaxation, even after accounting for a variety of other economic factors.

This paper shows that, perhaps counterintuitively, the steps taken by the Financial Accounting Standards Board to relax MTM accounting standards may have acted as a stabilizing factor on the market price of community bank shares by allowing banks to selectively liquidate assets, boosting asset prices until uncertainty was resolved.

This paper examines the impact of recent changes in accounting standards on the perceived risks associated with the banking sector. It specifically focuses attention on the impacts these changes had on community-based banks within the USA.

The purpose of this paper is to focus on various modes of Islamic finance and examines their risk and other characteristics by conducting a selective literature review.

Due to the Islamic prohibition of interest and in compliance with injunctions on permissible trade contracts, the savings and investment contracts offered by Islamic banks have a different risk profile than those of conventional banks. This gives rise to a number of regulatory issues pertaining to capital adequacy and liquidity requirements. Operational issues also arise as Islamic banks are limited in their choice of risk and liquidity management tools such as derivatives, options and bonds. All these issues are theoretically examined and various performance indicators of two Islamic banks are also examined to compare them with traditional banks that practice mark up pricing.

The balance sheets and various performance indicators show that there is evidence that Islamic banks in Pakistan tend to engage in little long‐term project financing. However, on the plus side these banks have shown good performance with respect to the returns on their assets and equity and have also demonstrated better risk management and maintained adequate liquidity.

A larger set of banks across various countries needs to be examined before any substantive conclusions can be reached about the relative performance of Islamic versus conventional banks.

These largely pertain to central bank prudential regulations which must ensure that a level playing field is created for Islamic banks to compete with traditional banks.

The paper is a commentary on the risk characteristics of Islamic banks and also analyzes for the first time the performance of the only two purely Islamic banks currently operating in Pakistan.

The purpose of this study is to understand the economic substance of Islamic banking transactions in South Africa and to analyse whether the economic substance is closely related to the legal form. Additionally, this study highlights the similarities and differences in the execution of Islamic banking transactions across different South African banks. The transactions analysed are deposit products of qard and Mudarabah and financing products of Murabaha, Ijarah and diminishing Musharaka.

The study was conducted through interviews with representatives from each of the four South African banks that offers Islamic banking products. Interviews were semi-structured and allowed interviewees to voice their perspectives, increasing the validity of the interviews.

The study found that specific Shariah requirements of Islamic banking transactions are considered and included in the legal structure of the contracts by all four banks offering Islamic banking products. However, the economic reality of these transactions was often significantly different from its legal form and was found to, economically, replicate conventional banking transactions. The study also found that all four banks offer Islamic banking products under the same Shariah principles, but in some instances (e.g. diminishing Musharaka), execute these transactions in different ways. This study is the first of its kind in South Africa.

While safeguards have been used to ensure the reliability and validity of the research, there remain a few inherent limitations which should be noted: interviewees, while chosen for their expertise and level of knowledge, may provide highly technical insight which may be difficult to interpret. Detailed technicalities were therefore excluded from this research. The regulatory environment of banks in South Africa, for example, regulation imposed by the Financial Service Board on all financial institutions in South Africa, has not been explored. However, the regulatory environment was brought to the readers’ attention to help illustrate certain themes. This research uses only Shariah requirements as detailed in Section 2.2 to analyse transactions. Fatwas (rulings) issued by the Shariah Boards of South African Islamic banks have not been included in this study and may be an area of future research.

This study is the first of its kind in South Africa. The study adds to the Islamic banking literature by analysing the real execution of Islamic banking transactions rather than the theoretical compliance with Shariah law.