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Business groups often contain banks or near banks that can protect group firms from economic shocks. A group bank subordinate to other group firms can become an “organ bank” that selflessly bails out distressed group firms and anticipates a government bailout. A group bank subordinating other group firms can extend loans to suppress their risk taking to default risk, preserving risk-averse low-productivity zombie firms. Actual business groups can fall between these polar cases. Subordinated group banks magnify risk taking; subordinating group banks suppress risk taking; yet both distortions promote business group firms’ survival. Limiting intragroup income and risk shifting, severing banks from business groups, articulating Business Group Law, or dismantling business groups may mitigate both distortions but also limits business groups’ internal markets, which are thought to be important where external markets work poorly.

The debate over whether or not to allow the sale of human organs is compelling enough to warrant discussion. A literature review revealed much ethical discussion, but little discussion was found on economic outcomes related to donors and selling human organs. It was demonstrated in the literature how an increased organ supply will benefit recipients. If allowing the sale of organs is the way to increase the organ supply for the benefit of recipients, then, in order to demonstrate that donors will not be exploited, it must be demonstrated how, and if, such sales would benefit those donors. This study explores whether or not one should sell human organs. Using basic models, this study develops economic scenarios and outcomes related to the selling of human organs with particular focus on pricing and profitability in relation to donor benefit. Theoretical outcomes show that the donor will not benefit in the long run.

The purpose of this study is to analyze the Lebanese anti-money laundering (AML) paradigm in light of banking secrecy law. The phenomenon of money laundering that was first associated with the crime of drug trafficking developed a lot since the early 1900s to become a major threat to the world’s economy today. The fight against this ever-growing crime, with multiple sources and origins, has been the centre of attention of the biggest countries in the world. Thus, the need for international AML standards was required, by which countries must abide, to ensure an effective fight against this crime. The issue of banking secrecy regulations was important to study along with the AML framework as the principles of the first totally contradict those of the latter.

The scope of this study first entails a qualitative technique. It will start with analysing existing legal provisions on money laundering and studying the AML framework internationally and in accordance with the Lebanese banking system. For that, websites such as GoogleScholar and HeinOnline were used to collect many scholars articles. Additionally, Laws, Regulations and Directives have been examined for the purpose of establishing the legal basis for the fight against money laundering. Moreover, an interview was conducted in 2018 with the Lebanese Financial Prosecutor, which served as data related to the operations of the Special Investigation Commission (SIC) in Lebanon, which is the Lebanese Financial Intelligence Unit. Second, quantitative research has been done. Reports of the Association of Banks in Lebanon, Financial Action Task Force Report and Annual Reports of the SIC of Lebanon have been used to gather information related to the AML/combating the financing of terrorism framework, such as customer due to diligence provisions and know-your-customer requirements and to collect statistics of suspicious reports.

The question of “How to balance the confidentiality of the Lebanese banking sector with the interest of the international community in the fight against money laundering?” was interesting to study, as it turned out that the existence of such professional secrecy does not affect the effective implementation of the AML guidelines by banks and other financial institutions. This can only happen when there is a special judicial organ to which banking secrecy is not opposable at any time, and which is the sole organ entrusted with lifting off this professional secrecy and allowing the disclosure of information to the competent authorities. Thus, the Lebanese banking system can ensure total compliance with the AML framework while still adopting banking secrecy regulations.

The choice of Lebanon was compelling because of the special level of protection its banking secrecy law offers.

In most industries, legal entities of a certain size and complexity must have a compliance function. Such requirement is either set forth by regulatory law or the governance rules of the relevant organisation. In the highly regulated credit industry, the role and responsibilities of the compliance function are more precisely defined than in other industries. This paper aims to analyse the personal accountability of senior compliance officers in a bank’s compliance function when there is a failure of proper compliance.

This paper is based on a keynote addressed at Jesus College, University of Cambridge, 7 September 2016. The author approaches the issue of senior compliance management by analysing development of international financial regulation with respect to legal requirements for compliance function. Subsequently, the author determines what constitutes senior compliance management and applies the various legal regimes to situations of compliance failures.

While the accountability of the chief compliance officer and deputy for compliance failures is not set forth in regulatory law, courts and scholars have acknowledged such personal responsibility exists resorting to principles of civil law (contracts or torts), criminal law or employment law. Approaches and questions for this legal analysis are similar in a civil law as well as in common law jurisdiction. The most relevant breach of contract of the chief compliance officer will be an omission to act (forbearance), i.e. the failure to properly organize the compliance function and/or to immediately report a compliance risk to the board.

Scholarly work in the law of compliance is still somewhat limited, thus the research also includes practitioners’ observations. The accountability of senior compliance management for compliance failures represents a growing trend in corporate governance to seek individual accountability for corporate misconduct; see, for example, US Department of Justice (DOJ) in its so-called Yates memorandum on “individual accountability for corporate wrongdoing”.

In incidents of non-compliance, banks and their compliance officers should be able to exculpate themselves if they can demonstrate proper organization of the compliance function.

The originality of this general review is to focus the analysis of accountability of senior compliance management on the credit industry and to consider latest developments in international financial regulation, such as the supervisory review and evaluation process (SREP) by the European Central Bank (ECB) in the single supervisory mechanism (SSM) or the corporate governance principles for banks by the Basel Committee on Banking Supervision (BCBS).

Environmental sustainability in health care is an important issue due to the limited available healthcare resources and increase in demand. For instance, organ recycling and transplantation may reduce the increasing pressure on healthcare resources. The purpose of this paper is to set out to identify and interrelate the inhibitors that significantly influence the recycling of human organs and their implications to the environment in developing economies such as India.

The study uses Delphi–ISM–regression, a three-step method, to investigate the possible reasons for the poor supply chain efficiency of organ recycling and to explore the consequence of excessive use of healthcare resources on the environment. The Delphi technique facilitates the identification, synthesis, and prioritization of the inhibitors. Then, using focused group discussion, the interpretive structure modeling (ISM) presents the interaction among the inhibitors into a hierarchy. Further, on the basis of 257 valid responses received on the structured survey instrument, the regression model examines the influence of identified constructs on one of the identified root causes.

The ISM presents the hierarchy-based model that depicts high driving power and low dependence inhibitors leading to reduced organ recycling rate. “Negative Intentions of family members” toward organ donation t “Willingness to discuss with family” and “Perceived Behavioral Control” emerged as the significant factors influencing organ recycling rate, which adversely impact the environment sustainability.

The patients on the organ waiting list put pressure on the availability of medical resources and, ultimately, on the environment through the consumption of different drugs and disposable of medical wastes. The study suggests policymakers and hospitals improve on the existing policies for an efficient supply chain of human organ recycling. The Indian situation echoes the situation in most of the emerging economies, and similar solutions can apply there too.

This study explores the potential benefits and costs of bank entry into venture capital investing. Data are obtained from a survey of banking organizations regarding their perceptions of the effects of such venture capital investing. Also, evidence on the portfolio diversification effects of such investments is provided using stock price data. These data are consistent with the existence of net benefits from bank entry into this industry. The implications for entrepreneurs are also discussed. Venture capital firms (professionally managed organizational investors) and business angels (private individual investors) invest in new and growing businesses. Their aim is to maximize their risk‐adjusted return on investment through the ex ante assessment of risk and the ex post monitoring of their client entrepreneurs. Because they invest in businesses that are inherently newer and smaller, often without substantial collateral, their deals are riskier than the loan packages that are funded by commercial banks. However, by investing in risk‐ reducing information and sharing it among coinvestors, these venture capitalists often generate returns that are the envy of many bankers. Many venture capitalists expect to earn more than 30% annually on their investments. At a time when banks have been experiencing earning problems, particularly those located in the West and Southwest, there are at least four possible benefits that could come to them and also to entrepreneurs from the entrance of banking organizations into venture capital financing. First, if banks were able to manage the increased risk, they might be successful in improving their earnings. The increased earnings would contribute to the elimination of the capital deficiency facing the banking industry. Second, if they funded entrepreneurs, the total supply of venture capital would increase and it could become much easier to locate seed money. Third, participation by banks would also contribute to the elimination of the widely reported capital gap that may exist for funding new ventures. Fourth, in the long run, if they provided venture capital, they might find that they were providing start‐up financing for future customers, customers that would not otherwise exist. This study contemplates a future role for commercial banks as a potentially huge source of funding for new ventures. It explores the possibility that under certain conditions commercial banks may be able to effectively manage the greater risk associated with venture capital investing. It concentrates on the potential effects of bank entry into venture financing on the risk of failure of the bank, a concern that underlies the existing prohibition for U.S. banks. The proposal to allow U.S. commercial banking organizations to enter the arena of venture capital investments may seem somewhat questionable in a period of massive numbers of bank failures. Yet there are reasons to believe that the potential effects of these activities may not be risk‐increasing as often argued and may, under certain circumstances, even be risk‐reducing. To understand this view, consider the reaction of commercial banks to the changes in their external environment that accompanied financial deregulation during the 1980's. The elimination of deposit rate ceilings that accompanied deregulation increased sharply the cost of bank funds. Banking organizations reacted to that increase in costs by reaching for higher‐risk loans. But, in the United States, these banks were unable through regulatory and market constraints to obtain complete compensation for the increased risk. If these banks had been able to take equity positions in venture capital investments, the upside potential from these commitments of funds to more risky undertakings could be realized, a potential that is impossible with the conventional loan contract. If commercial banks become major players in the market for venture capital, it seems likely that they will rely upon different strategies for controlling risk than those used by venture capital firms and business angels. Basic differences in their approaches to risk management could be a reflection of their costs of access to risk‐reducing information, their visibility in the community, and their tendencies to coinvest with similar types of investors. This study examines the possibility that the size of a bank will largely determine whether it views venture capital investing as a prudent means of doing business. This expectation is based on the assumption that the larger a bank, the more likely it will be to hold a portfolio of diversified venture capital investment. Thus, we would expect to find greater enthusiasm for venture capital investing among large banks than among small banks. If commercial banks were to be permitted to make venture capital investments in the United States, such a move could be so influential that no entity that depends upon this market for its survival would be unaffected. Business angels and venture capital firms could be overshadowed by the resources that banks would have at their disposal, while entrepreneurs and public policy makers would find it difficult to ever again suggest that there was insufficient capital available to fund deserving ventures. This study reviews the roles of venture capital firms and business angels and compares them to the role that could be played by banks. It also compares the perceptions of large bankers (assets >$1 billion) and small bankers (assets <$1 billion) regarding their institution's competence in managing different types of risk. This research will first examine how venture capital firms and business angels emphasize managing different types of risk. Hypotheses related to bank strategies for reducing venture capital risk will be proposed and tested. Finally, implications for entrepreneurs and public policy makers will be discussed.

The purpose of this paper is to estimate the cost and profit efficiency (PE) of Chinese commercial banks in the last ten years and investigate how market power affects bank efficiency and stability.

The paper builds a stochastic frontier analysis model to evaluate the cost and PE of commercial banks. The paper then uses a Lerner index and Z-index to represent market power and stability, respectively. In addition, the paper empirically analyzes the relationship between market power and bank efficiency, stability in the last ten years.

The results show that the efficiency of banks on the Chinese mainland increased during the study period, but is still lower than that of banks in Hong Kong; moreover, the efficiency of four state-owned commercial banks is lower than that of medium and small banks. Market power has a negative relationship with efficiency while its relationship with stability varies among Chinese banks.

The results imply that the promotion of financial liberalization and banking reform to introduce an appropriate competition mechanism has had a positive effect on the efficiency and stability of Chinese commercial banks.

Thus, the paper will contribute to deepen reform and opening up the banking sector in China.

The healthy development of banking can enhance the ability of banks to withstand financial risks, to promote the harmonious development of society.

The paper estimates the cost and PE of Chinese commercial banks using SFA model and investigates how market power affects bank efficiency and stability. The study design has a certain novelty, where Lerner index and Z index are used, respectively, to measure market power and stability and management efficiency of commercial banks is investigated from two aspects – PE and cost efficiency – by the translog cost function, instead of Douglas production function. In addition, the paper tries to put some of Hong Kong banks included in the study sample, and has a certain reference value.

This paper aims to examine the issue that arises in the context of benchmark rate (or interest rate) changes made for reasons of monetary policy in a jurisdiction with a significant presence of Islamic banks. Changes, especially increases, in the prevailing interest rate made by central banks raise issues of asset-liability management for banks, which typically have longer maturities on the asset side than on the liabilities side, resulting in exposure to interest rate risk for conventional banks, and what is known as rate of return (RoR) risk for Islamic banks, which for reasons of compliance with Islamic religious law (Shari’ah) do not use interest in their operations. Islamic banks use various financial instruments which reflect the cost of funds by means of contracts of sale on credit or of leasing or forms of partnership, which allow them to earn returns on their funds and to pay returns to customers who deposit funds with them.

The methodology of this study consisted of a descriptive analysis of the relevant characteristics of Islamic banks and their economic and regulatory environments, illustrated by a case study approach applied to two jurisdictions, namely, Sudan and Malaysia.

In jurisdictions where Islamic banks represent a significant share of the market for financial services, if the contracts used in Islamic financing allow for periodic adjustments of the profit rate or lease rental, this could result in a significant impediment to the full implementation of monetary policy and hence to the maintenance of financial stability.

This study is (to the best of authors’ knowledge) the first thorough analysis in the literature of the issues arising from the exposure of Islamic banks to RoR risk and has clear implications for regulatory and central bank policy.

Suddenly speech technology looks viable for many real world applications, as Jack Hollingum explains.