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1 – 10 of over 1000The purpose of this article is to analyse the weaknesses of governance institutions in constraining grand corruption arising from the government procurement of large…
Abstract
Purpose
The purpose of this article is to analyse the weaknesses of governance institutions in constraining grand corruption arising from the government procurement of large foreign-funded infrastructure projects in the Philippines. The weaknesses are revealed in the description and analysis of two major scandals, namely, the construction of the Bataan Nuclear Power Plant during the Marcos era and the National Broadband Network project of the Arroyo presidency.
Design/methodology/approach
This research employs a historical and comparative case approach to explore patterns of grand corruption and their resolution. Primary and secondary data sources including court decisions, congressional records, journal articles and newspaper reports are used to construct the narratives for each case.
Findings
Top-level executive agreements that do not require competitive public bidding provide an opportunity for grand corruption. Such agreements encourage the formation of corrupt rent-seeking relationships involving the selling firm, brokers, politicians and top-level government executives. Closure of cases of grand corruption is a serious problem that involves an incoherent and politically vulnerable prosecutorial and justice system.
Originality/value
This paper aims to contribute to research on grand corruption involving the executive branch in the Philippines, particularly in the procurement of large, foreign-funded government projects. It examines allegations of improprieties in government project contracting and the politics of resolving corruption scandals through the justice system.
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This study investigates the impact of financial development, measured by the ratio of broad money to gross domestic products, on de jure central bank (CB) independence (CBI) in 17…
Abstract
Purpose
This study investigates the impact of financial development, measured by the ratio of broad money to gross domestic products, on de jure central bank (CB) independence (CBI) in 17 countries in the Asia–Pacific region from 1995 to 2014.
Design/methodology/approach
This study uses the feasible generalized least squares (FGLS) approach, which is suitable since the CBI equation suffers from contemporaneous correlation, serial correlation and heteroscedasticity.
Findings
The FGLS results suggest a positive association between CBI and financial market development (FMD). This relationship is confirmed when estimating different indicators of de jure CBI and adopting the panel-corrected standard error estimate. However, the statistical significance of FMD is not supported when the ratio of domestic credit to the private sector to GDP is measured.
Research limitations/implications
It is significant to have a developed financial system to foster a better CBI. Moreover, it is important to measure the influence of financial market players on the operations of a CB.
Originality/value
The financial market in the Asia–Pacific has improved over the years. Hence, the results show the determinants of CBI in the Asia–Pacific, especially the role of FMD.
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This paper aims to conceptualize and empirically illustrate the challenges that financial market regulation presents to politicians and the organization tasked with specifying…
Abstract
Purpose
This paper aims to conceptualize and empirically illustrate the challenges that financial market regulation presents to politicians and the organization tasked with specifying regulations and supervising their implementation in the interest of users and consumers of financial instruments. It analyses the problem from the viewpoint of the governor's dilemma and the control/competence conflict, the linked problem of the rent-seeking of agents/intermediators and consumers of financial instruments. Political accountability problems are enhanced by the materiality of the technologies used, i.e. algo trading.
Design/methodology/approach
The paper theoretically conceptualizes and empirically illustrates the argument.
Findings
The paper finds that regulators of digitalized financial markets are faced with considerable problems and depend on private agents when regulating financial transactions. However, the new technological instruments also offer new possibilities for securing compliance.
Research limitations/implications
Further research should focus more in-depth on the cooperation between public and private actors in the specification and implementation of regulatory details. It should further investigate the conditions which allow regulators to use RegTech in the surveillance of financial firms.
Practical implications
Since financial market transactions are opaque for most users, the creation of more transparency is crucial to hold regulators accountable in their activity of surveillance of financial firms. New algorithm-based technologies may lend important support in doing so.
Originality/value
By linking the different analytical perspectives, i.e. the governor's dilemma vis-à-vis the intermediator or agent and the possible rent-seeking of intermediators, under the condition of a highly developed technology of financial transactions as well as the market structure, the paper offers new insights into the limits as well as new opportunities of regulating financial markets allowing for political accountability of regulators and financial firms.
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Lucia Gibilaro and Gianluca Mattarocci
This paper aims to examine the relevance of cross-border activity in the European banking sector, evaluating the role of differences in regulation to explain the level of interest…
Abstract
Purpose
This paper aims to examine the relevance of cross-border activity in the European banking sector, evaluating the role of differences in regulation to explain the level of interest in entering foreign markets.
Design/methodology/approach
The sample considers all banks in the European Union (EU 28) existing at year-end 2017, and information about the ultimate owners’ nationality to classify local and foreign banks is collected. The analysis provides a mapping of regulatory restrictions for foreign banks and evaluates how they impact the role of foreign players in the deposit and lending markets.
Findings
Results show that the lower are the capital adequacy requirements, the higher are the amounts of loans and deposits offered by non-European Economic Area banks and, additionally, the higher the probability of having a foreign bank operating in the country.
Originality/value
This paper provides new evidence on regulatory arbitrage opportunities in the EU and outlines differences among EU countries not previously studied.
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This paper aims to investigate the extent to which maṣlaḥah (public interest) is taken into consideration in Islamic banking operations in Malaysia, particularly in bayʿ al-ʿīnah…
Abstract
Purpose
This paper aims to investigate the extent to which maṣlaḥah (public interest) is taken into consideration in Islamic banking operations in Malaysia, particularly in bayʿ al-ʿīnah (sale and buyback), taʿwiḍ (compensation) and ibrāʾ (rebate).
Design/methodology/approach
This study applies deductive and inductive methods to analyze the application of maṣlaḥah in Islamic financial transactions. Three issues in Malaysia are selected as a case study, allowing bayʿ al-ʿīnah, standardizing the rate of taʿwiḍ and stipulating the ibrāʾ clause in financial agreements. As this study is qualitative in nature, all data are analyzed based on the content analysis method.
Findings
Both the maṣlaḥah of Islamic banks and their customers were found to be considered by the Central Bank of Malaysia in the implementation of contracts and principles of Islamic banking. The first maṣlaḥah represents the viability of Islamic banks, while the second maṣlaḥah promotes fairness and transparency between Islamic banks and their customers.
Research limitations/implications
This study only focuses on the contracts and principles of Islamic banking operations in Malaysia with regard to three selected issues.
Practical implications
This paper clarifies the practical application of maṣlaḥah in the Islamic banking industry, particularly with regard to implementing its contracts and principles.
Originality/value
This paper analyzes the argument of maṣlaḥah on the issues of bayʿ al-ʿīnah , taʿwiḍ and ibrāʾ in Malaysia, which are considered among scholars to be debatable issues. While many discussions focus on the legal aspect of Sharīʿah on those issues, this study emphasizes how the application of maṣlaḥah aims to solve the current problems and harmonize between Sharīʿah and reality.
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Mohammed Yaw Broni, Mosharrof Hosen, Hardi Nyagsi Mohammed and Ganiyatu Tiamiyu
Actions of incumbent politicians and firms’ managers during election years have been cited as sources of many problems that afflict economies and business entities. Given the…
Abstract
Purpose
Actions of incumbent politicians and firms’ managers during election years have been cited as sources of many problems that afflict economies and business entities. Given the controversies surrounding the impact of elections on firms’ soundness, this paper poses a question of whether banks should be averse to elections. Specifically, this study aims to investigate the impact of elections on the profitability and efficiency of banks.
Design/methodology/approach
Based on the authors’ knowledge, this is maiden analysis in this context for Ghana where relatively advanced appropriate GMM technique has been used on annual data from 2012 to 2016.
Findings
This study reveals that banks make higher returns in election years. Additionally, the authors report that government’s economic policies in election years are detrimental to management efficiency, though insignificant.
Practical implications
From an emerging economy perspective, this study would guide policymakers in designing policies that respond to, or minimize, the impact of elections on bank performance. The result of this analysis would also substantiate the market reaction to the changes in the economic, political and financial conditions.
Originality/value
This analysis suggests that firms’ performances in an election year depend on policies and political institutions in place. The authors argue that Ghana, with its exemplary democratic credentials and strong institutions, living alongside a high perception of corruption, is different. The contribution to literature is, first, by limiting this work to the banking sector of Ghana and, second, by incorporating the behaviors of incumbent governments and individuals in the regression specification model.
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This study aims to develop a Sharīʿah-compliance rating mechanism for the Islamic financial services industry (IFSI), with a special focus on banking. The banking sector is taken…
Abstract
Purpose
This study aims to develop a Sharīʿah-compliance rating mechanism for the Islamic financial services industry (IFSI), with a special focus on banking. The banking sector is taken as the area of focus due to its leadership role in the volume of global Sharīʿah-compliant assets.
Design/methodology/approach
The objectives of the Islamic financial system (IFS) are selected as the basis for ratings. A range of performance indicators (leading to achievement of the objectives) is grouped into four broader categories and used in the study to allocate scores with a sum total of 100. Special considerations – including the amount of resources required in performing an activity, suitability of prevailing business conditions, the degree of compulsion/discretion in performing a task and linkage with the essence of the IFS – were taken into account in the allocation of scores.
Findings
This study groups multiple performance measures into four categories, including portfolio construction (deposits mechanism, participatory and asset-based modes of financing), access to finance (service to the less-privileged and sector screening), reputation (disclosures and stakeholders’ survey) and Sharīʿah governance (Sharīʿah supervision and controls, charitable operations, human resources, product development and organization). The Portfolio, Audit, Reputation and System (PARS) rating system is then developed.
Practical implications
A Sharīʿah-compliance rating system is helpful in measuring the progress towards goal achievement of the IFS and in gaining stakeholders’ trust. It is also important for Sharīʿah boards and regulators in policy formulation, for management in addressing weaknesses and taking corrective measures and potentially for standard-setting bodies.
Originality/value
This study presents a comprehensive quantitative Sharīʿah-compliance rating mechanism, taking into consideration the objectives of the IFS – equitable distribution of wealth and financial stability, in addition to Sharīʿah-compliance in operations. Development of Sharīʿah-compliance quality ratings for Islamic banking is essential to gain customers’ trust; the suggested methodology is thus a contribution to the literature on Islamic finance.
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Md. Tofael Hossain Majumder and Xiaojing Li
This study aims to investigate the impacts of bank capital requirements on the performance and risk of the emerging economy, i.e. Bangladeshi banking sector.
Abstract
Purpose
This study aims to investigate the impacts of bank capital requirements on the performance and risk of the emerging economy, i.e. Bangladeshi banking sector.
Design/methodology/approach
The study applies an unbalanced panel data which comprises 30 banks yielding a total of 413 bank-year observations over the period 2000 to 2015.
Findings
Using generalized methods of moments, the empirical results of this research reveal that bank capital is positively and significantly impressive on bank performance, whereas negatively and significantly impact on risk. The study also finds the inverse relationship between risk and performance in both the performance and risk equations. The results also indicate that there is a persistence of performance and risk from one year to the next year.
Originality/value
This is the unique investigation on Bangladeshi bank industry that considers the simultaneous effect of bank capital requirements on risk and performance. Therefore, it is predicted that the empirical evidence of this research shows policy implications to the regulatory authority of Bangladeshi banking industry to determine relevant policies.
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Md. Kausar Alam, Mohammad Shofiqul Islam, Fakir Tajul Islam, Mosab I. Tabash, Mohammad Sahabuddin and Muhammad Alauddin
The study aims to investigate the reasons behind the growing diverse practices of Shariah governance (SG) among Islamic banks in Bangladesh.
Abstract
Purpose
The study aims to investigate the reasons behind the growing diverse practices of Shariah governance (SG) among Islamic banks in Bangladesh.
Design/methodology/approach
Data has been collected through a semi-structured interview process from the concerned authorities (Shariah supervisory board members, Shariah department officers, central bank executives and banking professional experts) related to SG and Islamic banks in Bangladesh. The data has been analyzed by NVivo software.
Findings
The results of the study show that SG mechanisms are different due to the lack of unique comprehensive SG guidelines and the absence of a Centralized Shariah Supervisory Board (CSSB) under the Central Bank. The self-developed practices, the diversified opinions and viewpoints of the Board of Directors (BOD), banks' policies, business motivations and profit intention are also responsible for diversified SG practices. The diverse understandings and explanations of Shariah, Madhab (school of thought) and rulings are also responsible for the different practices of SG in Bangladesh.
Research limitations/implications
The study has unique implications for the regulatory authorities and Islamic banks in Bangladesh. The study explored the diverse reasons for numerous applications of SG guidelines which will be beneficial for the central bank and regulators to resolve the issues by outlying unique SG guidelines.
Originality/value
This study outlines the reasons for dissimilar practices of SG by the Islamic banks in Bangladesh, which will be beneficial for Islamic banks and the central bank of Bangladesh.
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Malika Neifar and Leila Gharbi
This paper aims to determine whether Islamic banks (IBs) and conventional banks (CBs) in Tunisia are distinguishable from one another based on financial characteristics during the…
Abstract
Purpose
This paper aims to determine whether Islamic banks (IBs) and conventional banks (CBs) in Tunisia are distinguishable from one another based on financial characteristics during the 2005–2014 period covering the 2008 global financial crisis (GFC) and the 2011 Tunisian revolution.
Design/methodology/approach
For the comparison between IBs and CBs, 11 hypotheses are formulated to distinguish between the two types of banks. The authors use a univariate analysis based on the multi-dimension figures investigation and a multivariate one based on the robust OLS technique for panel linear regression with mixed effects.
Findings
Bank-specific factors, dummy and dummy interacting variables indicate that there are differences between Islamic and conventional bank behavior. Both methods show that IBs are more liquid, more profitable and riskier than CBs. Post-2011 Tunisian revolution, small IBs (small CBs) are more (less) solvent, large IBs are more stable and both types of banks are more liquid, which explain why Tunisian governments have relay on bank system to cover budget deficits post-2011 revolution.
Originality/value
In investigating the feature of IBs and CBs from the Tunisian context, the authors take into account the effect of two abnormal events (2008 GFC and 2011 Tunisian revolution) on IBs through interaction variables.