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Open Access
Article
Publication date: 15 November 2022

Ahanaf Shahriar, Saima Mehzabin, Zobayer Ahmed, Esra Sipahi Döngül and Md. Abul Kalam Azad

The banking sector in West Asia has always experienced positive growth except for Palestine. Apart from some negligible outlying outcomes in some countries that have faced…

Abstract

Purpose

The banking sector in West Asia has always experienced positive growth except for Palestine. Apart from some negligible outlying outcomes in some countries that have faced political crises and war, most West Asian countries have gained bank profitability and efficiency. However, the stability in the banking sector has been rarely examined in the literature. Hence, this study sheds light on examining bank stability by considering 12 countries in West Asia.

Design/methodology/approach

A fixed effect panel data regression analysis is employed on strongly balanced panel data using data from 2004 to 2018.

Findings

Results reveal that the net interest margin has a positive relationship with bank stability. The bank’s stability rises as the net interest margin improves. Furthermore, the non-interest income reveals a positive significant impact on the stability of banks, depicting that the increase in non-interest income increases the stability of banks. Additionally, the non-interest expense also reveals positive significant results with the stability of banks. Nevertheless, leverage ratio and long-term debt portray a negative significant impact on banks’ stability. The finding reveals that higher long-term debt and leverage ratios may decrease the stability of the banks in West Asia.

Practical implications

Overall, the authors’ findings add to the literature on the stability of the banks by providing some new but significant information. Some of the recommendations may be beneficial to the long-term success of 12 Western Asian countries’ banks.

Originality/value

The study examines the stability of banks by incorporating both profitability and operating efficiency along with net-interest income, which extends to the current literature’s insight.

Details

IIM Ranchi journal of management studies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2754-0138

Keywords

Article
Publication date: 23 November 2022

Peterson K. Ozili

The purpose of this study is to discuss the role of central bank digital currency (CBDC), Fintech and cryptocurrency for financial inclusion and financial stability.

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Abstract

Purpose

The purpose of this study is to discuss the role of central bank digital currency (CBDC), Fintech and cryptocurrency for financial inclusion and financial stability.

Design/methodology/approach

This study used critical discourse analysis to identify the benefits and risks of CBDC, Fintech and cryptocurrency for financial inclusion and financial stability.

Findings

Fintech, CBDC and cryptocurrency can increase financial inclusion by providing an alternative channel through which unbanked adults can access formal financial services. CBDC and Fintech services have the potential to preserve financial stability, while cryptocurrency presents financial stability risks that can be mitigated through effective regulation. This paper also identified some problems of CBDC, Fintech and cryptocurrency for financial inclusion and financial stability. This paper offered some insight about the future of financial inclusion and the future of financial stability.

Practical implications

Although CBDC, Fintech or cryptocurrency can extend financial services to unbanked adults and offer cost-efficient advantages, there are risk considerations that need to be taken into account when using CBDC, Fintech and cryptocurrency to increase financial inclusion and to preserve financial stability.

Originality/value

The literature has not identified the combined role of CBDC, Fintech and cryptocurrency for financial inclusion and financial stability. To the best of the author’s knowledge, this paper is the first paper to assess the combined role of CBDC, Fintech and cryptocurrency for financial inclusion and financial stability.

Details

Digital Policy, Regulation and Governance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2398-5038

Keywords

Article
Publication date: 3 November 2022

Ahmed Rufai Mohammad and Sirajo Aliyu

This paper aims to empirically investigate the asymmetrical relationship between changes in oil price and the banking stability of the conventional and Islamic banks in…

Abstract

Purpose

This paper aims to empirically investigate the asymmetrical relationship between changes in oil price and the banking stability of the conventional and Islamic banks in the Middle East and North African (MENA) countries.

Design/methodology/approach

This paper measures banking stability with Z-score and probability of default using the Generalized Method of Moment. This paper selects a sample of conventional and Islamic banks operating within the MENA oil-producing states between 2008 and 2016.

Findings

The result of this paper reveals that the banking stability of the two types of banks responds to positive and negative shocks in oil prices. Thus, the stability of conventional banks is slightly better than that of Islamic banks in the region. Consequently, this paper also reveals that bank capitalization improves with the banking stability of the two banking systems in the region.

Practical implications

The findings of this paper will help the banks in the MENA oil-producing countries with strategies for improving banking stability during the oil price fluctuations and provide the policymakers with possible time for bank capital reform.

Originality/value

This paper explores the impact of the international oil price shocks on Islamic and conventional banks in one of the essential global oil-producing regions. As such, this paper extends the banking stability literature by accounting for the role of oil shock prices on banking distance and the probability of default. To the best of the authors’ knowledge, this is the first investigation of different transmission channels of oil price fluctuations in the region while considering the dual banking system in the hub of Islamic banks.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1753-8394

Keywords

Open Access
Article
Publication date: 20 October 2022

Mohammed Adem

The impact of diversification on bank stability and risk remains an ongoing topic of discussion with inconclusive results. Hence, this study investigated the implications…

Abstract

Purpose

The impact of diversification on bank stability and risk remains an ongoing topic of discussion with inconclusive results. Hence, this study investigated the implications of income diversification on bank stability within African markets.

Design/methodology/approach

The study utilised longitudinal financial data on 45 countries from 2000 to 2017 and employed static and dynamic panel model estimation.

Findings

The results of the study suggest income diversification technique could improve financial stability throughout typical and crisis periods which validate portfolio management theory. The study also confirms the “too big to fail” hypothesis, extensive diversifying over an optimal range negatively impacts stability. Banks with a high level of liquidity, a higher operating efficiency and a larger deposit ratio become more resilient. Banking capital regulations found to be the appropriate monitoring instrument for lowering risks and maintaining stability. However, profitability was found to have a positive effect on bank risk-taking. The finding also suggests that political institutions have substantial, direct implications that are positively related to bank fragility. Macroeconomic factors such as gross domestic product (GDP) growth and inflation also influenced bank stability.

Practical implications

This study has important implications for bankers, regulators and academicians concerned about the effect of diversification on a bank’s risk-taking or stability in developing economies.

Originality/value

To the best of the author’s knowledge, this is the first study on Africa to analyse the quadratic influence of income diversification and the effects of political institutions on the level of bank stability.

Details

Asian Journal of Accounting Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2443-4175

Keywords

Article
Publication date: 2 November 2022

Samira Haddou and Sawssen Mkhinini

This paper aims to explore the asymmetric effect of liquidity risk (LR) and Shariah board size on bank financial stability for a panel of Islamic banks (IBs) based in Gulf…

Abstract

Purpose

This paper aims to explore the asymmetric effect of liquidity risk (LR) and Shariah board size on bank financial stability for a panel of Islamic banks (IBs) based in Gulf Cooperation Council (GCC) and Southeast Asian countries over the 2006–2019 period.

Design/methodology/approach

This paper uses the asymmetric nonlinear autoregressive distributed lag (NARDL) error correction model insofar as it allows assessing not only whether IBs with large boards outperform their peers with reduced boardrooms but also unveiling the potential asymmetries between LR and stability.

Findings

The findings show that while increasing the number of the Shariah board members does not impact the financial stability of IBs in both the short and long runs its decrease appears to enhance their stability in the long run. The findings also show that a hike, as well as a fall in LR, significantly influences the stability in the long run, which underlines the role that LR plays in bank financial stability.

Research limitations/implications

A prominent line of future research may consist in extending the country sample to cover more representative full-fledged IBs based on different regions, which allows the breakdown of the sample into GCC-based and non-GCC-based IBs. Doing so is interesting in terms of governance implications. Another extension would consist in considering additional sources of risk to stability.

Practical implications

IBs should enhance their expertise, which helps them diversify their funding strategy and cater for liquidity solutions. They also must establish a better Shariah governance framework to contain their risk-taking behavior that ultimately contributes to achieving financial stability.

Originality/value

This paper contributes to the empirical literature in Islamic banking by performing a model that simultaneously accounts for both short- and long-run asymmetries in the relationship between the financial stability of full-fledged IBs, the LR and the size of the Shariah supervisory board.

Details

Journal of Islamic Accounting and Business Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 3 October 2022

Amal Ben Soussia, Chahrazed Labba, Azim Roussanaly and Anne Boyer

The goal is to assess performance prediction systems (PPS) that are used to assist at-risk learners.

Abstract

Purpose

The goal is to assess performance prediction systems (PPS) that are used to assist at-risk learners.

Design/methodology/approach

The authors propose time-dependent metrics including earliness and stability. The authors investigate the relationships between the various temporal metrics and the precision metrics in order to identify the key earliness points in the prediction process. Authors propose an algorithm for computing earliness. Furthermore, the authors propose using an earliness-stability score (ESS) to investigate the relationship between the earliness of a classifier and its stability. The ESS is used to examine the trade-off between only time-dependent metrics. The aim is to compare its use to the earliness-accuracy score (EAS).

Findings

Stability and accuracy are proportional when the system's accuracy increases or decreases over time. However, when the accuracy stagnates or varies slightly, the system's stability is decreasing rather than stagnating. As a result, the use of ESS and EAS is complementary and allows for a better definition of the point of earliness in time by studying the relation-ship between earliness and accuracy on the one hand and earliness and stability on the other.

Originality/value

When evaluating the performance of PPS, the temporal dimension is an important factor that is overlooked by traditional measures current metrics are not well suited to assessing PPS’s ability to predict correctly at the earliest, as well as monitoring predictions stability and evolution over time. Thus, in this work, the authors propose time-dependent metrics, including earliness, stability and the trade-offs, with objective to assess PPS over time.

Details

The International Journal of Information and Learning Technology, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2056-4880

Keywords

Article
Publication date: 9 September 2022

Malika Neifar and Leila Gharbi

The purpose of this study to investigate the sensitivity of stability and insolvency of the Tunisian financial banking with respect to banks’ specific factors as well as…

Abstract

Purpose

The purpose of this study to investigate the sensitivity of stability and insolvency of the Tunisian financial banking with respect to banks’ specific factors as well as to the macroeconomic conditions (including gross domestic product growth, inflation rate, foreign direct investment [FDI], EXRate, INT and unemp) during 2005–2014 period covering 2011 Tunisian revolution.

Design/methodology/approach

The variables of interest the financial institution stability which is measured by Z-score and solvency indicators that are determined by the capital adequacy ratio (CAP) and deposits to assets (DTA). This study seeks to assess the linkages among them (causality, magnitude and duration) that may shed some light on the micro-financial vulnerabilities that are associated with the macroeconomic environment and the monetary authority policy. To do so, this study considers two models: a panel vector autoregressif-X model for the tri-variate vector (Z-score, DTA, CAP) estimated by a system generalized method of moments after a forward mean-differencing and a dynamic seemingly unrelated regression model for the bi-variate vector (Z-score, DTA) estimated by 3LS.

Findings

Results say that there is a uni-directional contemporaneous negative relationship from stability to insolvency. Stability evolution can be attributed to both macroeconomic conditions and banks’ specific factors, whereas insolvency is attributed only to banks’ specific factors. Stability was found to increase when growth rate and FDI rise, whereas instability increases when interest rate rises, exchange rate depreciates and if inflation is high. Stability increases also when CAP increases. However, compared to conventional banks (CBs), Islamic banks (IBs) are found to be more solvent than CBs, and more stable post 2011 Tunisian revolution.

Practical implications

As fluctuation in inflation and exchange rate could lead to high interest rates and hence decreases the stability of the financial sectors, Tunisian monetary authority is advised to practice low interest rate policy.

Originality/value

This paper attends not only to compare the response of stability and insolvency to the effect of exogenous variables (macroeconomic and financial factors) in Tunisian banks but also to detect short run and long run feedback effects between dependent variables as well as to investigate whether IBs and CBs present evident heterogeneity of stability and insolvency evolution in relation to 2011 Tunisian revolution.

Details

Journal of Islamic Accounting and Business Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 14 September 2022

Baah Aye Kusi, Joseph Ato Forson, Eunice Adu-Darko and Elikplimi Agbloyor

Financial crises (FC) remain a global threat to the financial stability of financial institutions and international bank regulatory capital requirement (IBRCR) by the…

Abstract

Purpose

Financial crises (FC) remain a global threat to the financial stability of financial institutions and international bank regulatory capital requirement (IBRCR) by the Committee on Banking Supervision provides mechanism for curbing the adverse effect of FC on financial stability. Hence, the purpose of this study is to provide, evidence on how IBRCR tones down the adverse FC effects on bank financial stability (BFS).

Design/methodology/approach

The study uses 102 economies between 2006 and 2016 in a two-step dynamic generalized method of moments model.

Findings

The results show that while FC and IBRCR negatively and positively impact BFS, respectively, it is observed that under the increasing presence of IBRCR, the negative effect of FC on BFS declines. Additionally, the results show that economies that maintain minimum IBRCR above 10.5% recommended by BASEL III are able to reinforce a significant reduction in the negative effect of FC on BFS.

Practical implications

These findings imply that in as much as financial crisis is injurious to BFS, regulators and policymakers can rely on IBRCR to avert the injurious effects of FC on BFS. Clearly, while IBRCR is necessary for reinforcing BFS through FC, bank managers who maintain IBRCR above the recommended 10.5% stands a better chance to taming the avert effect of FC on BFS. Additionally, economies that have not full adopted the BASEL minimum capital requirement may have to do so given its potential of dampening the adverse effect of FC on BFS.

Originality/value

The study presents an international perspective of how BASEL capital requirements can help tame global financial crisis using a global sample of 102 economies.

Details

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

Keywords

Article
Publication date: 4 September 2017

Marcin Figat

This paper aims to present the results of aerodynamic calculation of impact the main rotor on the fuselage and the tail of a light gyroplane. This kind of vehicle is a…

Abstract

Purpose

This paper aims to present the results of aerodynamic calculation of impact the main rotor on the fuselage and the tail of a light gyroplane. This kind of vehicle is a type of rotorcraft which uses a non-powered rotor in autorotation to develop lift and engine-powered propeller to provide the thrust. Both of them disturb the flow around the gyroplane body (gyroplane fuselage and tail) and influence on its static stability. The main goal of the presented research was to find the magnitude of this influence. To measure this effect, the main stability derivatives changes of gyroplane body were investigated.

Design/methodology/approach

The CFD analysis of the complete gyroplane was made. Computation was performed for the model of gyroplane which was equipped with the two sub-models of the main rotor and the engine-powered propeller. Both of them were modelled as the actuator discs. This method allows to compute the aerodynamic impact of rotating components on the gyroplane body. All aerodynamic analysis was made by the MGAERO software. The numerical code of the software bases on the Euler flow model. Next, the resulting aerodynamic coefficients were used to calculate the most important stability derivatives of the gyroplane body.

Findings

The result obtained by computation presents the change in the most important aerodynamic coefficients and stability derivatives of the gyroplane body caused by the impact of its main rotor. Moreover, the result includes the change of the aerodynamic coefficients and stability derivatives caused by change of the main rotor configuration (change of rotation rate and angle of incidence) and change of the flight condition (gyroplane angle of attack sideslip angle and flight speed).

Practical implications

Analysis of the main rotor impact will be very useful for evaluation of dynamic stability of the light gyroplane. Moreover, the results will be helpful to design the horizontal and vertical tail for the light gyroplane.

Originality/value

This paper presents the method of the numerical analysis of the static stability of the light gyroplane’s body. The results of analysis present the impact of disturbance generated by the rotating main rotor on the static stability of the gyroplane body. Moreover, the impact of the main rotor configuration change and the flight condition change on the static stability were investigated too. The evaluation of the gyroplane’s body static stability was made by the stability derivatives. The methodology and obtained result will be very useful for analysis of the dynamic stability of the light gyroplanes. Moreover, the results will be helpful during design the main components of the gyroplane like vertical and horizontal tail.

Details

Aircraft Engineering and Aerospace Technology, vol. 89 no. 5
Type: Research Article
ISSN: 1748-8842

Keywords

Article
Publication date: 14 June 2011

Huaishu Li, Yanhui Lai, Wu Qiang and Xiang Dong

In order to research the law of the low‐frequency power oscillation which often exists in the synchronous generator rectification system, the purpose of this paper is to…

Abstract

Purpose

In order to research the law of the low‐frequency power oscillation which often exists in the synchronous generator rectification system, the purpose of this paper is to study theoretical analysis and numerical calculation on the static stability of the system.

Design/methodology/approach

Different from the common three‐phase synchronous generator operating in large power networks, the stability of synchronous generator rectification systems is much more difficult to analyze because of its nonlinear loads. Some papers have analyzed the stability of the synchronous generator rectification system and presented different parameter conditions of system stability, but since factors that influence the system stability are complex, the essence of this kind of oscillation is not completely known yet. By considering rectification systems as an equivalent to DC circuits, the correct circuit model which is necessary to analyze the rectification systemic stability is set up, the changing law and relationship of various parameters under mini‐disturbances is analyzed, a linear differential equation about the DC‐side average current is derived, the stability of the synchronous generator rectification system is analyzed and deduced by using Hull criterion, all parameters influencing system stability are calculated and analyzed, and their ranges for a stable rectification system are given. Also, the reason why and how the parameters affect system stability is explained.

Findings

The operational stability of synchronous generator rectification systems is completely and correctly recognized.

Practical implications

The paper has a reference value for the design and safe operation of synchronous generator rectification systems.

Originality/value

The paper puts forward system stability criterion and gives a rational physical explanation about system stability.

Details

Kybernetes, vol. 40 no. 5/6
Type: Research Article
ISSN: 0368-492X

Keywords

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