A developing country's commercial banking risk governance disclosures: Post‐financial crisis

2020 ◽  
Author(s):  
Diana Weekes‐Marshall
Keyword(s):  
Financial Crisis ◽  
Commercial Banking ◽  
Risk Governance ◽  
Banking Risk

scholarly journals In the aftermath of the financial crisis: risk governance and the emergence of pre-emptive surveillance

2013 ◽  
Vol 40 (2) ◽  
pp. 227-246 ◽  
Author(s):  
JOHN GLENN
Keyword(s):  
Financial Crisis ◽  
Rare Events ◽  
Risk Society ◽  
Risk Governance ◽  
Financial Reforms ◽  
Radical Reform ◽  
The Future ◽  
Recent Financial Crisis

AbstractThis article examines the financial reforms that have been undertaken through two perspectives on risk: that of Beck's world risk society and an alternative Foucauldian approach. The former argues that, catastrophes such as the recent financial crisis will induce a political shift towards a cosmopolitan form of statehood. Yet, the lack of radical reform since the financial crisis would suggest otherwise. The article therefore argues that what we are witnessing is best understood in terms of reflexive governance in which the various rationalities of risk are reassessed and strengthened in order to avoid a similar occurrence in the future. Moreover, in response to the uncertainty that surrounds such rare events, more intense forms of surveillance have been adopted with the objective of pre-empting any future crisis. Yet, for various reasons, the reforms remain rather limited and the new rationality of pre-emption is unlikely to prevent further crises from occurring in the future.

scholarly journals The Effect of the 2008 Global Financial Crisis on the Efficiency of Large U.S. Commercial Banks

2019 ◽  
Vol 12 (2) ◽  
pp. 11-27
Author(s):  
Seyed Mehdian ◽  
Rasoul Rezvanian ◽  
Ovidiu Stoica
Keyword(s):  
Financial Crisis ◽  
Commercial Banks ◽  
Global Financial Crisis ◽  
The United States ◽  
Commercial Banking ◽  
Scale Efficiency ◽  
Mortgage Loans ◽  
2008 Financial Crisis ◽  
Efficiency Measures ◽  
The 2008 Financial Crisis

AbstractThe 2008 financial crisis, originated by securitization of sub-prime mortgage loans, had a huge impact on U.S. financial institutions and markets. We hypothesize that due to this crisis, the commercial banking industry has changed their portfolio structures and risk-taking behavior. To shed light on the response of U.S. banks to the 2008 financial crisis, we use the non-parametric approach to measure and compare the overall efficiency of large U.S. banks pre- and post-2008 financial crisis. We then decompose the overall measure of efficiency into allocative, overall technical, pure technical, and scale efficiency measures to better understand the sources of banking inefficiencies. The results indicate that large U.S. banks indeed changed their portfolios structure, and the efficiency of large commercial banks in the United States declined substantially during the financial crisis. Although it has been recovering since then, it still has not reached to the pre-crisis efficiency level.

Impact of Financial Crisis on Credit Risk: Pre- and Post-financial Crises 
in an Emerging Economy

2020 ◽  
Vol 9 (2) ◽  
pp. 118-132
Author(s):  
Syed Moudud-Ul-Huq ◽  
Rabaka Akter ◽  
Tanmay Biswas
Keyword(s):  
Risk Management ◽  
Financial Crisis ◽  
Credit Risk ◽  
Commercial Banks ◽  
Global Financial Crisis ◽  
Banking System ◽  
Commercial Banking ◽  
Real Economy ◽  
Credit Risk Management ◽  
The Global Financial Crisis

This aim of the article is to establish a model to discuss the reasons for changing the level of credit risk among the commercial banks of Bangladesh during the global financial crisis (GFC). Credit risk has been remaining as the essential and core risk in commercial banking activities. Multiple regression analysis is used to test the relationship among the level of credit risk as a dependent variable and financial crisis, other bank-level variables and macroeconomic variables. The causes of the GFC revealed not only systematic or structural imbalances but also the necessity to keep and strengthen the principles of credit risk management. We analyse the leading causes of the recent GFC. Moreover, the lessons that must be learnt from the weaknesses of credit risk management systems. Credit risk was found to respond to macroeconomic conditions, which indicate strong feedback effects from the banking system to the real economy. This article represents the analysis of the influence of the financial crisis on credit risk management in commercial banks and summarizes the challenges faced by banks for credit risk improvement. We hope that this reality creates new opportunities for managing credit risk in the future to increase this importance in the banks and the overall economy of Bangladesh.

scholarly journals The Impact of the Financial Crisis on Business Ethics in the Banking Sector: A Case Study from Slovakia

2013 ◽  
Vol 13 (3) ◽  
pp. 111-131 ◽  
Author(s):  
Jaroslav Belás
Keyword(s):  
Financial Crisis ◽  
Customer Satisfaction ◽  
Business Ethics ◽  
Banking Sector ◽  
Commercial Banking ◽  
Low Level ◽  
Level Of Satisfaction ◽  
Bank Employees ◽  
Moral Attitudes ◽  
The Impact

Abstract The importance of ethical standards for financial markets is based on the purpose of commercial banks and other financial institutions which operate with money of others. Besides significant economic implications, the financial crisis has also revealed considerable lack of moral values in commercial banking, which has been reflected by a very unscrupulous approach of bankers to their clients. The crisis has also caused a fundamental turnaround in public opinions on commercial banking and increased the pressure on application of moral principles in banking, which represents an appropriate complement of banking regulations. The aim of this article is to determine the basic attributes of business ethics in commercial banking and quantify changes in moral attitudes of bank employees in Slovakia through own research, which occurred during the financial crisis. Moral attitudes of bank employees are analyzed in relation to reaching customer satisfaction. The research focuses on identificating satisfaction of bank employees and also on how their satisfaction reflects acceptance of customers’ needs. A part of the research also deals with evaluation of customer satisfaction in the same timeframe. The results of our empirical research show that the low level of satisfaction and loyalty of bank employees is transferred to the low acceptance rate of customer need to sell bank’s products in the banking sector in Slovakia. The low level of satisfaction and loyalty has also caused a decline in the overall customer satisfaction. Index of personal satisfaction of bank’s customers has slightly increased in the examined period, but its current level is still very low.

scholarly journals Competition, bank fragility, and financial crisis

2018 ◽  
Vol 13 (1) ◽  
pp. 22-36 ◽  
Author(s):  
Dewi Hanggraeni
Keyword(s):  
Financial Crisis ◽  
Economic Condition ◽  
Banking Industry ◽  
Commercial Banking ◽  
Z Score ◽  
Significant Evidence ◽  
The Impact

This paper examines how competition affects bank fragility and how this relation varies in normal times and during a financial crisis using the data from Indonesian commercial banking industry. The author finds significant evidence, both statistically and economically, that more competition reduces bank fragility. In particular, the author finds that a decrease in Herfindahl-Hirschman Index (HHI) of deposits by 100 points leads to an increase in bank Z-score by 14.22 percent from its mean. Similarly, a decrease in HHI of loans by 100 points leads to an increase in Z36 by 20.44 percent. This finding is consistent across different kinds of robustness tests, including endogeneity, as well as alternative bank fragility and competition measures. However, this competition-stability nexus holds only in normal times and is reversed during a financial crisis. This suggests that the impact of competition on bank fragility is conditional on the economic condition.

Are Banks Improving Risk Governance After the Financial Crisis?

2019 ◽  
pp. 0148558X1987009
Author(s):  
Jengfang Chen ◽  
Charles Cheng ◽  
Catherina Y. Ku ◽  
Woody Liao
Keyword(s):  
Risk Management ◽  
Financial Crisis ◽  
Risk Governance ◽  
Stock Performance ◽  
Institutional Holdings ◽  
Corrective Actions

This article investigates the extent and the effectiveness of risk governance improvements in banks after the financial crisis of 2007/2008. Using a sample of 30 pairs of matched banks that were the center of the financial crisis, we find that (a) banks with lower stock performance (lower performing banks) had weaker risk governance in the year before the financial crisis than those with higher stock performance (higher performing banks), (b) those lower performing banks took corrective actions to rebuild their risk governance characteristics up to the level similar to the higher performing banks 2 years after the crisis, (c) the improvement of risk governance in the lower performing banks did not increase their institutional holdings and analyst followings, and (d) those lower performing banks that have taken corrective actions to improve risk governance have improved risk management and increased stock performance 2 years after the financial crisis.

A Convenient Scapegoat: Fair Value Accounting by Commercial Banks during the Financial Crisis

2011 ◽  
Vol 87 (1) ◽  
pp. 59-90 ◽  
Author(s):  
Brad A. Badertscher ◽  
Jeffrey J. Burks ◽  
Peter D. Easton
Keyword(s):  
Financial Crisis ◽  
Fair Value ◽  
Commercial Banking ◽  
Data Availability ◽  
Regulatory Capital ◽  
Asset Sales ◽  
Fair Value Accounting ◽  
Firm Level ◽  
Level Increase ◽  
Recent Financial Crisis

ABSTRACT Critics argue that fair value provisions in U.S. accounting rules exacerbated the recent financial crisis by depleting banks' regulatory capital, which curtailed lending and triggered asset sales, leading to further economic turmoil. Defenders counter-argue that the fair value provisions were insufficient to lead to the pro-cyclical effects alleged by the critics. Our evidence indicates that these provisions did not affect the commercial banking industry in the ways commonly alleged by critics. First, we show that fair value accounting losses had minimal effect on regulatory capital. Then, we examine sales of securities during the crisis, finding mixed evidence that banks sold securities in response to capital-depleting charges. However, the sales that potentially resulted from the charges appear to be economically insignificant, as there was no industry- or firm-level increase in sales of securities during the crisis. JEL Classifications: M41; M42; M44. Data Availability: Data are available from sources identified in the article.

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