Bank regulation and credit crunch: evidence from MENA region commercial banks

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Chawki EL-Moussawi ◽  
Mohamad Kassem ◽  
Josse Roussel
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Explanatory Power ◽  
Banking Regulation ◽  
Capital Requirements ◽  
Mena Region ◽  
Institutional Variables ◽  
Content Type ◽  
The Impact ◽  
The Relationship

PurposeThis paper focuses on the relationship between the regulatory capital requirements and the supply of credit for commercial banks that are operating in the MENA region from 1999 till 2017.Design/methodology/approachThe application of the Fixed Effects Model on a panel of commercial banks in the MENA region has shown a negative relationship between supply of credit and both the capital requirements and solvency ratios.FindingsThe results showed that the idiosyncratic, the macroeconomic and the institutional variables affect the supply of credit behavior of banks. The robustness tests using the Two-Stage Least Square method (2SLS) also led to a negative correlation between the growth of credit and capital requirements. Specific macroeconomic and institutional variables have revealed the expected sign and are significant regardless of the estimated specifications.Research limitations/implicationsThis work can be subjected to further future extensions. The explanatory power of our model can be improved by incorporating variables that reflect the corporate governance and structure of banking sector. Similarly, we can also include a variable that takes into account the increasing competition that could affect the stability of the banking sector and therefore the prudential banking regulation.Originality/valuePrevious studies that investigated only the relationship between capital level and risk-taking behavior of banks in the MENA region did not take into account neither the economic and institutional environment nor the impact of these regulations on credit (loans) supply.

A study of the relationship between employee wage and commercial banks efficiency in China

2016 ◽  
Vol 7 (2) ◽  
pp. 147-159
Author(s):  
Jiangtao Li ◽  
Jianyue Ji ◽  
Yanxia Wang
Keyword(s):  
Commercial Bank ◽  
Commercial Banks ◽  
Calculated Data ◽  
Wage Structure ◽  
Tobit Regression ◽  
Bank Efficiency ◽  
Content Type ◽  
Per Capita ◽  
The Impact ◽  
The Relationship

Purpose Efficiency of a commercial bank affects both its competitiveness and the role it plays in the process of economic development. Although great efforts have been exerted in developing the various aspects of banking efficiency, there seems to be a lack of research on examining the impact of the bank efficiency from the employee wage perspective. The mechanism of how employee wage affects commercial bank efficiency and the relationship between the two were analyzed in this paper. Based on the growing body of research on efficiency in banking, the aim of this paper is to examine if competitiveness of employee wages at any commercial bank has any impact on the bank efficiency score. Design/methodology/approach The method used was quantitative analysis, which was based on comparing the evaluated efficiencies of the banks with employee wages published in the bank reports. The empirical data in this paper were based on 16 Chinese listed commercial banks from 2004 to 2012. The per capita wage of commercial banks was selected as the wage indicator, and the efficiency value obtained by the slack-based measure (SBM) model was selected as the efficiency indicator. According to the calculated data, the Tobit regression model was built to analyze the relationship between employee wage and commercial bank efficiency. Findings The research results show that employee wage is the key variable that influences the efficiency of Chinese commercial banks, and the inverted U-shaped relationship between employee wage and commercial banks efficiency shows up. Practical implications The wage structure data of the composition of basic pay and bonus were not available at the time of conducting the research. Per capita wages were used instead to reflect the employee wage levels of Chinese banks. Originality/value This study can provide some help for the banking industry by analyzing the wage levels from the perspective of efficiency and also further enriches the theoretical system of the relationship between employee wage and bank efficiency.

Inflation shocks and income inequality

2019 ◽  
Vol 10 (2) ◽  
pp. 226-240
Author(s):  
Rolando Gonzales ◽  
Andrea Rojas-Hosse
Keyword(s):  
Genetic Algorithm ◽  
Methodological Approach ◽  
Mena Region ◽  
Content Type ◽  
Core Inflation ◽  
Research Gap ◽  
Using Data ◽  
The Impact ◽  
The Relationship ◽  
Detrimental Impact

Purpose The purpose of this paper is to analyze the effects of inflationary shocks on inequality, using data of selected countries of the Middle East and North Africa (MENA). Design/methodology/approach Inflationary shocks were measured as deviations from core inflation, based on a genetic algorithm. Bayesian quantile regression was used to estimate the impact of inflationary shocks in different levels of inequality. Findings The results showed that inflationary shocks substantially affect countries with higher levels of inequality, thus suggesting that the detrimental impact of inflation is exacerbated by the high division of classes in a country. Originality/value The study contributes to the literature about the relationship between inflation and inequality by proposing that not only the sustained increase in prices but also the inflationary shocks – the deviations from core inflation – contribute to the generation of inequality. Also, to the best of the authors knowledge, the relationship between inflation shocks and inequality in the MENA region has never been analyzed before, thus creating a research gap to provide additional empirical evidence about the sources of inequality. Additionally, the authors contribute with a methodological approach to measure inflationary shocks, based on a semelparous genetic algorithm.

scholarly journals Impact of the Basel III bank regulation on US agricultural lending

2020 ◽  
Vol 80 (3) ◽  
pp. 321-337 ◽  
Author(s):  
Kevin Nooree Kim ◽  
Ani L. Katchova
Keyword(s):  
Growth Rates ◽  
Banking Sector ◽  
Agricultural Sector ◽  
Global Financial Crisis ◽  
Detailed Examination ◽  
Capital Requirements ◽  
Basel Iii ◽  
Content Type ◽  
The Usa ◽  
The Impact

Purpose Following the recent global financial crisis, US regulatory agencies issued laws to implement the Basel III accords to ensure the resiliency of the US banking sector. Theories predict that enhanced regulations may alter credit issuance of the regulated banks due to increased capital requirements, but the direction of changes might not be straightforward especially with respect to the agricultural loans. A decrease in credit availability from banks might pose a serious problem for farmers who rely on bank credit especially during economic recessions. The paper aims to discuss these issues. Design/methodology/approach In this study, the impact of Basel III regulatory framework implementation on agricultural lending in the USA is examined. Using panel data of FDIC-insured banks from 2008 to 2017, the agricultural loan volume and growth rates are examined for agricultural banks and all US banks. Findings The results show that agricultural loan growth rates have slowed down, but the amount of agricultural loan volume issuance still remained positive. More detailed examination finds that regulated agricultural banks have decreased both the agricultural loan volume and their loan exposure to the agricultural sector, showing a possible sign of credit crunch. Originality/value This study examines whether the implementation of the Basel III regulation has resulted in changes in agricultural loan issuance by US banks as predicted by the lending channel theory.

scholarly journals The Impact of CRD IV on Bank Lending

2019 ◽  
Vol 8 (2) ◽  
pp. 203-217
Author(s):  
Matias Huhtilainen
Keyword(s):  
Bank Lending ◽  
Banking Regulation ◽  
Capital Requirements ◽  
Bank Credit ◽  
Bank Profitability ◽  
Consistent Finding ◽  
Loan Supply ◽  
The Impact ◽  
The Relationship ◽  
Crd Iv

This study addresses the post-financial crisis EU banking regulation reform CRD IV. The specific focus is on the relationship between increased capital requirements and the subsequent change in both supply and the price of bank credit. This study employs a twofold data consisting of a panel of Finnish unlisted savings and cooperative banks’ key figures over the period 2002-2018 and a representative survey conducted with personnel of Finnish institutions. In addition to the consistent finding in regards to the effect of bank profitability as well as fairly consistent findings in regards to the effect of bank size and GDP growth, the key finding suggests a slight decrease in loan supply under the CRD IV.

Multiple large shareholders and bank stability: the case of MENA banks

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rim Boussaada
Keyword(s):  
North Africa ◽  
Banking Sector ◽  
Mena Region ◽  
Bank Stability ◽  
Content Type ◽  
Mena Countries ◽  
Large Shareholders ◽  
Method Of Moments Estimation ◽  
The Relationship

PurposeThis study aims to investigate how multiple large shareholders individually and interactively influence Middle East and North Africa (MENA) bank stability.Design/methodology/approachThe empirical framework is based on a generalized dynamic two-step system and utilizes the method of moments estimation to analyze a panel dataset of 532 bank-year observations over the 2004–2017 period.FindingsThe estimation results show that large shareholders are crucial in explaining the differences in bank stability among MENA banks. Specifically, the first- and second-largest shareholders exacerbate bank instability. However, we found that the third-largest shareholder enhances bank stability. Additionally, the coalition between the two largest shareholders increases the moral hazard problem in MENA banks and significantly decreases stability. Meanwhile, the interaction between the three largest shareholders is associated with a control contestability problem, which impels better bank stability. The results support the dispersion effect of multiple large shareholders in MENA countries.Originality/valueThe role of large shareholders in corporate governance is widely recognized. However, very little is known about the role and the real impact that multiple large shareholders may have on the banking sector. To the best of the authors' knowledge, this work is the first to analyze the relationship between multiple large shareholders and bank stability in the MENA region.

Impact of internal and external CSR on organizational performance with moderating role of culture: empirical evidence from Chinese banking sector

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Abdul Waheed ◽  
Qingyu Zhang ◽  
Abaid Ullah Zafar ◽  
Hashim Zameer ◽  
Muhammad Ashfaq ◽  
...  
Keyword(s):  
Organizational Performance ◽  
Banking Sector ◽  
Content Type ◽  
Managerial Implications ◽  
Corporate Social ◽  
The Impact ◽  
The Relationship ◽  
Moderating Role ◽  
Chinese Banking

PurposeThis study investigates the impact of corporate social responsibility (CSR) on organizational performance, especially competitive performance (CP) along with moderating role of the organizational culture (OC) from the banking sector of China. Drawing on the stakeholder theory, the first goal is to examine the relationships between CSR and organizational CP. Second, the purpose is to evaluate the moderation of OC between the relationship of CSR and CP, respectively.Design/methodology/approachSEM using SmartPLS was majorly engaged to ascertain the relationship and to inquire the assumed hypotheses. The convenience sampling was engaged to collect the data from the Chinese banking market with the help of students, colleagues and personal visits.FindingsThe findings exhibited that CSR both external and internal CSR has significant correlations on organizational CP within banking sector of China. Second, the findings revealed a positive moderation influence of OC between the relationships of CSR and organizational CP. The comprehensive analysis of each factor of CSR on organizational CP was autonomously inspected to understand the insights which ensure that how the incorporation of CSR and OC activities may improve organizational CP.Research limitations/implicationsThis study faces numerous limitations related to sample and geographic locations that assure new work possibilities for researchers across the world.Practical implicationsThis study equips insightful information for management on how organizations can obtain CP by consolidating CSR and OC activities as their more productive strategic tools. This article endows with potential theoretical and managerial implications with empirical addition to concerned literature of OC, CSR and organizational CP.Social implicationsUnderstanding OC and CSR activities can provide interesting and helpful insights for the personnel to perform well within the banking institutes.Originality/valueThe topic of CSR and culture has been known as the evolving concept that is getting strong concern for the researchers. The additional work particularly empirical is yet required to explore the insights on CSR and OC themes worldwide, especially in developing nations.

The impact of transformational leadership on employees’ creativity

2018 ◽  
Vol 41 (1) ◽  
pp. 113-132 ◽  
Author(s):  
Taghrid S. Suifan ◽  
Ayman Bahjat Abdallah ◽  
Marwa Al Janini
Keyword(s):  
Transformational Leadership ◽  
Organizational Support ◽  
Structural Equation ◽  
Perceived Organizational Support ◽  
Banking Sector ◽  
Mediating Effect ◽  
Equation Modeling ◽  
Content Type ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to examine the effect of transformational leadership on employees’ creativity in the Jordanian banking sector through the mediating effect of perceived organizational support. Design/methodology/approach The study is based on survey data collected from 369 employees working in Jordanian banks. Validity and reliability analyses were performed, and direct and indirect effects were tested using structural equation modeling. Findings The results indicate that transformational leadership positively affects some dimensions of employees’ creativity and perceived organizational support. However, perceived organizational support is found to not be significantly related to some dimensions of employees’ creativity. Additionally, the mediating effect of perceived organizational support on the relationship between transformational leadership and some dimensions of employees’ creativity is found to not be significant. Originality/value This paper is one of the first to examine the relationship between transformational leadership and employees’ creativity through perceived organizational support, especially in an Arab country and in the banking sector.

Mark-to-market and its effects on community banking during the financial crisis

2015 ◽  
Vol 23 (1) ◽  
pp. 55-72 ◽  
Author(s):  
Hilde Patron ◽  
William J. Smith
Keyword(s):  
Financial Crisis ◽  
Banking Sector ◽  
Market Price ◽  
Accounting Standards ◽  
Capital Requirements ◽  
Community Banks ◽  
Content Type ◽  
Share Prices ◽  
Illiquid Markets ◽  
The Impact

Purpose – 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. Design/methodology/approach – 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. Findings – 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. Originality/value – 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.

Examining the relationship between e-service recovery quality and e-service recovery satisfaction moderated by perceived justice in the banking context

2020 ◽  
Vol 27 (6) ◽  
pp. 1951-1980
Author(s):  
Sonia Mathew ◽  
Ajay Jose ◽  
Rejikumar G ◽  
Dony Peter Chacko
Keyword(s):  
Information Quality ◽  
Banking Sector ◽  
Service Failure ◽  
Service Recovery ◽  
Equation Modeling ◽  
Content Type ◽  
Perceived Justice ◽  
Recovery Satisfaction ◽  
The Impact ◽  
The Relationship

PurposeThe study focuses on the core issue faced by bankers on how to retain existing customers who have encountered an e-service failure and who are skeptical about the justice received through the service recovery process. It further endeavors to create an internal bench-marking model for assessing e-service recovery satisfaction.Design/methodology/approachBy the experimental study, the authors confirm a measurement model using structural equation modeling for examining the impact of perceived service recovery quality antecedents on e-service recovery satisfaction moderated by perceived justice. In total, responses from 399 e-banking customers, who had experienced a e-service failure, were recorded using a 5-point Likert scale with a structured questionnaire.FindingsThe perceived e-service recovery quality antecedents identified were perceived information quality, digital commitment, perceived employee performance and perceived service orientation of organization. The empirical results revealed that “perceived information quality” was the most significant predictor of e-service recovery satisfaction. Perceived justice moderates the relation between perceived service recovery quality and e-service recovery satisfaction.Research limitations/implicationsThe research does not contemplate the e-service recovery satisfaction of customers who have undergone multiple service failures.Practical implicationsThe conclusions of the investigation suggest that the four antecedents of perceived e-service recovery quality model are suitable instruments for creating benchmarks for e-service recovery satisfaction for banks, and that perceived justice moderates the relationship between e-service recovery quality and e-service recovery satisfaction. Therefore, policymakers in banks can use this model to assess the e-service recovery quality, and they ought to enhance the perceived justice feel of the customers who have experienced a service failure.Originality/valueThere remains scarcity of empirical research focusing on perceived information quality and digital commitment as antecedents of perceived e-service recovery quality and its effect on e-service recovery satisfaction in the banking context. Furthermore, similar studies within the banking sector have rarely considered perceived justice as a moderator variable. Hence, this paper attempts to accomplish the research gap by empirically testing the e-service recovery satisfaction level of a large sample of the population toward four antecedents of perceived e-service recovery quality rendered by banks and create a benchmark model to ascertain e-service recovery satisfaction.

Impact of service quality, corporate image and customer satisfaction towards customers’ perceived value in the banking sector in Pakistan

2015 ◽  
Vol 33 (4) ◽  
pp. 442-456 ◽  
Author(s):  
Hashim Zameer ◽  
Anam Tara ◽  
Uzma Kausar ◽  
Aisha Mohsin
Keyword(s):  
Customer Satisfaction ◽  
Service Quality ◽  
Banking Sector ◽  
Perceived Value ◽  
Corporate Image ◽  
Content Type ◽  
Independent Variables ◽  
Customer Perceived Value ◽  
The Impact ◽  
The Relationship

Purpose – The purpose of this paper is to explore the impact of services quality, customer satisfaction and corporate image on customer perceived value in the banking sector of Pakistan. Design/methodology/approach – A model is developed to show the relationship between dependent and independent variables taken from the existing literature. The data are collected from 200 respondents taken from the five major cities of Pakistan using structured questionnaire. Correlation and regression are applied to estimate the relationship between variables and find out the extent to which the independent variables have impact on the dependent variable. Findings – Results show that there is a positive relation between the service quality, customer satisfaction and corporate image. It is also analyzed by the results that service quality and customer satisfaction have high impact on the customer perceived value where corporate image also effect the customer perceived value. Originality/value – This paper identified the impact of service quality, customer satisfaction and corporate image on the customer perceived value that helps the services sector especially banks how they can improve the customer perceived value through improving their service quality, customer satisfaction and corporate image.

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