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.

scholarly journals Determinants of Banks Profitability: Empirical Evidence from Ghana’s Commercial Banking Industry

2021 ◽  
pp. 175-189
Author(s):  
Abdul-Hamid Ahmed ◽  
Kouadio Stephane N’Dri
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Banking Industry ◽  
Negative Impact ◽  
Commercial Banking ◽  
Annual Data ◽  
Z Score ◽  
Significant Negative Impact ◽  
Negative Effect ◽  
The Impact

Over the years, Ghana’s commercial banking industry has been bedeviled with numerous challenges. The unbridled effect of this is the 2018 banking sector megrim which led to the collapse of seven major banks. This pointed out that it is very crucial to identify and mitigate the factors that negatively affect the performance of the banking sector. This paper is used to investigate the effect of banks specific variables (BSVs) and macroeconomic variables (MEVs) on the profitability of commercial banks (NIM, ROE, and ROA) in Ghana using FRED annual data of 25 years. In order to avoid endogeneity problems and aggregation bias, we used the SURE model to run the estimates simultaneously. The result reveals that profit earned by Ghana’s commercial banks is largely influenced by both internal factors such as KA, AQR, LMGT, MEFFI, and Z-Score and fluctuations in the macroeconomic environment (GDP and FOREX). The impact of KA, LMGT, MEFFI, and Z-score is significantly positive whereas AQR (NPLs) is found to have a negative effect on banks profitability. GDP has a significant negative impact on Ghana’s commercial bank’s profitability whiles forex induced commercial banks profitability positively, but inflation CPI does not determine the profitability of commercial banks in Ghana.

scholarly journals ANALISIS POTENSI KEBANGKRUTAN PADA PERUSAHAAN TEKSTIL DAN GARMEN DI INDONESIA YANG TERDAFTAR DI BEI

2019 ◽  
Author(s):  
sunreni
Keyword(s):  
Financial Crisis ◽  
Sampling Method ◽  
Global Financial Crisis ◽  
Z Score ◽  
Purposive Sampling ◽  
Descriptive Research ◽  
The Global Financial Crisis ◽  
The Impact ◽  
Research Period

This research wanted to know about the potential bankruptcy of the Textile and Garment Company in the research period 2009-2011 due to the impact of the global financial crisis will begin to be felt at the end of 2008 and beginning of 2009. Each of these companies studied had losses two years. Research conducted only descriptive research that just gives an overview of the results of the analysis of the potential bankruptcy of the six companies of Textiles and Garments that meet criteria based on purposive sampling method using a model of the Altman Z-Score as a model to predict the potential bankruptcy of the enterprise Textiles and Garments.Result of this research are six of corporate sample has a potencial bankruptcy because each score of altman Z-score are small of 1,81. Solutions of that corporate is restrukture their financial corporate.

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 The Impact of Financial Sector Sustainability Guidelines and Regulations on the Financial Stability of South American Banks

2021 ◽  
Vol 10 (1) ◽  
pp. 111-127
Author(s):  
Pedro Ildemaro Alguindigue Ruiz ◽  
Olaf Weber
Keyword(s):  
Latin America ◽  
Financial Stability ◽  
Banking Industry ◽  
Financial Sector ◽  
South American ◽  
Panel Regression ◽  
Z Score ◽  
Sustainable Finance ◽  
The Impact

Sustainability risks represent a significant concern for the banking industry. Consequently, financial regulators created financial sector sustainability guidelines and regulations. However, the effect of these policies on banks’ financial stability is unclear. Hence, this study analyzes 149 banks in 17 countries in Latin America to explore the impact of financial sector sustainability guidelines and regulations on the banking industry. We use the Z-Score to measure the financial stability of banks in countries with and without financial sector sustainability guidelines and regulations. Based on panel regression, our results suggest significant differences between banks in countries with and without financial sector sustainability guidelines and regulations. We conclude that sustainable finance regulations promote financial stability as well as sustainable banking practices.

scholarly journals Relevance of Shari’ah Governance in Driving Performance of Islamic Banks during the Financial Crisis: International Evidence

2020 ◽  
Author(s):  
Naji Mansour Nomran ◽  
Razali Haron
Keyword(s):  
Financial Crisis ◽  
High Efficiency ◽  
Banking Industry ◽  
Small Sample ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Governance Mechanism ◽  
Gmm Estimator ◽  
The Impact ◽  
Positive Effect

This study aims to examine the impact of Shari’ah governance mechanism on the performance of Islamic banks (IBs) during the financial crisis of 2008. Data were collected from 66 IBs over 18 countries covering the period of 2007–2015 and analyzed using the System-GMM estimator. The findings indicate that an increase in SSB effectiveness increases IBs’ performance even during the crisis periods. A possible justification for this positive effect is related to the SG structure of IBs that allows them to undertake higher risks to achieve a high efficiency level. For this, the IBs, policymakers and practitioners should consider these findings when aiming to improve SG practices in the Islamic banking industry, which in turn may help in protecting IBs during crisis and non-crisis periods. More specifically, they should give due importance to SSB (size, cross-membership, educational qualification, reputation and expertise) in enhancing the performance of IBs during the crisis and non-crisis periods. This study provides additional evidence on how IBs can sustain their performance during either crisis or non-crisis periods through adopting appropriate SG structure. However, the study only focuses on a small sample of 66 IBs due to lack of the data.

The Determinants of Merger Withdrawals’ Abnormal Returns in The Australian Market

2015 ◽  
pp. 89-110 ◽  
Author(s):  
Thuy Nguyen Thu ◽  
Giang Dao Thi Thu ◽  
Hoang Truong Huy
Keyword(s):  
Financial Crisis ◽  
Event Study ◽  
Abnormal Returns ◽  
Market Response ◽  
Crisis Period ◽  
Valuation Effects ◽  
Event Study Method ◽  
Private And Public ◽  
Method Of Payment ◽  
The Impact

This paper examines the abnormal returns in merger withdrawals in Australia, especially distinguishing the market response between private and public targets. We also study the determinants of those abnormal returns, including the method of payment and the impact of financial crisis periods. Using the event study method, we document that in the Australian context, the announced withdrawal of mergers involving private targets creates significantly negative valuation effects in comparison with the valuation effects in withdrawal of mergers involving public targets. We also find that a financial crisis period strongly affects abnormal returns of merger withdrawals. However, the method of payment does not have any impact on the abnormal returns.

Sign in / Sign up

Export Citation Format

Share Document