scholarly journals How Do Individuals Choose Banks? An Application to Household Level Data from Turkey

2009 ◽  
Vol 9 (1) ◽  
Author(s):  
Oya Pinar Ardic ◽  
Uygar Yuzereroglu
Keyword(s):  
Interest Rates ◽  
Banking Sector ◽  
Emerging Market ◽  
Probit Model ◽  
Study Groups ◽  
Bank Failures ◽  
Structural Factors ◽  
Data Set ◽  
Level Data ◽  
Private Banks

Abstract This paper uses a multinomial probit model to analyze individuals' choice of banks based on the types of banking services they use, their own characteristics, and their own perceptions about important factors in banking. Previous studies on this topic, which are limited in number, concentrate on the U.S. where financial markets are well-developed. This analysis uses a unique individual level data set from a nation-wide survey implemented after the 2001 crisis in Turkey, of which one major component was bank failures. Hence, it provides the first set of econometric evidence on the topic in an emerging market context. The study groups banks into three categories: public, large private and small private banks, among which the latter is perceived to be the potentially risky group. Investigating individuals' choice among these three types, the paper uncovers that while individuals tend to prefer small private banks on the basis of high interest rates, they tend to avoid them on the basis of trust. Additionally, the paper finds that the choice between public and large private banks mainly depends on structural factors. These results could be of potential use to policymakers in regulating the banking sector and to bank management in channeling marketing effort.

scholarly journals Bank-Specific and Macroeconomic Determinants of Profitability: A Revisit of Pakistani Banking Sector under Dynamic Panel Data Approach

2020 ◽  
Vol 8 (3) ◽  
pp. 42 ◽  
Author(s):  
Habib-ur Rahman ◽  
Muhammad Waqas Yousaf ◽  
Nageena Tabassum
Keyword(s):  
Panel Data ◽  
Interest Rates ◽  
Economies Of Scale ◽  
Banking Sector ◽  
Unobserved Heterogeneity ◽  
Dynamic Panel Data ◽  
Capital Adequacy ◽  
Bank Failures ◽  
Dynamic Panel ◽  
Macroeconomic Determinants

This study aims to examine the effect of the bank-specific and macroeconomic determinants of profitability for the banking sector of Pakistan. To incorporate the issues of endogeneity, unobserved heterogeneity, and profit persistence, we apply a generalised method of moments (GMM) technique under the Arellano–Bond framework to a panel of Pakistani banks that covers the period 2003–2017. The results of a dynamic panel data approach reveal that capital adequacy accelerates the profitability of the banking sector in Pakistan. Capital adequacy helps the financial system to absorb any negative shock by reducing the number of bank failures and losses. Conversely, our empirical investigation reveals that the liquidity ratio, business mix indicators, interest rates, and industrial production deteriorates the bank profitability. Liquidity risks enhance the probability of default risks and transmit into the unpaid loans and hence the lower return. Our empirical evidence further reveals that Pakistani banks are not getting any benefit of the economies of scale in terms of financial performance.

Another rating upgrade is likely for Hungary soon

2016 ◽  
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Banking Sector ◽  
Credit Rating ◽  
Emerging Market ◽  
Investor Sentiment ◽  
Central Banks ◽  
The Philippines ◽  
Content Type ◽  
Investment Grade

Significance Hungary thereby regains investment-grade status, albeit at the lowest level, from being downgraded to 'junk' because of doubts about the government's policies and the high public debt burden. Hungary's improving creditworthiness, underpinned by its current account surplus and deleveraging in the banking sector, contrasts with the increasing strain on Poland's credit rating. Political risk has become a major driver of investor sentiment towards emerging markets. Impacts Emerging market assets have become more vulnerable as investors reprice US monetary policy. Futures markets are now assigning a 51% probability to another rise in US interest rates at or before the Federal Reserve's July meeting. Central Europe's government bond markets are being supported by the persistently dovish monetary policy stance of its central banks. This contrasts with Latin America, where inflationary pressures are forcing many central banks to raise rates. Brazil, Turkey, Poland and the Philippines are among several countries where political uncertainty is a key determinant of asset prices.

scholarly journals WOMEN FEEL MORE PESSIMISTIC THAN MEN: EMPIRICAL EVIDENCE FROM TURKISH CONSUMER CONFIDENCE INDEX

2010 ◽  
Vol 11 (1) ◽  
pp. 146-171 ◽  
Author(s):  
Ashi Küçükaslan ◽  
Sadullah Çelik
Keyword(s):  
Exchange Rates ◽  
Interest Rates ◽  
Financial Market ◽  
Stock Exchange ◽  
Emerging Market ◽  
Consumer Confidence ◽  
Data Set ◽  
Confidence Index ◽  
Market Variables ◽  
The Relationship

The leading role that is attributable to economic indicators like consumer confidence has been well documented in the literature for many developed nations. Moreover, the relationship between high frequency financial market data has been a common research topic for world economies. However, there is hardly any study that attempts to search for the possible functional relationship between consumer confidence and financial market variables. This paper is a simple attempt to link these two brands of literature by focusing on the relationship between financial market variables and consumer confidence index before the global crisis has started. We have two distinctive points. First, we derive separate consumer confidence indices for men and women by employing micro‐level consumer confidence data from an emerging market (Turkish CNBC‐e consumer confidence index) for the period of January 2003 ‐ January 2008. Second, employing this data set, we do not only check for the existence of a relationship between consumer confidence and financial market variables (such as interest rates, exchange rates and stock exchange index) but also focus on the possibility of gender response. We find evidence of gender response difference as throughout the period women are more pessimistic than men‐due probably to lower levels of wealth‐and respond less to changes in exchange rates than men‐due probably to lower purchasing power. Santrauka Ekonominiu rodikliu kaip pirkejo pasitikejimo vaidmens svarba yra išsamiai pagrista daugelio išsivys‐čiusiu šaliu literatūroje. Be to, ryšys tarp aukšto finansu. rinkos svyravimo duomenu yra dažna tyrimu tema daugelyje pasaulio šaliu. Tačiau vargu ar galima būtu rasti tyrimu, kuriuose būtu bandoma surasti funkcini ryši tarp pirkejo pasitikejimo ir finansu. rinku rodikliu. Šis straipsnis ‐ tai meginimas susieti šias dvi rūšis, orientuojantis i ryši tarp finansu. rinku rodikliu ir pirkejo pasitikejimo indekso prieš prasi‐dedant pasaulinei krizei. Šiame straipsnyje pabrežti du išskirtiniai bruožai. Pirma, nustatomi atskiri mo‐teru ir vyru pasitikejimo indeksai naudojantis 2003 m. sausio men. ‐ 2008 m. sausio men. laikotarpio augančiu rinku mikrolygmens pirkejo pasitikejimo duomenimis (Turku CNBC‐e pirkejo pasitikejimo indeksas). Antra, naudojantis šia informacija tikrinamas ne tik esamas ryšys tarp pirkejo pasitikejimo ir finansu. rinku rodikliu (pavyzdžiui, palūkanu normos, valiutu kurso, akciju biržos indekso). Buvo rasta akivaizdžiu skirtumu tarp atsakymu, gautu iš skirtingu lyčiu atstovu. Visa laikotarpi moterys buvo pesi‐mistiškesnes nei vyrai, tikriausiai del žemo geroves lygio. Jos mažiau reagavo i valiutu kurso pokyčius nei vyrai del mažesnes perkamosios galios.

scholarly journals SMEs debt financing in the EU: on the eve of the coronacrisis

2020 ◽  
Vol 15 (3) ◽  
pp. 81-94
Author(s):  
Yevheniia Polishchuk ◽  
Anna Kornyliuk ◽  
Inna Lopashchuk ◽  
Alina Pinchuk
Keyword(s):  
Interest Rates ◽  
Financial Stability ◽  
Banking Sector ◽  
Debt Crisis ◽  
Debt Financing ◽  
Bank Loans ◽  
Eu Countries ◽  
Credit Lines ◽  
Level Data ◽  
Governmental Support

SMEs are the main drivers of economic development. As the debt crisis and coronavirus crisis show, despite their importance, they are extremely sensitive to economic downturns. Therefore, SMEs need to be supported through various tools. The paper is aimed at evaluating the SMEs’ bank and governmental support in the northern and southern EU countries in two crisis periods and assessing the financial state of SMEs on the eve of coronacrisis using micro-level data. It was proved that bank loans and credit lines remain the main sources of SMEs’ financing. After the debt crisis, banks are becoming more loyal to SMEs.It was proved that SMEs from the northern EU countries suffered less from the previous crisis and therefore started their recovery earlier than the southern ones in terms of profitability, liquidity and debt burden. In addition, it was shown that both groups on the eve of the new turbulence period were in better financial state compared to the previous debt crisis. The southern EU countries suffered more from both crises. At the same time, due to effective governmental support and bank loyalty, their SMEs entered the coronacrisis at the same level of financial stability as the northern ones. Since the new support measures are concentrated primarily in the banking sector through loan guarantee schemes and reduced interest rates, it is essential to provide debt financing to high-quality borrowers and avoid the debt crisis in southern counties.

scholarly journals Bank Liquidity Hoarding Strategies in Uncertain Times: New Evidence from an Emerging Market with Bank-level Data

2021 ◽  
Vol 12 (2) ◽  
pp. 377-398
Author(s):  
Van Dan Dang ◽  
Hoang Chung Nguyen
Keyword(s):  
Banking Sector ◽  
Emerging Market ◽  
Balance Sheet ◽  
Cross Sectional ◽  
Level Data ◽  
Balance Sheet Liquidity ◽  
The Impact ◽  
New Evidence ◽  
Multiple Robustness ◽  
Estimate Uncertainty

The paper explores the impact of uncertainty on bank liquidity hoarding, particularly providing new insights on the nature of the impact by bank-level heterogeneity. We consider the cross-sectional dispersion of shocks to key bank variables to estimate uncertainty in the banking sector and include all banking items to construct a comprehensive measure of bank liquidity hoarding. Using a sample of Vietnamese banks during 2007–2019, we document that banks tend to increase total liquidity hoarding in response to higher uncertainty; this pattern is still valid for on- and off-balance sheet liquidity hoarding. Further analysis with bank-level heterogeneity indicates that the impact of banking uncertainty on liquidity hoarding is significantly stronger for weaker banks, i. e., banks that are smaller, more poorly capitalized, and riskier. In testing the “search for yield” hypothesis to explain the linkage between uncertainty and bank liquidity hoarding, we do not find it to be the case. Our findings remain extremely robust after multiple robustness tests.

The asymmetric price-volume relation revisited: evidence from Qatar

2018 ◽  
Vol 12 (2) ◽  
pp. 193-219 ◽  
Author(s):  
Walid M.A. Ahmed
Keyword(s):  
Financial Services ◽  
Stock Price ◽  
Trading Volume ◽  
Emerging Market ◽  
Return Volatility ◽  
Data Set ◽  
Content Type ◽  
Level Data ◽  
The Future ◽  
Volume Relation

Purpose This study aims to revisit the stock price–volume relations, providing new evidence from the emerging market of Qatar. In particular, three main issues are examined using both aggregate market- and sector-level data. First, the return–volume relation and whether or not this relation is asymmetric. Second, the common characteristics of return volatility; and third, the nature of the relation between trading volume and return volatility. Design/methodology/approach The study uses the OLS and VAR modeling approaches to examine the contemporaneous and dynamic (causal) relations between index returns and trading volume, respectively, while an EGARCH-X(1,1) model is used to analyze the volatility–volume relation. The data set comprises daily index observations and the corresponding trading volumes for the entire market and the individual seven sectors of the Qatar Exchange (i.e. banks and financial services, consumer goods and services, industrials, insurance, real estate, telecommunications and transportation). Findings The empirical analysis reports evidence of a positive contemporaneous return–volume relation in all sectors barring transportation and insurance. This relation appears to be asymmetric for all sectors. For the market and almost all sectors, there is no significant causality between returns and volume. By and large, these findings lend support for the implications of the mixture of distributions hypothesis (MDH). Lastly, the information content of lagged volume seems to have an important role in predicting the future dynamics of return volatility in all sectors, with the industrials being the exception. Practical implications The findings provide important implications for portfolio managers and investors, given that the volume of transactions is generally found to be informative about the price movement of sector indices. Specifically, tracking the behavior of trading volume over time can give a broad portrayal of the future direction of market prices and volatility of equity, thereby enriching the information set available to investors for decision-making. Originality/value Based on both market- and sector-level data from the emerging stock market of Qatar, this study attempts to fill an important void in the literature by examining the return–volume and volatility–volume linkages.

scholarly journals Evaluating factors of profitability for Indian banking sector: a panel regression

2018 ◽  
Vol 3 (2) ◽  
pp. 236-254
Author(s):  
Rohit Bansal ◽  
Arun Singh ◽  
Sushil Kumar ◽  
Rajni Gupta
Keyword(s):  
Fixed Effects ◽  
Banking Sector ◽  
Stock Exchange ◽  
Capital Adequacy ◽  
The Other ◽  
Data Set ◽  
Content Type ◽  
Independent Variables ◽  
Private Banks ◽  
Public Banks

Purpose The purpose of this paper is to quantify several measures to examine the determinants of profitability for the listed Indian banks. The authors include both public sector (PSUs) and private sector’s banks in the study. The authors have taken all the banks that are registered on the Bombay stock exchange (BSE) in the sample. This paper also intends to identify the association between the net profit margin (PM) and return on assets (ROA) with the several other independent variables of the Indian banking sector including private banks and public banks over the past six years starting from April 1, 2012 to March 31, 2017. Therefore, a sample of 39 listed banking companies and total 195 balanced observations are selected for the analysis purpose. Design/methodology/approach The authors have used profitability as a dependent variable represented by net PM, ROA and several financial ratios as independent variables. Financial statement and income statement of all listed banks were obtained from BSE and particular company’s website. Panel data regression has been analyzed with both the descriptive research techniques, i.e., fixed effects and random effects. The authors also verified both panel techniques with Hausman’s specification test, which is a widely used procedure for selecting a panel effect. The authors applied PP – Fisher χ2, PP – Choi Z-statistics and Hadri to testing whether the data set is free from unit root problem and data set is a stationary series. Findings Results imply that interest expended interest earned (IEIE) and credit deposit ratio (CRDR) reduced the profitability of private banks in India. IEIE, CRDR and quick ratio (QR) reduced the profitability of public banks in India, while cash deposit ratio (CDR) and Advances to Loan Funds (ALF) increased the effectiveness of public banks. Under the total banks IEIE, CRDR reduced the profitability, on the other side, CDR, ALF and Total Debt to Owners Fund (TDOF) increased the profitability of total banks in India. Under the dependency of ROA, CRDR and TDOF reduced the return of private banks in India, while CDR, ALF and QR enhanced the profitability of private banks. Originality/value No variables found significant under public banks while taking ROA as a dependent variable. Under the overall banking data, CRDR reduced the profitability. On the other side, capital adequacy ratio and ALF increased the profitability of total banks in India. The findings of this study will support policy creators, financial executives and investors in constructing investment decisions.

Crime, corruption and the role of institutions

2014 ◽  
Vol 7 (1) ◽  
pp. 73-95 ◽  
Author(s):  
Ishita Chatterjee ◽  
Ranjan Ray
Keyword(s):  
Negative Impact ◽  
Probit Model ◽  
Data Sets ◽  
Older Individuals ◽  
Crime Victim ◽  
Data Set ◽  
Content Type ◽  
Country Level ◽  
Level Data

Purpose – There have been very few attempts in the economics literature to empirically study the link between criminal and corrupt behaviour due to lack of data sets on simultaneous information on both types of illegitimate activities. The paper aims to discuss these issues. Design/methodology/approach – The present study uses a large cross-country data set containing individual responses to questions on crime and corruption along with information on the respondents' characteristics. These micro-level data are supplemented by country-level macro and institutional indicators. A methodological contribution of this study is the estimation of an ordered probit model based on outcomes defined as combinations of crime and bribe victimisation. Findings – The authors find that: a crime victim is more likely to face bribe demands, males are more likely victims of corruption while females are of serious crime, older individuals and those living in the smaller towns are less exposed to crime and corruption, increasing levels of income and education increase the likelihood of crime and bribe victimisation to be reported and a stronger legal system and a happier society reduce both crime and corruption. However, the authors find no evidence of a strong and uniformly negative impact of either crime or corruption on a country's growth rate. Originality/value – This paper is, to the authors' knowledge, the first in the literature to explore the nexus between crime and corruption, their magnitudes, determinants and their effects on growth rates.

The U.S. Banking System From a Northern Exposure: Stability versus Efficiency

1994 ◽  
Vol 54 (2) ◽  
pp. 325-341 ◽  
Author(s):  
Michael D. Bordo ◽  
Hugh Rockoff ◽  
Angela Redish
Keyword(s):  
Interest Rates ◽  
Banking System ◽  
The United States ◽  
Bank Failures ◽  
Rates Of Return ◽  
Data Set ◽  
The Cost ◽  
Canadian Banking ◽  
Comparative Stability ◽  
The U.S

This article asks whether the vaunted comparative stability of the Canadian banking system has been purchased at the cost of creating an oligopoly. We assembled a data set that compares bank failures, lending rates, interest paid on deposits, and related variables over the period 1920 to 1980. Our principal findings are (1) interest rates paid on deposits were generally higher in Canada; (2) interest income received on securities was generally slightly higher in Canada; (3) interest rates charged on loans were generally quite similar; and (4) net rates of return to equity were generally higher in Canada than in the United States.

ANALISIS TINGKAT RISIKO INVESTASI PADA SAHAM PERBANKAN YANG GO PUBLIC (Studi Kasus pada Saham BBNI dan BNII di Bursa Efek Indonesia Tahun 2007 – 2010)

2019 ◽  
Vol 8 (02) ◽  
pp. 121
Author(s):  
Adri Wihananto
Keyword(s):  
Interest Rates ◽  
Banking Sector ◽  
Banking Industry ◽  
Stock Exchange ◽  
Statistical Tests ◽  
Logical Consequence ◽  
Risk Groups ◽  
Significance Level ◽  
Private Banks ◽  
Level Of Risk

Indonesia's banking industry experienced ups and downs in recent years. Triggering high inflation volatility of performances and declines of stocks, which greatly affect the performance of Indonesian banks. The increase of stocks indicates the higher interest rates. Higher interest rates could inhibit lending that led to the decline in performance and declines of stocks listed at BEI. Seeing the Indonesian banking industry has not stabilized, the logical consequence faced by investors when deciding to make investments in the banking sector is uncertainty or risk. Risk will always overshadow in any investment decisions taken by investors. This study attempted to compare the level of investment risk from the two banking groups to determine which groups are more risky, so investors could know where a decent investment to be chosen. This study aimed to determine the level of risk groups of state-owned banks, private banks, the level of risk groups by using the trend method, and whether there are differences in risk of both groups.The research methodology used is the descriptive method approach to comparative. The data used is two banking shares listed on the Indonesia Stock Exchange consists of three state-owned bank shares (known as PT. Bank Negara Indonesia Tbk) and private banks (PT. Bank Internasional Indonesia Tbk) during the period 2007 - 2010. The calculation of both the stocks level of risk using standart deviasi, regresion, corelation by using SPSS 17.0 and have statistic test of two parties. From the calculations showed that there was difference in risk between state-owned banks and private banks. With words both state-owned banks and private banks not have the same risk. Due to the influnce of the policies issued by the goverment against the state-owned bank. Result of the statistical tests to PT. Bank Negara Indonesia Tbk. obtained didn’t significant result for the 0.002 with a significance level of 0.05, it can be concluded that there is no influence between the level of risk with the level of returns in the stock of BBNI. Based on the result of statistical tests on significant result obtained PT. Bank Internasional Indonesia Tbk. at 0.05 with a significance level of 0.05, it can be concluded that there is influence between the level of risk with the level of returns in the stock of BNII.Key words: Private Banks, State-owned Bank, the Level of Risk, the Level of Return.

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