scholarly journals The safety network system and prospects for the appearance of a financial crisis in Bosnia and Herzegovina

2008 ◽  
Vol 53 (178-179) ◽  
pp. 198-229
Author(s):  
Novo Plakalovic
Keyword(s):  
Financial Crisis ◽  
Bosnia And Herzegovina ◽  
Financial Institutions ◽  
Banking Sector ◽  
Financial Sector ◽  
Bank Capital ◽  
Stress Tests ◽  
Foreign Countries ◽  
Potential Risks ◽  
High Level

The article is on the system of the safety network of the financial sector in Bosnia and Herzegovina (BH) and potential causes of possible financial instability. The network of protection of financial institutions in BH is to a certain extent incomplete but a high level of regulatory and supervisory activities has been present so far, which effects the expressed stability of financial institutions. Potential risks and the vulnerability of the financial system arise from a range of features which are characteristic of the local financial institutions, their activities, the condition of the BH economy, and macroeconomic stability and flows of goods and capital between the country and foreign countries. The sector of financial institutions has been privatized and it is in foreign ownership. Foreign exposure of domestic economy and financial markets is limited to only a small number of countries (Austria, Germany). There are pressures in respect of the increased rates of return on bank capital and there is a very high dynamic of credit growth. Possible unfavourable scenarios could bring about problems in the banking sector, which is shown by stress tests. The deterioration of the macroeconomic imbalance could also be a significant cause of serious problems in the local financial sector. There are no certain indicators that this could happen in the near future and influence the appearance of a financial crisis; however, such a situation cannot be ruled out.

Bank Capital Requirements after the Financial Crisis

2019 ◽  
pp. 706-735
Author(s):  
Mark E. Van Der Weide ◽  
Jeffrey Y. Zhang
Keyword(s):  
Financial Crisis ◽  
Structural Changes ◽  
Banking Sector ◽  
Balance Sheet ◽  
Banking System ◽  
Capital Requirements ◽  
Bank Capital ◽  
Regulatory Capital ◽  
Stress Tests ◽  
Global Banking

Regulators responded with an array of strategies to shore up weaknesses exposed by the 2008 financial crisis. This chapter focuses on reforms to bank capital regulation. We first discuss the ways in which the post-crisis Basel III reforms recalibrated the existing framework by improving the quality of capital, increasing the quantity of capital, and improving the calculation of risk weights. We then shift to the major structural changes in the regulatory capital framework—capital buffers on top of the minimum requirements; a leverage ratio that explicitly accounts for off-balance-sheet exposures; risk-based and leverage capital surcharges on the largest banks; bail-in debt to facilitate orderly resolution; and forward-looking stress tests. We conclude with a quantitative assessment of the evolution of capital in the global banking system and in the US banking sector.

scholarly journals Measuring the systemic risk in the South African banking sector

2017 ◽  
Vol 20 (1) ◽  
Author(s):  
Gregory M. Foggitt ◽  
Andre Heymans ◽  
Gary W. Van Vuuren ◽  
Anmar Pretorius
Keyword(s):  
Financial Crisis ◽  
South African ◽  
Systemic Risk ◽  
Banking Sector ◽  
Risk Index ◽  
Financial Sector ◽  
Ethical Behaviour ◽  
The South ◽  
Case Scenario ◽  
Worst Case

Background: In the aftermath of the sub-prime crisis, systemic risk has become a greater priority for regulators, with the National Treasury (2011) stating that regulators should proactively monitor changes in systemic risk.Aim: The aim is to quantify systemic risk as the capital shortfall an institution is likely to experience, conditional to the entire financial sector being undercapitalised.Setting: We measure the systemic risk index (SRISK) of the South African (SA) banking sector between 2001 and 2013.Methods: Systemic risk is measured with the SRISK.Results: Although the results indicated only moderate systemic risk in the SA financial sector over this period, there were significant spikes in the levels of systemic risk during periods of financial turmoil in other countries. Especially the stock market crash in 2002 and the subprime crisis in 2008. Based on our results, the largest contributor to systemic risk during quiet periods was Investec, the bank in our sample which had the lowest market capitalisation. However, during periods of financial turmoil, the contributions of other larger banks increased markedly.Conclusion: The implication of these spikes is that systemic risk levels may also be highly dependent on external economic factors, in addition to internal banking characteristics. The results indicate that the economic fundamentals of SA itself seem to have little effect on the amount of systemic risk present in the financial sector. A more significant relationship seems to exist with the stability of the financial sectors in foreign countries. The implication therefore is that complying with individual banking regulations, such as Basel, and corporate governance regulations promoting ethical behaviour, such as King III, may not be adequate. It is therefore proposed that banks should always have sufficient capital reserves in order to mitigate the effects of a financial crisis in a foreign country. The use of worst-case scenario analyses (such as those in this study) could aid in determining exactly how much capital banks could need in order to be considered sufficiently capitalised during a financial crisis, and therefore safe from systemic risk.

Does the Customers' Use of Mobile Technologies Influence the Number of Both Recruitments and the Branches in the Banking Sector in Tunisia?

2019 ◽  
pp. 231-248
Author(s):  
Amira Sghari
Keyword(s):  
Financial Institutions ◽  
Banking Sector ◽  
Digital Transformation ◽  
Professional Association ◽  
Mobile Technologies ◽  
Annual Reports ◽  
Foreign Countries ◽  
Banking Networks ◽  
Branch Banking ◽  
Number Of Branches

Digital determines new practices of companies and customers while touching all sectors of activity. Adaptation to the digital is imperative for banks. In this framework, this chapter explores the question of the influence of the use of mobile technologies by the customers on recruitment in the banking sector and on the number of the branch banking networks. Particularly, the authors seek to answer the following question: What are the effects of the use of mobile technologies by customers on recruitments and the number of branches in the banking sector in Tunisia? In order to answer this question, they analyze the annual reports of the last seven years published by Tunisia's Professional Association of Banks and Financial Institutions. Contrary to the findings observed in foreign countries concerning the reduction of the number of branches and recruitments following the digital transformation in the banking sector, in Tunisia the number of branches and recruitments has not stopped increasing.

Financial Market in Nepal

2020 ◽  
pp. 794-842
Author(s):  
Narayan Prasad Paudel
Keyword(s):  
Private Sector ◽  
Financial Market ◽  
Financial Institutions ◽  
Banking Sector ◽  
Financial Sector ◽  
Legal Framework ◽  
Capital Gains ◽  
Individual Investors ◽  
Infrastructure Development ◽  
Private Sector Development

The Nepalese financial sector is attributed of banking sector and non-banking sector. There is exponential growth in the number of financial institutions in Nepal in the last decade. The existing legal framework and institutional setup in Nepal is not conducive to the overall financial sector and private sector development and thus there is an urgent need for reformation in these sectors. The major impediments to private sector involvement in infrastructure development projects include the political and administrative instability; lack of consistent planning; lack of effective institutional support in designing and development of private sector infrastructure projects. Talking about the capital market and capital gains In Nepal, capital gains on securities transactions are taxed as ordinary income to corporations and individual investors while in most of the emerging markets capital gains on investments in stocks and bonds are not taxed, which need to be reformed as per the international practices.

What Has Not Changed

2019 ◽  
pp. 209-239
Author(s):  
Huw Macartney
Keyword(s):  
Financial Crisis ◽  
Business Models ◽  
Banking Sector ◽  
Value Added ◽  
Financial Sector ◽  
Quantitative Easing ◽  
The Real ◽  
Anglo American ◽  
The Impact

This chapter begins by explaining that financialization since the financial crisis has continued. The chapter then shows how the real culture of banking has not changed as a result. It examines the business models of the largest Anglo-American banks and the impact of Quantitative Easing to show the disconnect between the banks and their respective economies. It then examines rising household indebtedness, and the lending practices of the banks that exploit the heavily indebted. Finally it explores pay in the financial sector, showing that fixed and variable remuneration remain out of proportion to the value-added of the banking sector, and disproportionately high compared to pay in most other sectors. The conclusion we should draw is that bank culture has actually changed very little.

The more connected, the better? Impact of connectedness on volatility and price discovery in the Korean financial sector

2018 ◽  
Vol 44 (1) ◽  
pp. 46-73 ◽  
Author(s):  
DeokJong Jeong ◽  
Sunyoung Park
Keyword(s):  
Financial Crisis ◽  
Stock Market ◽  
Financial Institutions ◽  
Market Microstructure ◽  
Stock Price ◽  
Price Discovery ◽  
Global Financial Crisis ◽  
Financial Sector ◽  
Asian Crisis ◽  
Content Type

Purpose The purpose of this paper is to empirically analyze the effect of the increasing connectedness among financial institutions in the Korean financial market, as it affects the market microstructure in the stock market. Thus this work, first, analyzes the trend and characteristics of connectedness in the Korean financial sector. This work then demonstrates the impacts of connectedness on volatility and price discovery in the stock market. Design/methodology/approach The entire Korean financial sector is analyzed from January 1990 to July 2015, including the periods of the 1997 Asian crisis and the 2007/2008 global financial crisis. This paper quantifies the connectedness between financial institutions using network methodology. Densely connectedness specifically refers to the cases in which a node experiences strong-lagged return spillover from and/or to itself. Findings Connectedness is established as an important determinant of stock price discovery. This paper illustrates that connectedness increases on significant economic events such as the 1997 Asian crisis and the 2007/2008 global financial crisis. Furthermore, this paper demonstrates that the more densely connected a particular financial institution, the more volatile the stock price and the less accurate the stock price quality. Research limitations/implications Understanding the financial system from a network perspective has been on the rise after the 2007/2008 global financial crisis. This work helps regulators and policy makers understand the full implications of introducing new policies that can more closely connect financial institutions. Originality/value This paper precisely captures financial institutions’ connectedness by including all types of financial institutions at the micro level. Additionally, this paper links connectedness to market microstructure in the stock market.

Book Reviews

2012 ◽  
Vol 50 (2) ◽  
pp. 527-529
Keyword(s):  
Financial Crisis ◽  
Undergraduate Students ◽  
Hedge Funds ◽  
Banking Sector ◽  
The United States ◽  
Columbia University ◽  
The European Union ◽  
Stress Tests ◽  
The Great Depression ◽  
Current Financial Crisis

Kenneth Kuttner of Williams College reviews “From Financial Crisis to Global Recovery” by Padma Desai. The EconLit abstract of the reviewed work begins: Presents an introduction for economics and finance undergraduate students to the financial crisis, using a combination of scholarly research and narrative. Discusses the financial crisis origin; banking sector stress tests -- the United States versus the European Union; whether the U.S. economy is on the mend; global recovery prospects -- North America and Europe, Asia, and South America; hedge funds and derivatives, credit default swaps, and rating agencies; U.S. and EU regulatory proposals -- how strict and how cooperative; the dollar's future as a reserve currency; the Great Depression and the current financial crisis; and the future of American capitalism. Desai is Gladys and Roland Harriman Professor of Comparative Economic Systems and Director of the Center for Transition Economies at Columbia University. Index.

Polish banking scandal may lead to more consolidation

2018 ◽  
Keyword(s):  
Interest Rates ◽  
Financial Institutions ◽  
Banking Sector ◽  
Financial Sector ◽  
Household Consumption ◽  
Financial Supervision ◽  
External Shocks ◽  
Content Type ◽  
Near Term ◽  
Loan Growth

Significance Allegations of bribery and corruption against the former chairman of Poland’s Financial Supervision Authority (KNF), the financial sector regulator, have stoked both political and regulatory tensions. Impacts The banking sector is resilient to domestic and external shocks, but a slowdown in GDP could dampen household loan growth next year. Further sector consolidation is likely and would further underline the dominance of large, state-backed financial institutions. Interest rates are unlikely to be raised before end-2019 at the earliest, providing some support to household consumption in the near term.

scholarly journals Navigating the financial crisis in Helvetic Waters: An analysis of the banking sector (2007-09)

2011 ◽  
Vol 1 (2) ◽  
pp. 65-78
Author(s):  
Elisabeth Paulet ◽  
Francesc Relano
Keyword(s):  
Financial Crisis ◽  
Business Model ◽  
Financial Institutions ◽  
Banking Sector ◽  
Balance Sheet ◽  
Banking System ◽  
Characteristic Structure ◽  
International Banks ◽  
Business Approach ◽  
Domestic Banks

As has been argued throughout this paper, the different way in which banks have been affected by the crisis is closely linked to their distinct business model. Consequently, the characteristic structure of the balance sheet in big banks and ethical banks is correlated with their divergent dynamic during the crisis. While the financial turmoil has left the business approach of ethical banks unchanged, as evidenced in the striking stability of their balance sheet from 2007 to 2009, the pattern shown by big banks has substantially changed over this same period. These developments would tend to suggest the need to reform the business model of big banks. There is no clear empirical evidence that a banking system with a large number of small institutions would be any more stable than the system as it currently stands. Besides, financing certain big projects would always require the existence of large international banks. Both types of financial institutions are in fact complementary. How to regulate the banking and financial sector is thus a complex and multifaceted issue. One cannot impose the same requirements on big international-oriented banks and small domestic banks. As this paper has tried to demonstrate, both have a distinct business model.

scholarly journals Diversity across EU banking sectors: Poorly researched and underappreciated

2018 ◽  
Vol 87 (4) ◽  
pp. 153-179
Author(s):  
Hans-Helmut Kotz ◽  
Dorothea Schäfer
Keyword(s):  
Financial Crisis ◽  
Sovereign Debt ◽  
Large Scale ◽  
Goodness Of Fit ◽  
Banking Sector ◽  
Financial Sector ◽  
Future Research ◽  
Banking Union ◽  
The European Union ◽  
Research Gaps

Zusammenfassung: Das Interesse an der Rolle der Vielfalt im Bankensektor hat erheblich zugenommen, seit die Finanzkrise (und die anschließenden Staatsschuldenkrisen) die europäischen Länder in unterschiedlicher Weise getroffen haben. In diesem Überblicksartikel werden entscheidende Forschungslücken im Bereich der Vielfalt im Bankensektor herausgearbeitet. Vorbereitend dazu bilanzieren wir die Vielfalt der Bankensektoren in der Europäischen Union und beleuchten die Unterschiede vor und nach der Finanzkrise. Kernpunkte einer künftigen Forschungsagenda zur Bewertung der Diversität im Bankensektor (und im Finanzsektor im Allgemeinen) sind: (a) die Definition der empirischen Bedeutung des Konzepts und damit seiner messbaren Eigenschaften, (b) die Beziehung zwischen Diversität und Wettbewerbsniveau (Marktmacht) im Bankensektor, (c) die Verbindung zwischen Diversität und Stabilität des Bankensektors, (d) die Relevanz der Diversität im Bankensektor für einen erleichterten Zugang zu Finanzierung, insbesondere für KMU, und (e) die Verknüpfungen zwischen Diversität im Bankensektor (Finanzsektor) und nichtfinanzieller, „realer“ wirtschaftlicher Diversität („Goodness of fit“-Problematik, institutionelle Einbettung). Die aufgezeigten Forschungslücken zu schließen, wäre ein wichtiger Beitrag sowohl zur Debatte über eine tiefere Integration der europäischen Finanzmärkte (Bankenunion, Kapitalmarktunion) als auch zur Debatte über eine nachhaltige Finanzarchitektur, die gleichzeitig Innovation und Wachstum fördert und die Gesellschaft wirksam vor großen Finanzkrisen schützt. Summary: Interest in the role of diversity in banking sectors has increased substantially since the financial crisis (and the subsequent sovereign debt crises) have hit European countries differentially. The purpose of this note is to hint at crucial research gaps in terms of appreciating consequences of this variety. In preparation for this, we take stock of the across country diversity of banking sectors in the European Union before and after the financial crisis. Key issues in a future research agenda for evaluating diversity in the banking sector (and the financial sector more generally) have to do with: (a) defining the concept’s empirical meaning and hence its measurable properties, (b) the relationship between diversity and the level of competition (market power)in the banking sector, (c) the link between diversity and banking sector stability, (d) the pertinence of banking sector diversity for mitigating access to finance problems, in particular for SMEs and (e) the interlinkages between diversity in the banking (financial) sector and non-financial, “real” economy diversity (“goodness of fit”-issue, institutional embededdness). Filling the indicated research gaps would be an important contribution to both the debate on deeper integration of Europe’s financial markets (Banking Union, Capital Markets Union)as well as the debate on a sustainable financial architecture, being at the same time conducive to innovation and growth whilst protecting society effectively from large-scale financial crises.

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