Global Financial Crisis and Banking Sector Efficiency: The Indian Perspective

2014 ◽  
Vol 1 (1) ◽  
pp. 90-109
Author(s):  
Seema Garg
Keyword(s):  
Data Envelopment Analysis ◽  
Financial Crisis ◽  
Commercial Banks ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Data Envelopment ◽  
Crisis Period ◽  
International Financial Crisis ◽  
Indian Banks ◽  
The Impact

Banks play a crucial role in developing and least developed economies by facilitating in trade finance. Banks established an important linkage in international trade by guaranteeing international payments and thereby reducing the risk of trade transactions. The Banks in India has witnessed a significant growth, specialization and diversification since the initiation of financial sector reforms in 1991and further slowdown in the economy as a result of global financial crisis in 2008-2009. This study examines the performance of Indian banks using data envelopment analysis. Though, there are large number of literature have been published on banking efficiency, This is an attempt to investigate the impact of global financial crisis on performance of Indian banking sector. The sole objective of this study is to exhibit, utilizing empirical data, the quantum to which the global financial crisis had an impact on the performance of the Indian banking industry. This study gives a comparative empirical analysis of the technical efficiency of Indian commercial banks during pre and post crisis period covering 2005-2012 using non parametric technique i.e. Data Envelopment Analysis (DEA). This period is consisting of pre and post global crisis period which is characterized by far reaching experience of crisis period (2008-2009) and its impact on the efficiency of the Indian banking sector. Overall, the results reveal that the effect of international financial crisis on the Indian banks has not been significant. Instead, the analysis reveals there is a statistically insignificant improvement in the efficiency of Indian banks’ following international financial crisis. Furthermore, the paper shows that the commercial banks have a high degree of resilience and stability.

scholarly journals An Evaluation of the Technical Efficiency of the Selected Commercial Banks with the Usage of the CCR-DEA Model under the Conditions of Acquisitions in the Banking Sector

2020 ◽  
Vol 54 (1) ◽  
pp. 77
Author(s):  
Anna Pyka
Keyword(s):  
Data Envelopment Analysis ◽  
Technical Efficiency ◽  
Linear Form ◽  
Commercial Banks ◽  
Banking Sector ◽  
Data Envelopment ◽  
Dea Model ◽  
The Impact ◽  
Ccr Model

<p>The aim of this article is to evaluate the technical efficiency of the chosen commercial banks, which in the years 2014–2016 were participants in acquisitions in the banking sector, with the usage of the Data Envelopment Analysis (DEA) model. The DEA model was modified through reshaping the linear form using the Charnes, Cooper, and Rhodes (CCR) model, which is aimed at expenditures. Particular attention was paid to the impact of acquisitions in the banking sector on the improvement or deterioration of the technical efficiency of banks that act as acquiring banks.</p>

scholarly journals The Impact of the Global Financial Crisis on Profitability of the Banking Industry: A Comparative Analysis

Economies ◽  
2018 ◽  
Vol 6 (4) ◽  
pp. 66 ◽  
Author(s):  
G. Erfani ◽  
Bijan Vasigh
Keyword(s):  
Financial Crisis ◽  
Commercial Banks ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Seemingly Unrelated Regression ◽  
Islamic Banks ◽  
Islamic Tradition ◽  
Score Model ◽  
The Global Financial Crisis ◽  
The Impact

In this paper, the effects of the recent global financial crisis on efficiency and profitability of financial institutions were analyzed. In a comparative study, the impacts of the global financial crisis on the performance of Islamic and commercial banks were examined. The fundamental difference between Islamic and conventional banking is that Islamic banking is founded upon the ethical principles of Islamic tradition and law (Sharia). By utilizing a sample of eight Islamic banks and eleven commercial banks, the impact of the global financial crisis on efficiency and profitability of the banking sector was evaluated. This study covered the period from 2006 to 2013. The results of this research were obtained from the Altman Z-score model, ratio analysis, the data envelopment analysis (DEA) method, and the seemingly unrelated regression (SUR) model. The results show that during the study period, Islamic banks (IBs) managed to maintain their efficiency while most commercial banks (CBs) suffered a loss in their efficiency. Furthermore, this study found that the financial crisis did not have a significant impact on the profitability of Islamic banks.

scholarly journals Liquidity of Czech and Slovak commercial banks

2012 ◽  
Vol 60 (7) ◽  
pp. 463-476 ◽  
Author(s):  
Pavla Vodová
Keyword(s):  
Financial Crisis ◽  
Commercial Banks ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Balance Sheet ◽  
Annual Reports ◽  
Lender Of Last Resort ◽  
Liquidity Crises ◽  
Lending Activity ◽  
The Impact

As liquidity problems of some banks during global financial crisis re-emphasized, liquidity is very important for functioning of financial markets and the banking sector. The aim of this paper is therefore to evaluate comprehensively the liquidity positions of Czech and Slovak commercial banks via different liquidity ratios in the period of 2001–2010 and to find out whether the strategy for liquidity management differs by the size of the bank. We used unconsolidated balance sheet data over the period from 2001 to 2010 which were obtained from annual reports of Czech and Slovak banks. The sample includes significant part of Czech and Slovak banking sector (not only by the number of banks, but also by their share on total banking assets). We have calculated five different liquidity ratios for each bank in the sample. The results showed that liquidity of Czech banks has declined during last ten years. On the contrary, liquidity of Slovak banks fluctuated only slightly during the period 2001–2008. Bank liquidity has fallen due to the financial crisis in both countries; the impact is worse for Slovak banks. Both Czech and Slovak banks have become less liquid also as a result of increase in lending activity. Czech and Slovak banks have the same strategies how to insure against liquidity crises: big banks rely on the interbank market or on a liquidity assistance of the Lender of Last Resort, small and medium sized banks hold buffer of liquid assets.

scholarly journals Cost efficiency of the Czech and Slovak banking sectors: an application of the data envelopment analysis

2016 ◽  
Author(s):  
Iveta Palecková
Keyword(s):  
Data Envelopment Analysis ◽  
Cost Efficiency ◽  
Commercial Banks ◽  
Banking Sector ◽  
Banking Industry ◽  
Returns To Scale ◽  
Data Envelopment ◽  
Cost Efficient ◽  
The Cost ◽  
Variable Returns To Scale

The aim of the paper is to estimate the cost efficiency of the Czech and Slovak commercial banks within the period 2010-2014. For empirical analysis the Data Envelopment Analysis input-oriented model with variable returns to scale is applied on the data of the commercial banks. The intermediation approach is adopted to define the inputs and outputs. The Czech commercial banks are more cost efficient than Slovak commercial banks. The development of average cost efficiency is similar in the Czech and Slovak banking industry. The most efficient Czech banks are Ceská sporitelna and Sberbank in the Czech banking sector, the most efficient Slovak bank is Privatbanka with 100% efficiency.

Restructuring Measurements Impact on Bank Risk After the Global Financial Crisis — Empirical Evidence from Vietnam

2021 ◽  
pp. 2150019
Author(s):  
Tu T. T. Tran ◽  
Yen Thi Nguyen
Keyword(s):  
Financial Crisis ◽  
Commercial Banks ◽  
Global Financial Crisis ◽  
Banking System ◽  
The State ◽  
Bank Risk ◽  
The Government ◽  
The Global Financial Crisis ◽  
Bank System ◽  
The Impact

Project 254 signed in November 2011 which is relating to “Restructuring the system of credit institutions in the period of 2011–2015” has been considered as a milestone in marking the Vietnamese government to prevent the influence of the financial crisis of 2008. This paper identifies hypotheses evaluating the impact of restructuring measurements on the risk of the Vietnamese’s commercial banks in 10 years, starting from 2008. Using the OLS regression method for analysis by running Eviews and ANOVA test in SPSS with a unique database of 216 observations of 31 commercial banks in Vietnam, it was found that: (i) The bail-out activities of the State Bank of Vietnam in 2015 does not influence on bank risk, (ii) The mergers and acquisitions (M&A) do not support the bank to reduce risk, it increases the risk for acquiring banks, (iii) The global crisis 2008 exerts dire consequence on the bank system in Vietnam, (iv) There is the difference of risk among the groups of the bank experiencing a different number of years of operation. Basing on this result, the paper also makes recommendations to the Government, The State Bank of Vietnam and the commercial banks for effective risk management toward the development of the Vietnamese banking system.

Global Financial Crisis and Bank Productivity in Mexico

2015 ◽  
pp. 581-599
Author(s):  
Francisco Vargas Serrano ◽  
Luis Rentería Guerrero ◽  
Gang Cheng ◽  
Panagiotis D. Zervopoulos ◽  
Arnulfo Castellanos Moreno
Keyword(s):  
Financial Crisis ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Malmquist Index ◽  
Data Envelopment ◽  
Significant Difference ◽  
Before And After ◽  
Domestic Banks ◽  
Productivity Indicators ◽  
The Global Financial Crisis

This chapter presents an attempt to compare the productivity of the Mexican banking sector in two different periods: the 2007-2011 period of global financial crisis and the 2003-2006 stage, which can be regarded as a relatively stable period. The purpose of this study is to disclose whether the global financial crisis affected Mexican banking productivity. Three Data Envelopment Models (DEA) are tested in order to assess whether there is a significant difference between the productivity patterns of Mexican banks before and after the financial crisis. Such models are the radial Malmquist Index, the non-radial and slacks-based model, and non-radial and non-oriented. Essentially, no significant difference of productivity indicators for both foreign and domestic banks was found. Likewise, no significant difference between the pre- and post-crisis periods was perceived, as far as productivity indicators are concerned. Therefore, the global financial crisis was effectless in banking operation.

scholarly journals FINANCIAL PERFORMANCE OF ISLAMIC BANKING AFTER THE GLOBAL FINANCIAL CRISIS: A COMPARISON BETWEEN ISLAMIC COMMERCIAL BANKS AND ISLAMIC BUSINESS UNIT BANKS IN INDONESIA

2017 ◽  
Vol 4 (1) ◽  
pp. 149
Author(s):  
Laili Rahmi
Keyword(s):  
Financial Crisis ◽  
Financial Performance ◽  
Risk Ratio ◽  
Commercial Banks ◽  
Global Financial Crisis ◽  
Islamic Banking ◽  
Business Unit ◽  
Significant Difference ◽  
The Global Financial Crisis ◽  
The Impact

<p>The global financial crisis has affected some industries or non-industries around the world. It has also impacted to Islamic banking in Indonesia, especially after 2007-2008. It has been recorded the Islamic banking industry in Indonesia shows a speedy recovery from the impact of the global financial crisis. Thus, this study aims to evaluate and examine the differences of Islamic banking’s financial performance after the global financial crisis in Indonesia. The financial performances in this study are profitability ratio (Return on Asset (ROA) and Return on Equity (ROE)), liquidity ratio (Financing to Deposit Ratio (FDR) and Current Asset Ratio (CAR)) and solvency risk ratio (Equity Multiplier (EM) and Debt to Equity Ratio (DER)). The samples in this study are the six Islamic banks from Islamic Commercial Banks (Bank Usaha Sharia (BUS)) and Islamic Business Unit Banks (Unit Usaha Sharia (UUS)) in Indonesia. Based on the results shows by the descriptive statistic, UUS is more effective in using their assets to generate income compared to BUS, but BUS is greater to manage their financing and more liquid than UUS whose has higher risk than BUS during 2009-2013. Independent sample t-test shows that there is significant difference in terms of profitability, liquidity and solvency risk ratio between BUS and UUS Indonesia during 2009-2013</p>

scholarly journals The Impact of the Global Financial Crisis on China's Banking Sector

2017 ◽  
Vol 35 (1) ◽  
pp. 5-30
Author(s):  
Michiel Haasbroek ◽  
Jörn-Carsten Gottwald
Keyword(s):  
Financial Crisis ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Financial Sector ◽  
Chinese Economy ◽  
Initial Reaction ◽  
Top Down ◽  
Bottom Up ◽  
The Global Financial Crisis ◽  
The Impact

The banking sector had long been left at the fringes of China's reform policies. Major initiatives of the 1990 and early 2000s helped to balance the need for modernization and internationalization with the objective of preserving political control. When the Global Financial Crisis (GFC) erupted in 2007, it hit the Chinese economy but predominantly in its export sector and much less in its financial sector. Yet when exports collapsed and factories closed in the winter of 2008/2009, the Chinese leadership implemented an ambitious stimulus program and used its leverage over the financial sector to re-start economic growth. These factors – GFC and domestic stimulus – created a series of intended and unintended outcomes. Financial reform in China entered a new stage signalling a profound change in China's banking sector. These changes follow two sometimes contradictive, sometimes mutually reinforcing reform dynamics of top-down policies and bottom-up innovation. In this article we follow an institutional approach and discuss the intensified participation of China's big banks in the Go Out strategy, followed by a shift in the pattern of lending. One factor in this change is the rise of shadow banking and particularly an explosive growth in internet-based financial services. Thus, while the initial reaction to the GFC re-emphasized direct, top-down state involvement in the banking sector, the outcomes of the GFC, China's policies and business innovations have facilitated profound bottom-up changes.

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