scholarly journals Theoretical Investigation for the Failure of Lehman Brothers and Merril Lynch: A Lesson for Banking Institutions in Nigeria

2021 ◽  
Vol 4 (2) ◽  
pp. 88-93
Author(s):  
Andabai Priye Werigbelegha
Keyword(s):  
Subprime Mortgage ◽  
Risky Assets ◽  
Bank Supervision ◽  
Institutional Failure ◽  
Efficient Management ◽  
Lehman Brothers ◽  
Banking Institutions ◽  
Effective Supervision ◽  
Nigerian Banking ◽  
Current Reality

The study theoretically examines the failure of Lehman Brothers and Merril Lynch as a lesson for the banking institutions in Nigeria. Hence, the instability experience in the Nigeria financial system in recent time; especially, banking sub-sector was as a result of institutional failure. Banking experts in Nigeria viewed that the failure of the two banks was an enough signal to the Nigerian banking industry. Hence, the study reveals that the two banks were absolutely limited to the size and age in determining their future instead of depending on the effectiveness and efficient management of risky assets. Hence, the conventional lending procedures are not instituted; rather than depending on subprime mortgage arrangement that has no collateral securities. The declining home prices has make refinancing more difficult as a result of inadequate innovations in securitization. The recommends that the regulatory authorities should not only relied on the conventional tools of bank supervision, but, they should employ more non-conventional methods of obtaining classified information. The financial institutions should train and retrain their employees to meet the current reality on ground. The conventional lending procedures should be instituted rather than depending on subprime mortgage management that did not have collateral securities. The Central Bank of Nigeria (CBN) should be proactive to ensure effective supervision and risk management principles.

JUST HOW RISKY? COMPARATIVE INSTITUTIONAL RISKS OF MISSION-BASED DEPOSITORY INSTITUTIONS

2020 ◽  
Vol 25 (04) ◽  
pp. 2050023
Author(s):  
GREGORY B. FAIRCHILD ◽  
MEGAN E. JUELFS
Keyword(s):  
Community Development ◽  
Underserved Populations ◽  
The United States ◽  
Prima Facie ◽  
Minority Communities ◽  
Ceteris Paribus ◽  
Depository Institutions ◽  
Institutional Failure ◽  
Banking Institutions ◽  
Predictive Likelihood

We examine the relative institutional failure risks for three sets of bank depositories: Community Development Banking Institutions (CDBIs), Minority Depositories (MDIs) and what we term Non-Mission Depository Institutions (NMDIs). CDBIs have primary missions of community development and serving underserved populations; MDIs are typically led by minorities and serve minority populations (a single institution can be both a CDBI and an MDI, either or neither). In this analysis, NMDIs represent all other depository banks. Given their operation within lower-income and minority communities, MDIs and CDBIs appear, prima facie, to face greater institutional failure risks. We examine these risks across each set of institutions, ceteris paribus. Utilizing data from a number of sources, including the Reports of Condition and Income (call reports) for a substantial set of FDIC-insured banks in the United States, we apply a modified Capital, Assets, Management, Earnings and Liquidity model (CAMEL) to measure the predictive likelihood of failure. Recognizing that MDIs are not homogeneous, we also examine relative institutional failure across types of depositories. The results indicate that CDBIs and MDIs are systematically at lower failure risks and that there are differences across service designations.

scholarly journals Transformation of the Ukrainian banking system regulation: a new horizon of compliance with the international framework

2019 ◽  
Vol 14 (4) ◽  
pp. 22-33
Author(s):  
Lyubov Khudoliy ◽  
Oleg Bronin
Keyword(s):  
Systematic Approach ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Banking System ◽  
Basel Iii ◽  
Banking Supervision ◽  
Macroeconomic Shocks ◽  
Bank Supervision ◽  
Banking Institutions ◽  
The Global Financial Crisis

This article discusses the latest methodological recommendations of the Basel Committee on Banking Supervision developed in response to the effects of the global financial crisis and known as Basel III. The purpose of the study is to explore scientific approaches to justifying bank regulation as a key condition for overcoming the economic crisis and improving financial sustainability. The object of research is Basel III instruments that will be implemented in the bank regulatory policy of Ukraine. The systematic approach and systemic thinking used in the article allow one to substantiate the expediency of Ukrainian banking institutions’ governance based on the risk-oriented approach and to determine the strategy of bank supervision for the next 1-3 years. The study evaluates the results of stress testing of the largest banks in Ukraine. Thus, the results confirm that the banking sector in Ukraine is sufficiently capitalized in the absence of macroeconomic shocks, but in case of a crisis, some of these banks are not protected. Therefore, the article formulates recommendations for improving the regulation of these banks, the phased implementation of Basel III, the application of new principles, standards, tools and methods, corporate governance and risk management in Ukrainian banks.

scholarly journals “EVALUATE THE EFFECT OF GLOBAL RECESSION ON LEADING AGRICULTURE, MANUFACTURING AS WELL AS SERVICE SECTORS OF INDIA"

2020 ◽  
Vol 3 (2) ◽  
pp. 125-131
Author(s):  
Salman Shaikh
Keyword(s):  
Financial Markets ◽  
United States Of America ◽  
Service Sector ◽  
Investment Bank ◽  
Subprime Mortgage ◽  
Global Recession ◽  
Lehman Brothers ◽  
Service Sectors ◽  
The U.S ◽  
The Web

In today’s era all the countries are interlinked with the web of globalization. Which means a small jerk in the foreign country leads to the great impact on the domestic country. The same incident happened in the history; better known as global crisis of United States of America. The crisis On Sept. 15, 2008, Lehman Brothers filed for bankruptcy. With $639 billion in assets and $619 billion in debt, Lehman's bankruptcy filing was the largest in history, as its assets far surpassed those of previous bankrupt giants such as WorldCom and Enron. Lehman was the fourth-largest U.S. investment bank at the time of its collapse, with 25,000 employees worldwide. Lehman's demise also made it the largest victim of the U.S. subprime-mortgage-induced financial crisis that swept through global financial markets in 2008. Lehman's collapse was a seminal event that greatly intensified the 2008 crisis and contributed to the erosion of close to $10 trillion in market capitalization from global equity markets in October 2008 – the biggest monthly decline on record at the time. In this paper an attempt is made to represent India being a part of globalization experienced what kind of impact on its manufacturing, agriculture and service sector.

scholarly journals Responsibility and Capitalism. A Phenomenological Way to Approach the Economic Crisis

2013 ◽  
Vol 8 (1) ◽  
Author(s):  
Floriana Ferro
Keyword(s):  
United States ◽  
North America ◽  
Economic Crisis ◽  
The United States ◽  
Mortgage Market ◽  
Western World ◽  
Critical Stage ◽  
Subprime Mortgage ◽  
Lehman Brothers ◽  
The World

The Western world is presently afflicted by a huge economic crisis, started in 2007 in the United States, with the collapse of the subprime mortgage market, and exploded in 2008 with the breakdown of Lehman Brothers[1]. Even if its most critical stage seems to be finished, capitalist countries find it difficult to recover. Globalization exported the effects of the crisis everywhere, but those that suffered the greatest damages are Europe and North America. The collapse of some financial companies is only the top of a huge iceberg. The crisis has roots in something deeper, in the principles and mechanisms of capitalism itself. The Western part of the world is still paying not for the mistakes of a few executives, but for a general lack of ethics in the whole system.

scholarly journals Corporate Governance Failure: The Case Of Enron And Parmalat

2016 ◽  
Vol 12 (16) ◽  
pp. 283 ◽  
Author(s):  
Rezart Dibra
Keyword(s):  
Corporate Governance ◽  
Global Financial Crisis ◽  
Academic Research ◽  
Chief Executive ◽  
Vital Role ◽  
Economic Systems ◽  
Corporate Fraud ◽  
Subprime Mortgage ◽  
Lehman Brothers

Corporate governance is a central and dynamic aspect of business. The term governance is derived from the latin word gubernare, meaning to steer. It usually applies to the steering of a ship. Thus, this implies that corporate governance involves the function of direction rather than control. Corporate governance has come to the forefront of academic research due to the vital role it plays in the overall health of economic systems. Corporate governance was long ignored as a matter of potential importance for the development of a nation’s economy. The wave of U.S. corporate fraud in the 1990s was attributed to deficiencies in corporate governance. The recent 2008-2009 global financial crisis, triggered by the unprecedented failure of Lehman Brothers and the subprime mortgage problems, renewed interest on the role of corporate governance in the financial sector. The development of a strong corporate governance framework is important to protect stakeholders, maintain investor confidence in the transition countries, and attract foreign direct investment. This paper looks at the collapse of Enron and the Parmalat, which was a particular Italian scandal. Parmalat, Enron, and other American firms such as Tyco and WorldCom all have a number of fudging at their core – efforts to make the companies look healthier than they were. Parmalat’s collapse began in November when its auditor raised questions about a $135 million derivatives profit. After additional evidence of accounting misstatements, the company’s chief executive and founder, Calisto Tanzi, resigned on the 15th of December. Four days later, the company disclosed the fake Bank of America letter. On the 23rd of December, Italian investigators stated that the company had used dozens of offshore companies to report non-existent assets to offset themselves. This was as much as $11 billion in liabilities. Also, this is in addition to the fact that Parmalat might have been falsifying its accounting figures for as long as 15 years.

scholarly journals Failure of Lehman Brothers

2021 ◽  
pp. 1-14
Author(s):  
Mahmoud Mofid Abdul Karim
Keyword(s):  
Management Practices ◽  
Banking Sector ◽  
Governance Structure ◽  
Corporate Governance Structure ◽  
Subprime Mortgage ◽  
Lehman Brothers ◽  
Close Relationship ◽  
Ethics Code ◽  
Excessive Risk Taking ◽  
Excessive Risk

Abstract This study assessed the failure of the Lehman brothers. The aim was to evaluate the causes of Lehman's bankruptcy and determine the strategies that could prevent bankruptcy in the banking sector going forward. Findings indicated a close relationship between regulations and the actions of management. In particular, the failure of Lehman showed that regulation and supervision are critical to the success and continuity of the banking sector. The analysis also showed that the demise of Lehman was a result of complex factors. These included unethical management practices, deregulation, excessive risk-taking, poor corporate governance structure, fraud, and lack of a robust ethics code. Keywords: Derivatives, Hedging, Subprime Mortgage, Bankruptcy.

scholarly journals Corporate governance and control in Nigerian banking institutions: matters arising

2007 ◽  
Vol 5 (1) ◽  
pp. 322-329
Author(s):  
Joseph K. Achua
Keyword(s):  
Corporate Governance ◽  
Banking Sector ◽  
Corporate Control ◽  
Sharp Contrast ◽  
Banking Institutions ◽  
Banking Reforms ◽  
And Control ◽  
Nigerian Banking

This paper identifies ‘weak corporate governance’ as the major cause of crises in Nigerian banking institutions. It contends that corporate governance is an innovative alternative banking practice that caters appropriately for the needs of all stakeholders in sharp contrast to the conventional banking, which often marginalizes most of the essential stakeholders, as well as vitiates their corporate control. The paper argues that the existing banking reforms, though potentially worthwhile, may even be harmful if corporate governance and control principles are misplaced or misapplied. It therefore cautions that in today’s borderless economy, purposeful corporate governance is not an option but a necessity; and recommends that regulations should fill in the existing slit to synchronize diversity, dissent and differences in corporate governance for a robust banking sector

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