scholarly journals Banking Crises and Market Discipline in Indonesian Banking Industry

2017 ◽  
Vol 19 (1) ◽  
Author(s):  
George Adam Sukoco Sikatan ◽  
Rokhim Rokhim
Keyword(s):  
Banking Industry ◽  
Banking Crises ◽  
Market Discipline

Market discipline in the Brazilian banking industry: an analysis for the subordinated debt holders

2009 ◽  
Vol 36 (3) ◽  
pp. 286-307 ◽  
Author(s):  
Helder Ferreira de Mendonça ◽  
Renato Falci Villela Loures
Keyword(s):  
Banking Industry ◽  
Market Discipline ◽  
Subordinated Debt ◽  
Debt Holders

scholarly journals Do Depositors Punish Banks for Bad Behavior? Market Discipline, Deposit Insurance, and Banking Crises

2001 ◽  
Vol 56 (3) ◽  
pp. 1029-1051 ◽  
Author(s):  
Maria Soledad Martinez Peria ◽  
Sergio L. Schmukler
Keyword(s):  
Deposit Insurance ◽  
Banking Crises ◽  
Market Discipline

Banking crises and market discipline: International evidence

2012 ◽  
Vol 36 (8) ◽  
pp. 2285-2298 ◽  
Author(s):  
Elena Cubillas ◽  
Ana Rosa Fonseca ◽  
Francisco González
Keyword(s):  
Banking Crises ◽  
Market Discipline ◽  
International Evidence

scholarly journals Does the agency problem exist in Korean banking industry?

2009 ◽  
Vol 6 (4) ◽  
pp. 551-555
Author(s):  
Seok Weon Lee
Keyword(s):  
Panel Data ◽  
Cash Flow ◽  
Risk Taking ◽  
Banking Industry ◽  
Agency Problem ◽  
Market Discipline ◽  
Financial Industry ◽  
Government Regulations ◽  
Banking Regulations ◽  
Bank Managers

In this paper, we empirically examine whether the agency problem exists in Korean banking industry. Banking industry may be a very special type of industry where government regulations are prevailing and market discipline may function less effectively than in other industries. Investors and even bankers themselves may believe that regulators will not let them fail because it can cause much bigger damage to the economy especially when banking regulations are very loose. Therefore investors would not have great incentives to monitor the behavior of banks, and bank managers could pursue riskier strategies than the firms in other industries do without worrying about the possible loss of their jobs due to the bad performance and reputation of their management. But when regulations are very tight bank managers would realize that closing down and bankruptcy of the bank is not hard to occur, and therefore, they would act in a more conservative and risk aversive manner, which is the case where the agency problem arises. From the analysis of the panel data, we find consistent evidences that the agency problem does not appear to exist in Korean banking industry before 1998 period, when regulations are very loose, which is consistent with our presumption. We find positive associations between the level of outside share ownership and risk-taking for the period of pre-1998. But this association becomes weaker for the post-regulation period 1998-2005. As the regulations become tighter, agency problem becomes bigger which will be the loss, anyway, of firm‟s cash flow, while the regulations may have some effectiveness in bringing more safety of the industry. Thus, regulators and the firms in financial industry need to develop better systems to minimize the costs associated with agency problem when making regulatory reforms.

scholarly journals Market discipline and deposit insurance: evidence from some Middle Eastern banks

2008 ◽  
Vol 6 (1-2) ◽  
pp. 278-285 ◽  
Author(s):  
Ghassan Omet ◽  
Saif Ibrahim ◽  
Hadeel Yaseen
Keyword(s):  
Financial Institutions ◽  
Deposit Insurance ◽  
Middle Eastern ◽  
Banking Crises ◽  
Market Discipline ◽  
Financial Intermediaries ◽  
Basel Accord ◽  
Effective Governance ◽  
Time Period ◽  
Bank Disclosure

Financial intermediaries (banks) and market (stock markets) can play an important role in economic growth. They facilitate a more efficient mobilization of savings, spread risk, and provide liquidity. Given the high costs of banking crises, regulators have always sought the means that promote greater levels of prudence in the behaviour of banks. Indeed Pillar 3 of the Basel Accord relies on enhancing bank disclosure to strengthen market discipline. In other words, Basel II introduces mechanisms to ensure effective governance in financial institutions. The primary objectives of this research are to provide answers to two questions. First, do depositors discipline Jordanian, Kuwaiti, Omani, and Saudi banks? Second, the fact that the Kuwaiti and Saudi deposits are 100 percent insured explicitly and implicitly respectively, while the Jordanian and Omani deposits are insured up to $14,000 and $50,000 respectively, does this difference in the deposit insurance design have any bearing on market discipline. Based on a sample of listed Jordanian, Kuwaiti, Omani, and Saudi banks during the time period 1997 – 2006, the overall results clearly indicate the absence of market discipline in Kuwait, Oman, and Saudi Arabia. In other words, market discipline is at work only in Jordan.

scholarly journals Crisis and Punishment? Explaining Politicians’ Appetite for Retribution in Post-Crisis Europe

2020 ◽  
Author(s):  
Iosif Kovras ◽  
Stefano Pagliari
Keyword(s):  
Financial Crisis ◽  
Significant Variation ◽  
Banking Sector ◽  
Banking Industry ◽  
Banking Crises ◽  
Retributive Justice ◽  
2008 Financial Crisis ◽  
Bank Executives

This article investigates the politics of holding bank executives accountable for banking crises. The post-2008 financial crisis was characterized by a significant variation in the endorsement of retributive justice. While some countries established special prosecutorial bodies and facilitated prosecutions, others relied on the existing prosecutorial mechanisms to seek out wrongdoing. The comparative experience of Iceland and Cyprus shows that the unfolding of the crisis shapes the appetite of politicians for retributive justice. With a banking collapse, politicians will be most proactive, as voters’ demand for justice is high and the risks for the banking industry are minimal. With a severe yet negotiated crisis following a bailout/bail-in, politicians are more reluctant to endorse policies that may risk the recovery of the fragile banking sector.

scholarly journals Relationship between market discipline and capital buffers in Brazilian banks,

2021 ◽  
Vol 32 (85) ◽  
pp. 109-125
Author(s):  
José Alves de Carvalho ◽  
José Alves Dantas
Keyword(s):  
Banking Industry ◽  
Emerging Market ◽  
Positive Association ◽  
Banking Regulation ◽  
Developed Countries ◽  
Market Discipline ◽  
Regulatory Requirement ◽  
Risk Appetite ◽  
Empirical Tests ◽  
The Difference

ABSTRACT The aim of this study was to investigate the relationship between the market discipline and the capital buffers of Brazilian banks, identifying the channels through which this phenomenon materializes. The literature on market discipline and capital buffers has focused on developed countries. In Brazil, the topic is in its infancy, despite the characteristics of the market representing a relevant opportunity for broadening the related studies. Even with the specificities of an emerging market, the Brazilian banking industry provides a vast field for studying market discipline and capital buffers, given that the banks have leverage with investors, who are sensitive agents to alterations in the risk appetite of those entities. This study contributes to understanding the dynamics of the market discipline in the banking industry and to fostering discussions about the role of that private supervision in promoting the transparency and solidity of the financial system, providing support and guidelines for banking regulation. Using data from 193 Brazilian banks, from 2001 to 2017, the empirical tests included the estimation of panel data models, with the use of two-stage least squares (TSLS), following Ayuso et al. (2004), Flannery and Rangan (2004), and Nier and Baumann (2006). As the discipline exercised by the monitoring and influence of the market is not directly verifiable by external agents, six proxies were developed based on the cost of fundraising, on unsecured deposits, on subordinated debt, and on disclosure. The capital buffer was represented by the difference between the capital calculated by the institution and the minimum regulatory requirement. The results of the empirical tests revealed a positive association between the capital buffer and market discipline, providing evidence of the presence of that private supervision in the Brazilian banking industry.

Sign in / Sign up

Export Citation Format

Share Document