Market Structure and Bank Conduct in the MENA Region

The Middle East North Africa (MENA) region is witnessing a wave of bank consolidations, with many mega-mergers taking place in the Gulf Cooperation Council (GCC) countries. These will result in creating large banks, reducing the number of market players and increasing market concentration; which is already high. A further increase in concentration may raise concerns about the resulting dominance of large banks and the consequences on their pricing behaviour. The interrelationships between market structure and pricing behaviour is summarised by the popular model of industrial economics called the structure–conduct–performance (SCP) model. Consequently, we test the prevalence of this model in a sample of 15 MENA banking sectors to detect the possible existence of an impact running particularly from the structure of banking markets to the pricing behaviour (power) of banks in order to predict a possible emergence of oligopolistic behaviour following bank consolidations. Using a two-stage least squares model, we found a positive and significant impact of market concentration on bank pricing, suggesting that an further increase in MENA banking markets’ concentration may boost banks pricing power and persuade them to increase their returns at the expense of their customers.

Regional banking markets in Russia: Differentiation in terms of location

Subject. This article focuses on regional markets of banking services of the subjects of the Russian Federation. Objectives. The article aims to study interregional differences in the demand and supply of banking services in Russia to describe the territorial structure of the Russian banking system. Methods. For the study, I used logical, comparative, and statistical analyses. Results. The article describes and interprets the types of regional banking markets based on their parameterization by supply and demand at the regional level, suggests the reasons for their formation and characterizes their interrelation in the Russian banking market. Conclusions and Relevance. The development of Russian banking markets depends on their key characteristics. Regional banking markets have persistent interregional differences. The results can be used by the Bank of Russia when designing a strategic document for the development of the banking system, as well as by commercial banks.

New insight into market concentration and competition: Use of Barnett’s variable profit function to measure market structure in banking

Previous research on market concentration in banking is heavily tilted towards using deposits as the underlying variable for measuring market concentration. This paper proposes a change in methodology by replacing deposits with the Variable profit function based on Barnett and Hahm’s Economic model for Financial Institutions, used in their 1994 paper. This model has also been successfully used in Dr. William A. Barnett’s successive research. Hancock 1997 also proposes using a similar methodology for modelling banks as Economic firms. Results change dramatically once deposits are substituted by variable profits, and a confounding puzzle is solved, involving one of South Asia’s thriving banking markets.

Competitions in different banking markets and shadow banking: evidence from China

PurposeThis study investigates the interrelationships between competitions in different banking markets and shadow banking for the Chinese banking industry over the period 2003–2017. The current study also examines the determinants of competition in different banking markets and the factors influencing the size of shadow banking.Design/methodology/approachBank competition is measured by the Boone indicator, while the relationship between bank competition and shadow banking is examined through a three-stage least square estimator.FindingsThe findings suggest that a larger volume of shadow banking leads to a decline in the level of competition in the deposit market, loan market and noninterest income market, while an increase in the level of competition in the loan market, deposit market and noninterest income market leads to an expansion of shadow banking. The authors find that higher bank risk and higher developed of stock market reduce the competitive condition in the loan market, and the competition in the deposit market will be enhanced by higher levels of banking sector development and higher levels of inflation, but bank diversification will reduce the level of competition in the deposit market. The authors further find that higher bank profitability and higher stock market development reduce bank competition in the noninterest income market. Finally, the results show that larger bank size and higher development of stock market reduce the size of shadow banking in China, but higher economic growth increases the size of shadow banking.Originality/valueThis is the first piece of research investigating the relationship between bank competition and shadow banking. This will also be the first piece of research examining the determinants of competition in different banking markets and also the factors influencing the size of shadowing banking in China.

FINANCIAL INSTRUMENTS OF STOCK AND BANKING MARKETS IN CORRUPTION CRIMES AND THEIR LEGAL REGULATION

Введение: статья посвящена исследованию особенностей и возможностей применения финансовых инструментов фондового и банковского рынков в коррупционных сделках. Рассматриваются особенности нормативно-правовой базы, связанной с регулированием применения финансовых инструментов фондового и банковского рынков при совершении гражданско-правовых действий. Материалы и методы: в качестве основных источников выступили действующее законодательство Российской Федерации, материалы судебной практики, открытые сведения из средств массовой информации, опыт практической деятельности автора в банковской системе РФ. При написании статьи использованы классические общенаучные методы анализа, синтеза и дедукции, а также метод моделирования. Результаты исследования: в статье проанализированы особенности и возможности использования финансовых инструментов фондового и банковского рынков в коррупционных сделках. Остаются проблемными вопросы, связанные с институтом «номинального держателя», обращением цифровых финансовых активов. Обсуждение и заключения: автором предложены меры по предупреждению, выявлению и профилактике применения ценных бумаг, цифровых финансовых активов, банковских методов и инструментов в коррупционных преступлениях. В частности, для снижения коррупционных рисков предложен механизм публичной продажи долей государства в акционерных компаниях на организованных торгах (на бирже). Обобщен и графически представлен механизм коррупционной реализации государственного (муниципального) имущества посредством создания акционерных обществ. Кроме того, автор статьи предлагает внести изменения в раздел 6 Справки о доходах, расходах, об имуществе и обязательствах имущественного характера для государственных гражданских и муниципальных служащих и в абзац пятый статьи 26 закона «О банках и банковской деятельности» в части отражения использования договоров аренды банковского сейфа.

DETERMINANTS OF SHARIA BANKING MARKET SHARE GROWTH IN INDONESIA

The purpose of this paper is to investigate the variables that influence Islamic banking markets in Indonesia. The research data were obtained directly from the website of the Central Statistics Agency (BPS) and the financial services authority(OJK) from 2011-2018 which were taken on a quarterly basis. This study uses multiple regression analysis to analyze the factors that have an impact on the market share of Islamic banks in Indonesia. The variable that can affect Islamic banking marketshare in Indonesia is the liquidity ratio (FDR). While other variables such as the default rate (NPF), profit rate (ROA), economic growth (GDP) and conventional bank interest rates (INT) do not affect Islamic banking. The results suggest that Islamic banking regulates liquidity ratios (FDR) so that Islamic banking can effectively increase its market. This study complements previous research so that Islamic banking maintains a liquidity ratio in order to remain balanced.Keywords: marketshare, Islamic banking, FDR, GDP, ROA