Search

Small finance banks (SFBs) are a special category of banks incepted by the Reserve Bank of India in 2015 to cater to the financial needs of the underserved population of the country with the aim of financial inclusion. They serve the priority sector and the unorganised sector of the country. This article analyses and evaluates the performance of these banks on the basis of various financial parameters such as capital adequacy, asset management, management quality, earning quality and liquidity derived from the CAMEL framework. Following a robust evaluation methodology, namely data envelopment analysis (DEA), a sample of all the SFBs operating in India to date is taken. As per the composite rating of CAMEL, results show that the majority of SFBs exhibit satisfactory performance. Utkarsh SFB Limited is ranked at the first position and is followed by Fincare SFB Limited on the second position. Jana SFB Limited stands at the last position amongst all the banks, preceded by ESAF SFB Limited. The results of DEA show average inefficiency among SFBs. The calculated efficiency scores of SFBs highlight that Capital SFB, Fincare SFB, Jana SFB, Shivalik SFB and Utkarsh SFB are the most efficient banks, with a technical efficiency score of 1. ESAF SFB has the lowest efficiency score. Scale inefficiency is the major reason for inefficiency. The study provides valuable insights to the authorities, managers and investors about the performance of these banks and gives them a future vision of the sustenance of these banks. [ABSTRACT FROM AUTHOR]

This paper examines the impact of geopolitical risk on bank wholesale funding using a sample of 2333 commercial banks in 41 countries over the period 2002–2021. Evidence suggests that increased geopolitical risk reduces the share of bank wholesale funding. Interestingly, our finding is driven by small and medium‐sized banks, as large banks do not lose funding from wholesale financiers when geopolitical risk is higher. Delving into the mechanisms that drive our findings, we find that wholesale financiers rely on noisy public signals on bank asset quality such as insolvency risk, earnings volatility and bad debts to determine whether to refinance or withdraw their financing. Small banks lose funding from both informed and uninformed wholesale financiers as their asset quality is adversely affected when geopolitical risk is elevated. Large banks with better asset quality are not significantly affected by geopolitical risk and benefit from the flight‐to‐safety motive. [ABSTRACT FROM AUTHOR]

This paper investigates the driving forces of shadow banking in 27 EU Member States, using annual data for 1999–2020. To account for heterogeneity, the panel is split into two sub-groups labeled "old" Europe and Eastern Europe. The estimations provide evidence that bank assets, insurance corporation assets, interest rate spreads, and regulatory quality significantly determine shadow banking growth. Financial development also has a considerable influence. The strong link between shadow banking entities and insurance corporations highlights the need to create a framework to test the interconnectedness of financial institutions at the EU level. [ABSTRACT FROM AUTHOR]

Most studies have found that the Covid‐19 pandemic did not negatively impact the euro area banking industry's performance at an aggregate level. This study explores whether this finding still holds using the return on assets of 16 banking groups operating in the euro area and considering bank‐specific factors, idiosyncrasies related to different exposures of their portfolios to the business cycle and weaknesses stemming from underlying structural vulnerabilities. The banking groups are classified into clusters using unsupervised learning techniques. This research contributes to the empirical literature on the determinants of banks' performance by highlighting the importance of banks' heterogeneity, notably controlling for differential performance due to asset quality, solvency and business model. In addition, this paper shows that the magnitude of return on assets' exposure to the business cycle varies across banks and that inflation in the euro area matters only for a subset of them. Importantly, the study sheds some light on the possible reasons for the mixed results in the literature regarding the role of non‐interest income, the T1 capital ratio and inflation. Finally, no significant effects of the Covid‐19 variables on banks' return on assets are found during the first seven quarters of the pandemic. [ABSTRACT FROM AUTHOR]

Small Finance Banks (SFBs) are specialised banking institutions incorporated to serve the unbanked, small and underserved customers. Their primary motive is to improve financial access by providing access to essential financial services. This article examines the performance of ten SFBs in India over four years. The CAMELS model has been applied for performance analysis, which provides performance and ranking of various SFBs using the model’s six parameters: Capital adequacy, Asset quality, Management, Earning quality, Liquidity and Sensitivity. This study will help identify SFBs in financial distress, which will be helpful in timely action for their revival. Financial analysts and credit rating agencies can also use the comparative performance of these banks to frame their opinion or ratings. The common public, including customers and investors, can frame their short-term and long-term investment decisions based on the performance and ranking of these institutions. Furthermore, a proper assessment of these banks is needed as their good performance can ensure that formal credit availability reaches the grassroots level. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Finance Letters / Maliye Finans Yazıları Dergisi is the property of Maliye Finans Yazilari Yayimcilik Ltd. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

We study the optimality of macroprudential policies in an environment where banks provide liquidity to firms. Informational frictions between banks can cause interbank market freezes, prompting firms to accumulate their own liquid assets. Liquidity hoarding by firms in turn reduces the demand for bank loans and bank profitability, makes interbank market freezes even more likely, and may ultimately trigger a self-fulfilling bad equilibrium. Such "liquidity panics" provide an additional rationale for liquidity requirements on banks, which alleviate frictions in the banking sector and, paradoxically, can increase aggregate investment. Instead, policies encouraging bank lending can have the opposite effect. [ABSTRACT FROM AUTHOR]

This study examines the too-big-to-fail expectations in the primary market issuance spreads of commercial bank tier-2 capital bonds and additional tier-1 capital bonds in China. Using a sample of 574 issuances with total amount of 4.76 trillion RMB (749 billion USD), we conduct median regressions with the issuance spreads as the dependent variable. The coefficients of DSIB and GSIB are negative and statistically significant at 1% and 5% levels respectively in the full sample, and are negative and statistically significant at 1% level in the subsample after the guidance on asset management businesses was announced. Ceteris paribus, the issuance spreads of capital bonds of systemically important banks are 15.2 bps to 19.7 bps lower than those issued by other banks. The too-big-to-fail expectations and implicit guarantee of systemically important banks in the Chinese bond market, which narrow the primary market spreads of capital bonds issued by systemically important banks, may account for the results. To address the potential endogeneity issues, we use 90% quantile and 95% quantile of sample bank consolidated assets as proxies of systemic importance, and use China Development Bank bond yields to calculate issuance spreads, and the results show that the conclusion is robust. [ABSTRACT FROM AUTHOR]

Purpose: Remuneration policies may differ from country to country, and their effect on bank stability could be due to the legal framework. Therefore, this study aims to investigate how the legal system impacts the relationship between CEO compensation and bank stability across countries. Design/methodology/approach: To test the study hypotheses, the authors use panel data of 74 banks operating in ten OECD countries during the period 2009–2016 and apply the generalized moments method regression model to better remediate the endogeneity problem. Findings: The findings confirm that a country's banking regulations significantly affect its bank stability. Common law countries have less bank stability than civil law countries. This result can be interpreted by the fact that, in common-law countries, banks' CEO are strongly protected by the law, so they allocate a large part of bank assets to risky loans to improve their variable remuneration. Practical implications: The research can help policymakers understand bank stability in one country. Any legal reform would require prior knowledge of how risk-taking may arise in executive compensation. Originality/value: The contribution is to explain the controversial effect of executive compensation on bank stability in the framework of legal theory. The authors argue that regulators should monitor compensation structures and that the country's legal origin of law shapes the CEO compensation structure and is a determinant of bank stability. To the best of the authors' knowledge, there are no studies exploring this field. So, this study tries to shed more light on the dark side of CEOs' behavior when undertaking risky projects to maximize their remuneration. [ABSTRACT FROM AUTHOR]

Purpose: Islamic banking and microfinance institutions (MFIs) share the core objective of serving the underprivileged. This study aims to investigate whether Islamic banking development facilitates (greases) or hinders (sands) the social mission of MFIs. Design/methodology/approach: Data for 19 countries covering the period 2010–2018 were collected from the World Bank, Bank Focus and International Monetary Funds and analyzed using conventional econometric methods. Endogeneity-corrected techniques and alternative proxies were employed to ensure robust results. Findings: The study revealed that Islamic banking development (proxied by the size of the Islamic banking assets) weakens the depth of outreach of MFIs (measured by average loan size). In countries with growing Islamic banking, MFIs appear to shift their focus toward wealthier clients, potentially due to market saturation among the poor. This is evidenced by MFIs offering larger loans, suggesting a mission drift toward profit maximization. Therefore, it can be inferred that competition from Islamic banks, to some extent, erodes the social mission of MFIs. Originality/value: This study is among the few to examine the recent and comprehensive relationship between Islamic banking development and the social mission of MFIs. [ABSTRACT FROM AUTHOR]

SUMMARY: KPMG issued its audit report for the parent company of Silicon Valley Bank (SVB), SVB Financial Group, on February 24, 2023, and the bank's assets were taken over by Federal Deposit Insurance Corporation regulators on March 10. Although depositors began fleeing SVB in February, deposits declined by 13 percent during the preceding fiscal year. SVB invested substantially in long-term government bonds, whose value plummeted due to significant Federal Reserve interest rate increases, and the classification of the securities prevented their conversion to cash to meet depositor demands. Alongside explaining management and regulatory failings that led to SVB's collapse, this paper formulates an argument of possible alternative actions the auditor could have pursued during the audit or upon release of its audit report. Due to inaction, KPMG may hinder its ability to defend against current litigation. [ABSTRACT FROM AUTHOR]

Supervision is important for the entire financial system since it plays the role of a stabilizer; it seeks to create a healthy environment for financial institutions, and in particular for banks. Bank supervision is considerably more challenging than that of other institutions because of the opacity and complexity of bank assets. We explore the impact of supervision on the risk, profitability, and growth of Tunisian banks. The empirical study focused on 210 annual reports of almost all Tunisian banks during the 2010–2019 period. Banking supervision effectiveness is measured by enforcement outputs (i.e. on-site audits and sanctions). The generalized least squares method of multivariate analysis was used to analyze our panel data.The results show that supervisory and regulatory measures applied during this period have a negative impact on bank risk and profitability. This means that stricter banking regulation and supervision reduce both the risk and profitability of banks. Our results also show that intense supervision reduces the growth of loans for Tunisian banks. Our results have important implications for the decision-making of bank managers and regulators in Tunisia as well as for relevant actors in similar emerging economies. Strengthening further banking supervision policy is still needed by the central bank of Tunisia, i.e. the bank regulator. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to analyse the policy implications of the Insolvency and Bankruptcy Code (IBC) 2016, which was enacted in India as part of banking sector reforms. The study aims to answer the question: Has the policy helped banks enhance their asset quality, stability, and performance?" To determine the effect of IBC on these research variables, we used a difference-in-difference (DID) regression technique. We collected a sample of 924 bank year observations for three categories of banks -- public, private and foreign ownership banks for the period during 2010 to 2021. We first analysed the ownership-wise impact of IBC on asset quality, stability and performance. Then, we further investigated the policy's implications by dividing banks into unhealthy and healthy categories based on their Z scores. In our findings, bank stability and asset quality for three ownership banks (private, public and foreign banks) is significantly different from each other. For overall sample observations, the relationship between asset quality and banks stability is negative and significant. This suggests that a deterioration in asset quality leads to less change in bank stability, i.e. the result confirms banks' loan evergreening problem during the reform period. The results estimating the impact of IBC on stability of public sector banks was insufficient, except for risk capital. Our findings show that public sector banks have tightened their lending standards in anticipation of potential asset quality deterioration. However, our analysis of the IBC's impact on unhealthy banks' asset quality, stability and performance did not align with the policy's objectives. While the IBC policy in itself is passing through several changes in recent, the study's results can aid policymakers in better assessing the impact of banking policies in India and can be used a reference for future policy formulation. A few related areas where the study results will aid to help are insolvency resolution, developing liquidation and cross-board insolvency framework. This paper is the first effort to estimate the impact of IBC separately on asset quality, bank stability, and performance of banks in India. [ABSTRACT FROM AUTHOR]

Copyright of FinanzRundschau is the property of De Gruyter and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

We examine the conditioning role of competition in affecting the relationship between liquidity creation and bank risk in a sample of US banks from 2001 to 2016. We find aggregate evidence that competition is related to bank fragility as proxied by the Z‐score both directly and indirectly through its interaction with liquidity creation. However, when the ex‐ante level of liquidity creation is low and/or competition is low to moderate, competition is associated with an improvement in bank risk at a given level of liquidity creation. In addition, the joint fragility effect of competition and liquidity creation manifests more strongly, in an economic sense, in poorly capitalised banks and large banks with assets of more than $3 billion. Our findings emphasise the crucial role of targeted competition regulations in ensuring bank solvency and systemic stability while maintaining a robust level of competition. [ABSTRACT FROM AUTHOR]

This paper (re-)evaluates the effectiveness of central bank asset purchases in the euro area given their prominent role in the ECB's response to the pandemic as well as the evidence from the US suggesting diminishing returns of this policy measure over time. We analyse their macroeconomic impact in the euro area using a time-varying parameter structural vector autoregression with stochastic volatility and perform identification via sign and zero restrictions of Arias et al. (Econometrica 86:658–720, 2018), their fusion with high-frequency information approach akin to Jarociński and Karadi (Am Econ Macroecon 12:1–43, 2020) and a novel method which merges high-frequency identification with narrative sign restrictions of Antonlin-Diaz and Rubio-Ramirez (Am Econ Rev 108:2802–2829, 2018). We find that the potency of the ECB's asset purchases to lift inflation has indeed considerably declined over time with several factors contributing to a more muted response of prices to central bank asset purchases. Our results show that the reanchoring channel is no longer active while the counterproductive effects via the mechanism outlined in Boehl et al. (Working Paper No. 691, 2020), which we dub the capacity utilization channel, have emerged lately and are further complemented with disinflationary effects stemming from the cost channel. Also, the effects passed through more standard transmission channels of central bank asset purchases like portfolio rebalancing and signalling, while still significant, appear to be less persistent recently. Overall, our findings point to a diminishing return of the ECB's asset purchases to stabilize inflation and its expectations in the euro area. [ABSTRACT FROM AUTHOR]

This study aims to compare the efficiency levels of Islamic commercial banks using the Data Envelopment Analysis (DEA) and Hahslm Reflexivity Dynamics (HEFDYN) methods before and after the spin-off period from 2008 to 2021. The implementation of Law (UU) No. 21 of 2008 concerning Sharia banking requires conventional commercial banks (BUK) to separate their Sharia business units (UUS) and establish Sharia commercial banks (BUS) when the assets of the UUS reach at least 50% of the total assets of the parent bank or after 15 years from the enactment of the Law. This research adopts a quantitative approach and focuses on a case study of two converted banks, namely Bank Aceh Syariah and NTB Syariah. The research methodology involves employing the data envelopment analysis with the VRS approach and the Hahslm Reflexivity Dynamics (HEFDYN) method. Based on the results of the DEA analysis, Bank Aceh Syariah successfully achieved a perfect efficiency value after undergoing conversion, demonstrating effective resource utilization and optimal operational performance. Conversely, Bank NTB Syariah experienced a slight decline in efficiency values, primarily attributable to decreased income variables and financing output in 2019. The HEFDYN analysis also revealed that although Bank Aceh Syariah attained perfect efficiency post-conversion, there is still potential for improvement, particularly in terms of financing growth. Similarly, Bank NTB Syariah, despite the decrease in efficiency values, has the opportunity to enhance its financial performance through targeted improvement efforts. [ABSTRACT FROM AUTHOR]

The prudential principle is crucial to the continued success of the business. As far as giving support in light of Sharia standards and completing different activities, banks need to make strides that do not hurt the bank and the interests of clients who share their assets with the bank. And, banks are expected to work as per prudential standards. This study employed descriptive qualitative research, which falls under the category of field research. Information sources in this study utilized essential information acquired through meetings and auxiliary information such as true records, diaries, and other writing. The results showed that the implementation of the prudential banking principle in business capital financing at BPRS Metro Madani Head Office is by using feasibility analysis 5C + IS, 7P and setting the maximum limit of fund disbursement. The application of good prudential principles has a positive and good impact on the bank. This is evidenced by the decline in the level of problematic financing in BPRS from year to year. [ABSTRACT FROM AUTHOR]

We propose an agent-based computational model for a financial system consisting of a network of banks with interconnected balance sheets comprising fixed assets (e.g. loans to agents outside the network), liquid assets (e.g. cash or central bank reserves), general collateral (e.g. government debt), unsecured interbank loans and reverse-repos to other banks as assets, as well as deposits, unsecured interbank loans and repos from other banks as liabilities. Importantly, we allow banks to use reverse-repo assets as collateral for obtaining repo loans from other banks, that is to say, rehypothecation. Banks need to satisfy liquidity, collateral, and solvency constraints. If the first two constraints are violated because of internal or external shocks, solvent banks attempt to restore them by rebalancing their assets, which might lead to the propagation of the shock because of fire-sale effects (if fixed assets are sold) or liquidity hoarding (if secured or unsecured loans are recalled). Insolvent banks, as well as banks that failed to restore the liquidity and collateral constraints after rebalancing, are removed from the network using a resolution algorithm that includes a netting step (i.e. removal of closed cycles of liabilities) and a novation step (i.e. redistribution of repo assets and liabilities to remaining banks). We show analytically that this proposed resolution algorithm has several desirable properties, most importantly the order-independence of the novation step, and we investigate the stability properties of the network through a series of numerical experiments. [ABSTRACT FROM AUTHOR]

This study investigates how competition and loan loss provisions (LLP) affect stability by including the variable of LLP as a moderating factor introduced as a new variable in the research framework. This study used panel data from 2012 to 2021 from Indonesia's largest banks by assets. This study will analyze competitiveness, loan loss provision, and stability using moderated regression. This study determined long-term and short-term results using VAR/VECM. At the short-term level, competition did not significantly affect stability, while stability had a more significant effect on competition. However, increased competition seems to improve banking stability in the long run. The role of allowance of impairment losses varies depending on the period, with its negative impact on stability in the short-term. This study uses loan loss provision (LLP) as a moderating variable to examine the extent to which competition enhances stability. Internal banking policies must strengthen understanding of the impact of loan loss provisions and ensure effective risk management practices. In addition, banks must consider long-term strategies in managing competition by maintaining a balance between healthy competition and sound risk management to achieve long-term stability. [ABSTRACT FROM AUTHOR]

The banking sector has the potential to progress and grow sustainably. This is reflected in the increase in the value of distributed funds and the value of commercial bank assets. However, this increase was not in line with the increase in company value. Therefore, companies must be able to optimize their resources to increase corporate value. This study aims to analyze and explain the factors that can affect corporate value. The variables used in this research are corporate governance as an independent variable, financial performance as a mediating variable, and corporate value as a dependent variable. The type of research used is explanatory research with a quantitative approach. The samples for this research were Bank Rakyat Indonesia (BBRI), Bank Mandiri (BMRI), Bank Negara Indonesia (BBNI), and Bank Tabungan Negara (BBTN). The data analysis was done using descriptive statistical analysis and partial least squares (PLS) analysis which is processed using SmartPLS software. The results of this research indicate that corporate governance has a negative and insignificant effect on corporate value. Furthermore, corporate governance variables also had a negative and insignificant effect on financial performance. Apart from that the results also show that the financial performance variable is not able to mediate the relationship between corporate governance and corporate value significantly. The practical implication of this research was to encourage banking management in Indonesia to implement good corporate governance as it can boost financial performance. [ABSTRACT FROM AUTHOR]

Copyright of Accounting & Financial Studies Journal is the property of Republic of Iraq Ministry of Higher Education & Scientific Research (MOHESR) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of European Journal of Applied Economics is the property of Singidunum University and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper proposes a theoretical framework modelling the effect of simultaneous sectorial shocks on the banking system resilience, in presence of overlapping portfolio risk. A sectorial shock decreases the value of banks' assets and solvency. We show that beyond a determined threshold, the regulator (central bank) shall intervene in order to avoid that simultaneous sectorial shocks lead to bankruptcies in a cascading process. The model is simulated in the context of the Tunisian banking system for a variety of extreme macroeconomic conditions (economic recession and inflation). The simulations show that the simultaneous shocks to industry, commerce and real estate sectors might lead to the bankruptcies of one to 10 banks among the 23 Tunisian banks via the cascading contagion channel, in the absence of a prompt and adequate intervention by the regulator. [ABSTRACT FROM AUTHOR]

Fintech is driving the revolution of finance and profoundly affecting the development of the financial sector. However, few studies examined how commercial banks' fintech innovation affects total factor productivity (TFP). To build up the fintech index of commercial banks, we use web crawler technology to accumulate news related to the fintech innovation of commercial banks in Baidu news. We use the panel data of 72 banks in China from 2010 to 2020 to explore the impacts and mechanisms of fintech on commercial banks' TFP. The results show that fintech innovation effectively improves TFP after a series of robustness tests. Further, we find that fintech innovation can improve commercial banks' TFP by promoting innovations of financial products, increasing risk control capability, reducing cost, and improving profit. Also, the utility of fintech is more significant in banks with more assets, facilities, and human capital, which means that fintech innovation creates a "bigger is better" mindset. Meanwhile, the result of quantile regression shows that the higher the fintech innovation, the more significant the increase in TFP, which further reveals that there is 'too big to fail' among commercial banks under digitalization. [ABSTRACT FROM AUTHOR]

This article examines the peculiarities of the management of assets and liabilities of Ukrainian banks in the conditions of significant structural transformations of the resource base during the period of martial law. The analysis is carried out at the level of homogeneous structural and functional groups of banks (SFGBs), which are formed using published reporting data and the application of Kohonen's self-organizing map (SOM). Accumulation of statistical data has been carried out for 5 years, special attention is paid to structural changes in the resource base and directions of placement of bank assets over the past two years. Over the past two years, the bank has been under the influence of shock factors affecting assets and liabilities. At the beginning of 2022, there was an outflow of funds from bank accounts, which was gradually compensated by the inflow of current funds from corporations and the population of individuals. In 2023, the National Bank of Ukraine actively stimulated the development of the term resource base, the basis for ensuring the growth of credit operations. Transactions with state securities continue to grow in the structure of bank assets. The priority task of the banking system remains the financial support of business, but in the conditions of a full-scale war, such development of credit operations is limited. It is expedient to study the strategy of banks by combining the structure of assets and liabilities according to similar characteristics and analyzing the dynamics of groups. Observation of homogeneous groups confirms their stable nature, features of strategy, risk profile and development priorities. It has been proven that banks within homogeneous SFGBs demonstrate similar behaviour in the formation of management strategies and reactions to internal and external shocks. At the macro level, the SOM structure allows you to quantitatively assess the main processes taking place in the banking system, conduct comparisons with maps, and identify problems and priorities in the management of bank assets and liabilities. The SFGB method allows you to evaluate the trajectory of individual banks on the map and develop recommendations for improving the strategy of managing assets and liabilities. [ABSTRACT FROM AUTHOR]

Copyright of Zeitschrift für Bankrecht und Bankwirtschaft is the property of De Gruyter and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

We document the contribution of Islamic finance development to economic growth by studying a global sample of countries engaged in providing Islamic financial services. Fifteen countries are included in the sample based on significant Islamic banking share in total domestic banking assets. Results are documented through the application of the Panel regression (EGLS) method for the period 2001–2020. Findings suggest a positive contribution of the Islamic Financial Services Industry (IFSI) to economic growth in sample countries in multiple regression settings. Additionally, a range of control variables, including domestic credit to the private sector, inflation, and trade openness, contribute significantly to economic growth. We recommend the creation of a conducive environment for the promotion of IFSI on account of the built‐in stability feature and positive contribution to economic growth. We also recommend overall development in the financial sector of selected economies, including credit availability to the private sector and trade openness. Our study helps in understanding the dynamics of economic growth in economies with a dual banking system (conventional & Islamic). This article contributes to the literature by studying a larger sample of countries engaged in the practice of Islamic finance and considering the significance of the market share of assets under IFSI. [ABSTRACT FROM AUTHOR]

Despite the momentous rise in concentration and market share of foreign banks in overall bank assets in Africa, rigorous empirical work(s) examining their effect on financial sector development in Africa is hard to find. In view of this, the study seeks to investigate the moderating role of institutions/governance on the foreign bank presence‐financial development nexus. Employing the two‐step system generalized method of moment for a panel dataset of 28 economies in Africa over the period, 2000–2018, the results show that foreign bank presence has a positive effect on financial development. Also, the study finds evidence that foreign banks in host countries increase financial development in the presence of quality institutions. The study recommends improvement in institutional quality, which will help foreign banks to promote financial development. [ABSTRACT FROM AUTHOR]

We study the portfolio choice problem of banks, taking into account losses due to fire-sale spillovers. We show that the optimal asset allocation can be recovered as the unique Nash equilibrium of a potential game. Our analysis highlights the key tradeoff between individual diversification and systemic risk. In a stylized model economy featuring two banks and two assets, we show that sacrificing individual diversification to reduce portfolio commonality increases the likelihood of a sale event, while simultaneously decreasing the probability of a costly systemic sell-off. Banks have stronger incentives to achieve systemic diversification if there is more heterogeneity in leverage among them, leading to a decrease in the overall vulnerability of the system. We provide numerical evidence that our conclusions are robust with respect to the number of banks and assets in the system. Funding: The research of A. Capponi has been supported by the NSF/CMMI CAREER-1752326 award. The research of M. Weber has been supported by the NUS Start-Up Grant [A-0004587-00-00]. [ABSTRACT FROM AUTHOR]

The Sharia banking market share is still stuck at the level of 7% of total national banking assets until the February 2024 period. Several strategic policies have been implemented by both regulators and Sharia banking players, but this has not yet increased the Sharia banking market share. Several other relevant studies inform that internal factors in the form of financial performance and macroeconomic conditions are one of the causes of the stagnant increase in the market share of sharia banking in Indonesia, so it is necessary to reexamine/analyze these factors. Furthermore, this research aims to analyze the influence of macroeconomic conditions as proxied by the inflation rate and BI rate as well as the financial performance of Sharia banks as proxied by the CAR and FDR ratios on the Market Share of Sharia Banks in Indonesia. The sample in this study was a total of sharia commercial banks and sharia business units with data regression analysis using the help of the Eviews version 12 program. The results of this research show that simultaneously the independent variables (inflation, BI rate, CAR and FDR) in this research have a significant influence on Market Share with a significance level of 5%. Overall, the results obtained show that the variables inflation, BI rate, CAR and FDR influence the Sharia banking Market Share with a significance level of 5%. Partially, inflation and FDR have no effect on the market share of sharia banking, but the BI rate and CAR have a significant effect on sharia banking in Indonesia. [ABSTRACT FROM AUTHOR]

Copyright of Share: Journal of Islamic Economics & Finance / Jurnal Ekonomi dan Keuangan Islam is the property of Share Jurnal Ekonomi dan Keuangan Islam and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Banking systems play an essential role in the economy through their varied functions. They facilitate access to credit, ensure efficient money management and promote the smooth functioning of financial markets. In the current period, in financial and credit institutions there is an orientation towards the use of AI. Thus artificial intelligence has been introduced in bank asset management, in analyzing and assessing the risks of bank customers, in bank marketing, etc. The aim of the paper is to present the current AI technologies used in banking, highlighting the transformations that the field has undergone in recent years as a result of the implementation of AI. Moreover, the benefits, but also the risks that may arise for all actors participating in the banking market will be highlighted. We focus our attention on AI because it stimulates innovation in industry and opens the way to new business opportunities. [ABSTRACT FROM AUTHOR]

Purpose: The study examines how the liquid assets holdings among non-financial Indian firms vary due to tightening monetary policy and increasing macroeconomic uncertainty. Design/methodology/approach: The authors analyze 5,640 firms for the period 2011–2021. The authors first estimate India's monetary policy shocks by decomposing the exogenous shocks from the systematic component of monetary policy changes. The authors then examine the effects of the estimated monetary policy shocks and a range of macroeconomic and policy uncertainty indicators on companies' cash and bank balances to asset ratios using two-step system generalized method of moments (GMM) estimators. Findings: The authors find that monetary policy shocks cause the cross-sectional variances for the firms' liquidity holdings to increase. In anticipation of macroeconomic volatility, companies respond to these shocks after taking into account all the firm-level information to minimize the opportunity costs of holding extra cash or too few cash balances that can hamper firms' operations. Furthermore, compared to other shocks, the contribution of inflation-induced shocks is predicted to be the largest in the cross-sectional deviation of the firm's cash holdings. The authors also find that low-growth, older and financially constrained firms observe lesser heterogeneity in their cash holdings as they tend to hold cash as a precautionary buffer. Originality/value: The authors' approach to the analysis is unique in many ways. To address potential transmission bias, the authors use nowcasts and forecasts of real gross domestic product (GDP) growth and inflation to generate a series of exogenous monetary policy shocks for identifying unanticipated changes in short-term interest rates. Subsequently, the authors estimate how these shocks affect the cross-sectional deviation of liquid assets. For estimating the effects of macroeconomic uncertainty on corporate cash demand, the authors utilize a range of proxies for uncertainty. Unlike previous attempts, the authors offer evidence for a developing and fast-emerging economy. [ABSTRACT FROM AUTHOR]

Copyright of Comparative Economic Research is the property of Wydawnictwo Uniwersytetu Lodzkiego and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This article examines the peculiarities of the management of assets and liabilities of Ukrainian banks in the conditions of significant structural transformations of the resource base during the period of martial law. The analysis is carried out at the level of homogeneous structural and functional groups of banks (SFGBs), which are formed using published reporting data and the application of Kohonen's self-organizing map (SOM). Accumulation of statistical data has been carried out for 5 years, special attention is paid to structural changes in the resource base and directions of placement of bank assets over the past two years. Over the past two years, the bank has been under the influence of shock factors affecting assets and liabilities. At the beginning of 2022, there was an outflow of funds from bank accounts, which was gradually compensated by the inflow of current funds from corporations and the population of individuals. In 2023, the National Bank of Ukraine actively stimulated the development of the term resource base, the basis for ensuring the growth of credit operations. Transactions with state securities continue to grow in the structure of bank assets. The priority task of the banking system remains the financial support of business, but in the conditions of a full-scale war, such development of credit operations is limited. It is expedient to study the strategy of banks by combining the structure of assets and liabilities according to similar characteristics and analyzing the dynamics of groups. Observation of homogeneous groups confirms their stable nature, features of strategy, risk profile and development priorities. It has been proven that banks within homogeneous SFGBs demonstrate similar behaviour in the formation of management strategies and reactions to internal and external shocks. At the macro level, the SOM structure allows you to quantitatively assess the main processes taking place in the banking system, conduct comparisons with maps, and identify problems and priorities in the management of bank assets and liabilities. The SFGB method allows you to evaluate the trajectory of individual banks on the map and develop recommendations for improving the strategy of managing assets and liabilities.

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

We examine the Indian bank asset quality review, which doubled the declared loan delinquency rate. Relative economic stability during the exercise and the absence of a capital backstop together make it unique. We find that the expected reduction in information asymmetry does not automatically lead to the recapitalization of banks by markets. The consequent undercapitalization leads to underinvestment and risk-shifting through zombie lending. The impact flows to the real economy through borrowers, including shadow banks, and adversely impacts growth. These findings show that bank cleanup exercises not accompanied by policies aimed at recapitalization may be insufficient even during normal times. [ABSTRACT FROM AUTHOR]

Asset quality is an important parameter for assessing the financial performance of a bank. Non-performing assets not only reduce income but also reduce the profitability of the bank. Increasing non-performing assets (NPAs) of banks is one of the biggest obstacles to the socio-economic development of our country. From 2014 to 2018, there was a huge increase in non-performing assets. But after that, NPA is seen decreasing. The Reserve Bank of India implemented strict regulation and supervision of Indian banks using the Basel norms. So that loans will be given, and they will take care that it does not increase unproductively. The researcher tries to highlight the causes of unproductive assets and their solutions in this article. [ABSTRACT FROM AUTHOR]

Savings are important determinants of wealth. At the macroeconomic level, governments attach importance to saving money in order to make new investments, produce new capital goods, and sustain economic growth. However, due to the high level of internal and external debt in Djibouti, it is nearly impossible for the country to achieve domestic savings. Hereby, the major aim of this study is to examine the dynamic effect of financial sector development in stimulating the gross national saving of Djibouti from the period 1987 to 2021. The paper considered numerous indicators as measurements of the financial sector development including FDI inflows, domestic loans to the private sector, central bank assets to GDP, and money supply. To proceed with the analysis, Non-Linear Autoregressive Distributed Lag (NARDL) was performed and according to the model, the findings highlighted that the Djiboutian financial industry is still in its early development and has not yet made a substantial contribution to boosting the country's national savings. Nevertheless, the gross national saving of Djibouti was still positively prompted by significant components of the financial sector development, such as the positive shocks of FDI inflows and both the negative shocks of central bank assets and money supply. While both the positive and negative shocks of the credit offered to the private sector were uncovered to diminish the national savings in the long run. In conclusion, the current research will help governments and policymakers understand the best ways to use the financial sector to raise gross national savings. It will also present evidence of how to implement long-term initiatives that can lower public debt and encourage savings. Not to mention, the article provides information on the value of long-term investments. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to study the effect of country-level perceptions of corruption on commercial banks' lending activity over the importance of loans and the quality of loan portfolios of banks in Europe. Design/methodology/approach: The paper uses country-level perceptions of corruption scores from Transparency International, individual bank-specific data from ORBIS and macroeconomic data from the World Bank. The sample is composed of 640 commercial banks in 42 European countries from 2013 to 2019. The authors estimate, by pooled OLS, the relationship between corruption and the importance of loans and the quality of the banks' loan portfolios. In addition, several robustness tests reinforce the results. Findings: The results show that corruption negatively impacts the importance of loans in bank assets and positively impacts the proportion of bad loans. In addition, trade openness increases the weight of loans and the weight of nonperforming loans. Bank size, capital and risk also affect bank lending activity. Finally, European Monetary Union (EMU) membership reinforces the negative (positive) effect on loans (bad loans). Research limitations/implications: The results highlight the importance of fighting corruption. Governments, regulators and banks benefit from pursuing transparency-oriented policies to decrease the perception of corruption and foster economic development. Originality/value: The literature on the impact of corruption on bank lending activity focuses mainly on high-corruption countries. This paper studies the European case, scarcely investigated in the literature, in the aftermath of two international financial crises and when significant regulatory transformations in banking supervision were instituted in the EMU countries. [ABSTRACT FROM AUTHOR]

I present a dynamic general equilibrium model in which commonality in bank assets endogenously changes over the business cycle and shapes systemic risk. To reduce individual risks, banks diversify, increasing portfolio overlap and hence the similarity of their exposures to fundamental shocks. Systemic financial crises burst at the end of credit booms when productive investment opportunities are exhausted, banks' diversification incentives are strong, and their portfolios are highly correlated. A calibrated model is able to match key moments related to frequency, severity, and the economy's behavior around systemic crises. [ABSTRACT FROM AUTHOR]

Central bank assets held in foreign countries are entitled to immunity from execution under international law. Even as foreign sovereign immunity in general has become less absolute over time, the trend has been toward greater protection for foreign central bank assets. As countries expand their use of central banks, however, recent cases have limited immunity for certain kinds of sovereign wealth funds held by central banks. Sanctions on foreign central bank assets have also become more common, raising issues about the relationship between central bank immunity and the recognition of governments, the relationship between immunity and executive actions, and the denial of central bank immunity as a countermeasure. This symposium Article explores recent developments in central bank immunity focusing on sovereign wealth fund litigation in Sweden, U.S. sanctions on Afghan central bank assets, and the global response to sanctions imposed on Russian central banks following the invasion of Ukraine. Some of these actions and cases do not implicate foreign sovereign immunity. However, proposals to confiscate Russian central bank assets and U.S. litigation to turn Afghan central bank assets over to private plaintiffs, even if presented as countermeasures to secure reparations, would undermine significantly one of the increasingly rare areas of international economic law around which there is a global consensus: the immunity of foreign central banks from measures of execution. [ABSTRACT FROM AUTHOR]

In this paper, an adaptive endogenous model is introduced to explain the formation and evolution mechanism of interbank lending market with central bank. We investigate the evolution of structure of interbank lending market and the impact of structure of bank assets, bank adaptive behaviors, liquidity and dispersion on the resilience of interbank lending market, respectively. Simulation results demonstrate that the structure of the initial interbank lending market has scale-free and small-world features, which keeps in the evolution of the network. Moreover, we find risk gathering requires relatively long time but the outbreak is concentrated and percentage of defaults is a nonmonotonic function of percentage of initial liquid assets. Furthermore, we discover that moderate liquidity hoarding helps to reduce risk contagion effect in the initial stage of contagion while excessive hoarding of liquidity increases the fragility of the network. [ABSTRACT FROM AUTHOR]

The growth of assets in Islamic banking serves as a pivotal indicator of the sector's development and market share. This study examines the factors influencing asset growth in Sharia Commercial Banks (BUS) and Sharia Business Units (UUS) in Indonesia from 2008 to 2015. Internal factors, including financing growth, Third Party Fund (DPK) growth, and Non-Performing Financing (NPF) levels, as well as the external factor represented by the Rupiah/USD Exchange Rate, are analyzed using multiple linear regression and SPSS 18.0. The study reveals that these factors collectively have a significant impact on asset growth. Specifically, financing growth and Third Party Funds (DPK) growth positively influence asset growth, while Non-Performing Financing (NPF) levels exert a negative influence. However, the Rupiah/USD Exchange Rate shows no significant effect on asset growth. This research contributes valuable insights into the dynamics of asset growth in Islamic banking, informing both industry stakeholders and policymakers. [ABSTRACT FROM AUTHOR]

The study investigated the relationship between mobile money growth and banking development in Sub-Saharan Africa. The question of whether mobile money threatens or supports traditional banks is contentious. Therefore, the motivation was to comprehensively examine the extent of mobile money's influence on banking development. The study used a quantitative research design with aggregated quarterly panel data from the four regions of Sub-Saharan Africa. The Panel ARDL estimation was applied to quantify the nature of the relationship between mobile money and banking development variables. Study findings showed that an increase in active mobile money accounts and volumes was associated with a decline in bank accounts, bank branches, and ATMs in the long run. At the same time, this trend was offset by positive impacts on private sector credit and total bank assets again in the long run. The findings align and extend the technology acceptance models and show that increased use of mobile money technology has substitution and complementary effects on banking development. Policymakers and financial institutions should carefully consider the potential trade-offs and synergies between mobile money adoption and traditional banking services, leveraging the positives while addressing challenges arising from the disruptive forces of technological innovation. [ABSTRACT FROM AUTHOR]

Purpose: This paper investigates the effect of abnormal increase in credit supply on economic growth in Nigeria after controlling for the quality of the legal system, size of central bank asset, banking sector cost efficiency and bank insolvency risk. Design/methodology/approach: The authors employ the generalised method of moments (GMM) regression methodology to estimate the effect of abnormal increase in credit supply on two measures of economic growth in Nigeria. Findings: The abnormal increase in credit supply has a significant effect on economic growth. Abnormal increase in credit supply increases real gross domestic product (GDP) growth. The abnormal increase in credit supply decreases real GDP per capita during the global financial crisis. The abnormal increase in domestic credit to the private sector has a significant positive effect on GDP per capita when there is strong legal system quality in Nigeria. In contrast, the abnormal increase in domestic credit to the private sector has a significant negative effect on real GDP growth when there is strong legal system quality in Nigeria. Practical implications: The abnormal increase in credit supply is ineffective in increasing GDP per capita during crisis years. Policymakers should be cautious in pressuring financial institutions to release an abnormally large amount of credit into the economy particularly during financial crises. Rather, policymakers should encourage financial institutions to supply credit in a sustained manner – not in an abnormal manner –and in a way that supports growth. Originality/value: The present study contributes to the literature by analysing the effect of abnormal increase in credit supply on economic growth in a developing country context. [ABSTRACT FROM AUTHOR]