New Economics Papers
on Banking
Issue of 2007‒07‒20
three papers chosen by
Roberto J. Santillán–Salgado, EGADE-ITESM

  1. The design of bank loan syndicates in Emerging Markets Economies By Godlewski, Christophe
  2. The Duration of International Loan Syndication Arrangement By Godlewski, Christophe
  3. Islamic Banking Performance in the Middle East: A Case Study of Jordan By Saleh,Salman, Ali and Zeitun, Rami

  1. By: Godlewski, Christophe
    Abstract: We empirically explore the influence of loan characteristics, banking and financial structure, and regulatory and institutional factors on the design of 10,930 bank loan syndicates in emerging market economies from 1990 to 2006. Our results show that the structure of syndicates is adapted to enhance monitoring of the borrower and to increase the efficiency of re-contracting process in case of borrower's distress. Main syndication motives, such as loans portfolio diversification, regulatory pressure and management costs reduction, influence syndicate design in emerging markets economies.
    Keywords: Bank; Loan; Syndication; Syndicate Structure; Emerging Markets; Poisson Regressions.
    JEL: G21 C25
    Date: 2007–07
  2. By: Godlewski, Christophe
    Abstract: We investigate the factors that influence the duration of international loan syndication arrangement using individual (loan and syndicate characteristics) and country (information disclosure and legal environment) level data from 68 countries over the period 1992-2006. Employing accelerated failure time models, we find that the duration of a syndicated loan arrangement is influenced by both type of characteristics. Loan, syndicate, legal environment and information disclosure characteristics which reduce agency problems related to syndication reduce the duration. Among the country level characteristics, information disclosure which reduces moral hazard due to informational frictions between syndicate members appears to be the most important driver of a faster deal arrangement, while better creditor rights protection increase the duration of syndication arrangement, consistently with recontracting risk issues.
    Keywords: Syndicated loans arrangement; Duration; Agency problems; Information disclosure; Legal risk; Accelerated failure time models
    JEL: G21 C41
    Date: 2007–05
  3. By: Saleh,Salman, Ali and Zeitun, Rami (University of Wollongong)
    Abstract: Islamic banking in Jordan started around two decades ago. Since then it has played an important role in financing and contributing to different economics and social sectors in the country in compliance with the principles of Shariah rules in Islamic banking practices. Since there have been limited studies on the financial performance of Islamic banks in the country. The aim of this paper is to examine and analyse the Jordanian experience with Islamic banking, and in particular the experience for the first and second Islamic bank in the country, Jordan Islamic Bank for Finance and Investment (JIBFI), and Islamic International Arab Bank (IIAB) in order to evaluate the Islamic banks’ performance in the county. The paper goes further to shed some light on the domestic as well as global challenges, which are facing this sector. However, this paper used the performance evaluation methodology by conducting the profit maximization, capital structure, and liquidity tests. This paper found that the efficiency and ability of both banks has increased and both have expanded their investment and activities and had played an important role in financing projects in Jordan. Another interesting finding of the paper that these banks have focused on the short-term investment, perhaps this seems to be the case in most Islamic banking practices. Another finding is that the Bank for Finance and Investment (JIBFI) has a high profitability that encourages other banks to practice the Islamic financial system. The paper also found that Islamic banks have a high growth in the credit facilities and in profitability.
    Keywords: Islamic banking, Performance, Efficiency, Challenges, Jordan
    Date: 2006

This issue is ©2007 by Roberto J. Santillán–Salgado. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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