New Economics Papers
on Banking
Issue of 2008‒05‒10
five papers chosen by
Roberto J. Santillán–Salgado, EGADE-ITESM

  1. The Emergence of Information Sharing in Credit Markets By Brown, Martin; Zehnder, Christian
  2. Banks as organizations By Engwall, Lars
  3. The Reform of Italian Cooperative Banks: Discussion of Proposals By Eva Gutierrez
  4. Factor Model for Stress-testing with a Contingent Claims Model of the Chilean Banking System By James P Walsh; Dale F. Gray
  5. Product Market Competition, Regulation and Dividend Payout Policy of Malaysian Banks By Ameer, Rashid/R

  1. By: Brown, Martin (Swiss National Bank); Zehnder, Christian (Harvard Business School)
    Abstract: We examine how asymmetric information and competition in the credit market affect voluntary information sharing between lenders. We study an experimental credit market in which information sharing can help lenders to distinguish good borrowers from bad ones, ecause borrowers may exogenously switch locations. Lenders are, however, engaged in spatial competition, and thus may lose market power by sharing information with competitors. Our results suggest that asymmetric information in the credit market increases the frequency of information sharing between lenders significantly. Competition between lenders reduces information sharing, but the impact of competition seems to be only of second order importance.
    Keywords: information sharing; credit; competition; asymmetric information
    JEL: D82 G21 G28
    Date: 2008–04–30
  2. By: Engwall, Lars (Department of Business Studies, Uppsala University)
    Abstract: In analyzing banks as organizations this paper employs a model which distinguishes between three main actor groups in an organization: providers, personnel and customers. They are linked together by technology through different kinds of actor interface. Through the analysis four organizational issues are identified: flow, technology, allocation and quality. In addition different organizational solutions to handle these issues are discussed.
    Keywords: banks; organizational theory; banker; bankväsen; organisationsteori
    Date: 2008–04–18
  3. By: Eva Gutierrez
    Abstract: This paper argues that the governance framework of cooperative banks may hamper raising capital, particularly at time of distress, complicating the bank resolution process ?specially for large banks?and may not provide adequate incentives to control banks' management. Reforms should preserve the positive characteristics that make cooperative banks a valuable addition to the Italian financial system, while providing enough flexibility and incentives for banks to adopt a suitable governance model. Our empirical analysis suggests that cooperative banks may enjoy a higher degree of monopoly power than commercial banks. Thus, regulations and the enforcement of antitrust policies should ensure a leveled playing field.
    Keywords: Bank resolution , Italy , Bank supervision , Governance , Capital accumulation ,
    Date: 2008–03–28
  4. By: James P Walsh; Dale F. Gray
    Abstract: This paper derives risk indicators for the major Chilean banks based on contingent claims analysis, an extension of Black-Scholes-Merton option-pricing theory. These risk indicators are clearly tied to macroeconomic and financial developments in Chile and outside, but bank responses are highly heterogeneous. To reduce the number of variables linked to the banks' risk to a tractable number, we apply principal component analysis. Vector autoregressions of risk indicators with the most significant factors show strong ties from financial markets and regional developments. Impulse response functions from these factors are derived, which allow for scenario testing. The scenarios derived in the paper illustrate how the magnitude and persistence of responses of bank credit risk can vary across banks in the system.
    Keywords: Working Paper , Chile ,
    Date: 2008–04–09
  5. By: Ameer, Rashid/R
    Abstract: This paper investigates the impact of the product market competition, regulations on the dividend policies of We find significant differences in the payout of the banks categorized as selling a non-interest based banking products and mix of both interest and non-interest based banking products. We find that the decision to increase dividends is significantly related to earnings, and the decision to cut dividend is significantly related to the changes in the non-performing loans, corporate and real estate sectors loans ratio and earnings loses. Research findings have implication for the regulators of the banks. The research provides a clear link between banks' portfolio choice and earnings that have implications for the dividends in the emerging markets.
    Keywords: Dividends; Banks; Non-performing loans; Ordered Probit Model; Malaysia
    JEL: D21
    Date: 2007

This issue is ©2008 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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