|
on Banking |
| By: | Lehner, Maria |
| Abstract: | When expanding abroad, a multinational bank faces a trade-off between accessing a foreign country via cross border lending or a financial foreign direct investment, i.e. greenfield or acquisition entry. We analyze the entry mode choice of multinational banks and explicitly derive the entry mode pattern in the banking industry. Moreover, we show that in less developed banking markets, a trend towards cross border lending and acquisition entry exists. Greenfield entry prevails in more developed markets. Furthermore, we identify a tendency towards acquisition entry in small and towards greenfield entry in larger host countries. |
| Keywords: | foreign bank entry; multinational bank; cross border lending; greenfield entry; acquisition entry |
| JEL: | F37 G21 G34 L13 O16 |
| Date: | 2008–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:8222&r=ban |
| By: | Ruiz-Porras, Antonio |
| Abstract: | We study the effects of financial structure and financial development on banking fragility. We develop our study by using fixed-effects panel-data regressions and by controlling the effects of certain banking indicators. We use individual and principal-components indicators of the activity, size and efficiency of intermediaries and markets. The indicators include data for 211 countries between 1990 and 2003. Our main findings suggest that banking stability is enhanced in market-based financial systems. Financial development reduces it. However this fragility-enhancing effect can be unveiled only when we account for financial structure. Thus, financial structure and development jointly matter to assess banking fragility. |
| Keywords: | Banks; fragility; financial structure; financial development |
| JEL: | N20 E44 G21 |
| Date: | 2008–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:12124&r=ban |
| By: | Maximilian J. B. Hall (Dept of Economics, Loughborough University) |
| Abstract: | On 8 October 2008 the UK Government announced a far-reaching plan to restore financial stability, protect depositors and re-invigorate the flow of credit to businesses and individuals in the UK. The £400 billion bailout plan embraced three elements: a massive expansion in emergency liquidity support from the Bank of England; recapitalisation of UK banks and building societies using taxpayers' money; and the provision of a Government guarantee of new short- and medium-term debt issuance made by UK-incorporated banks and building societies. This action proved necessary in the wake of continuing and substantial weaknesses in many banks' share prices despite the temporary ban on short-selling imposed by the Financial Services Authority. It followed two revisions to domestic deposit protection arrangements, and the adoption of a piecemeal approach to failure resolution which saw the eventual nationalisation of Northern Rock in February 2008, the nationalisation of Bradford and Bingley in September 2008 and the brokering of takeover rescues of Alliance and Leicester and HBOS by Banco Santander and Lloyds TSB respectively in July and September 2008, and of the Cheshire and Derbyshire Building Societies by the Nationwide Building Society in September 2008. This metamorphosis in approach to failure resolution by the UK authorities in response to the sub-prime crisis and the credit crunch – nationalisation by default to (part) nationalisation as the preferred course of action - is duly analysed in this article, as well as their proposals for banking reforms which still have to be agreed by Parliament. |
| Keywords: | UK banks; banking regulation and supervision; failure resolution; central banking; deposit protection. |
| JEL: | E53 E58 G21 G28 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:lbo:lbowps:2008_14&r=ban |
| By: | Abdul Majid, Muhamed Zulkhibri; Sufian, Fadzlan |
| Abstract: | This paper examines for the first time the relationship between China banks’ efficiency and its share price performance. Our analysis consists of three parts. First, we calculate the annual share price returns of the banks for each year between 1997 and 2006. Then we employ Data Envelopment Analysis (DEA) Window Analysis method, first proposed by Charnes et al. (1985) to estimate the efficiency of the banks. Finally, we estimate the annual share price returns over the change in efficiency, while controlling for other bank specific traits. The empirical findings suggest that large China banks have exhibited higher technical and pure technical efficiency levels compared to their small and medium sized bank counterparts, while the medium sized banks have exhibited higher scale efficiency. The relationship between China banks’ efficiency and share price performance suggest that bank efficiency estimates derived from the DEA Window Analysis method contributes significant information towards share price returns beyond that provided by financial information. |
| Keywords: | Bank Efficiency; Share Prices; DEA Window Analysis; China |
| JEL: | G1 G2 |
| Date: | 2008–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:12120&r=ban |
| By: | Maximilian J. B. Hall (Dept of Economics, Loughborough University); Mulinman D. Hadad (Bank Indonesia, Jakarta, Indonesia); Wimboh Santoso (Bank Indonesia, Jakarta, Indonesia); Ricky Satria (Bank Indonesia, Jakarta, Indonesia); Karligash Kenjegalieva (Dept of Economics, Loughborough University); Richard Simper (Dept of Economics, Loughborough University) |
| Abstract: | In one of the first stand-alone studies covering the whole of the Indonesian banking industry, and utilising a unique dataset provided by the Indonesian central bank, this paper analyses the levels of intermediation-based efficiency obtained during 2007. Using Tone’s (2001) input-oriented, non-parametric slacks-based DEA model, and modifying it where necessary to deal with negative inputs and outputs (Sharp et al. 2006), we firstly estimate the relative average efficiencies of Indonesian banks, both overall, and by group, as determined by ‘bank total asset size’ and ‘bank status’. In the second part of the analysis, we adopt Simar and Wilson’s (2007) bootstrapping methodology to eliminate the ‘bias’ in the efficiency estimates and to formally test the impact of ‘bank total asset size’ and ‘bank status’ on Indonesian banks efficiencies. The results from the initial analysis show that: (i) average bank efficiency within the industry during 2007 lay between 62% – 67%; (ii) the most efficient group of banks was the ‘state-owned’ group with an average efficiency score over 90%, with the least efficient group being the ‘regional government-owned’ banks with average efficiency scores between 45% and 58%; (iii) ‘listed banks’ perform better, on average than ‘non-listed banks’; and (iv) ‘Islamic banks’, despite their different operational structure when compared with conventional banks, enjoyed average efficiency scores between 54% and 74%. In the second stage of the analysis, the bias corrected efficiency scores demonstrates that ‘regional government-owned’, ‘foreign exchange’, ‘non-foreign exchange’, and ‘joint-venture and foreign groupings’ were significantly less efficient than ‘state-owned’ banks, with the first-mentioned being the most inefficient and the other groupings ranked in ascending order of efficiency as listed. Moreover, ‘large total asset sized’ banks were shown to be more efficient than their ‘smaller total asset sized’ counterparts. |
| Keywords: | Indonesian Finance and Banking; Efficiency. |
| JEL: | C23 C52 G21 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:lbo:lbowps:2008_13&r=ban |