The global financial crisis and banking sector resilience

2014 ◽  
Vol 16 (4) ◽  
pp. 265-288
Author(s):  
Sylvia Maxfield ◽  
Mariana Magaldi de Sousa
Keyword(s):  
Financial Crisis ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
The Global Financial Crisis

Twin Peaks Regulation After the Global Financial Crisis: A Reform Model for China?

2017 ◽  
Vol 8 (3) ◽  
Author(s):  
Miao Han
Keyword(s):  
Financial Crisis ◽  
Central Bank ◽  
Financial Services ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Relevant Literature ◽  
Twin Peaks ◽  
The Global Financial Crisis ◽  
Peak Model ◽  
Twin Peak

AbstractThe global financial crisis (GFC) has been defined as the worst financial crisis after the Great Depression of the 1930s. Reforms underway, as well as debates in discussion, revolve around both regulatory philosophy and approaches towards better supervisory outcomes. One of the most radical institutional reforms took place in the United Kingdom (UK), where the Twin-Peak model replaced the previous fully integrated regulator – the Financial Services Authority (FSA) under the Financial Services Act 2012. This paper argues that China should also introduce twin peaks regulation, but it is rather based on the resources of risk in its financial sector than the direct GFC challenge. In theory, the core arguments focus on the structure of agencies responsible for prudential regulation and the role played by the central bank as well. The Twin-Peak model has been further examined in terms of regulatory objectives and instruments. By method, this paper is a country-specific comparative study; Australia, the Netherlands and the UK are selected to represent different Twin-Peak models. This paper contributes to the relevant literature in two main aspects. First, it has displayed the principal pattern of the Twin-Peak model after detailing the case studies, including the relationship involving in two regulators, central bank and finance minister in particular. Based on this, second, it becomes possible to design a very specific model to reform China’s current sector-based financial monitoring regime. As far as the author knows, until end-2015, this is the first paper which has proposed such a particular model to China. It is argued that the appropriate institutional structure of market regulation should fit well in with a country’s financial market. Accordingly, the Twin-Peak model will be able to balance the regulatory tasks for the over-concentrated risk in China’s large banking sector but the underdeveloped securities market. Even though, regulatory independence will continue to be challenged.

Global Financial Crisis and Bank Productivity in Mexico

2015 ◽  
pp. 581-599
Author(s):  
Francisco Vargas Serrano ◽  
Luis Rentería Guerrero ◽  
Gang Cheng ◽  
Panagiotis D. Zervopoulos ◽  
Arnulfo Castellanos Moreno
Keyword(s):  
Financial Crisis ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Malmquist Index ◽  
Data Envelopment ◽  
Significant Difference ◽  
Before And After ◽  
Domestic Banks ◽  
Productivity Indicators ◽  
The Global Financial Crisis

This chapter presents an attempt to compare the productivity of the Mexican banking sector in two different periods: the 2007-2011 period of global financial crisis and the 2003-2006 stage, which can be regarded as a relatively stable period. The purpose of this study is to disclose whether the global financial crisis affected Mexican banking productivity. Three Data Envelopment Models (DEA) are tested in order to assess whether there is a significant difference between the productivity patterns of Mexican banks before and after the financial crisis. Such models are the radial Malmquist Index, the non-radial and slacks-based model, and non-radial and non-oriented. Essentially, no significant difference of productivity indicators for both foreign and domestic banks was found. Likewise, no significant difference between the pre- and post-crisis periods was perceived, as far as productivity indicators are concerned. Therefore, the global financial crisis was effectless in banking operation.

Shadow prices of non-performing loans and the global financial crisis

2019 ◽  
Vol 20 (5) ◽  
pp. 411-434
Author(s):  
Ameni Tarchouna ◽  
Bilel Jarraya ◽  
Abdelfettah Bouri
Keyword(s):  
Financial Crisis ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Shadow Price ◽  
Market Price ◽  
Shadow Prices ◽  
Content Type ◽  
Managerial Implications ◽  
Bad Loans ◽  
The Global Financial Crisis

Purpose This paper aims to determine the opportunity cost borne by US commercial banks to reduce non-performing loans (NPLs) by one unit within the global financial crisis framework. Design/methodology/approach To achieve this aim, the authors use the directional output distance function to estimate the technical efficiency while considering NPLs as undesirable output. Then, they estimate the shadow prices of NPLs by using the envelope theorem and solving the revenue function. Findings The results indicate that medium-sized banks are the most efficient, while small banks are the most inefficient ones. Moreover, the shadow prices of NPLs of large banks are higher than those of small and medium-sized banks. This implies a more elevated cost when lessening bad loans in large banks. This is more prominent during the crisis given that the shadow prices of NPLs of large banks have risen sharply over that period. Practical implications Shadow prices have important managerial implications given that they display the amounts of required reduced revenues to lessen NPLs. Accordingly, banks’ managers are called to reduce these loans by paying more attention when choosing their customers. Originality/value With the absence of an observable market price for bad loans in financial literature, the shadow price notion offers an adequate measure to evaluate them. To the best of authors’ knowledge, this is the first study that provides an estimation of the shadow price of NPLs in the US banking sector.

scholarly journals Asymmetric Procyclicality of Chinese Banking and the Countercyclical Buffer of Basel III

2015 ◽  
Vol 2015 ◽  
pp. 1-9
Author(s):  
Yufeng Li ◽  
Zhongfei Li
Keyword(s):  
Financial Crisis ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Capital Requirements ◽  
Basel Iii ◽  
Time Varying ◽  
Regulatory Capital ◽  
Economy Growth ◽  
The Global Financial Crisis ◽  
Chinese Banking

Since the global financial crisis of 2007-2008, the importance of the procyclicality in the banking sector has been highlighted. One of the Basel III objectives is to promote countercyclical buffers and reduce procyclicality. We apply time-varying copula combined with GARCH model to test the existence of asymmetric procyclicality of Chinese banking. The results show that the procyclicality of Chinese banking is asymmetric, where the dependence between loan and economy growth is more correlated during the decline stage than the rise stage of economy. Based on this asymmetry, we suggest that the authority can use high frequent index for signalling the start point of releasing countercyclical buffer and accelerate the releasing pace to avoid the supply of credit being constrained by regulatory capital requirements in downturns.

scholarly journals The Impact of the Global Financial Crisis on China's Banking Sector

2017 ◽  
Vol 35 (1) ◽  
pp. 5-30
Author(s):  
Michiel Haasbroek ◽  
Jörn-Carsten Gottwald
Keyword(s):  
Financial Crisis ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Financial Sector ◽  
Chinese Economy ◽  
Initial Reaction ◽  
Top Down ◽  
Bottom Up ◽  
The Global Financial Crisis ◽  
The Impact

The banking sector had long been left at the fringes of China's reform policies. Major initiatives of the 1990 and early 2000s helped to balance the need for modernization and internationalization with the objective of preserving political control. When the Global Financial Crisis (GFC) erupted in 2007, it hit the Chinese economy but predominantly in its export sector and much less in its financial sector. Yet when exports collapsed and factories closed in the winter of 2008/2009, the Chinese leadership implemented an ambitious stimulus program and used its leverage over the financial sector to re-start economic growth. These factors – GFC and domestic stimulus – created a series of intended and unintended outcomes. Financial reform in China entered a new stage signalling a profound change in China's banking sector. These changes follow two sometimes contradictive, sometimes mutually reinforcing reform dynamics of top-down policies and bottom-up innovation. In this article we follow an institutional approach and discuss the intensified participation of China's big banks in the Go Out strategy, followed by a shift in the pattern of lending. One factor in this change is the rise of shadow banking and particularly an explosive growth in internet-based financial services. Thus, while the initial reaction to the GFC re-emphasized direct, top-down state involvement in the banking sector, the outcomes of the GFC, China's policies and business innovations have facilitated profound bottom-up changes.

scholarly journals Systemic Risk Contribution and Contagion of Industrial Sectors in China: From the Global Financial Crisis to the COVID-19 Pandemic

2021 ◽  
Vol 2021 ◽  
pp. 1-16
Author(s):  
Jianxu Liu ◽  
Yangnan Cheng ◽  
Yefan Zhou ◽  
Xiaoqing Li ◽  
Hongyu Kang ◽  
...  
Keyword(s):  
Financial Crisis ◽  
Stock Market ◽  
Systemic Risk ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Spillover Effect ◽  
Industrial Sectors ◽  
Risk Contribution ◽  
The Global Financial Crisis ◽  
Over Time

This paper investigates the risk contribution of 29 industrial sectors to the China stock market by using one-factor with Durante generator copulas (FDG) and component expected shortfall (CES) analyses. Risk contagion between the systemically most important sector and other sectors is examined using a copula-based ∆CoVaR approach. The data cover the 2008 global financial crisis and the beginning of the COVID-19 pandemic. The empirical results show that the banking sector contributed most to systemic risk before and during the global financial crisis. Nonbank finance became equally important in 2020, and the COVID-19 pandemic promoted the position of the computer and pharmaceuticals sectors. The spillover effect diminishes over time, but there remains risk contagion between sectors. The risk spillover trend is consistent with that of systemic risk.

scholarly journals Dividend Announcements of Banking Sector in Gulf Area; Pre, During and Post the Recent Global Financial Crisis

2018 ◽  
Vol 10 (6) ◽  
pp. 20
Author(s):  
Bassam Jaara ◽  
Mahmoud Dalou
Keyword(s):  
Financial Crisis ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Positive Impact ◽  
Emerging Countries ◽  
Share Prices ◽  
Gcc Countries ◽  
Event Study Method ◽  
Dividend Announcements ◽  
The Global Financial Crisis

This research aims to analyze the movement of dividend policy announcements impact on share prices, and the performance of all listed banks in Gulf area pre-during-post the financial crisis. This research has positioned and utilized event study method, and dividend pay-out ratio to evaluate the movements in share prices of two event windows for 65 banks (All listed banks) from 2005 to 2013. The main results for this research showed that there is a strong signaling effect since most of the windows show positive impact of dividend announcements on the CAARS. Likewise, there can be equally significant lifecycle impact since the large banks show different pay out pattern as compared with the small banks. Moreover, there has been steady dividend pay by banks at an average even in the crisis periods. In addition, a proportion of payers have increased as compared to the non-payers over years, which is related to both life cycle and competition theories. The last finding presents that banking sector in the GCC countries have not been affected like other emerging countries during the global financial crisis, because they supported by oil prices.

Global Financial Crisis: Exploring the Special Role of U.S. Banks and Regulations

2016 ◽  
Vol 4 (1) ◽  
Author(s):  
Nabila Nisha
Keyword(s):  
Financial Crisis ◽  
Financial Markets ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Special Role ◽  
Subprime Lending ◽  
International Banking ◽  
The Government ◽  
The Global Financial Crisis

Financial markets have suffered the greatest dislocation following the truly seismic significance of the global financial crisis. Regulators argue that the banking sector played a particularly special role in triggering the causes of the subprime debacle, thereby leading to the occurrence of the global financial crisis. Banks previously functioned as only a financial intermediary, but certain developments in the international banking sector like deregulation, technological progress, consolidation and competition, securitisation and financial innovation, resulted in banks being involved in subprime lending activities and hence, a reason behind the financial turmoil. The aim of this paper is to scrutinise the special role of banks in the global financial crisis and to stress on the need for increased regulation and their implications on the banking sector. The current study will thus contribute to the examination of the salient features of the global financial crisis and provide regulatory suggestions for the banking sector and the government as a whole.

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