The Impact of Public Guarantees on Bank Risk-Taking: Evidence from a Natural Experiment*

The financial crisis of 2007-09 was converted the focus of researchers and regulators toward bank risk-taking and this study is also analyzed the private ownership structure impact on Pakistani bank’s risk-taking. This study selects the all Pakistani private banks for investigation and data is collected from financial statements from 2005 to 2016. Most of the past studies found a negative impact of private ownership structure on bank risk-taking and this study is also indicated the negative relationship between private ownership and bank risk-taking. On the other, non-performing loans are double than the international standards that highlighted the owner’s attention toward high risky investments for high return. Thus, this study suggests that check this relationship with other factors that forced the owner’s behavior toward risk.

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Corruption and Government Intervention on Bank Risk-Taking: Cases of Asian Countries

Jurnal Dinamika Manajemen ◽

10.15294/jdm.v9i2.15951 ◽

2018 ◽

Vol 9 (2) ◽

pp. 228-237

Author(s):

Rizky Maulana Nurhidayat ◽

Rofikoh Rokhim

Keyword(s):

South Korea ◽

Risk Taking ◽

Government Intervention ◽

The Other ◽

Bank Risk ◽

Asian Countries ◽

Dummy Variables ◽

Macroeconomic Variables ◽

Using Data ◽

The Impact

This paper aims to addresses the impact of corruption, anti-corruption commission, and government intervention on bank’s risk-taking using banks in Asian Countries such as Indonesia, Malaysia, Thailand, and South of Korea during the period 1995-2016. This paper uses corruption variable, bank-specific variables, macroeconomic variables, dummy variables and interaction variable to estimate bank’s risk-taking variable. Using data from 76 banks in Indonesia, Malaysia, Thailand and South Korea over 21 years, this research finds consistent evidence that higher level of corruption and government intervention in crisis-situation will increase the risk-taking behaviour of banks. In the other hand, bank risk-taking behaviour minimized by the existence of anti-corruption commission. In addition, this paper also finds that government intervention amplifies corruption’s effect on bank’s risk-taking behaviour because of strong signs of moral hazard and weaknesses in the governance and supervision.

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The Impact of Ownership and Regulations on Bank Risk-Taking: Evidence from the Middle East and North Africa (MENA) Region

SSRN Electronic Journal ◽

10.2139/ssrn.2531350 ◽

2014 ◽

Author(s):

Faizul Haque

Keyword(s):

Middle East ◽

North Africa ◽

Risk Taking ◽

Bank Risk ◽

Mena Region ◽

The Impact

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Capital regulation, competition and risk-taking behavior of Indian banks in a simultaneous approach

Managerial Finance ◽

10.1108/mf-09-2017-0340 ◽

2018 ◽

Vol 44 (4) ◽

pp. 459-477 ◽

Cited By ~ 2

Author(s):

Santi Gopal Maji ◽

Preeti Hazarika

Keyword(s):

Human Capital ◽

Risk Taking ◽

Value Added ◽

Capital Adequacy ◽

Bank Risk ◽

Capital Regulation ◽

Content Type ◽

Risk Taking Behavior ◽

Indian Banks ◽

The Impact

Purpose The purpose of this paper is to investigate the association between capital regulation and risk-taking behavior of Indian banks after incorporating the influence of competition. Further, the study intends to enrich the existing literature by providing empirical evidence on the role of human resources in managing risk along with the influence of other bank specific and macroeconomic variables. Design/methodology/approach Secondary data on 39 listed Indian commercial banks are collected from “Capitaline Plus” corporate data database for a period of 15 years. Capital is measured by capital adequacy ratio as defined by the regulators, and two definitions of risk – credit risk and insolvency risk – are employed. Competition is measured by Herfindahl-Hirschman deposits index, concentration ratio and H-statistic. The value-added intellectual coefficient model is employed to compute human capital efficiency (HCE). Three-stage least squares technique in a simultaneous equation framework is used to estimate the coefficients. Findings The study finds that absolute level of regulatory capital and bank risk are positively associated, although the influence of capital on risk is not statistically significant. The influence of competition on risk is negative for all the models, which supports the “competition stability” view. The impact of human capital on bank risk is also negative for all cases. Practical implications The findings of the study are useful for the decision makers in several ways based on the inverse influence of competition and HCE on bank risk. Further, the observed positive association between capital and risk indicates that the capital regulation is not sufficient to enhance the stability in the banking sector. Originality/value This is the first study in the Indian context that incorporates the competition in the banking industry as an explanatory variable in the extant bank capital and risk relationship.

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