Government Intervention and Bank Market Power: Lessons from the Global Financial Crisis for the COVID-19 Crisis

2020 ◽  
Author(s):  
Brandon Tan ◽  
Deniz Igan ◽  
Maria Soledad Martinez Peria ◽  
Nicola Pierri ◽  
Andrea Presbitero
Keyword(s):  
Financial Crisis ◽  
Market Power ◽  
Global Financial Crisis ◽  
Government Intervention ◽  
The Global Financial Crisis

scholarly journals Does higher market power necessarily reduce efficiency? Evidence from Chinese rice processing enterprises

2020 ◽  
pp. 1-15
Author(s):  
Jiawu Dai ◽  
Yuchen Feng ◽  
Xiuqing Wang ◽  
Guang Yuan
Keyword(s):  
Financial Crisis ◽  
Market Power ◽  
Cost Efficiency ◽  
Global Financial Crisis ◽  
Least Squares Method ◽  
Stochastic Frontier ◽  
Ordinary Least Squares ◽  
The Global Financial Crisis ◽  
Stochastic Frontier Cost Function ◽  
Rice Processing

This study evaluates the market power and cost efficiency of China’s rice processing firms through a stochastic frontier cost function. The effect of market power on cost efficiency is tested using the two-stage ordinary least squares method and a Hausman-Taylor type instrumental variable. On average, firms in the industry have weak market power but high cost efficiency, which has been declining since the 2008 global financial crisis. Firms with stronger market power exhibit higher cost efficiency, contradicting the quiet life hypothesis. This effect is more significant for firms with weaker market power after the global financial crisis. The enhancement of market power may help save resources for improving management and efficiency for Chinese rice processing industry.

scholarly journals Government intervention and bank markups: Lessons from the global financial crisis for the COVID-19 crisis

2021 ◽  
pp. 106320
Author(s):  
Brandon Tan ◽  
Deniz Igan ◽  
Maria Soledad Martinez Peria ◽  
Nicola Pierri ◽  
Andrea F. Presbitero
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
Government Intervention ◽  
The Global Financial Crisis

scholarly journals Changes to the Regulatory Framework of the Chinese Rare Earth Industry after the Global Financial Crisis

2017 ◽  
Vol 35 (1) ◽  
pp. 31-51
Author(s):  
Roland Howanietz
Keyword(s):  
Rare Earth ◽  
Financial Crisis ◽  
Market Power ◽  
Global Financial Crisis ◽  
Regulatory Framework ◽  
Chinese Government ◽  
Restrictive Trade ◽  
Global Welfare ◽  
The Global Financial Crisis ◽  
The Impact

In the wake of the Global Financial Crisis, the Chinese government radically adjusted the regulatory framework of the domestic Rare Earth Elements (REEs) sector. This article investigates the reasons for regulatory adjustments and the impact on China's market power. The analysis of long-term REEs price and production trends illustrates four reasons for regulatory adjustments: the China discount, the need for industrial upgrading, growing domestic REEs demand and severe environmental pollution. The analysis of the effects of regulations shows that the restrictive trade regime has increased China's market power and ability to affect prices, which led to a redistribution of global welfare in favour of China. However, this market power is only temporary due to foreign countermeasures such as WTO-based allegations.

scholarly journals Government Intervention and Bank Market Power

2020 ◽  
Vol 20 (275) ◽  
Author(s):  
Brandon Tan ◽  
Maria Martinez Peria ◽  
Nicola Pierri ◽  
Andrea Presbitero
Keyword(s):  
Financial Crisis ◽  
Market Power ◽  
Global Financial Crisis ◽  
Banking Industry ◽  
Significant Decline ◽  
Similar Increase ◽  
Matching Method ◽  
Government Interventions ◽  
The Global Financial Crisis ◽  
Shed Light

The COVID-19 pandemic could result in large government interventions in the banking industry. To shed light on the possible consequences on market power, we rely on the experience of the global financial crisis and exploit granular data on government interventions in more than 800 banks across 27 countries between 2007 and 2017. For identification, we use a multivariate matching method. We find that intervened banks experience a significant decline in market power with respect to matched non-intervened banks. This effect is more pronounced for larger and longer interventions and is driven by a rise in costs—mostly because of higher loan impairment charges—which is not followed by a similar increase in prices.

On the formation of a New Paradigm of fiscal Policy

2013 ◽  
pp. 152-158 ◽  
Author(s):  
V. Senchagov
Keyword(s):  
Public Finance ◽  
Fiscal Policy ◽  
Financial Crisis ◽  
Global Financial Crisis ◽  
Domestic Demand ◽  
Real Economy ◽  
New Paradigm ◽  
Monetary Aggregate ◽  
The Past ◽  
The Global Financial Crisis

Due to Russia’s exit from the global financial crisis, the fiscal policy of withdrawing windfall spending has exhausted its potential. It is important to refocus public finance to the real economy and the expansion of domestic demand. For this goal there is sufficient, but not realized financial potential. The increase in fiscal spending in these areas is unlikely to lead to higher inflation, given its actual trend in the past decade relative to M2 monetary aggregate, but will directly affect the investment component of many underdeveloped sectors, as well as the volume of domestic production and consumer demand.

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