Bank Regulation, the Quality of Institutions, and Banking Risk in Emerging and Developing Countries: An Empirical Analysis

Klomp, Jeroen; Haan, Jakob de

doi:10.1080/1540496x.2014.1013874

Cited by 105 publications

(70 citation statements)

References 40 publications

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“…Using data of almost 200 banks from OECD countries for the period of 2002 to 2008, Klomp and de Haan (2012) show that while bank regulation has little impact on risk taking by low-risk banks, it significantly alters the behavior of high-risk banks. Similar results are reported by Klomp and de Haan (2014) for a sample of emerging and developing countries.…”

Section: Literature Review Contribution and Hypothesissupporting

confidence: 90%

Supervisory powers and bank risk taking

Shehzad

Haan

2015

Journal of International Financial Markets, Institutions and Mo

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a b s t r a c tWe examine the effect of different types of bank supervisory powers in place before the crisis on bank risk-taking during the crisis. We employ data of more than 8000 banks from high-income OECD countries for the 2007-2011 period and impaired loans to gross loans ratio as proxy for bank risk-taking. Our Hausman-Taylor estimates indicate that the powers of bank supervisors to shake up the organizational structure of banks are more effective than powers to issue monetary penalties. Our results also suggest that supervisory powers do not affect risk-taking behavior of systemically important banks.

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Section: Literature Review Contribution and Hypothesissupporting

confidence: 90%

Supervisory powers and bank risk taking

Shehzad

Haan

2015

Journal of International Financial Markets, Institutions and Mo

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“…Recent studies find that banking regulation improves bank performance and stability, including a decline in NPLs in many emerging economies (see, e.g. Fu, Lin, and Molyneux 2014; Klomp and de Haan 2014;Neyapti and Dincer 2014;Ozkan, Balsari, and Varan 2014). Higher levels of bank regulation may decrease bank competition, thereby improving the stability of the banking system, which supports the evidence reported by Cao and Shi (2001) and Riordan (1993).…”

Section: Literature Review and Hypothesis Developmentsupporting

confidence: 60%

Real estate investments and financial stability: evidence from regional commercial banks in China

Zhang

Cai

Liu

et al. 2016

The European Journal of Finance

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The 2008 US subprime mortgage crisis demonstrated how developments in real estate markets can cause instability in the banking sector and raised concerns in many emerging economies with significant real estate development and a rapidly growing commercial banking sector, particularly in China. There is clear evidence that commercial banks in China, especially regional commercial banks, have lent significantly to the real estate sector. The recent slowdown in the housing market in China and the increase in nonperforming loans (NPLs) in China's commercial banking sector motivated us to investigate the connection between real estate markets and banking stability. This paper proposes three testable hypotheses linking the growth of investment in real estate and the stability of regional commercial banks in China, measured by NPLs. Our empirical results reveal a close connection between the growth of investment in real estate and the NPLs among regional commercial banks, and its sensitivity to real estate market cycles. When real estate market activity declines, our results suggest, regional commercial banks can find themselves in trouble if they have significant exposure to one type of (real estate) asset. In addition, we find that regional bank competition plays a critical role in defining the relationship between bank stability and real estate investment activity. ARTICLE HISTORY

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“…Many studies has highlighted about the role of good national governance in reducing banks risk which can be aligned with the supporting sources for the last two hypothesizes. The findings are aligned with the study of Williams [12], Klomp and de Haan [69]. Specifically, Levine [70] clearly emphasizes about the vital role of legal system and transparent legal environment in the development of economics: the more clear and unambiguous legal environment, the more sustainability and improvement in business cycle.…”

Section: Independent Variablessupporting

confidence: 56%

Financial Fragility of Banks In Vietnam: The Role of Revenue Diversification and National Governance Quality

2018

EEHSS-18 June 10-11, 2018 Ho Chi Minh City (Vietnam)

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Abstract-This paper investigates the effects of revenue diversification and national governance quality on the financial fragility of 31 commercial banks in Vietnam over the period 2005 -2016. By using an unbalanced panel data and employing GMM estimator, this study"s empirical findings show that an increase in revenue diversification is associated with a rise in bank financial fragility. Meanwhile, a higher in national governance quality drives to lower in financial fragility of Vietnam banks. This study analyses further from the interaction between diversification and national governance quality indicators show that most indicators of Vietnam governance quality tend to play an important role in relationship between diversification and bank financial fragility.

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Bank Regulation, the Quality of Institutions, and Banking Risk in Emerging and Developing Countries: An Empirical Analysis

Cited by 105 publications

References 40 publications

Supervisory powers and bank risk taking

Supervisory powers and bank risk taking

Real estate investments and financial stability: evidence from regional commercial banks in China

Financial Fragility of Banks In Vietnam: The Role of Revenue Diversification and National Governance Quality

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