Competition and financial stability in European cooperative banks

Fiordelisi, Franco; Mare, Davide Salvatore

doi:10.1016/j.jimonfin.2014.02.008

Cited by 242 publications

(69 citation statements)

References 51 publications

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“…The standard deviation of ROA (SDROAit) that was computed over the full sample as in equation (1), after being tested by Lepetit and Strobel (2013), also provides a lower average RMSE (Root Mean Squared Error) than the rolling moment method. Moreover, our approach in equation (1) has also been used by many works previously (Beck et al, 2013;Cihák and Hesse, 2007;Fiordelisi and Mare, 2014;Fu et al, 2014;Laeven and Levine, 2009) 4 . Because the distribution of the Z-score is highly skewed, we use a natural logarithm of the Z-score (Anginer et al, 2014;Laeven and Levine, 2009).…”

Section: Datamentioning

confidence: 99%

Competition in Dual Markets: Implications for Banking System Stability

2018

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This paper examines the impact of market competition on the stability of Islamic and conventional banks in countries where these banks operate alongside one another. To investigate this issue, we use a sample of 100 Islamic and 390 conventional banks from 19 countries. Our baseline result shows that competition in a dual market erodes banks' stability.The heightened competitive pressure in a dual market encourages banks to engage in excessive risk-taking that can jeopardize their stability. However, the effect of competition is missing for Islamic banks, suggesting their superiority in having religious clients. Although our overall results support the 'competition-fragility' hypothesis, we find that competition can be beneficial for banks, especially at a low to medium competition level. Last, we also find that the adverse impact of competition can be reduced by having high capitalization, especially in the case of a conventional bank. Some policy implications are discussed in the paper. JEL Classifications: D40; G21; G28; Z12

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Section: Datamentioning

confidence: 99%

Competition in Dual Markets: Implications for Banking System Stability

2018

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“…This measure was used in several studies. For example we can quote Fiordelisi and Mare, 2014;Rose andHudgins, 2008, Trujillo-Ponce, 2013. An increase of this ratio indicates that banks are more exposed to liquidity risk since they grant more credit than collects deposit.…”

Section: An Overview On the Evolution Of Liquidity Risk And Bank Perfmentioning

confidence: 99%

Liquidity Risk and Bank Performance: An Empirical Test for Tunisian Banks

Hakimi

Zaghdoudi

2017

BER

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An important part of banking literature was interested in the relationship between credit risk and bank performance. However, only few studies investigated the association between liquidity risk and bank performance. The aim of this paper is to study the effect of liquidity risk on the Tunisian bank performance. To this end, we used a sample of 10 Tunisian banks over the period 1990-2013. By applying panel data method, precisely random effect regression, results show that liquidity risk decreases significantly Tunisian bank performance. Also, findings indicate that international financial crisis and inflation act negatively and significantly on bank performance.

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“…To approximate the stability of banks, the Z-score can be used (as, for instance in Berger et al, 2009;Fiordelisi & Mare, 2014;Capraru et al, 2016). The indicator is estimated as follows:…”

Section: Methodology and Data Descriptionmentioning

confidence: 99%

The evaluation of stability of Czech and Slovak banks

Kočišová

Gavurová

Behún

2018

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Research background: Commercial banks could affect the stability of the whole banking system due to the way they carry out their business activities. The supervision authorities play a key role in protecting banking stability by ensuring banks´ resilience to shocks, ability to recover their position in response to crisis and ultimately the supervision authorities help prevent failure of these banks. Therefore, in recent years' researchers have been trying to define conditions that could guarantee stability of banks. Purpose of the article: This paper aims to describe the methodology used to measure banking stability, namely banking stability index (BSI) and Z-score. In the first part, we present the literature review, then we try to assess the stability in the condition of the Czech Republic and Slovakia during the period 2006-2016. Methods: The BSI is constructed according to the methodology presented by Ghosh (2011), taking into account the main components, which are described by the set of financial indicators of banks. The results according to countries have showed that the tendency of development in the Czech and Slovak banking sector was the same. At the beginning of the analyzed period, the Slovak banks were more stable compared to Czech ones. Since 2009 the situation has been different, where the Czech banks could be considered as more stable compared to Slovak ones. The tendency of development of Z-score in both countries could be considered as the same, without the 2009 year, when the Czech banks significantly strengthened their capitalization, which influenced the development of Z-score. The results of correlation analysis between Z-score and BSI pointed to the fact that there was no high correlation between these two measures, therefore it is appropriate to use both methodologies for stability evaluation.

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Competition and financial stability in European cooperative banks

Cited by 242 publications

References 51 publications

Competition in Dual Markets: Implications for Banking System Stability

Competition in Dual Markets: Implications for Banking System Stability

Liquidity Risk and Bank Performance: An Empirical Test for Tunisian Banks

The evaluation of stability of Czech and Slovak banks

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