Does a one-size-fits-all approach to financial regulations alleviate default risk? The case of dual banking systems

Rizwan, Muhammad; Moinuddin, Muhammad; L’Huillier, Barbara; Ashraf, Dawood

doi:10.1007/s11149-017-9340-z

Cited by 12 publications

(9 citation statements)

References 86 publications

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“…Literature shows that, in dual-banking systems, different regulatory policies have a varying impact on conventional and Islamic banks ( Rizwan et al, 2017 ). Due to the engagement of Islamic banks in asset-backed financing in risk-sharing modes, studies found mixed evidence on the effect of the GFC on Islamic banks relative to conventional banks.…”

Section: Systemic Risk: a Review Of The Literaturementioning

confidence: 99%

Systemic risk, Islamic banks, and the COVID-19 pandemic: An empirical investigation

Rizwan

Ahmad

Ashraf

2022

Emerging Markets Review

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Section: Systemic Risk: a Review Of The Literaturementioning

confidence: 99%

Systemic risk, Islamic banks, and the COVID-19 pandemic: An empirical investigation

Rizwan

Ahmad

Ashraf

2022

Emerging Markets Review

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“…Johnston (2013) takes the United States as an example to illustrate that seeking efficiency without concentrating on regulation will lead to increasing deregulation and ultimately have numerous adverse effects. Financial regulations are established to reduce financial and economic instability without jeopardizing the economic contributions of financing institution to economic development (Rizwan et al, 2018). Financial regulation will not distort or stifle behaviors that are beneficial to enterprises' long-term operations.…”

Section: Literature Reviewmentioning

confidence: 99%

“…The reasons why the efficiency scores of financing and R&D in SMEs in coastal and non-coastal areas of China increased after adding the intensity of financial regulation are as follows. Firstly, effective financial regulation could maintain financial stability (Rizwan et al, 2018;Jungo et al, 2022). By supervising the activities of financial institutions and enterprises, it is possible to prevent the financial system from being disordered and improve the efficiency of resource allocation (Badertscher et al, 2013;Shroff et al, 2017).…”

Section: The Influence Of Financial Regulation On the Efficiency Of I...mentioning

confidence: 99%

THE EFFICIENCY OF FINANCING AND R&D IN TECHNOLOGY-BASED SMES AND IMPACT OF FINANCIAL REGULATION

Feng

Zhang

Chiu

et al. 2022

Technological and Economic Development of Economy

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Technological innovation is a long-term activity with highly unpredictable returns on investment, which makes SMEs with information problems and lack of collateral value be vulnerable to financing constraints when engaging in innovation activities. This study incorporates financing and R&D activities into the evaluation of innovation efficiency and further considers the impact of financial regulation as an external factor in technology-based SMEs in China. This study puts forward a three-stage dynamic DDF-DEA model to explore the overall innovation efficiency as well as the efficiency of each stage in technology-based SMEs by dividing the innovation process into three stages, namely the financing stage, R&D stage and operating stage. The study reveals that the overall efficiency of innovation are higher in non-coastal areas of China than in coastal areas. Non-coastal regions have higher efficiency in the financing and operating stages, while coastal regions have higher efficiency in the R&D stage. Strengthening financial regulation could improve the financing and R&D efficiency both in coastal and non-coastal areas, but it has different effect on the operating efficiency in coastal and non-coastal areas. The results of this study could provide some reference for China and other emerging economies to formulate policies in improving the efficiency of financing and R&D.

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“…Rizwan, Moinuddin, L'Huillier, and Ashraf (2017) examined the impact of financial regulations on the financial stability of conventional and Islamic banks in 15 countries over the period 2000-2015. They found that the financial regulations have different impacts on the default risk of Islamic and conventional banks.…”

Section: Empirical Evidence On Banks' Solvencymentioning

confidence: 99%

Impacts of Inflation and Interest Rate Uncertainty on Performance and Solvency of Conventional and Islamic Banks in Pakistan

Rashid

Khalid²

2017

J. Islam. bus. manag.

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Abstract. This paper examines the effects of inflation and real interest rate uncertainty on the performance and solvency of banks in Pakistan. It also examines whether the effect of both types of uncertainty differs for conventional and Islamic banks. Annual data covering the period 2008-2015 for a sample of 25 banks are used to carry out the empirical analysis. Generalized Least Square (GLS) estimator is applied to overcome the problem of heteroscedasticity. The results indicate that several bank-specific variables are important in determining the performance and solvency of banks operating in Pakistan. The results also show that these variables have considerable differential impacts on the financial performance and solvency of both conventional and Islamic banks. With regard to the effects of macroeconomic variables, the results show that the rate of inflation, the interest rate, and their volatility also have quite different effects on the performance and solvency of conventional and Islamic banks. We find that although neither inflation nor interest rate uncertainty significantly affect the solvency of conventional banks, the solvency of Islamic banks is significantly affected by both types of uncertainty. Specifically, we find that inflation uncertainty has a negative, whereas, the uncertainty associated with the real interest rate has a significant positive impact on the solvency of Islamic banks. However, both types of uncertainty have a statistically insignificant effect on the financial performance of both conventional and Islamic banks in Pakistan. Providing significance evidence on the bank-specific empirical determinants, our analysis helps bank managers to improve their banks' financial performance and solvency. Further, our findings are helpful for understanding how the financial performance and financial soundness of conventional and Islamic banks are determined during periods of heightened inflation and real interest rate uncertainty.

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Does a one-size-fits-all approach to financial regulations alleviate default risk? The case of dual banking systems

Cited by 12 publications

References 86 publications

Systemic risk, Islamic banks, and the COVID-19 pandemic: An empirical investigation

Systemic risk, Islamic banks, and the COVID-19 pandemic: An empirical investigation

THE EFFICIENCY OF FINANCING AND R&D IN TECHNOLOGY-BASED SMES AND IMPACT OF FINANCIAL REGULATION

Impacts of Inflation and Interest Rate Uncertainty on Performance and Solvency of Conventional and Islamic Banks in Pakistan

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