Effects of Economic Freedom on Bank Profit Beta-Convergence in ASEAN-5 Banking Sectors

Abstract

Following the inauguration of the ASEAN Banking Integration Framework (ABIF), ASEAN members are expected to step up their efforts to liberalize their banking sectors to facilitate a higher level of integration among themselves and with the global banking system. This increased integration is expected to foster the convergence of profitability among ASEAN banks as competition abounds in the banking sectors from domestic banks' exposure to their fellow ASEAN rivals. From a revenue perspective, stronger rivalry following higher economic freedom through liberalization will cause the demand curve for banking outputs to be more elastic, which then

Stock Market Linkage between China and ASEAN-6 Countries: Integration Perspective

“…The higher the integration of the stock market, the closer the correlation between capital flows and price changes among various markets. Many articles empirically studied the co-movement of stock prices across international financial markets, such as those by Gopalan et al (2023), Haini (2020), Le et al (2023), Sriyana and Afandi (2020), Yap et al (2020), andYildirim et al (2021).…”

Are stress‐tested banks in the United States becoming similar? Evidence from convergence tests

“…First, our analysis extends the literature on the convergence of various bank performance indicators with respect to financial market integration after regulatory changes. Following studies on the convergence of bank performance by Evans et al (2008), Mamatzakis et al (2008), Weill (2009, Casu and Girardone (2010), Goddard et al (2013), Kasman and Kasman (2013), Andrieş and Căpraru (2014), Matousek et al (2015), Carvallo and Kasman (2017), Thota andSubrahmanyam (2020), andYap et al (2020), among many others, we evaluate the extent to which bank profitability, risk taking, and systemic risk contributions converge among stress-tested banks after the implementation of stress tests in the United States. 3 Second, our study complements the literature on stress testing as previous research provides evidence of the reduced riskiness of banks participating in stress tests (Acharya et al, 2018;Cornett et al, 2020;Sahin et al, 2020).…”