Financial Sector Regulation: The Lessons of the Asian Crisis

Brownbridge, Martin; Kirkpatrick, Colin

doi:10.1111/1467-7679.00086

Cited by 35 publications

(20 citation statements)

References 6 publications

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“…Improving the overall macroeconomic stability, the regulation and supervision of local banks as well as the regulatory environment for micro-finance institutions seem to be appropriate policy directions along with encouraging the provision of savings facilities to micro, small and medium sized enterprises (Brownbridge andKirkpatrick 1999, Maimbo andMavrotas 2001).…”

Section: Discussionmentioning

confidence: 99%

“…The financial liberalization experience of many African economies in recent years, although towards the right direction in many cases, seems to suggest that changing the financial structure of an economy is a complicated process which assumes a deep understanding of the entire set of interactions between financial sector reforms and the economy. At the same time, the recent experience of the Asian financial crisis clearly suggests that whilst financial liberalization may be desirable, the process must be correctly regulated (Stiglitz 1999, Brownbridge andKirkpatrick 1999).…”

Section: Introductionmentioning

confidence: 99%

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Savings and financial sector development: panel cointegration evidence from Africa

Kelly

Mavrotas

2008

The European Journal of Finance

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The paper uses different measures of financial sector development for a dynamic heterogeneous panel of 17 African countries to examine the impact of financial sector development on private savings. An innovative econometric methodology is also employed related to a series of cointegration tests within a panel. This is an important contribution since traditional panel data analysis adopted in previous studies suffers from serious heterogeneity bias problems. The empirical results obtained vary considerably among countries in the panel, thus highlighting the importance of using different measures of financial sector development rather than a single indicator. The evidence is rather inconclusive, although in most of the countries in the sample a positive relationship between financial sector development and private savings seems to hold. The empirical analysis also suggests that a change in government savings is offset by an opposite change in private savings in most of the countries in the panel, thus confirming the Ricardian equivalence hypothesis. Liquidity constraints do not seem to play a vital role in most of the African countries in the group, since the relevant coefficient is negative and significant in only a small group of countries.

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Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Savings and financial sector development: panel cointegration evidence from Africa

Kelly

Mavrotas

2008

The European Journal of Finance

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“…For example, Japanese banks were among the largest international lenders to other countries in the Asia-Pacific region, and as a result of their losses suffered in 1997, they were forced to reduce external lending to other countries to comply with capital adequacy requirements(Brownbridge and Kirkpatrick, 1999).3 Chow et al (1997b) highlighted that transactional (short-horizon) exposure can be managed by using financial derivative contracts while economic (long-horizon) exposure can only be managed through operational hedges (e.g. constructing overseas facilities) so that foreign currency inflows and outflows can be matched to reduce the amount of exposed cash flows.432 H. H. Au Yong and R. Faff Downloaded by [University of Newcastle (Australia)] at 17:08 05 October 2014…”

mentioning

confidence: 99%

Asia-Pacific banks risk exposures: pre and post the Asian financial crisis

Yong

Faff

2008

Applied Financial Economics

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In this article, we provide an insight into Asia-Pacific banks’ market, interest rate and exchange rate exposures using a market-based model, pre and post the Asian financial crisis. Our study provides a unique comparative analysis across 10 countries, for both short-horizon and long-horizon risk exposures. Overall, our findings reveal that bank portfolios in countries that are harder hit by the Asian crisis have higher market and short-term interest rate exposures post-crisis. With long-horizon returns, there are a larger number of significant interest rate (IR) and exchange rate (ER) exposures, which are consistent with the prior literature that long-horizon return measures economic exposures that are difficult to hedge. When the long-horizon regressions with an error correction model are carried out, the results obtained support the short-horizon results. Among the country groups, the newly industrialized economies display the greatest sensitivity to IR and ER changes during the post-Asian crisis period. Investigating bank regulation effects, we find evidence that bank portfolios that experience lower restrictions on their activities and ownership, and greater private monitoring have lower market risk.

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“…At the root of the banking crisis in Cameroon was multifaceted government intervention, inadequate management, and a virtual lack of enforcement of banking regulations (Brownbridge and Kirkpatrick, 1999 in the area with deposits of more than 68% of the area total and loan portfolio of more than 78% of the area gross total (Coulter and Abena, 2010).…”

Section: The Evolution Of Microfinance and Mfis In Cameroonmentioning

confidence: 99%