How using derivatives affects bank stability in emerging countries? Evidence from the recent financial crisis

Keffala, Mohamed Rochdi

doi:10.1016/j.ribaf.2015.03.007

Cited by 10 publications

(12 citation statements)

References 26 publications

(24 reference statements)

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“…Some improvements in the value relevance after the adoption of IFRS were increased. To test the impact of derivative usage on bank stability in emerging countries from a sample of 66 banks by GMM model during 2003-2011, Keffala (2015) findings revealed that options and futures affect negatively the stability of banks from emerging countries. Forwards and swaps are not destabilising derivatives.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Regarding literatures on financial derivatives use in banks, much has written on the effect of derivatives usage on banks performance or risks (Reichert and Shyu, 2003;Purnanandam, 2007;Au Yong et al, 2009;Li and Marinč, 2014;Egly and Sun, 2014) but focusing only on developed countries. Although Keffala et al (2012), Keffala (2012), Keffala and De Peretti (2013) and Keffala (2015) merged between recently developed countries and emerging countries in his studies; nevertheless, few papers worked in emerging countries such as Bendob et al (2015) by testing the effect of financial derivatives on banks performance in emerging countries, and Wen-Hsien Tsai (2010) who investigates on the enterprise risk management which has become increasingly important for any organisation while Sufian (2010) and Xiong (2010) talk about the changing of efficiency on enterprise under the technological growing. Hence, the current paper tries to fill this gap by focusing on emerging countries banks.…”

Section: Introductionmentioning

confidence: 99%

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Does the usage of financial derivatives decrease the systemic risks in the GCC banks An empirical study

Bendima

Benbouziane

Bendob

et al. 2019

IJMED

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In the financial markets, the financial institutions and banks use the financial derivatives for hedging against systemic risks, for speculation or/and arbitrage. This study aims to investigate mainly whether the use of financial derivatives makes banks reducing their systemic risks. Using the data of 19 commercial banks from GCC during the period from 2000 to 2013, the main results reveal that the use of financial derivatives decrease banks systemic risks, while the performance indexes effect is not obvious, it differs between a negative and a positive effect. However, banks use derivatives with the increase in off-balance sheet to hedge their risks. Finally, the rise of GDP does not give a safety feeling to managers of banks, so they tend to use derivatives to hedge, in addition, they use them also with the increase in inflation and unemployment rates for hedging purposes.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Does the usage of financial derivatives decrease the systemic risks in the GCC banks An empirical study

Bendima

Benbouziane

Bendob

et al. 2019

IJMED

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“…Additionally, it has been stated in many different studies that there is a positive correlation between low economic growth and financial crises. Moreover, a volatility in the exchange rate and a high current account deficit amount can also be accepted as indicators of these crises [4][5][6].…”

Section: Historical Background Of Financial Crisismentioning

confidence: 99%

“…For example, Jackson [26] analyzed the details of the Asian financial crisis that occurred in 1997 and reached the conclusion that the volatility in the currency exchange rate was the main reason for this crisis. Moreover, Golub et al [4], Keffala [5], and Knights and McCabe [6] determined that the derivatives played a key role in the 2008 global financial crisis. Additionally, Gilchrist et al [27] and Mera and Renaud [28] underlined the importance of the inflation effect on financial crises.…”

Section: A Literature Review Of Global Risks and Financial Crisesmentioning

confidence: 99%

Analyzing the Global Risks for the Financial Crisis after the Great Depression Using Comparative Hybrid Hesitant Fuzzy Decision-Making Models: Policy Recommendations for Sustainable Economic Growth

2018

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The aim of this study is to analyze the effects of global risks on financial crises. For this purpose, five different outstanding crises after the Great Depression of 1929 are taken into the consideration. Additionally, four different dimensions are selected regarding global risk by considering the Global Risk Report. Moreover, the hesitant fuzzy DEMATEL, the hesitant fuzzy VIKOR, and the hesitant fuzzy TOPSIS methodologies are used to reach this objective. We concluded that, with respect to global risks, the industry-based dimension has the highest importance in comparison to other dimensions. In addition, we also identified that the 2010 European debt crisis and the 1982 Latin American debt crisis were the most influenced crises in terms of global risk. The main reason for this is that the macroeconomic problems such as high inflation and unemployment had negative impacts on the industries of these countries. Another important point is that the results of the hesitant fuzzy VIKOR and hesitant fuzzy TOPSIS models are quite different, but they are the most similar when the experts do not reach the consensus. This situation shows that this analysis is quite appropriate with respect to the hesitant approach. While considering these aspects, we recommended that countries should firstly focus on the solutions related to industry level problems in order to minimize the global risk. Owing to this issue, it can be more possible to reach sustainable economic growth in the world.

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“…Risk management may be related to volatility of returns in the sense that its reduction is considered hedge and its increase is called speculation (Szado, 2011;Lins et al, 2011). Several studies (Junior, 2012;Coutinho et al, 2012;Keffala, 2015) have been performed both in Brazil and abroad focusing the investigation on financial risks vis-à-vis the use of derivatives. The motivation for these types of studies comes primarily from constant debates about the derivative markets and examples of recent crises, fraud and significant financial losses worldwide.…”

Section: Introductionmentioning

confidence: 99%

O estudo da influência da estratégia de derivativos no risco das companhias brasileiras

Luqueze

Ribeiro²,

Quaglio

2018

BASE

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Este é um artigo de acesso aberto, licenciado por Creative Commons Atribuição 4.0 Internacional (CC BY 4.0), sendo permitidas reprodução, adaptação e distribuição desde que o autor e a fonte originais sejam creditados. ABSTRACTThis work aims at investigating the influence of hedge approaches on corporate risk by applying an empirical research on derivative strategies by publicly traded Brazilian companies and the association with their risk levels. Many previous studies did not analyze the effects of specific attributes of both derivative strategies and various financial instruments adopted by companies to mitigate their risk. In this paper, these features were considered and, splitting derivative strategies such as currencies and interest rates, the results indicate that the influence of the strategies on the risk is significant. When the total amount of derivatives contracted by firms was deployed in strategies and products, an association between risk and derivative strategies was significant, which may be explained by the peculiarities of foreign currency and interest rates embedded in various financial instruments. This result is consistent with the macroeconomic environment in which Brazilian companies are inserted in view of the frequent exposure to currency risk and interest rate volatility. RESUMOEste trabalho tem como objetivo investigar a influência das abordagens de hedge no risco corporativo, aplicando uma pesquisa empírica sobre estratégias de derivativos por empresas brasileiras de capital aberto e a associação com seus níveis de risco. Muitos estudos anteriores não analisaram os efeitos de atributos específicos de estratégias de derivativos e os vários instrumentos financeiros adotados pelas empresas para mitigar seu risco. Neste artigo, essas características foram consideradas e, ao separar estratégias de hedge tais como moedas e taxas de juros, os resultados indicam que a influência dessas estratégias sobre o risco é significativa. Quando o montante total de derivativos contratados pelas empresas foi segregado em modalidades e produtos, uma associação entre estratégias de risco e derivativos foi significativa, o que pode ser explicado pelas peculiaridades de moeda estrangeira e taxas de juros embutidas Palavras chave: derivativos financeiros, risco corporativo, companhias brasileiras, alternativas de hedge, análise de dados em painel, estratégia de derivativos, efeitos de risco.

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How using derivatives affects bank stability in emerging countries? Evidence from the recent financial crisis

Cited by 10 publications

References 26 publications

Does the usage of financial derivatives decrease the systemic risks in the GCC banks An empirical study

Does the usage of financial derivatives decrease the systemic risks in the GCC banks An empirical study

Analyzing the Global Risks for the Financial Crisis after the Great Depression Using Comparative Hybrid Hesitant Fuzzy Decision-Making Models: Policy Recommendations for Sustainable Economic Growth

O estudo da influência da estratégia de derivativos no risco das companhias brasileiras

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