Regulations, competition and bank risk-taking in transition countries

Agoraki, Maria‐Eleni K.; Delis, Manthos D.; Pasiouras, Fotios

doi:10.1016/j.jfs.2009.08.002

Cited by 532 publications

(473 citation statements)

References 47 publications

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“…One study that supports this theory is the research conducted by Yeyati and Micco (2007), who state that in the banking sector of 8 Latin countries there was evidence of a positive relationship between competition and financial stability. In addition, the study by Arogaki et al (2011) also found evidence in the countries of Central and Eastern Europe that supports the idea that competition in the banking industry can improve stability. The research conducted by Boyd et al (2006) also came to the same conclusion, using samples from the United States and 134 other countries.…”

Section: Literature Reviewmentioning

confidence: 52%

Competition and Cooperation in Economics and Business

Husodo¹,

Gitaharie²,

Gani³

et al. 2017

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Although all care is taken to ensure integrity and the quality of this publication and the information herein, no responsibility is assumed by the publishers nor the author for any damage to the property or persons as a result of operation or use of this publication and/or the information contained herein. Business -Gani et al. (Eds) © 2018 Taylor & Francis Group, London, ISBN 978-1-138-62666-9 v Business -Gani et al. (Eds) © 2018 Taylor & Francis Group, London, ISBN 978-1-138-62666-9 ix Preface This book is one of the five volumes of proceedings that provides an opportunity for readers to engage with selected papers presented at the 1st Asia-Pacific Forum for Research in Social Sciences and Humanities (1st APRISH) conference held in Depok (Indonesia) on November 7-9, 2016. Quoting the theme of the conference "Competition and Cooperation in the Globalized World," this book would be a valuable contribution to get a better understanding of the future global challenges. Readers will find a broad range of research reports on topics ranging from globalization, poverty, population and some macroprudential perspectives on managing the risk of a more integrated world. One of the unique and valuable dimensions of this conference is the capability for blending the chemistries among educators, students, and researchers from around the world to discuss globalization in a broad spectrum. The reader will discover both common challenges and creative solutions emerge from very diverse settings. The relevance of the conference's theme, towards an evidence-based society, for a variety of disciplines, is reflected in the diverse range of papers that have been submitted for publication. These serve to demonstrate the natural attraction of the conference for sharing ideas and findings within an international community. Overall, the conference was undoubtedly very successful. Plenary lectures and presentations were successfully bridging the gap between the different fields of social sciences, making it possible for non-experts in a given area to gain insight into new areas. Also, among the speakers there were some young scientists, namely, doctoral, master's and undergraduate students, who bring new perspectives to their fields. Terms of use: Documents in EconStor may Competition and Cooperation in Economics and Competition and Cooperation in Economics andThe editors would like to thank all those who have contributed to submit full papers for this conference. We rece...

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Section: Literature Reviewmentioning

confidence: 52%

Competition and Cooperation in Economics and Business

Husodo¹,

Gitaharie²,

Gani³

et al. 2017

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“…Several authors (Rime, 2001;Lin et al, 2005;Altunbas et al, 2007;Leaven and Levine, 2009) revealed that regulatory capital (CAR) is positively associated with bank risk. In contrast, others found an inverse relationship between regulatory capital and bank risk (Ho and Hsu, 2010;Agoraki et al, 2011;Lee and Chih, 2013). These studies support the -Moral hazard hypothesis (MHH),‖ which holds that banks with strong regulatory capital can absorb higher risk.…”

Section: Capital Adequacy Ratiomentioning

confidence: 61%

“…The Capital Adequacy Ratio (CAR) in Models I and II are negatively associated with bank default risk (NPLR) and are statistically significant (p<.01), similar to Ho and Hsu (2010); Agoraki et al (2011); Lee and Hsieh (2013);…”

Section: Baseline Modelsmentioning

confidence: 92%

Bank Disclosures and their Impact on Credit Risk: Evidence from Bangladesh

Zheng

Sarker

Nahar

2017

Asian Economic and Financial Review

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Article History JEL ClassificationC12; C23; G21; G32.The only way to ensure a well-informed response to bank risks is by ensuring transparent disclosures that flourish with potential synergy. This study investigates the impact of bank disclosures on credit risk where panel data are used. PCSE and FGLS regression models are applied to a sample of 32 commercial banks in Bangladesh from 2010 to 2014. The results reveal that bank disclosures index, non-sponsor ownership and advances to total assets are inversely associated with bank risk, whereas government ownership, capital adequacy ratio and tier 1 capital have a positive effect. The study's findings have a twofold implication for the national economy. First, the higher number of disclosures portrays a transparent image in users' minds that decreases stock volatility and the cost of capital. Second, policy makers should rethink government ownership with respect to the absorption of serious risk. Therefore, it is highly recommended either to denationalize or to reduce government ownership. Contribution/ Originality:This study is one of very few studies which have investigated the relationship between bank disclosures and credit risk in the developing country context. It found that bank credit policies are tremendously affected by the government ownership. Thus, this paper will contribute to the research related to credit risk management.

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“…Indeed, these authors showed that most regulators encourage banks to increase their capital compared to the risk level. However, the relationship between equity to total assets ratio and bank risk was found to be negative (Jahankhani and Lynge, 1980;Brewer and Lee, 1986;Karels et al, 1989;Jacques and Nigro, 1997;Bolt and Tieman, 2004;Agusman et al, 2008;Agoraki et al, 2011;Lee and Hsieh, 2013). Bolt and Tieman (2004) argued that capital requirement is a strict criterion for supplying loans.…”

Section: Bank Capital and Riskmentioning

confidence: 99%

“…Therefore, an institution with high level of capital find in its interest to take less risk. According to Agoraki et al (2011), banks holding more capital are less exposed to risk, but high market power may increase bank risk. Demirgüç-Kunt and Kane (2002) showed that a negative relationship between capital and risk is referred to the moral hazard hypothesis, which stipulates that undercapitalised banks take on excessive risk to exploit existing flat deposit insurance schemes.…”

Section: Bank Capital and Riskmentioning

confidence: 99%

Bank capital, profitability and risk in BRICS banking industry

Jabra

Mighri

Mansouri

2017

GBER

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This paper analyses the relationship between bank capital, risk and profitability for the BRICS banking industry data from 2004 to 2012. We use a dynamic panel data model based on two-step GMM estimation procedure. For the sake of analysis, we differentiate between before and after crisis periods in order to highlight the impact of financial crisis on clearing up the above relationship. The main empirical results are summarised as follows: 1) capital and risk are significantly and negatively related, while capital and profitability are significantly and positively linked; 2) bank capital has the greatest positive impact on ROE measure of profitability for investment banks; 3) BRICS investment banks are likely associated with a more sound financial supervision and technology; 4) regulatory quality and institutional developments are dependent upon differences in profitability and risk; 5) Results also provide evidence that financial crisis affects considerably the relationship between capital, risk and profitability. 90W. Ben Jabra et al.

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Regulations, competition and bank risk-taking in transition countries

Cited by 532 publications

References 47 publications

Competition and Cooperation in Economics and Business

Competition and Cooperation in Economics and Business

Bank Disclosures and their Impact on Credit Risk: Evidence from Bangladesh

Bank capital, profitability and risk in BRICS banking industry

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