The Effect of Bank Size on Risk Ratios: Implications of Banks’ Performance

Terraza, Virginie

doi:10.1016/s2212-5671(15)01340-4

Cited by 39 publications

(34 citation statements)

References 5 publications

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“…Pradhan & Shrestha [52], Aladawan [2], Bourke [17], Srairi [60], and Bikker & Hu [16] found an empirical positive relationship between bank size and bank profitability, especially in the case of a large size. Yet Terraza [61] empirically supported this significantly positive relationship only for medium sized banks. These findings were questioned by the findings made by Batten and Vinh [5], Kosmidou et al [41] and Boyd and Runkle [19], Berger et al [13], Saddique et al [55].…”

Section: Literature Reviewmentioning

confidence: 97%

The Determinants of Bank Performance: The Case of Tunisian Listed Banks

Chouikh¹,

Blagui²

2017

JFA

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This paper studies the relationship between Tunisian listed banks performance and two types of determinants; internal and external. The internal explanatory variables are: (1) the bank size, (2) privatization, (3) board size, (4) capital-to-assets ratio, and (5) cost of efficiency. The macro-economic (external) exogenous variables are: (1) gross domestic product growth rate and (2) inflation. Our panel-data analyses suggest a statistically significant and negative relationship between bank profitability (endogenous variable) and board size. However, the remaining variables were found to be statistically insignificant. This can be explained by two main sub-hypotheses: (a) state-owned banks included in the sample disturb the statistical significance of the results and (b) the year 2011 is a cut-off point that changed the Tunisian bank performance determinants.

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Section: Literature Reviewmentioning

confidence: 97%

The Determinants of Bank Performance: The Case of Tunisian Listed Banks

Chouikh¹,

Blagui²

2017

JFA

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“…This being said, and knowing that MES estimation was not size dependent, nevertheless, it captured the increase in the small cap volatility during crisis times, which may be interpreted in terms of both capitalization and liquidity availability. Terraza (2015) showed that the capital adequacy degree declined during 2008, but there was an increase in capitalization and liquidity after that except for small banks in 2011 and 2012. In addition, Ding and Sickles (2018) pointed out a positive relation between capital and risk adjustments of large banks that held low capital buffers; however, they pointed out a negative relation between capital and risk adjustments for small banks with low capital buffers.…”

Section: Findings and Discussionmentioning

confidence: 99%

The Leaders, the Laggers, and the “Vulnerables”

Arakelian

Hashem

2020

Risks

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We examine the lead-lag effect between the large and the small capitalization financial institutions by constructing two global weekly rebalanced indices. We focus on the 10% of stocks that “survived” all the rebalancings by remaining constituents of the indices. We sort them according to their systemic importance using the marginal expected shortfall (MES), which measures the individual institutions’ vulnerability over the market, the network based MES, which captures the vulnerability of the risks generated by institutions’ interrelations, and the Bayesian network based MES, which takes into account different network structures among institutions’ interrelations. We also check if the lead-lag effect holds in terms of systemic risk implying systemic risk transmission from the large to the small capitalization, concluding a mixed behavior compared to the index returns. Additionally, we find that all the systemic risk indicators increase their magnitude during the financial crisis.

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“…To account for seasonality effects, we follow Cooper et al (2019) and Terraza (2015) and use the return on total assets (ROA) where total assets are the average of z-score = Equity Total assets + ROA Std. Dev.…”

Section: Stability Variablesmentioning

confidence: 99%

Values-Based and Global Systemically Important Banks: Their Stability and the Impact of Regulatory Changes After the Financial Crisis on it

Schäfer

Utz

2021

Asia-Pac Financ Markets

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We study the financial stability of Values-Based Banks (VBBs) and Global Systemically Important Banks (GSIBs), and how regulatory changes in the aftermath of the financial crisis affected bank stability. These two types of banks allow contrasting an environmental and social impact banking approach to a conventional one. VBBs exhibit significantly higher financial stability before and during the financial crisis. However, regulatory changes in the aftermath of the financial crisis requiring higher capital buffer, have significantly affected GSIBs and rendered the difference in stability levels insignificant.

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The Effect of Bank Size on Risk Ratios: Implications of Banks’ Performance

Cited by 39 publications

References 5 publications

The Determinants of Bank Performance: The Case of Tunisian Listed Banks

The Determinants of Bank Performance: The Case of Tunisian Listed Banks

The Leaders, the Laggers, and the “Vulnerables”

Values-Based and Global Systemically Important Banks: Their Stability and the Impact of Regulatory Changes After the Financial Crisis on it

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