The Effect of Financial Markets Development on Bank Risk: Evidence from Southeast Asian Countries

Vithessonthi, Chaiporn

doi:10.2139/ssrn.2444104

Cited by 5 publications

(7 citation statements)

References 92 publications

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“…Therefore, both financial structure and financial development affect banking fragility. Vithessonthi (2014) studied the influence of financial development on risk of 52 banks (measured by bank capital and revenue diversification) in five South East Asian countries during the period between 1990 and 2012. His empirical results indicated that financial development tends to increase bank risk; in particular, the financial development is negatively related to bank capital in the period after the Asian financial crisis, and positively related to bank revenue diversification.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Köhle (2012) concluded that when the growth of credit to private sector exceeds GDP growth, bank risk increases. Vithessonthi (2014) found that the development of banking sector, also estimated by the growth in domestic credit to private sector, is positively related to bank risk, which can be hypothesized as follows:…”

Section: Bank Sector Development (Bsd)mentioning

confidence: 99%

“…The market cap variable represents the depth of stock markets and indicates the extent to which stock markets in a country are well developed. Vithessonthi (2014) suggested that increased stock market development will lead to a drop in capital to total risk-weighted assets, i.e. increasing bank risk.…”

Section: Stock Market Development (Smd)mentioning

confidence: 99%

“…Literature identifies various determinants of bank risk, including bank-specific variables and macroeconomic variables (Louzis et al, 2012;Poghosyan & Čihak, 2011;Baselga-Pascual et al, 2015;Vithessonthi, 2014), the effects of both of which are to be investigated in this paper on risk of commercial banks in six Southeast Asian countries in the context of the recent global financial crisis. The paper is structured as follows.…”

Section: Introductionmentioning

confidence: 99%

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Factors Affecting Bank Risk-Taking: Evidence from Southeast Asian Countries

Son¹,

Thanh²,

Trung³

2016

JABES

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In this paper we use a dynamic panel data model (system GMM estimator) to analyze bank-specific and macroeconomic determinants of bank risk as measured by the Z-score of 70 listed commercial banks operating in six Southeast Asian countries over the period from 2005 to 2013. Our results indicate that asset structure, capitalization, size, and the stock market development are negatively and significantly related to bank risk, which is, in turn, positively related to efficiency, revenue diversification, and the banking system development.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Bank Sector Development (Bsd)mentioning

confidence: 99%

Section: Stock Market Development (Smd)mentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Factors Affecting Bank Risk-Taking: Evidence from Southeast Asian Countries

Son¹,

Thanh²,

Trung³

2016

JABES

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“…For financial market development estimation, two measures are employed, including stock market development (Marketcapit) and banking sector development (DCRit) (Vithessonthi, 2014). While we compute the former using total market capitalization as a ratio to GDP, the latter is measured by the ratio of private credit from the banking system to GDP.…”

mentioning

confidence: 99%

Financial Market Development and Risk of Commercial Banking Operation in Vietnam

Khanh¹,

Son²

2016

JABES

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Banks, non-bank companies and stock exchange: do we know the relationship?

Ghimire¹,

Gautam

Karki³

et al. 2015

EBR

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e complex relationship between intrinsic and extrinsic rewards Orni Gov Improvement of the communication between teachers and students in the coaching programme and in a process of action research Review, Vol. 1 (15), No. 4, 2015: 25-45 DOI: 10.18559/ebr.2015Abstract : This paper investigates the role played by the banking sector in founding, sustaining and developing stock exchange markets. The paper has constructed data on market capitalisation separately for banks and non-bank companies. We apply cointegration techniques developed by Engle and Granger [1987] and Johansen [1988] and we bootstrap the variables to examine the nature of relationship between the banks and stock markets. We found that banks have played an important role in the development of stock exchanges. Further, the empirical analysis made amongst ten developed and developing exchanges suggests a listing of non-bank companies important for development of stock markets. These findings have also been verified by analysing the data of an exchange not included in the test.

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The Effect of Financial Markets Development on Bank Risk: Evidence from Southeast Asian Countries

Cited by 5 publications

References 92 publications

Factors Affecting Bank Risk-Taking: Evidence from Southeast Asian Countries

Factors Affecting Bank Risk-Taking: Evidence from Southeast Asian Countries

Financial Market Development and Risk of Commercial Banking Operation in Vietnam

Banks, non-bank companies and stock exchange: do we know the relationship?

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