Turkish Banking Recapitalization and the Financial Crisis: An Efficiency and Productivity Analysis

Duygun, Meryem; Shaban, Mohamed; Weyman‐Jones, Thomas

doi:10.2753/ree1540-496x4806s506

Cited by 13 publications

(4 citation statements)

References 21 publications

(19 reference statements)

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“…At the same time, analytics allowed banks to develop and value new securities (Berger, 2003) which led to the proliferation of financial products which were supposed to mitigate the risks associated to the 13 We tried to estimate the bias-corrected measure of the Malmquist index (and its components) using the bootstrap procedure but the results show that the bias correction would increase the mean-square error. 14 It could be argued that the TFP fall could be due to the recapitalisation of the Royal Bank of Scotland and of Lloyds bank (see Fethi et al, 2012, for a similar result). In reality, the effect of these two banks on the direction of the TFP change is negligible: we have re-estimated the Malmquist index without the two banks and the direction of the change is unaffected.…”

Section: Resultsmentioning

confidence: 92%

Trademarking activities and total factor productivity: Some evidence for British commercial banks using a metafrontier approach

Duygun

Sena

Shaban

2016

Journal of Banking & Finance

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In this paper, we compute a non-parametric Metafrontier Malmquist index to evaluate the Total Factor Productivity (TFP) change among UK-based trademarking and non-trademarking commercial banks between 2005 and 2013. The use of the metafrontier approach allows us to: a) identify the drivers of TFP growth for each group of banks, b) compare the TFP growth of each group to the TFP growth experienced by the whole industry, and c) assess the extent to which the former catches up with the latter measured along the metafrontier. Our results suggest that TFP has been increasing among trademarking banks up to the onset of the financial crisis but this process has since reversed. The catch-up indexes suggest that both groups of banks were catching up with the metafrontier up to the financial crisis although the drivers of this process differed between the two groups. After the financial crisis, improvements in technology have been driven by a small number of commercial banks i.e. the non-trademarking banks. These results suggest that a large section of the commercial banking sector has not been able to overcome the effects of the financial crisis.

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Section: Resultsmentioning

confidence: 92%

Trademarking activities and total factor productivity: Some evidence for British commercial banks using a metafrontier approach

Duygun

Sena

Shaban

2016

Journal of Banking & Finance

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“…The findings have likewise featured that the macroeconomic factors as inflation, GDP growth, the stock market volatility and the term structure of interest rates additionally all affect banks capital structure. Duygun et al (2012) have studied the costs of recapitalization on an example of 22 Turkish banks for the period 2006-2009 that incorporates the last financial crisis. The investigation has incorporated banks particular qualities and macroeconomic factors.…”

Section: Capital Ratios and Buffering Levelsmentioning

confidence: 99%

Evaluating the Relationship between the Banking System Stability and the Internal Capital Adequacy Assessment Process: Evidence from the Egyptian Banking Sector

Mohamed¹

2018

JFRM

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In the repercussions of the latest financial crisis that have occurred on the years 2008-2009, to fortify the stability of the banking systems, policy makers, and the Basel Committee on Banking Supervision-BCBS, together with national regulators have built up a few safety measures, and structures to guarantee that banks establishments keep up adequate capital levels through using risk management tools, in specific the Internal Capital Adequacy Assessment Processes (ICAAP). They all have called for thorough evaluations and assessments for the structure and components of risk management frameworks, tools, and practices whether by banks, regulators, analysts and risk management experts consistently, to ascertain the adequacy of the banking systems, policies, arrangements and techniques for overseeing risks, and guaranteeing the sufficiency of holding appropriate capital levels for confronting normal, as well as adverse and unexpected situations or emergencies. The main objectives of this research study are to shed the light on the ICAAP as one of the main keys of risk management programs, a process by which banks can use to ensure that they operate with an appropriate level of capital, forward looking processes for capital planning covering a broad range of risks across banks, activities beyond simple capital management, and bring together risk and capital management activities in a form that can be used to support business decisions. The research study shall evaluate the significant relationship between the Banking System Stability (dependent variable) and the Internal Capital Adequacy Assessment Process (ICAAP-independent variable) with evidence from the Egyptian Banking Sector.

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“…Negative values of the shadow input price or return on the fixed input equity level (corresponding to above average ratio of equity to total expenses) would arise if, for example, the firm was operating in the uneconomic region of the production function. Such ÒExcessive-CapitalizerÓ banks most often appear when the banking system is mandated to re-capitalize following a financial crisis 5 Ð a classic example of this regulatory imposition of re-capitalization was the IMFmandated re-organization of the Turkish banking system after 2001 when the regulatory capital requirement was set at 25 percent of total assets, at a time when many European banks were operating with less than 3 percent equity-assets ratios, see Fethi et al (2012). 5 We are grateful to a reviewer for emphasizing the distinction between regulatory capital requirements and real balance sheet constraints…”

Section: Alternative Modelling For the Technology And Relative Efficimentioning

confidence: 99%

“…However, to our knowledge, there is an insufficient number of studies that formally consider the relationship between banksÕ regulated capital and productivity (Fethi et al, 2012).…”

Section: Introductionmentioning

confidence: 99%

How a regulatory capital requirement affects banks’ productivity: an application to emerging economies

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Turkish Banking Recapitalization and the Financial Crisis: An Efficiency and Productivity Analysis

Cited by 13 publications

References 21 publications

Trademarking activities and total factor productivity: Some evidence for British commercial banks using a metafrontier approach

Trademarking activities and total factor productivity: Some evidence for British commercial banks using a metafrontier approach

Evaluating the Relationship between the Banking System Stability and the Internal Capital Adequacy Assessment Process: Evidence from the Egyptian Banking Sector

How a regulatory capital requirement affects banks’ productivity: an application to emerging economies

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