No description available.

In the past two decades, significant changes have been shaping and transforming the banking sectors worldwide. Among these trends we find an intensive surge in foreign bank ownership which is especially remarkable in the countries of the Central, Eastern and South-Eastern European region. Using the sample of 17 countries and filtering out more than 140 domestically-operating foreign-owned banks, we examine the determinants of their performance in relation to host country conditions and home country banking sector performance over the period of seven years between 2005 and 2011. Due to the topic's currency, we additionally provide an insight into the link between sovereign debt and bank ownership. By means of system GMM model, or fixed effects model, we reveal that macroeconomic fundamentals of the host country affect the foreign-owned banks' performance but do not suffice in explaining it fully. Moreover, the depth of the current crisis as demonstrated in the home country impacts negatively on the host-country-operating foreign-owned banks. We did not find any convincing evidence of the host sovereign debt and bank ownership nature of relationship.

This dissertation consists of two essays: one looks at the relation between firm focus and hedging in the REIT industry, and the other compares bank board structures in China and the US. The first essay presented in Chapter 2 examines the relation between corporate hedging and firm focus in the REIT industry by using a sample of REITs in 2005 and in 2007. We find 46.41% utilization rate in 2005 and 43.41% in 2007. Consistent with our hypothesis, we find that, relative to diversified firms, focused firms are more likely to engage in hedging. Focused firms also tend to be involved in greater amount of hedging. We also document a negative relation between hedging and transparency, although the evidence is not overwhelming. Consistent with previous literature, there is a strong firm size effect. The second essay presented in Chapter 3 examines the relation between bank performance and board structure by using a sample of 74 US banks and 53 Chinese banks for the period 2002 to 2006. Indeed, the empirical relation between board structure and performance is virtually non-existing in China. In particular, for the US sample, the board size is found to be significantly and negatively correlated with ROA, but a larger board also tends to be associated with lower costs. For Chinese banks, the evidence indicates that governance variables are not significantly correlated with performances with the exception of block ownership: there is strong evidence that the relation between block ownership and bank performance is negative. Additionally, we find substantial differences in board structure between the two countries; in particular the average board size and the proportion of outside directors for US banks are almost twice of those in China.

Podpiera (2006) found that compliance with Basel Core Principles (BCP) in banking provisions has a direct positive effect on bank performance. Using Non-performing Loans (NPL) ratio and Net-Interest Margin (NIM) as indicators of bank performance, his panel data from 1998 to 2002 with 65 different countries proved that higher compliance results in better bank performance and soundness. This paper is a reexamination of this relationship in a more recent time period from 2006 to 2010 when another global financial crisis took place. I found evidence that the positive relationship between BCP compliance and bank performance continues to be true.

Banks as financial institutions play an important role in the lives of people by facilitating the flow of funds and ensuring the stability of the global economy. Recently, the world economy witnessed various financial shocks that escalated into a financial crisis between 2007 and 2009. Moral hazard, scandals, and collapses of financial institutions caused many to lose their trust on the current financial system that emphasizes profit maximization and high risk taking instead of working to keep the economy stable and healthy. This has caused many researchers to search for new alternative ways of managing the financial system, and one such alternative is social banking.   Social banks are financial institutions that differ from conventional banks by emphasizing social responsibility values instead of only focusing on profitability. There are several key differences between social and conventional banks, such as differences in asset allocation, the involvement of stakeholders in decision-making, higher levels of transparency, and additional social screening of loan applicants and investment opportunities. The purpose of social banks is to channel funds from socially-minded investors to borrowers with the right motivations.   The main purpose of this research paper is to investigate whether social banks differ from conventional banks in terms of their financial performance overall and during the financial crisis. In order to achieve this, we have adopted a quantitative strategy and gathered data from ten social and ten conventional banks from various European countries. We have used several financial ratios to measure their profitability, liquidity, and default risk, and performed linear regression to estimate the coefficients to test whether being social or conventional has an effect on these bank performance measures.   The results of our analysis reveal that, while conventional banks were able to achieve higher profitability than social banks both overall and during the financial crisis, social banks managed to maintain better liquidity than conventional banks on both occasions. Our results also reveal that social banks overall had lower risk of default than conventional banks.   Based on our results we cannot conclude that the social banking system is inherently better in all aspects than the conventional banking system. We can, however, note that social banks do have certain advantages such as better liquidity, and this suggests that the overall stability of the financial system could potentially be improved by conventional banks adopting some of the more successful practices of social banks, such as more careful screening of loan applicants and investment opportunities.

This study aims to investigate the effectiveness of using asset securitisation as risk management technique in banks. This study examines the direct impacts of asset securitisation on the riskiness of banks’ loan portfolios as well as the indirect impacts on the subsequent financial stability. This study also tests the changes in banks’ equity capital and liquidity as a result of using asset securitisation in order to understand their potential contributions to the examined bank risk behaviour. Furthermore, this study tests the impacts of adopting the Basel capital requirements on banks’ exposure to asset securitisation and the related bank risk behaviour. The study is informed by stakeholder theory. The use of stakeholder theory in the current study helps in addressing the causal connections between banks’ risk management practices and the achievement of banks’ performance objectives. Using stakeholder theory also helps understand the role of external regulatory structures in supporting risk management practices in banks. The empirical study is conducted by using a sample of 44 bank holding companies selected from 13 European countries during the period 2004-2014. The choice of the sample banks is based on the availability of securitisation data as well as the condition that all European banks should have placed at least one securitisation transaction during the period of the study. Moreover, seven linear regression models were developed to examine the study relationships and were estimated by using Fixed Effects panel data analysis. The use of panel data analysis in this study aims to capture the dynamics of bank risk behaviour and other bank-specific conditions that are associated with asset securitisation during the period of the study. The results found in the empirical analysis confirm that incorporating the use of asset securitisation with higher capital requirements is more likely to reduce originators’ credit risk-taking that arise from their lending activities. The findings reported in this study, however, do not support the regulatory capital arbitrage hypothesis of the securitisation products. Furthermore, this study confirms that European securitising banks continued to view asset securitisation as cost-efficient funding source, despite the decreasing number of transactions since the crisis. The findings in this study also show that European securitising banks did not effectively operate their securitisation proceeds in profitable investments during the period of the study. Based on the results found in the current study, we can suggest that introducing more risk-sensitive capital requirements is a key factor in the future development of the asset securitisation markets. This study contributes to the existing literature by emphasising the direct connections between asset securitisation and the riskiness of banks’ loan portfolios. This study also is one of the first studies to test asset securitisation effects on the absolute level of bank capital in order to provide a better understanding of the regulatory capital arbitrage hypothesis. The current study further extends the existing literature to test the role of the Basel capital requirements in controlling the use of asset securitisation in banks, taking into account the former regulatory frameworks and the full implementation years of the Basel (II) framework. Unlike previous studies, the employment of stakeholder theory in the current study has helped in expanding the perception of risk management in banks, from purely controlling device to a broad approach that aims to support bank’s existence and prosperity. Furthermore, this study is one of the first studies that had a broader look at the European securitisation market, during the years before and after the crisis and compared the empirical results of both sub-samples to validate the robustness of the study findings in terms of the financial crisis.

The current study aims to contribute to Corporate Governance CG and Risk Management RM literature by providing empirical evidence of the relationship between the three construct: CG, RM and Bank Performance BP within the GCC banking sector. Furthermore, the Islamic data and conventional data have been separated to investigate the association between CG, RM and BP. To do so, 90 active banks (30 Islamic – 60 conventional) banks have been selected as a sample for ten years period from (2003 – 2012), and subsequently used the regression analysis (Ordinary Least Square OLS) for the four selected models as follows; Regarding the empirical results of Model (1) which investigate the relationship between CG’s variables and BP measured by ROE and ROA for all banks’ data; Islamic data and conventional data, the result indicate that the board size, gender diversity, role duality and audit committee are insignificantly associated with bank performance measured by ROE in all types of banks. In addition, in Islamic banks the Non-Executive Board Member NEBM and credit and investment committee are negatively and significantly associated with ROE, however, this association is insignificant in conventional banks. The capital ratio is positively and significantly associated with ROA in all types of banks. Furthermore, the gender diversity is insignificantly associated with bank performance measured by ROA in both Islamic and conventional banks. Interestingly, bank size is significant and positive with bank performance measured by both of ROE and ROA in all types of banks. Model (2) investigates the relationship between RM’s variables and BP measured by ROE and ROA for all banks’ data; Islamic data and conventional data. The results indicate that capital risk and liquidity risk are insignificant with BP measured by ROE in all types of banks. The association between non-performing loan and credit risk with ROE are insignificant in Islamic banks, however, this association is significant and negative in conventional banks. Interestingly, the capital adequacy ratio is positively and significantly associated with ROE and ROA in all types of banks. Furthermore, as per Model (3) which investigate the relationship between both of CG and RM’s variables and BP measured by ROE and ROA for all banks’ data; Islamic data and conventional data, it can be concluded that the NEBM is significantly and negatively associated with BP measured by ROE and ROA in all types of banks. In this model, it was noted that some variables are insignificantly associated with bank performance in both Islamic and conventional banks, those variables are gender diversity, role duality, Loan to Deposit Ratio LDR, NPL, credit risk, capital risk and liquidity risk. In Model (4) which investigate the relationship between CG and RM measured by NPL for all banks’ data; Islamic data and conventional data. It can be concluded that NEBM and CEO-turnover are insignificant with NPL in all types of banks. Furthermore, board size, Role duality, LDR and Risk committee are negatively and significantly associated with NPL in conventional banks, however, they are insignificant in Islamic banks. The gender diversity in all types of banks is negative and significantly associated with NPL. In addition to the above, the current study provides evidence that the determinants of bank performance in the GCC banking sector vary among the different independent variables. No single variable could explain the bank performance, this conclusion highlights that there is a need for additional analysis of the three constructs in different periods.

No description available.

The 1990s saw significant increases in commercial bank membership in the Federal Home Loan Bank (FHLB) System and extensive growths in FHLB assets and outstanding advances. Since FHLB policies may enable risk-taking behavior by the System's member institutions, this research evaluates the impact of the FHLBs on community bank members, local consumers, and local markets. Results suggest that commercial bank liquidity is enhanced by and managed with the use of System advances, and investments in loans and mortgage-related assets increase with FHLB participation, particularly by small bank members. Credit quality and bank financial conditions improve after participating in the FHLB program, and cost savings from borrowing System funds may contribute to higher rates paid on deposits in local markets. However, banks with greater exposure to interest rate risk are more likely to become FHLB members, and interest rate risk exposure further increases after membership attainment, as the amount of advances borrowed increases, and the longer members remain in the FHLB program. Long-term advances have not been used to lengthen liability duration to offset growth in long-term asset investments, which makes the FHLB System more highly susceptible to rising rates. / Ph. D.

Over the last few decades, numerous studies have adopted efficiency and productivity techniques to examine and evaluate the overall performance of banking industries to inform policy effect as well as identify the best practice. The majority of banking efficiency and productivity studies focus on the developed US and European countries. There are only limited studies in the Asian banking industries but no cross-country comparison in major Asian economies. To fill this literature gap, this thesis attempts to measure and compare the cost efficiency and total factor productivity change in ten Asian banking sectors using an unbalanced panel data set consisting of 280 commercial banks over the period of 1998 to 2005. It is widely agreed that cross-country differences play an important part in examining banks performance in international comparison. They can influence the frontier technology as additional explanatory variables or they can enter inefficiency directly as a measure of determinants or heteroscedasticity. Both cases are considered in the empirical sections of this thesis. In the former case, the empirical results from systematic comparisons of panel data stochastic frontier models with and without incorporating these cross-country heterogeneities suggests that cross-country differences are important sources to explain banks performances therefore they should not be neglected. The overall cost efficiency in these Asian banking industries is 0.5897 with a decreasing trend, despite positive technical progress and slight economies of scale. The total factor productivity change is measured by using a new cost-based total factor productivity index, an index number counterpart of Bauer's (1990) total differential approach. A five-way decomposition is also provided with the attempt to identify the main contributors to the productivity change. Overall, Asian banking industries have experienced positive but not substantial productivity change from 1998-05. In the latter case, a general model that considers exogenous influences in both inefficiency and random noise error term is constructed and compared against other alternative specifications. The empirical results favour this general model and the overall and country-specific cost efficiency and total factor productivity are then estimated and calculated.