M.Com. (Informatics) / This dissertation examines the field of network management in a banking environment. Special attention is given to business aspects that might influence network management. Technical aspects of network management are only discussed briefly. The study is broadly divided into two sections, the theoretical background and the formulation of a network model in the banking environment. Banks require that their services must always be of the highest standard. Special attention is given to services that banks provide on a daily basis. Network management can become very technical and complex. Large networks can become a nightmare to manage without proper business management principles. The dissertation offers an introduction to business principles and concentrates on different environments that might influence banks and their networks. The study indicates the importance of the open system environment for banks. The success of open systems largely depends on the acceptance of standards set by standard organizations like ISO (International Standards Organization). Banks in general are mainly dependent on IBM products and they rely on IBM to provide for their open needs. The dissertation covers the problems that IBM faces in opening up their systems. Network management protocols are very important. Today there are two main contenders in this area, namely SNMP and CMIP. In the future both protocols might play a role in managing networks. Identification of banks' needs and requirements is important for the definition of the model. Special consideration is given to external factors influencing banks and their networks. To isolate these influences three environments can be identified namely the macro, market and micro environments. The most important requirement of banks is to provide a reliable and continuous service of high standing quality to their clients. Banks provide a variety of financial services to their customers and the competition between different banks makes the development of new, and the improvement of existing services ...

ABSTRACT The purpose of this study is to analyse the cost and profit efficiency of banks in South Africa. The cost-to-income ratio has always been used in the South African banking sector in measuring efficiency. However this approach is very simplistic and does not provide enough insight on real profit efficiency. This research uses a stochastic frontier model to determine both cost and profit efficiency of four large and four small, South African-based banks. The results of the study show that South African banks have significantly improved their cost efficiencies between 2000 and 2005. However efficiency gains on profitability, over the same time period, have not been significant. No bank was found to be superior to another in terms of achieving efficiency gains in cost reduction and profitability. A weak positive correlation was found to exist between the cost and profit efficiencies, with the most cost efficient banks also being most profit efficient. With regard to bank size, cost efficiency declined with increasing bank size.

Thesis (M.M. (Finance & Investment)--University of the Witwatersrand, Faculty of Commerce, Law and Management, Wits Business School, 2016 / The banking industry plays an essential role in any economy in terms of resource mobilisation and allocation. Banks also accept deposits, create credit, offer agency, utility and money transmission services.A well-developed banking industry plays an important role in efficient financial intermediation and this helps to boost economic growth. The financial intermediary role performed by banks allows the banking sector to influence the direction of available resources, thereby affecting the rate of economic growth (Obadeyi, 2014).Due to these benefits derived from the banking sector, a large number of industrialised, developing and transition countries have undertaken extensive reforms in their banking sector over the past two decades (Swary and Topf 1992). Banking sector reforms are defined as government intervention in the banking industry to provide a panacea for existing anomalies in the banking sector (Azeez and Ojoh, 2012). The reforms that were implemented by various countries included interest rates liberalisation, the removal of quantitative controls on lending, lifting barriers to competition, deregulation of the banking sector, the privatisation of public financial institutions and the introduction of market based securities. They were implemented to enhance the intermediation role of banks, ensure that banks are well positioned to greatly mobilise savings and optimally allocate these mobilised savings in the form of credit extension to profitable investments (Ajayi, 2005). The treatise investigates the effectiveness of banking sector reforms on financial intermediation in African Countries using data of eleven countries. Annual time series and panel data which covered a period of 20 years from 1980 to 2000 was used.Secondary data which was used for this treatise was gathered fromjournals, books, peer-reviewed articles, International Monetary Fund statistics (IMF), Global Banking (Center for financial markets Milken Institute) and World Bank Financial Development database was used in this research. The regression results showed that the banking sector reforms had a negative impact on financial intermediation on the eleven countries under study. Thus, the reforms failed to achieve their objectives of mobilising savings and increasing intermediation activities (lending). In addition, the results showed that the control variables which were inflation and gross savings had an inversely relationship with financial intermediation except for income per capita which had a positive relationship. The main causes of the failure of the banking sector iii reforms in Africa were the macroeconomic imbalances, financial system instability and wrong sequencing of the reforms. / GR2018

There are many functions of the financial system, with the basic function of transferring loanable funds from lender to borrowers (Rose et al, 1995). This financial transaction can be carried out directly or semi directly between lenders and borrowers. The shortcomings of direct and semi direct financing have opened doors for a third method—financial intermediation, which is done by financial intermediaries. Commercial bank is the classic example of financial intermediary at work. To achieve the goal of owners’ wealth maximization, banks should manage their assets, liabilities, and capital efficiently. In doing this, the bank should be conscious of the gap or spread between the interest income and the interest expenses paid, which is called net interest income (NII). Net interest income is a major part of banks’ profit, this is basically why the financial intermediaries try to offer lowest returns to savers and lend funds to borrowers at the highest possible interest rates. It is measured as net interest margin (NIM), which is NII divided by the average earning assets. This study examines the interest rate sensitivity of commercial banks’ interest profitability (Net Interest Margin) and net worth at the theoretical level and attempt to measure empirically the extent to which the interest profitability and net worth of commercial banks have been affected during the period of changing interest rates between 2001 and 2010. It as well measures the extent to which the factors that determine interest rate movement affect interest rate and which of the factors has more effect on interest rate. The measure of profitability captures the essence of lend-long borrow-short without directly including other determinants of bank income, such as loan loss and loan volume, which may be correlated with interest rates. It is also important to note that NIM is not a measure of total banks’ profits since it does not include non-interest income and expenses. A software package stata 10.0 was used to conduct the hypothesis testing, trend, and correlation analysis. The sampled banks are fourteen commercial banks and one investment bank in South Africa. The sampled banks were later divided into two groups (big and small), based on their assets size as at the year-end 2010. There are five (5) big banks with asset size of more than R100 billion and ten (10) small banks with asset size of less than R100 billion iii as at the year-end 2010. Analysis was further carried out separately on both the big and small banks to see the effect of interest rate fluctuations on them. Data required by the model was obtained from annual financial statements of the sampled banks for the period of ten years. It was found that fluctuations on interest rate (repo rate) affect the profit of commercial banks, but this effect is huge on small banks than the big banks. As the repo rate increases, the profit of commercial banks increases. Such effect of repo rate on profit of commercial banks was found to be statistically significant. It was also found that interest rate changes as well affect the net worth of commercial banks. The macroeconomic factors the determine the interest rates do not have direct effect on the banks’ profit, but have significant effect on the banks’ net worth, especially that of the small banks. As the rate of inflation, the rate of money supply, and uncertainty increase, the net worth of the small commercial banks in South Africa also increase. It could be advised that to maximize owners’ equity, South African commercial banks (big and small) should concentrate more on forecasting and controlling the determinants of the interest rates, rather than the interest rates themselves. It was also found that among the internal factors affecting profit and net worth of commercial banks, the liquidity ratio is most significant relative to capital ratio, competition, and non-performing loan.

In partial fulfilment of the requirements for the Master of Management Degree in Finance & Investment Management / The fragility of the banking sector and the systemic effects of bank failures coupled with the position banks occupy as the centre of financial and economic activity has called for effective regulatory reforms to ensure greater supervision and monitoring, prudent banking practices, financial stability and restoration of public confidence in the financial system. Therefore, this study is aimed at examining the spate of bank failures in Africa and the extent to which the introduction of regulatory reforms and prudential measures by regulatory authorities have impacted or helped in reducing the incidence of bank failures in Africa. To this end, the study looks at the various determinants of bank failures and fragility, indicators of financial soundness, the measures adopted so far in curbing bank failures and the resultant effect, the deficiencies in the existing reforms and regulations as well as policy recommendations for future studies. The study revealed that successful implementation of reforms is not limited to effective prudential approach & guidelines but largely influenced by Macro-economic conditions in the economy. For the purpose of performance evaluation and assessing the impact of regulatory reforms on the banking sector in Africa (Pre reform and Post reform), this study looks at a case study of some selected African countries namely Nigeria, South Africa, Zambia, Uganda, Ghana to enable us have a clear insight on the performance of banks pre-reforms and post reforms. Keywords: Banking sector reforms, Financial intermediation, Banking crisis, Bank performance, Capital adequacy. / GR2018

Esta dissertação explora a relevância empírica da regulação sobre o sistema bancário. O sistema bancário representa o mais importante setor e deverá sempre estar funcionando plenamente para não comprometer outros setores econômicos. O Estado pode intervir quando o sistema financeiro parecer instável. Esta instabilidade pode ser causada por quebras bancárias. A falência de um banco pode ser evitada se houver um controle sobre o risco de suas atividades. A regulação pode exigir o controle deste risco ao limitar a quantidade de captação que o banco realiza em relação aos seus recursos próprios. Esta relação é chamada de alavancagem. Portanto, altos índices de alavancagem representariam maior risco do banco. O trabalho pretende analisar o impacto da regulação sobre o perfil de alavancagem dos bancos comerciais brasileiros e verificar se a regulação é eficiente. A eficiência da regulação está relacionada com a sua real necessidade e se consegue atingir seus objetivos da maneira menos onerosa para a sociedade. Este estudo visa analisar a eficiência da regulação sobre o setor bancário brasileiro no período de 1950 a 2005. / This dissertation explores the empirical relevance of regulation on banking system. The banking system is a very important sector and it must be safe. Government can intervene when this system seems to be instable. This instability can be caused by bank failure. Financial leverage measure the degree to which a bank is utilizing borrowed money. Higher degree shows higher probability of default. We want to analyze the impact of regulation related to financial leverage on banks? risk taking and if this regulation is efficient. The regulation is efficient when its introduction is really necessary and it is not excessively costly. This dissertation analyzes the efficiency of regulation on Brazilian banking sector during 1950 to 2005.

Thesis advisor: Fabio Schiantarelli / Thesis advisor: James Anderson / The thesis is composed of the following three distinct papers. 1.Banks and Development: Jewish Communities in the Italian Renaissance and Current Economic Performance Do banks affect long-term economic performance? I answer this question by relying on an historical development that occurred in Italian cities during the 15th century. A sudden change in the Catholic doctrine had driven the Jews toward money lending. Cities that were hosting Jewish communities developed complex banking institutions for two reasons: first, the Jews were the only people in Italy allowed to lend for a profit; second the Franciscan reaction to Jewish usury led to the creation of charity lending institutions that evolved into many of the current Italian banks. Using Jewish demography in 1450 as an instrument, I estimate large effects of current banking development on the income-per-capita of Italian cities. Additional firm-level analyses suggest that well-functioning local banks exert large effects on aggregate productivity by reallocating resources toward more efficient firms. Controlling for province effects, using additional historical data on Jewish demography and exploiting the expulsion of the Jews from the Spanish territories in Italy in 1541, I argue that my results are not driven by omitted institutional, cultural and geographical characteristics. In particular, I show that the difference in current income between cities that hosted Jewish communities and cities that did not exists only in those regions that were not Spanish territories in the 16th century. These difference-in-difference estimates suggest that the Jewish Diaspora can explain at least 10% of the current income gap between Northern and Southern Italy. 2. Contract Incompleteness, Globalization and Vertical Structure: an Empirical Analysis This paper studies the effects of international openness and contracting institutions on vertical integration. It first derives a number of predictions regarding the interactions between trade barriers, contracting costs, technology intensity, and the extent of vertical integration from a simple model with incomplete contracts. Then it investigates these predictions using a new dataset of over 14000 firms from 45 developing countries. Consistent with theory, the effect of technology intensity of domestic producers on their likelihood to vertically integrate is decreasing in the quality of domestic contracting institutions and in international openness. Contract enforcing costs are particularly high in developing countries and their effects on the vertical structure of technological intensive firms may have significant welfare costs. If improving domestic contracting institutions is not feasible an equivalent solution is to increase openness to international trade. This would discipline domestic suppliers reducing the need for vertical integration. 3. Productivity, Welfare and Reallocation: Theory and Firm-Level Evidence (joint with Susanto Basu, Fabio Schiantarelli and Luis Serven) We prove that in a closed economy without distortionary taxation, the welfare of a representative consumer is summarized to a first order by the current and expected future values of the Solow productivity residual in level and by the initial endowment of capital. The equivalence holds if the representative household maximizes utility while taking prices parametrically. This result justifies TFP as the right summary measure of welfare (even in situations where it does not properly measure technology) and makes it possible to calculate the contributions of disaggregated units (industries or firms) to aggregate welfare using readily available TFP data. We show how these results must be modified if the economy is open or if taxes are distortionary. We then compute firm and industry contributions to welfare for a set of European OECD countries (Belgium, France, Great Britain, Italy, Spain), using industry-level (EU-KLEMS) and firm-level (Amadeus) data. After adding further assumptions about technology and market structure (firms minimize costs and face common factor prices), we show that welfare change can be decomposed into three components that reflect respectively technical change, aggregate distortions and allocative efficiency. Then, using the appropriate firm-level data, we assess the importance of each of these components as sources of welfare improvement in the same set of European countries. / Thesis (PhD) — Boston College, 2010. / Submitted to: Boston College. Graduate School of Arts and Sciences. / Discipline: Economics.

Os principais objetivos deste trabalho foram: i) demonstrar, através de fundamentação teórica, que as distorções na análise de indicadores extraídos de demonstrações contábeis não corrigidas podem levar a decisões equivocadas, implicando prejuízos aos usuários da informação contábil, e ii) provar, através de investigação empírica, que os efeitos da inflação não devem ser ignorados, mesmo em ambientes com taxas reduzidas, quando da análise de rentabilidade e adequação de capital dos bancos no Brasil. Foram estabelecidas as seguintes hipóteses de pesquisa: i) os indicadores de rentabilidade legais dos bancos no Brasil são significativamente maiores que o os indicadores ajustados pelos efeitos da inflação, e ii) o índice da Basiléia legal dos bancos no Brasil é significativamente menor que o índice ajustado pelos efeitos da inflação. Para a investigação empírica do problema, selecionou-se uma amostra com os 50 maiores bancos comerciais por ativo para o período 1996-2002, e aplicou-se a técnica da correção monetária de balanço, em bases mensais, com a utilização do Índice Geral de Preços - Disponibilidade Interna. A fim de verificar se as distorções causadas pelos efeitos do reconhecimento da inflação apresentaram-se significativas, foram aplicados testes de hipóteses. A análise dos resultados permitiu rejeitar a hipótese de nulidade entre as diferenças de médias dos indicadores legais e ajustados, com um nível de significância de 1%, para todos os anos do período analisado. Baseando-se nesses resultados, foi possível confirmar as hipóteses da pesquisa. Constatou-se, ainda, que mesmo com uma inflação de apenas 1,71% em 1998, as diferenças encontradas foram consideradas estatiscamente significativas, ou seja, relevantes para a tomada de decisão. Portanto, provouse que os efeitos da inflação devem ser considerados quando da análise de rentabilidade e adequação de capital dos bancos no Brasil. Indiretamente, também foi possível explicitar que os bancos estão divulgando uma rentabilidade nominal maior que a real, e que há maior cobertura de riscos pelo capital próprio corrigido. Por fim, concluiu-se que, após o fim da exigência legal da correção monetária, o questionamento mínimo que todo usuário da informação contábil deve fazer refere-se à possibilidade de tomar decisões equivocadas, baseando-se na análise de indicadores extraídos de demonstrações contábeis não corrigidas. / The main objectives of this work were: i) to demonstrate, based on theoretical foundation, that the distortions in the analysis of ratios taken from financial statements computed according to corporate law misleads the decision making process, implying damages to accounting information users, and ii) to prove, by empirical research, that inflation effects must not be ignored, even in a low rate environment, when the profitability and capital adequacy of banks in Brazil are analyzed. The following hypotheses were formulated: i) the profitability ratios stemming from the so-called \"legal financial statements\" are significantly higher than those adjusted by inflation effects, and ii) Basel index also computed based on \"legal financial statements\" is significantly smaller than that adjusted by inflation effects. For the empirical research, a sample with the 50 major commercial banks, ranked by total assets for the period 1996-2002, was selected, and monetary restatement technique was applied, by the utilization of General Price Index - Internal Availability on a monthly basis. To verify whether the distortions were significant, hypotheses were statistically tested. The analysis of results allowed us to reject the null hypothesis between the means of legal and restated ratios, with a level of significance of 1%, for all the years within the analyzed period. It was still evidenced that, even with an inflation of only 1.71% in 1998, the differences found could be considered statistically significant, and therefore, relevant enough for the decision making process. The research hypotheses being confirmed, it was proved that inflation effects must be considered when analyzing the profitability and capital adequacy of banks in Brazil. Indirectly, it was also possible to state that banks are reporting a nominal profitability higher than the actual one and that there is a larger coverage of risks for the restated equity. Finally, it was concluded that the minimum questioning that every accounting information user should raise refers to the possibility of making wrong decisions, based on the analysis of ratios taken from financial statements not adjusted by inflation.

O objetivo desta dissertação de mestrado é estudar a adequação de capital em bancos, com ênfase na implementação das regras do Acordo da Basiléia no sistema financeiro do Brasil. Mesmo tratando-se de pesquisa de natureza acadêmica, na qual nos preocupamos em ressaltar os pontos de vista de diversos autores sobre os principais conceitos relacionados com o assunto, tais como, Capital, Risco, Insolvência e Desregulamentação, não nos furtamos em fornecer uma visão prática das medidas necessárias à implementação do Acordo da Basiléia nos bancos brasileiros, a partir da entrada em vigor da Resolução nº 2099, do Conselho Monetário Nacional. Realizamos, também, um estudo crítico dos principais pontos constantes do Acordo da Basiléia, tecendo comentários a respeito dos aspectos que julgamos mais relevantes e relacionando-os com a realidade do mercado financeiro brasileiro. Apresentamos evolução trimestral do índice de capitalização obtido de uma amostra de 10 bancos, no período de dezembro/94 a dezembro/96. Para cada um dos bancos foi feito um gráfico, que permite uma visualização adequada do grau de capitalização no período analisado. Nosso estudo constata que as medidas de prudência aplicadas pelos organismos supervisores, notadamente no que se refere ao Acordo da Basiléia, se não forem aplicadas pelos bancos observando a essência dos seus ativos de risco, pouco contribuem para se mensurar o capital mínimo necessário para absorver eventuais perdas, nem possibilitam uma divulgação dos efeitos danosos dos créditos de alto risco nos demonstrativos financeiros, necessários para a tomada de decisões dos acionistas e demais usuários. / This dissertation studies the capital adequacy of banking, giving emphasis to the implementation of rules from the Basle Accord in the Brazilian Financial System. Even though this is an academic research, in which we tried to underline many of authors\' points of view about the most important concepts related to the subjetct, such as Capital, Risk, Insolvency and Deregulation, we did not avoid a practical view of the necessary acts to implement the Basle Accord in Brazilian banks, since Resolution nº 2099, from the National Monetary Council, was put in practice. We also made a critical study about the main issues of the Basle Accord, making comments about the aspects we judged more relevant and relating them to the Brazilian financial market reality. We present a three-month evolution of the capitalization ratio, taken from a sample of 10 banks, for the period from December/94 to December/96. To each bank a chart was prepared showing the degree of capitalization in the period analyzed. Our study shows the prudent acts used by the supervision entities, specially refering to the Basle Accord. If these acts were not used by the banks observing the substance of their assets under of risk, they would not be very useful to measure their minimum capital needed to absorb eventual losses, and they would not be helpful to disclose the adverse effects from high risk credits in the financial statements such disclosure is necessary to help stockholders and other users to make their decisions.

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