Download or read book Essays on Bank Fragility Dynamic Depositor Discipline and Disclosure written by Fazelina Sahul Hamid and published by LAP Lambert Academic Publishing. This book was released on 2012 with total page 156 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book aims to answer a few key questions that are relevant in banking. Firstly, it aims to find if CAMEL-type indicators are able to predict subsequent decisions by regulators to fail banks. Secondly, it aims to find if depositors discipline banks by focusing on depositors' reaction to the price signal and the amount of risk-related information that banks disclose. The findings show that banks' probability of failure increases as a result of high reliance on external funding and depositors in East Asia are not sensitive to price signal but they are sensitive to the amount of information disclosure. This study also finds that depositors in East Asia reward good banks for disclosing more information but they do not discipline weak banks by demanding greater disclosure. This implies that disclosure is a more effective signal for healthy banks than for weak ones. These analyses provide support to the proposition of the third pillar of the Basel II which aims to encourage market discipline by requiring banks to disclose more risk-related information. This book should be especially useful to banks and banking regulators.
Download or read book Essays on Liquidity Risk and Banking Fragility Dynamic Depositor Discipline and Information Disclosure written by Fazelina Sahul Hamid and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis contains three empirical essays in banking. The empirical analyses focus on the role of information in banking. This will be done by analyzing the effectiveness of three types of signals that are sent by banks. The first signal is the CAMEL-type indicators that measure the soundness of the banks. The second signal is the price offered by banks in attracting deposits. The third signal is the amount of risk related information that banks disclose in their financial statements. This thesis aims to answer a few key questions that are relevant in banking. Firstly, it aims to find if CAMEL-type indicators are able to predict subsequent decisions by regulators to fail banks. This analysis will focus on the banks' liquidity ratio before and during crises in finding whether high liquidity holding and high reliance on external funding contribute towards the subsequent failure of the banks. Secondly, it aims to find if depositors discipline banks by focusing on depositors' reaction to the price signal from banks. Lastly, it aims to find if depositors react to the amount of risk-related information that banks disclose. The empirical issues are analyzed using the sample of financial institutions in five crisis led East Asian countries namely Indonesia, Korea, Malaysia, Philippines and Thailand. Among the striking findings in Chapter 2 are that the effect of liquidity on the probability of bank failure varies before and during a crisis. The results show the vulnerabilities of banks to failure declines as a result of higher liquidity holding. The results also show that banks' probability of failure increases as a result of high reliance on external funding. Findings in Chapter 3 confirm the endogenous relationship between the price and quantity of deposits in the depositor discipline model. Panel data analysis shows that depositors' behavior in East Asia is driven by bank fundamentals and risk aversion activities and also by price movements. Dynamic panel data analysis is carried out to account for the lagged dependency of the deposits growth variable and endogeneity of the price mechanism in the depositor discipline model. The results show that depositors in East Asia do not demand a higher price for deposits. Analysis by subdividing the sample of banks into healthy and weak banks shows that the relationship between price and quantity is not non-linear. Healthy banks are not able to attract more deposits by raising price. Depositors do not discipline weak banks by demanding a higher return. Lack of responsiveness by depositors to price signals may be attributable to large the outflow of deposits that happened during the crisis period and regulations on interest rates. Analysis in Chapter 4 confirms that depositors are influenced by the content and also quantity of risk-related information disclosure. Panel data analysis shows that higher risk-related information disclosure enables banks to attract more funds only during the post-crisis period. Once the lagged dependency of the deposits growth variable and endogeneity of the price and disclosure mechanism is taken into account, estimation using dynamic panel data analysis shows that disclosure is a more effective signal in attracting deposits than price. These findings provide support to the proposition of the third pillar of the Basel II which aims to encourage market discipline by requiring banks to disclose more risk-related information. In line with the wake-up-call hypothesis, the findings show that depositors' responsiveness to the amount of information disclosure is higher during the post-crisis period. This study also finds that the effectiveness of disclosure signal varies according to the quality of banks. Depositors in East Asia reward good banks for disclosing more information but they do not discipline weak banks by demanding greater disclosure. Greater responsiveness of depositors to the disclosure signal of healthy banks compared to weak banks implies that disclosure is a more effective signal for healthy banks than for weak ones. Other issues analyzed in the thesis pertain to the relevance of the different type of econometric analysis used in carrying out the empirical analyses.
Download or read book Dynamic Depositor Discipline in U S Banks written by Kathleen McDill and published by International Monetary Fund. This book was released on 2003-11-01 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the presence of depositor discipline in the U.S. banking sector. We test whether depositors penalize (discipline) banks for poor performance by withdrawing their uninsured deposits. While focusing on the movements in uninsured deposits, we also account for the possibility that banks may be forced to pay a risk premium in the form of higher interest rates to induce depositors not to withdraw their uninsured deposits. Our results support the existence of depositor discipline: a weak bank may not necessarily be able to stop a deposit drain by raising its uninsured deposit interest rates.
Download or read book The Federal Reserve System Purposes and Functions written by Board of Governors of the Federal Reserve System and published by . This book was released on 2002 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Provides an in-depth overview of the Federal Reserve System, including information about monetary policy and the economy, the Federal Reserve in the international sphere, supervision and regulation, consumer and community affairs and services offered by Reserve Banks. Contains several appendixes, including a brief explanation of Federal Reserve regulations, a glossary of terms, and a list of additional publications.
Download or read book Finance Financial Sector Policies and Long run Growth written by Asli Demirguc-Kunt and published by World Bank Publications. This book was released on 2008 with total page 82 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: The first part of this paper reviews the literature on the relation between finance and growth. The second part of the paper reviews the literature on the historical and policy determinants of financial development. Governments play a central role in shaping the operation of financial systems and the degree to which large segments of the financial system have access to financial services. The paper discusses the relationship between financial sector policies and economic development.
Download or read book Contractual Arrangements for Intertemporal Trade written by Edward C. Prescott and published by U of Minnesota Press. This book was released on 1987 with total page 173 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Financial Crises Explanations Types and Implications written by Mr.Stijn Claessens and published by International Monetary Fund. This book was released on 2013-01-30 with total page 66 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reviews the literature on financial crises focusing on three specific aspects. First, what are the main factors explaining financial crises? Since many theories on the sources of financial crises highlight the importance of sharp fluctuations in asset and credit markets, the paper briefly reviews theoretical and empirical studies on developments in these markets around financial crises. Second, what are the major types of financial crises? The paper focuses on the main theoretical and empirical explanations of four types of financial crises—currency crises, sudden stops, debt crises, and banking crises—and presents a survey of the literature that attempts to identify these episodes. Third, what are the real and financial sector implications of crises? The paper briefly reviews the short- and medium-run implications of crises for the real economy and financial sector. It concludes with a summary of the main lessons from the literature and future research directions.
Download or read book Macroeconomics and the Financial System written by N. Gregory Mankiw and published by Macmillan. This book was released on 2011 with total page 642 pages. Available in PDF, EPUB and Kindle. Book excerpt: Watch this video interview with Greg Mankiw and Larry Ball discussing the future of the intermediate macroeconomics course and their new text. Check out preview content for Macroeconomics and the Financial System here. The financial crisis and subsequent economic downturn of 2008 and 2009 was a dramatic reminder of what economists have long understood: developments in the overall economy and developments in the financial system are inextricably intertwined. Derived and updated from two widely acclaimed textbooks (Greg Mankiw’s Macroeconomics, Seventh Edition and Larry Ball’s Money, Banking, and the Financial System), this groundbreaking text is the first and only intermediate macroeconomics text that provides substantial coverage of the financial system.
Download or read book An Opportunity for a Different Peru written by Marcelo Giugale and published by World Bank Publications. This book was released on 2007 with total page 860 pages. Available in PDF, EPUB and Kindle. Book excerpt: For the first time in the republican history of Peru, the presidential transition takes place in democracy, social peace, fast economic growth and favorable world markets. In other words, there has never been a better chance to build a different Peru - a richer country, more equal and governable. There are multiple ways to achieve that goal. New reforms must stem from a widespread and participatory debate, one of a common vision conceived for and by Peruvians. This book aims at making a technical and independent contribution to such debate; it summarizes the knowledge available about the challenges to be faced by the new administration. The study does not recommend silver bullets, but suggests policy options. It is based on the analysis of the current reality and in six decades of relationships with Peru, in which the Bank has implemented more than 100 projects and prepared more than 500 technical reports covering the wide range of development topics. When necessary, the study provides lessons that the Bank has learned elsewhere. The study provides a conceptual framework to the analysis of the country's 34 economic sectors and the two historical perspectives behind them. In doing so, it offers a comprehensive reform agenda that sheds light on possible priorities and courses of action.
Download or read book Yes Africa Can written by Punam Chuhan-Pole and published by World Bank Publications. This book was released on 2011-06-24 with total page 497 pages. Available in PDF, EPUB and Kindle. Book excerpt: Takes an in-depth look at twenty-six economic and social development successes in Sub-Saharan African countries, and addresses how these countries have overcome major developmental challenges.
Download or read book General Principles for International Remittance Services written by Group of Ten. Committee on Payment and Settlement Systems and published by . This book was released on 2007 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Global Waves of Debt written by M. Ayhan Kose and published by World Bank Publications. This book was released on 2021-03-03 with total page 403 pages. Available in PDF, EPUB and Kindle. Book excerpt: The global economy has experienced four waves of rapid debt accumulation over the past 50 years. The first three debt waves ended with financial crises in many emerging market and developing economies. During the current wave, which started in 2010, the increase in debt in these economies has already been larger, faster, and broader-based than in the previous three waves. Current low interest rates mitigate some of the risks associated with high debt. However, emerging market and developing economies are also confronted by weak growth prospects, mounting vulnerabilities, and elevated global risks. A menu of policy options is available to reduce the likelihood that the current debt wave will end in crisis and, if crises do take place, will alleviate their impact.
Download or read book Emerging Capital Markets and Globalization written by Augusto de la Torre and published by World Bank Publications. This book was released on 2006-10-20 with total page 232 pages. Available in PDF, EPUB and Kindle. Book excerpt: Back in the early 1990s, economists and policy makers had high expectations about the prospects for domestic capital market development in emerging economies, particularly in Latin America. Unfortunately, they are now faced with disheartening results. Stock and bond markets remain illiquid and segmented. Debt is concentrated at the short end of the maturity spectrum and denominated in foreign currency, exposing countries to maturity and currency risk. Capital markets in Latin America look particularly underdeveloped when considering the many efforts undertaken to improve the macroeconomic environment and to reform the institutions believed to foster capital market development. The disappointing performance has made conventional policy recommendations questionable, at best. 'Emerging Capital Markets and Globalization' analyzes where we stand and where we are heading on capital market development. First, it takes stock of the state and evolution of Latin American capital markets and related reforms over time and relative to other countries. Second, it analyzes the factors related to the development of capital markets, with particular interest on measuring the impact of reforms. And third, in light of this analysis, it discusses the prospects for capital market development in Latin America and emerging economies and the implications for the reform agenda.
Download or read book Lessons and Policy Implications from the Global Financial Crisis written by Mr.Luc Laeven and published by International Monetary Fund. This book was released on 2010-02-01 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: The ongoing global financial crisis is rooted in a combination of factors common to previous financial crises and some new factors. The crisis has brought to light a number of deficiencies in financial regulation and architecture, particularly in the treatment of systemically important financial institutions, the assessments of systemic risks and vulnerabilities, and the resolution of financial institutions. The global nature of the financial crisis has made clear that financially integrated markets, while offering many benefits, can also pose significant risks, with large real economic consequences. Deep reforms are therefore needed to the international financial architecture to safeguard the stability of an increasingly financially integrated world.
Download or read book The Road Ahead for the Fed written by John B. Taylor and published by Hoover Press. This book was released on 2009 with total page 256 pages. Available in PDF, EPUB and Kindle. Book excerpt: Expert contributors examine the recent actions of the Federal Reserve and suggest directions for the Fed going forward by drawing on past political, historical, and market principles. They explain how the Fed arrived at its current position, offer ideas on how to exit the situation, and propose new market-based reforms that can help keep the Fed on the road to good monetary policy in the future.
Download or read book World Development Report 1985 written by and published by World Bank Publications. This book was released on 1985 with total page 259 pages. Available in PDF, EPUB and Kindle. Book excerpt: This report focuses on the contribution that international capital makes to economic development. While the report pays close attention to the events of the recent past, it also places the use of foreign capital in a broader and longer-term perspective. Using such a perspective, the report shows how countries at different stages of development have used external finance productively; how the institutional and policy environment affects the volume and composition of financial flows to developing countries; and how the international community has dealt with financial crises. This report concludes that the developing countries will have a continuing need for external finance. It demonstrates that many of the policies required to attract external finance and promote economic growth are either being implemented or planned already.
Download or read book The World Bank Legal Review written by Hassane Cissé and published by World Bank Publications. This book was released on 2011-11-04 with total page 429 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book focuses on the legal challenges and opportunities for International Financial Institutions in the post-crisis world. It includes contributions from academics, practitioners and Bank staff. The contributions cover a broad array of issues, included governance reform and constitutional framework of IFIs, privileges and immunities, responsibility of international organizations, issues related to fragile and conflict-affected states, climate finance, and the recent financial crisis. The book is organized in three main areas, namely (i) Law of International Organizations: Issues Confronting IFIs; (ii) Legal Obligations and Institutions of Developing Countries: Rethinking Approaches of IFIs; and (iii) International Finance and the Challenges of Regulatory Governance.
