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Banking Industry (banking + industry)
Selected AbstractsCOMPETITIVE ISSUES IN THE TAIWANESE BANKING INDUSTRY: MERGERS AND UNIVERSAL BANKSTHE DEVELOPING ECONOMIES, Issue 3 2003Peiyi YU This paper investigates scale economies and scope economies in the Taiwanese banking system, looking beyond the market-power (MP) and efficient-structure (ES) hypotheses. Given the existence of overall economies of scale and the positive value of expansion path sub-additivity, we conclude that there might be large increases in profits following mergers. Moreover, since the profit-structure relationship after financial reform is determined by the relative-market-power hypothesis, this consolidation trend will not necessarily decrease the social benefit for Taiwanese consumers. With regard to scope economies and product-specific economies of scale, we are unable to recommend whether Taiwanese banks should develop as specialized banks or diversified banks in the future. Finally, we find that risk indicators play an important role in explaining the observed variation in bank profitability, and present evidence that default risk and leverage risk have negative effects on the profits of banking, although the effect of portfolio risk is uncertain. [source] Metadata Use in the Commercial Banking IndustryBULLETIN OF THE AMERICAN SOCIETY FOR INFORMATION SCIENCE & TECHNOLOGY (ELECTRONIC), Issue 6 2003Joan Starr Senior Project Consultant First page of article [source] Post-merger strategy and performance: evidence from the US and European banking industriesACCOUNTING & FINANCE, Issue 4 2009Jens Hagendorff G21; G34; G28 Abstract The banking industry has one of the most active markets for mergers and acquisitions. However, little is known about the type of operational strategies adopted by banking firms in the years following a deal. For a sample of bidding banks in the USA and Europe, this study compares the design and performance implications of different post-merger strategies in both geographical regions. Using accounting data, we show that European banks pursue a cost-cutting strategy by increasing efficiency levels vis-à-vis non-merging banks and by cutting back on both labour costs and lending activities. US banks, on the other hand, raise both interest and non-interest income in the post-merger period. [source] Information Technology and Productivity Changes in the Banking IndustryECONOMIC NOTES, Issue 1 2007Luca Casolaro This paper analyses the effects of investment in information technologies (IT) in the financial sector using micro-data from a panel of 600 Italian banks over the period 1989,2000. Stochastic cost and profit functions are estimated allowing for individual banks' displacements from the best practice frontier and for non-neutral technological change. The results show that both cost and profit frontier shifts are strongly correlated with IT capital accumulation. Banks adopting IT capital-intensive techniques are also more efficient. On the whole, over the past decade IT capital-deepening contribution to total factor productivity growth of the Italian banking industry can be estimated in a range between 1.3 and 1.8 per cent per year. [source] Increased Concentration in Banking: Megabanks and Their Implications for Deposit InsuranceFINANCIAL MARKETS, INSTITUTIONS & INSTRUMENTS, Issue 1 2005Kenneth D. Jones During the past two decades, the U.S. banking industry has experienced an unprecedented wave of consolidation, marked by a substantial decline in the number of insured depository institutions and the emergence of banking behemoths with assets totaling in the hundreds of billions of dollars. This unparalleled concentration of assets and deposits among a handful of "megabanks" has important implications for deposit insurance. Most importantly, the Federal Deposit Insurance Corporation (FDIC) now faces a situation in which the failure of even a single megabank could overwhelm the resources immediately available to the deposit insurance system and expose both the banking industry and the government (i.e., taxpayers) to huge potential liabilities. This article highlights the current structure of the banking industry, examines the threat that this structure poses to the deposit insurance funds, and suggests possible approaches for dealing with megabanks and the increasing concentration of insured deposits. [source] How ABN AMRO and other international banks are succeeding in RomaniaGLOBAL BUSINESS AND ORGANIZATIONAL EXCELLENCE, Issue 1 2007Roxana Wright The dynamic financial environment of Central and Eastern Europe allows for a clear determination of "best practices" in the banking industry through analysis of common patterns in banking and finance. We explain the specific practices that have led to successful adaptation on the part of international banks like ABN AMRO in Romania and to Romanian financial markets. In general, we have found, through a series of case studies designed to assess best practices, that the best performing strategies are those which are based upon "distributed decision making," allowing for decisive action and rapid organizational learning at the local level. In order for rapid organizational learning to take place, efficient business relationships are critical to the firm's functioning. In addition, the firm must develop a substantial diversity in both its internal and external networks. © 2007 Wiley Periodicals, Inc. [source] The Three-Hierarchical Location-Allocation of Banking Facilities with Risk and UncertaintyINTERNATIONAL TRANSACTIONS IN OPERATIONAL RESEARCH, Issue 4 2001H. Min The location-allocation of commercial banking facilities often involves providing three layers of services (automatic teller machines, branch bank offices, and main banks) to non-homogeneous population centers. As such, the bank location-allocation problem is hierarchical in nature. Nevertheless, the existing literature to date has neglected to consider the internal dynamics and functional dependence of different hierarchies of banking services. To help the commercial banking organization formulate viable location-allocation strategies in the ever-uncertain and volatile banking industry, this paper proposes a stochastic, three-hierarchical location-allocation model for successively arranging the spatial patterns of banking facilities. [source] Bank Mergers in Europe: The Public Policy IssuesJCMS: JOURNAL OF COMMON MARKET STUDIES, Issue 3 2000Jean Dermine A very large merger wave in the banking industry has taken place in Europe over the last 15 years. Public policy-makers need to assess how bank mergers , be they domestic intra-industry, across-industry, or cross-border , affect their mission of protecting investors and ensuring financial stability, an appropriate level of competition, and the competitiveness of national firms. Moreover, as the banking world is becoming increasingly international, there is a need to reassess the structure of bank regulation and supervision which has been assumed historically by each nation-state. [source] The Impact of Mergers and Acquisitions on the Efficiency of the US Banking Industry: Further EvidenceJOURNAL OF BUSINESS FINANCE & ACCOUNTING, Issue 1-2 2008Adel A. Al-Sharkas Abstract:, Using the Stochastic Frontier Approach (SFA), this study investigates the cost and profit efficiency effects of bank mergers on the US banking industry. We also use the non-parametric technique of Data Envelopment Analysis (DEA) to evaluate the production structure of merged and non-merged banks. The empirical results indicate that mergers have improved the cost and profit efficiencies of banks. Further, evidence shows that merged banks have lower costs than non-merged banks because they are using the most efficient technology available (technical efficiency) as well as a cost minimizing input mix (allocative efficiency). The results suggest that there is an economic rational for future mergers in the banking industry. Finally, mergers may allow the banking industry to take advantage of the opportunities created by improved technology. [source] Information technology and productivity payoff in the banking industry: evidence from the emerging marketsJOURNAL OF INTERNATIONAL DEVELOPMENT, Issue 6 2003Abdur Chowdhury First page of article [source] Critical success factors of business process re-engineering in the banking industryKNOWLEDGE AND PROCESS MANAGEMENT: THE JOURNAL OF CORPORATE TRANSFORMATION, Issue 4 2008T. C. E. Cheng This study seeks to identify the factors that are critical to successful implementation of business process re-engineering (BPR), and attempts to develop a reliable, empirically tested and rigorously validated measurement instrument for BPR, for Hong Kong's banking sector. We conducted a large-scale survey of banking industry executives and applied a rigorous research methodology to treat the survey data. We identified four critical success factors (CSFs) of BPR implementation, which are management commitment, customer focus, use of IT and communication of change and developed a functional instrument to measure BPR in the banking industry. Of these four factors, only customer focus has a significant relationship with firm performance. This finding is consistent with the literature on successful re-engineering. This paper contributes to research by identifying the success factors of BPR implementation, and provides managerial insights on the successful management of BPR, in the banking industry. Copyright © 2008 John Wiley & Sons, Ltd. [source] New Institutional Economics' contribution to strategic groups analysisMANAGERIAL AND DECISION ECONOMICS, Issue 3 2007Stephane Tywoniak Rather than consider the two broad strands of strategic group research,performance-based and behavior-based studies,as competing approaches, we argue that they relate to complementary levels of analysis. We present a four-level framework for analyzing structures within industries drawn from New Institutional Economics (NIE) which covers different approaches to strategic group formation from institutional isomorphism and embeddedness through to the firm-level effects of certain resource deployments. We apply an institutional approach to a case study of the Australian banking industry and supplement this with a quantitative approach based around key strategic variables. This analysis suggests that distinct groups have emerged due to the institutional environment and the different regulatory environments experienced by various banks in the industry. Copyright © 2007 John Wiley & Sons, Ltd. [source] Optimal auditing in the banking industryOPTIMAL CONTROL APPLICATIONS AND METHODS, Issue 2 2008T. Bosch Abstract As a result of the new regulatory prescripts for banks, known as the Basel II Capital Accord, there has been a heightened interest in the auditing process. Our paper considers this issue with a particular emphasis on the auditing of reserves, assets and capital in both a random and non-random framework. The analysis relies on the stochastic dynamic modeling of banking items such as loans, reserves, Treasuries, outstanding debts, bank capital and government subsidies. In this regard, one of the main novelties of our contribution is the establishment of optimal bank reserves and a rate of depository consumption that is of importance during an (random) audit of the reserve requirements. Here the specific choice of a power utility function is made in order to obtain an analytic solution in a Lévy process setting. Furthermore, we provide explicit formulas for the shareholder default and regulator closure rules, for the case of a Poisson-distributed random audit. A property of these rules is that they define the standard for minimum capital adequacy in an implicit way. In addition, we solve an optimal auditing time problem for the Basel II capital adequacy requirement by making use of Lévy process-based models. This result provides information about the optimal timing of an internal audit when the ambient value of the capital adequacy ratio is taken into account and the bank is able to choose the time at which the audit takes place. Finally, we discuss some of the economic issues arising from the analysis of the stochastic dynamic models of banking items and the optimization procedure related to the auditing process. Copyright © 2007 John Wiley & Sons, Ltd. [source] Information Production and Capital Allocation: Decentralized versus Hierarchical FirmsTHE JOURNAL OF FINANCE, Issue 5 2002Jeremy C. Stein This paper asks how well different organizational structures perform in terms of generating information about investment projects and allocating capital to these projects. A decentralized approach,with small, single,manager firms,is most likely to be attractive when information about projects is "soft" and cannot be credibly transmitted. In contrast, large hierarchies perform better when information can be costlessly "hardened" and passed along inside the firm. The model can be used to think about the consequences of consolidation in the banking industry, particularly the documented tendency for mergers to lead to declines in small,business lending. [source] ON NETWORK COMPETITION AND THE SOLOW PARADOX: EVIDENCE FROM US BANKSTHE MANCHESTER SCHOOL, Issue 2008SUSHANTA K. MALLICK In this paper we develop a model to examine the effect of information technology (IT) in the banking industry. IT can reduce operational cost and create network externality. Empirical studies, however, have shown inconsistency, the so-called Solow paradox, which we explain by stressing the heterogeneity in banking services. In a differentiated model, we characterize the conditions to identify these two effects and explain how the two seemingly positive effects turn negative. Using a panel data set of 68 US banks over 1986,2005, our results show that the profitability effect of IT spending is negative, reflecting a negative network competition effect in the banking industry. [source] Social Movements and Development In Quebec: The Experience of the Desjardins MovementANNALS OF PUBLIC AND COOPERATIVE ECONOMICS, Issue 4 2001Roger Levasseur Along with the other sectors of the banking industry over the last two decades, the savings and credit cooperatives have been affected by deep currents which are radically changing their form and structure. In Quebec, the Desjardins movement is at present involved in a fundamental reform of the organizational structures which have characterized its growth since the period between the two world wars. This article deals with the major transformations which the Desjardins movement experienced, from the creation of the first caisse populaire in 1900 to the situation existing at the end of the twentieth century. Using an approach at the junction of history and sociology, it considers the Desjardins movement as one of the components of what Alain Touraine calls a ,social development movement'. We aim to show that the present changes affecting the savings and credit cooperation fall within the long-term historical trends, while at the same time reflecting new phenomena. We shall point out the most significant aspects of these new developments. [source] Cost Efficiency of the Banking Sector in Vietnam: A Bayesian Stochastic Frontier Approach with Regularity ConstraintsASIAN ECONOMIC JOURNAL, Issue 2 2010Ha Thu Vu C11; D24; G21 This paper investigates the cost efficiency of the Vietnamese banking industry. To obtain an appropriate estimate of cost efficiency, monotonicity and concavity constraints are incorporated in the estimation of the cost frontier using the Bayesian approach. Overall, the level of cost efficiency of Vietnam's banking sector is relatively high, around 87 percent. The findings reveal minor and insignificant differences in the cost efficiency of different groups of banks classified by ownership. Furthermore, throughout the estimation period, the industry faced a slight decrease in cost efficiency. This could be explained by increases in the costs of managing diverse activities, the enlargement of branch networks and the upgrading of the banking technology platform. [source] Organizational Form and Expense Preference: Spanish ExperienceBULLETIN OF ECONOMIC RESEARCH, Issue 2 2002Iftekhar Hasan This article investigates the effect of alternative ownership structures, stock versus mutual, on the cost of production of Spanish depository institutions. By introducing a stochastic frontier analysis in estimating the best,practiced expense,preference behaviour, the empirical approach adjusts for the possibility that the two sectors of the banking industry employ different production technologies and finds evidence that is consistent with expense,preference behaviour by the mutual savings banks. [source] The Benefits of Banking Mega-Mergers: Event Study Evidence from the 1998 Failed Mega-Merger Attempts in CanadaCANADIAN JOURNAL OF ADMINISTRATIVE SCIENCES, Issue 3 2003Ramon Baltazar We investigate the main benefit(s) of specific banking mega-mergers, and whether or not we can infer the benefit(s) from event study evidence of stock market reactions to the mega-mergers. In addressing these questions, we examine the market's reactions to three announcements surrounding the 1998 failed mega-merger attempts in the Canadian banking industry. From our analysis, we conclude that market power,not scale, scope, or X-eficiency economies, or access to government safety net subsidies,was the primary benefit ascribed by Canadian shareholders to the merger proposals. To the extent that the market's perception of merger benefits is an accurate indicator of the merging partners' motives, we also conclude that an analysis of shareholder reactions to a merger announcement,as undertaken here,is a productive avenue for regulators attempting to discern a particular merger's main motivations. Résumé Dans cette étude, nous examinons les avantages principaux de certaines méga-fusions bancaires. Nous nous demandons s'il est possible d'inférer ces avantages à partir de l'étude des réactions du marché boursier aux méga-fusions. Notre étude s'appuie sur les réactions du marché enregistrées à la suite de trois annonces, en 1998, de tentatives de méga-fusions avortées dans l'industrie bancaire canadienne. Notre analyse débouche sur la conclusion que le pouvoir du marché,et non son échelle, son étendue, l'efficacité de son économie (économies en efficacité X) ou l'accès au filet de sécurité des subventions gouvernementales,est le principal avantage que les actionnaires canadiens évoquent pour justifier les propositions de fusion. La perception des avantages de la fusion étant un indicateur clair des motivations des partenaires de la fusion, nous pensons qu'une analyse des réactions des actionnaires à l'annonce d'une fusion est une piste pertinente dans la détermination des principales raisons qui la sous-tendent. [source] Les déterminants de la fidélité des clients commerciaux dans l'industrie bancaire canadienneCANADIAN JOURNAL OF ADMINISTRATIVE SCIENCES, Issue 2 2003Jasmin Bergeron Résumé La concurrence omniprésente qui sévit dans l'industrie bancaire canadienne motive les institutions financières à développer des stratégies pour fidéliser leurs clients. La présente étude empirique montre que la fidélité des clients commerciaux dépend notamment de la confiance de l'entreprise envers son institution financière, de la culture relationnelle instaurée par la banque, de l'absence de conflits entre les deux parties, et du niveau concurrentiel de l'organisation. Plusieurs recommandations stratégiques et opportunités de recherche sont présentées. Abstract The omnipresent competition that exists in the banking industry motivates financial institutions to increase customer loyalty. This empirical study indicates that the loyalty of commercial clients toward their bank depends mostly on the following factors: the company's trust toward its financial institution, the relational culture implemented in the bank, the occurrence of conflicts between both parties, and the competitiveness of the organization. Strategic recommendations and research opportunities are discussed. [source] | ||||||||||||||||||||||||||||