			Home About us Contact

US Banks (us + bank)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	100%

Selected Abstracts

ON NETWORK COMPETITION AND THE SOLOW PARADOX: EVIDENCE FROM US BANKS

THE MANCHESTER SCHOOL, Issue 2008
SUSHANTA 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]

Survey Data and the Interest Rate Sensitivity of US Bank Stock Returns

ECONOMIC NOTES, Issue 2 2000
H. A. Benink
In this paper, we provide empirical evidence on the interest rate sensitivity of the stock returns of the twenty largest US bank holding companies. The main contribution of the paper is the use of survey data to model the unexpected interest rate variable, which is an alternative approach to the existing literature. We find evidence of significant negative interest rate sensitivity during the early 1980s, and evidence of declining significance in the late 1980s and early 1990s. This result is also obtained when using the forecast errors of ARIMA processes to model the unexpected movement in the interest rate. [source]

Do European Primarily Internet Banks Show Scale and Experience Efficiencies?

EUROPEAN FINANCIAL MANAGEMENT, Issue 4 2007
Javier Delgado
G21; O32; O33 Abstract Empirical evidence shows that Internet banks worldwide have underperformed newly chartered traditional banks mainly because of their higher overhead costs. European banks have not been an exception in this regard. This paper analyses, for the first time in Europe, whether this is a temporary phenomenon and whether Internet banks may generate scale economies in excess of those available to traditional banks. Also do they (and their customers) accumulate experience with this new business model, allowing them to perform as well or even better than their peers, the traditional banks? To this end, we have generally followed the same analytical framework and methodology used byDeYoung (2001, 2002, 2005)for Internet banks in the USA although the limitations in the availability of data, as well as the existence of different regulatory frameworks and market conditions, particularly in the retail segment, in the 15 European Union countries have required some modifications to the methodology. The empirical analysis confirms that, as is the case for US banks, European Internet banks show technologically based scale economies, while no conclusive evidence exists of technology based learning economies. As Internet banks get larger, the profitability gap with traditional banks shrinks. To the extent that Internet banks are profitable, European authorities may encourage a larger number of consumers to use this delivery channel, by tackling consumers security concerns. This would allow Internet banks to capture more of the potential scale efficiencies implied in our estimations. [source]

Post-merger strategy and performance: evidence from the US and European banking industries

ACCOUNTING & FINANCE, Issue 4 2009
Jens 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]

Optimizing object classification under ambiguity/ignorance: application to the credit rating problem

INTELLIGENT SYSTEMS IN ACCOUNTING, FINANCE & MANAGEMENT, Issue 2 2005
Malcolm J. Beynon
A nascent technique for object classification is employed to exposit the classification of US banks to their financial strength ratings, presented by the Moody's Investors Services. The classification technique primarily utilized, called CaRBS (classification and ranking belief simplex), allows for the presence of ignorance to be inherent. The modern constrained optimization method, trigonometric differential evolution (TDE), is adopted to configure a CaRBS system. Two different objective functions are considered with TDE to measure the level of optimization achieved, which utilize differently the need to reduce ambiguity and/or ignorance inherently during the optimization process. The appropriateness of the CaRBS system to analyse incomplete data is also highlighted, with no requirement to impute any missing values or remove objects with missing values inherent. Comparative results are also presented using the well-known multivariate discriminant analysis and neural network models. The findings in this study identify a novel dimension to the issue of object classification optimization, with the discernment between the concomitant notions of ambiguity and ignorance. Copyright © 2005 John Wiley & Sons, Ltd. [source]

On the Information Content of Bank Loan-loss Disclosures: A Theory and Evidence from Japan

INTERNATIONAL REVIEW OF FINANCE, Issue 1 2000
Scott Gibson
We develop a model in which banks use loan-loss disclosures to signal private information about the credit quality of their loan portfolios. The cross-sectional predictions generated by the model are shown to help to explain previously documented counterintuitive empirical regularities for US banks. We also take advantage of a recent Japanese regulatory policy shift, which first forbade the reporting of restructured loan balances and then forced full disclosure. This policy shift allows us to address a common difficulty in testing signalling theories, in that we are able to construct a timely proxy for the private information that we allege is being signalled. Consistent with our signalling model, we find that banks taking the largest write-offs turn out later to be the strongest banks, with the fewest restructured loans. [source]

Loan Loss Provisions by Banks in Hong Kong, Malaysia and Singapore

JOURNAL OF INTERNATIONAL FINANCIAL MANAGEMENT & ACCOUNTING, Issue 1 2007
Li Li Eng
This paper studies loan loss disclosures by banks in Hong Kong, Malaysia, and Singapore for the period 1993 through 2000. We find that unexpected loan loss provisions are positively related to bank stock returns and future cash flows. This indicates that Asian bank managers increase loan loss provisions to signal favorable cash flow prospects, and bank investors bid bank stock prices up when unexpected provisions are positive. These results are consistent with those obtained by Wahlen (1994) for US banks. We also examine the impact of the Asian financial crisis of 1997 on the loan loss variables. The results indicate that the association between the unexpected loan loss provisions and bank stock returns and future cash flows was significantly lower in the crisis years, relative to the non-crisis period. Evidently, discretionary loan loss provisions had no signaling value during the crisis. This suggests that macroeconomic uncertainty influenced the strategic behavior of Asian bank managers and investors. [source]