Understanding banking sector reforms in Turkey: assessing the roles of domestic versus external actors1

In this study, we investigate the effect of regulation on banking sector performance in an emerging country context. Consecutive crises in the early 2000s led to three waves of reformist banking regulations in Turkey: (1) the banking sector restructuring program in 2002, (2) limitation of the full deposit insurance system in 2004, and (3) a corporate governance-related banking law in 2005. Results show that these actions had a positive effect on bank lending, asset quality, and profitability. Findings also support the view that the sequence and timing of banking reforms in Turkey acted as a shield against the global financial crisis of 2008.

This paper employed time series data on relevant empirical diagnostics to examine banking sector growth-led nexus within the context of Africa’s largest economy, Nigeria. Diagnostics established stationarity of banking sector indicators and control variables at first difference. Findings showed no causal relationships between banking sector reforms and economic growth in the short-run and that, though liberalisation in particular did not Granger-cause growth of the economy during the study period, banking sector reforms caused growth of the real sector of the Nigerian economy. Hence, the caveat was that long-run growth effects of banking sector reforms on real sectors of economies are functions of policy targets of such banking or financial sectors reform strategies. Consequently, articulation of banking and financial sectors reforms within long-run rather than short-run perspectives and complementarity of liberalisation were recommended.

There is a growing concern associated with the recent banking sector reform on whether it achieved its purpose of making banks efficient or not. Several studies have had several opinions with respect to the real impacts of banking sector reforms on banking sector efficiency. Consequently, this study examines the impact of Nigerian banking sector reforms on Nigerian banks’ performance and efficiency in two time periods – pre -consolidation period and postconsolidation period. To evaluate this, the researchers adopt a non-parametric (Data Envelopment Analysis) approach, and the factors that determine efficiency are examined. The findings of this study reveal varying levels of efficiency in both periods. Although some banks still remained inefficient, there was a general improvement in efficiency in the post-consolidation period. This improvement was not entirely attributed to the consolidation policy as two immediate years after the consolidation exercise still recorded poor levels of efficiency among many banks. Further investigation reveals some effects of the recent financial crisis on the overall efficiency of Nigerian banking sector.

This research investigated the banking sector reforms and economic growth using time series data from 1970 to 2013 for the Nigerian economy. Autoregressive Distributed Lags (ARDL) Bounds test was applied for the specific determination of the long and short-run relationships between banking sector reforms and economic growth. The research finds that the interest rate margin is more significant than other variables in the model in explaining the banking sector reforms and economic growth. Banking sector credit to the private sector was negative and statistically insignificant in economic growth in Nigeria. This means that the size of the banking sector does not enhance economic growth. Meanwhile, inflation is negatively and statistically significant in economic growth. The duration of banking sector reforms should be defined and strictly adhered to irrespective changes in the political administration of the country.

Banking sector plays a vital role the development of any economy. There were LPG ushered in drastic changes in Indian economy in the year 1991. At the same time Indian banking sector was plagued with many problems. To bring Reforms in the Banking sector Narasimham committee was formulated. Narasimham committee Recommendations were far-fetched and far-ahead of their times. Financial inclusion initiatives have a history of more than fifty years. Measures towards Financial inclusion in India started before the introduction of Banking Reforms. Financial inclusion initiatives like Nationalisation of banks, Self-help group model,Kissan credit cards and General credit cards, Bankmitr, Swabimaan campign, Pradhanmantri Jandhanyojana etc contributed tremendously not only towards financial inclusion but also towards the banking sector reforms in India. This paper tries give a bird eye view towards the contribution of Financial inclusion measures towards Banking sector Reforms.

PurposeBanking sector reforms can impact the development of the real sector. However, there is very little known about this impact on the construction sector in a developing country context. This study aims to evaluate the impact of the banking sector reform on the construction output (CNS) using the banking sector reform in Nigeria in 2005 (2005 Banking Sector Reform Programme [BSRP]) as a case.Design/methodology/approachThis study used econometric methodology comprising unit root test for stationarity, Johansen test for cointegration, analysis of variance (ANOVA) and the analysis of covariance. Time series data covering a period from 1981 to 2017 (37 years) about the banking and construction sector performances are analyzed using ten-time series equations.FindingsThe ANOVA estimates reveal that the 2005 BSRP positively impacted the CNS and construction sector growth rate. However, the ANOVA estimates reveal that the gross domestic product (GDP) and bank total loan had a positive impact on CNS in the period (1981–2017) before and after the 2005 BSRP, and consequently removing the effect of the 2005 BSRP on CNS.Practical implicationsThis paper concludes that the banking sector reform has a positive impact on CNS in the Nigerian construction industry. The impact is greater and lasting when the reform is directly targeted at improving CNS.Originality/valueThis study provides empirical evidence of the dependence between banking sector reform and construction sector performance in a developing country context. Also, this study demonstrates the relationship between GDP, banking sector reform and construction sector performance in a developing country context.

The Nigerian economy has been experiencing a lot of reforms in the banking subsector. Despite these reforms that ought to have enhanced the performance of the industrial sector of the economy, the weak performance of the industrial sector has survived unscathed and prolonged. Therefore, the major interest of this paper is to investigate the long and short-run relationships existing between banking sector reforms and the performance of the industrial sector in Nigeria. The study begins with a review of the banking sector reforms and the link to the industrial sector performance. Time series data from 1982-2015 are used to empirically assess the long-run relationship between banking sector reforms-targeted variables and the Nigerian industrial sector. The Modified PANTULA Principle was adopted in the selection of the most suitable variant of the Johansen Cointegration technique and found that model three was only suitable in the determination of the long-run relationship between commercial banks credit to the industrial sector and industrial production, and not manufacturing capacity utilisation.Summary of the variants of the Johansen cointegration equations were provided to facilitate a robust discussion of the long-run relationship between the indicators of banking sector reforms and industrial sector performance. A modified variant of causality test was adopted in the investigation of the direction of causality that exist between the reforms variables and industrial sector performance indicators. Various lag selection techniques were applied and found the Final Prediction Error(FPE) as most suitable. The Vector Auto Regression (VAR) impulse response and variance decomposition were applied to determine the effects of the reforms shocks on the industrial sector performance variables. The results shows amongst other that in the era reforms, the shocks from the banking sector credit to the industrial sector is higher than other reforms indices. This makes credit to the industrial sector a potent force in the enhancement of industrial sector performance in Nigeria. Therefore, banking sector reforms should be designed to enhance the consistent flow of credit to the industrial sector of the economy. Structural breaks were also applied to see the effects of the changes in reforms on the performance of the industrial sector.

Banking sector reforms is the deliberate policy measures adopted by the monetary authority to promote the safety, soundness, reliability and stability of the sector, in order to be able to deliver the expected goods by improving the economy. It is against this background the investigates that impact of bank sector reforms on Nigeria’s economics growth for the period which spanned from 1970 to 2014 using ARDL analysis. The period study was disaggregated into pre bank reforms period (1970-1985), reforms period (1986-2014) and pool period (1970-2014). Real Gross domestic product (GDP) was used as a proxy for economic growth regressed on some bank performance variables such as ratio of narrow money to broad money, loan deposit ratio, commercial bank credit to the private sector, cash reserve ratio and interest rate. The study found that the bank reformed has not impacted on the growth of the Nigerian economy. The study recommend that the government should ensure strict regulatory measures through the use of its monetary policies to regulate the banking sector and the Central Bank of Nigeria should continue with its banking sector reforms and encourage substantial credit allocation to the prioritized private sector.

In India, the last 10 years have seen major improvements in the working of various financial market participants. The government and the regulatory authorities have followed a step-by-step approach, not a big bang one. The entry of foreign players has assisted in the introduction of international practices and systems. Technology developments have improved customer service. On the whole, the cumulative effect of the developments since 1991 has been quite encouraging. An indication of the strength of the reformed Indian financial system can be seen from the way India was not affected by the Southeast Asian crisis. However, financial liberalisation alone will not ensure stable economic growth. Some tough decisions still need to be taken. This research paper seeks to analyse some of the thrust areas of the Banking sector in India and its impact, with an overview of the Asian context. Banking Sector Reforms have always postulated positive goals. However, the impact of Banking, economic and Governmental policies reveal a lopsided growth ailing in several quarters as well as a shortfall in targets due to several constraints. We have analysed the impact of policies on rural credit and funding, the extent of financial inclusion achieved, the need to address inequalities of income through planned redistribution of income and wealth and to channelize the Banking sector for a positive role in this regard, the funding from Banks in infrastructure and growth projects, the support to MSMEs’, the impact of monetary and fiscal policies in the context of the current economic situation, effectiveness achieved through regulation and norms and a brief assessment of system integrity and a comparative analysis in the Asian context. The Research data indicates that Banking Sector Reforms have always been pragmatic and inclusive. However, the impact of Banking, economic and Governmental policies reveal a lopsided growth ailing in several quarters as well as a shortfall in targets due to several constraints.

Banking and financial sector assume a crucial role in enhancing economic development. During 1990s, when GCC countries underwent major economic reforms, the private sector had to play a leading role by participating in the economic development activities such as designing and implementing private programs in which the private sector can significantly contribute. Since the role of private sector has expanded, their financial requirements have increased. This gap was largely filled in by the banking sector for capital market has not been so effective in the Gulf region. Thus, Banking sector reforms have forced the banks in Gulf region to be more focused on satisfying customers developing new operating models, defining new business strategies to achieve operational efficiency in the changing environment. When it comes to Oman, the banking system is sound and efficient. A major challenge being faced by the banks in Oman is to manage the operational and strategic changes that are increasingly taking place after 1990 when major economic reforms were introduced. Efficient change management is the driving and resisting force for achieving the bench mark target in all functions of banks. The purpose of the study is to measure the financial efficacy of commercial banks in Oman after 1990s in the process of their way of handling the changes.

This paper gives an overview of the banking sector in Kenya; it highlights the reforms since the country‟s independence in 1963; it tracks the growth of the banking sector in response to the reforms implemented over the past four decades; and finally, it highlights the challenges facing the banking sector in Kenya. The country‟s banking sector consists of more than 40 commercial banks, with the Central Bank of Kenya, which is the country‟s central bank, at the apex. Since the 1980s, the Kenyan government has implemented a number of banking sector reforms – in order to safeguard and improve the banking sector. The response to these reforms by the banking sector has been varied. As a result of these reforms, there has been a shift in the dominance from the State-owned banks to the private commercial banks. There has also been an improvement in the Central Bank‟s oversight of the financial institutions, and an enforcement of the banks‟ capital-adequacy requirements. By the standards of African countries, Kenya currently has one of the most developed banking systems in Africa. The country has enjoyed a substantial bank-based financial sector development over the years, and its institutional framework has also grown stronger. However, like many other developing countries‟ financial systems, the Kenyan banking system still faces wide-ranging challenges, such as high interest rate spreads and financial inclusion challenges

In the article the efficiency of implementation of reforms in the banking sector in the conditions of crisis is analysed. An analytical study of the implemented measures of reforming the banking sector as a significant component of the country's monetary policy system has been carried out. It is indicated that the banking sector, as the main regulator of the country's monetary policy, keeps the most important blocks of the financial system of the state under absolute control. But at present, the country's economic sector and its banking sector in particular is facing serious threats that require concrete proposals to resolve them. It is specified that the issues of determining the factors and factors that support the country's economy and the search for effective reforms of the banking sector in the monetary policy system are becoming particularly relevant. It is stated that banking crises are an indicator of instability and devaluation of the economy. To avoid their recurrence or mitigate their negative impact, government regulators should develop a mechanism that would strengthen prudential requirements for market participants – financial companies. It is noted that after the reforms of the banking sector of Ukraine in the field of corporate lending in 2016–2017, banks became more willing to provide loans for small amounts, and consequently, the concentration of the loan portfolio decreased. It is noted that the implemented reforms have encouraged banks to pay more attention to the financial condition of debtors, which has allowed to expand access to credit for financially stable clients. It is emphasised that banking sector reform should be the highest priority of the monetary policy system if the country intends to improve and realise its economic growth potential in the coming years. It is concluded that reformation efforts should be aimed at strengthening the supervisory structure, enhancing prudential requirements, increasing transparency of banking operations, management and financial reporting, as well as facilitating the consolidation of fragmented private banks and equalising of the playing field between private and state-owned banks, in particular, given the dominant position of the National Bank and the full guarantee of household deposits in private banks.

This paper gives an overview of the Australian banking sector; it highlights the reforms since the 1970s; it tracks the growth of the banking sector in response to the reforms implemented over the past five decades; and finally, it highlights the challenges facing the Australian banking sector. The country’s banking sector consists of more than 60 commercial banks, with the Reserve Bank of Australia, the country’s central bank, at the apex. Since the 1980s, the Australian government has implemented a number of banking sector reforms in order to safeguard and improve the banking sector. The response to these reforms by the banking sector has been varied. As a result of these reforms, there has been an increase in the number of banks and a decrease in the number of building societies and credit unions. There has also been an improvement in the central bank’s oversight of the financial institutions, and an enforcement of the banks’ capital-adequacy requirements. Currently, Australia has one of the most developed banking systems in the world. The country has enjoyed a substantial bank-based financial sector development over the years, and its institutional framework has also grown stronger. However, like any other country’s financial system, the Australian banking system still faces wide-ranging challenges, such as bank concentration and exposure.

Banking sector is an important part of the financial system of any country. Through this article an attempt is made to focus on the changes that have taken in different phases in the banking sector in India. The article highlights that the banking sector reform was undertaken early in the reform cycle in India. The changes were not driven by any crisis. The reforms have not been an outcome of multilateral aid. The design and detail of the modification were evolved by domestic expertise; though international experience is always kept in view. The banking sector is the lifeline of any modern economy. It is one of the important pillars of the financial system, which plays a vital role in the success/failure of an economy. Banks are one of the oldest financial intermediaries in the financial system. Through this discussion we try to highlight the different functions carried out by the Commercial banks in India. Also we have made an attempt to give an eyes view of the present setup in the Commercial Banking sector in India with special reference to Digital Banking.

Banking sector reforms faced some difficulties despite its laudable achievement. In Nigeria, wrong perception and stiff resistance to the policy could potentially determine prospective investors in the banking industry. The objective of the study is to analyse banking sector reforms on Nigeria economic growth for competitive global market from 1981-2020. The study made use of secondary time-series data sourced from annual CBN statistical bulletin. Augmented Dickey Fuller (ADF) and cointegration test were employed to determine the existence of long run relationship among the variables. The study used Econometric View (E-view 12) for descriptive analysis of the variables. The findings revealed that among others that credit allocation to private sector had a statutory trend from 1981 to 2006 and later experienced a gradual upward movement from 2007 to 2020. This shows that banking sector has contributed to the real sector of the economy through credit given to private sector. It shows that credit is significant to economic growth. The study concluded and recommended that time lag should be permitted to exist from one reform period and the next reform period to allow for appropriate planning and as well policy consistency.