Impact Of Financial Regulation Research Articles

The impact of financial regulations on bank lending in emerging economies in Sub-Saharan Africa

The aim of this study is to investigate the impact of financial regulations on bank lending in emerging economies in Sub-Saharan Africa. The dynamic system-generalized method of measures (GMM) is used to address difficulties such as unexplained periods and nation-specific implications, besides the endogeneity of the variables in question. Spanning from 2012 to 2022, the research used data from 80 banks in 20 sub-Saharan African nations. The findings show that expansive financial regulation, which includes a boost in the amount of cash in circulation, induces bank lending. At the same time, restrictive financial regulations, with the value as an improvement in interest rates by central banks, lead to credit contractions, albeit with little impact because of the attainable poverty of banking sectors, organizational limitations, bank-focused attention, and additional system rigidity typical of developing nations, which compromises the efficiency of the system. Other characteristics that substantially impact bank lending routes include capital sufficiency ratios and the scale of economic activity. Sub-Saharan African countries may boost the efficiency of financial regulations propagation on bank lending by making better use of the transfer process of fluctuations in cash supplies and interest rates.

The Impact of Financial Regulation on Indian Arbitral Institutions and Corporate Compliance

The Impact of Financial Regulation on Indian Arbitral Institutions and Corporate Compliance

Impact of Financial Regulations on Insurance Company Profitability in Morocco

Impact of Financial Regulations on Insurance Company Profitability in Morocco

The impact of financial regulation on changes in housing occupancy in the housing market

The impact of financial regulation on changes in housing occupancy in the housing market

Impact of Financial Regulation on Arbitration Institutions and Corporate Compliance in India

Impact of Financial Regulation on Arbitration Institutions and Corporate Compliance in India

Impact of Financial Regulations on Market Liquidity in Germany

Purpose: The aim of the study was to investigate the impact of financial regulations on market liquidity in Germany. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: Financial regulations in Germany impact market liquidity through a complex interplay of factors. While they enhance stability and investor protection, compliance costs and altered trading dynamics may initially hinder liquidity. However, regulatory initiatives driving innovation and global harmonization can ultimately foster a more efficient market environment, benefiting both domestic and international Unique Contribution to Theory, Practice and Policy: Market microstructure theory, information-based theory of liquidity & agency theory may be used to anchor future studies on the impact of financial regulations on market liquidity in Germany. Financial institutions should proactively adapt their trading strategies and liquidity management practices in response to changing regulatory environments. Regulators should adopt a balanced approach to financial regulation, considering both the benefits of market liquidity and the need for stability and investor protection.

A Study on the Impact of Financial Regulation on the Relationship between Housing Demand and House Affordability

A Study on the Impact of Financial Regulation on the Relationship between Housing Demand and House Affordability

The Impact of Financial Regulation on Bank Risk and Performance: The Basel III Spillover Experiment

The Impact of Financial Regulation on Bank Risk and Performance: The Basel III Spillover Experiment

“The Impact of Financial Regulation on the Ability of Emerging Growth Companies to Raise Capital in the US.”

“The Impact of Financial Regulation on the Ability of Emerging Growth Companies to Raise Capital in the US.”

THE EFFICIENCY OF FINANCING AND R&D IN TECHNOLOGY-BASED SMES AND IMPACT OF FINANCIAL REGULATION

Technological innovation is a long-term activity with highly unpredictable returns on investment, which makes SMEs with information problems and lack of collateral value be vulnerable to financing constraints when engaging in innovation activities. This study incorporates financing and R&D activities into the evaluation of innovation efficiency and further considers the impact of financial regulation as an external factor in technology-based SMEs in China. This study puts forward a three-stage dynamic DDF-DEA model to explore the overall innovation efficiency as well as the efficiency of each stage in technology-based SMEs by dividing the innovation process into three stages, namely the financing stage, R&D stage and operating stage. The study reveals that the overall efficiency of innovation are higher in non-coastal areas of China than in coastal areas. Non-coastal regions have higher efficiency in the financing and operating stages, while coastal regions have higher efficiency in the R&D stage. Strengthening financial regulation could improve the financing and R&D efficiency both in coastal and non-coastal areas, but it has different effect on the operating efficiency in coastal and non-coastal areas. The results of this study could provide some reference for China and other emerging economies to formulate policies in improving the efficiency of financing and R&D.

The impact of financial regulation on the stickiness of credit card lending rate: evidence from the USA

We examine the effect of the U.S. Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 on the credit card lending rate pass-through. Our findings show that the Act had no impact on the long-term relationship between the lending rate and funding costs. However, in the short-term, banks were quicker to raise rates in response to an increase in funding costs after the implementation of the CARD Act. Our study shows that financial regulations can have unintended consequences.

Foreign bank lending during a crisis: The impact of financial regulations

This study examines foreign bank lending during crises by using data on 1,558 individual banks in Asian and Latin American countries during the period 1987-2013. Our results reveal that, in a crisis period, Asian banks with a higher level of foreign ownership tend to reduce their lending. Nevertheless, during crises banks consistently increase their lending in order to support their borrowers; in fact, in Latin America, crises stimulate foreign banks to lend more. Our evidence on lending during a crisis supports credit rationing theories with a flight to quality. The international substitution effect also holds based on our results. Taking financial structures and regulation into consideration, for banks with more foreign ownership in a highly concentrated financial system in Asia, the crisis has less effect on a cut in lending, while it has a greater effect on cuts in lending for countries with a higher level of government-owned assets. This paper contributes to the existing literature on the bank lending channel and provides implications for policymakers.

금융기관의 대출집중 행태 개선효과에 관한 연구

금융기관의 대출집중 행태 개선효과에 관한 연구

The value-relevance of fundamental signals and the impact of financial regulations on security valuation and earnings management

This article investigates the value-relevance of earnings and financial analysts’ fundamental signals, as identified by prior research. We document four primary findings. First, consistent with the claims in the accounting literature, the value-relevance of ‘bottom line’ earnings has declined over time. Second, the combined value-relevance of earnings and financial analysts’ fundamental signals have also declined over time. Prior studies in this line of research have generated mixed evidence. In other words, some previous studies support an increase and some others find a decrease in the value-relevance of book values of net assets (common equity) over time. This study focuses on the financial analysts’ fundamental signals, not the book values of net assets, and the change in the degree of the value-relevance of those signals over time. Third, we find a negative correlation between firms’ excess returns and regulations, such as Sarbanes-Oxley (SOX) and Dodd-Frank, which are consistent with the claims of some prior studies that the implementation costs of the regulations may exceed their benefits for shareholders of the corporations affected by the regulations. Finally, we also report that the levels of opportunistic earnings management, reflected in some of those fundamental signals, have declined following these regulations.

A Data Science Approach to Predict the Impact of Collateralization on Systemic Risk

In this paper, we simulate and analyze the impact of financial regulations concerning the collateralization of derivative trades on systemic risk - a topic that has been vigorously discussed since the financial crisis in 2007/08. Experts often disagree on the efficacy of these regulations. Compounding this problem banks regard their trade data required for a full analysis as proprietary. We adapt a simulation technology combining advances in graph theory to randomly generate entire financial systems sampled from realistic distributions with a novel open source risk engine to compute risks in financial systems under different regulations. This allows us to consistently evaluate, predict and optimize the impact of financial regulations on all levels - from a single trade to systemic risk - before it is implemented. The resulting data set is accessible to contemporary data science techniques like data mining, anomaly detection and visualization. We find that collateralization reduces the costs of resolving a financial system in crisis, yet it does not change the distribution of those costs and can have adverse effects on individual participants in extreme situations.

Does a one-size-fits-all approach to financial regulations alleviate default risk? The case of dual banking systems

Financial regulations are developed to curb financial and economic fragility costs without undermining the economic contributions of banks to economic development. To understand the impact financial regulations have on reducing the financial fragility of banks we use the probability-of-default of banks as a proxy for bank failure. After analyzing data collected from 15 countries with a dual banking system for the period 2000–2015, we find convincing evidence that not all financial regulations have risk-reducing benefits for banks and the impact of financial regulations on default risk is not the same for conventional banks (CBs) and Islamic banks (IBs). The empirical evidence suggests that regulations that lessen overall default risk have a greater impact on IBs while those increasing default risk have a greater impact on CBs. Based on our findings we recommend that regulators should consider the different natures of CBs and IBs and tailor financial regulations to suit these operationally distinct financial intermediaries.

Regulation of Financial Innovation Stability vs. Progress?

This paper analyzes the impact of financial regulation on the process of financial innovation. We use a discrete investment choice model to examine the potential trade-off between a more innovative and a more stable financial system, which regulators might face when intervening in the process of financial innovation. While the trade-off holds in a simple setting, it can break when inefficiencies are added into the model. We find clumping behavior and preemptive moves as two examples of inefficiencies that break the trade-off. Regulators can combat those inefficiencies and thereby improve both innovativeness and stability at the same time.

The impact of financial regulation on current account balances

Both global imbalances and financial market deregulation feature prominently among the potential causes of the global financial crisis, but they have been largely discussed separately. In this paper, we take a different angle and investigate the relationship between financial market regulation and current account balances, an area for which limited empirical evidence exists. We use a panel of countries over the period 1980–2010 and employ a novel empirical approach which allows us to simultaneously account for model uncertainty, current account persistence and unobserved heterogeneity. We find robust evidence that financial market regulations affect current account balances and that different aspects of these regulations can have opposing effects on the current account. In particular we find that easing bank entry barriers is negatively associated with the current account balance. In contrast, bank privatization and securities market deregulation tend to raise current account balances. Our results also highlight the importance to control for persistence and unobserved heterogeneity. Once we control for these factors, we find robust evidence for a wide range of current account theories in contrast to previous studies accounting for model uncertainty.

A shackled revolution? The Bubble Act and financial regulation in eighteenth-century England

Revisionist estimates of growth rates during the British industrial revolution, though largely successful in presenting a more modest picture of Britain's ‘take-off’ prior to the 1830s, have also posed fresh analytical difficulties for champions of the new economic history. If eighteenth-century Britain was witness to a diffuse explosion of ‘useful knowledge,’ why did aggregate growth rates or industrial output growth rates not more closely shadow the pace of technological change? In an effort to explain this paradox, Peter Temin and Hans-Joachim Voth have claimed that a few key institutional restrictions on financial markets – namely the Bubble Act, and the tightening of usury laws in 1714 – served to amplify the crowding-out impact of government borrowing. Against this vision, the present paper contends that the adverse impact of financial regulation and state borrowing in eighteenth-century Britain has been greatly overstated. To this end, the paper first briefly outlines the historical context in which the Bubble Act emerged, before turning to survey the existing diversity of perspectives on the Act's lasting impact. It is then argued that there is little evidence to support the view that the Bubble Act significantly restricted firms' access to capital. Following this, it is suggested that the ‘crowding-out’ model, theoretical shortcomings aside, is largely inapplicable to eighteenth-century Britain. The savings-constrained vision of British capital markets significantly downplays the extent to which the Bank of England, though founded as an institution to manage the public debt, provided the entire financial system with liquidity in the eighteenth century.