Large International Banks Research Articles

Credit Risk Models: An Application to Deposit Insurance Pricing

The Federal Deposit Insurance Corporation (FDIC) has recently tested credit risk measurement models used by large international banks to measure the risk of their portfolios in order to measure the risk of default of its insured banks' deposits. Using both balance sheet and equity market data for a sample of 15 large Italian banks, this study applies some of these models to value both individual and portfolio default risks for a deposit insurance agency. The empirical analysis allows to estimate the loss probability distribution which in turn can be used to: (i) evaluate the capital adequacy of the deposit insurance agency; (ii) estimate the marginal contribution to the whole portfolio risk of a single insured bank; (iii) identify a formula for deposit insurance pricing, as an alternative to the one based on option pricing models. Such a formula, based on a value-at-risk framework enables a more accurate risk quantification.

Responses to formal performance appraisal feedback: the role of negative affectivity.

This study examined the effects of performance appraisal feedback on job and organizational attitudes of tellers (N = 329) in a large international bank. Negative affectivity moderated the link between favorable appraisal feedback and job attitudes. Among the higher rated performers, attitudes were improved 1 month after being notified of favorable appraisal results (Time 2). Improved attitudes persisted 6 months after the performance appraisal (Time 3) among tellers with low negative affectivity but not among those with high negative affectivity. Among the lower rated performers, mean levels of attitudes did not change significantly during the study.

Test-retest reliability and factor structures of organizational citizenship behavior for Hong Kong workers.

In 1990 Podsakoff, MacKenzie, Moorman, and Fetter developed a scale to measure the five dimensions of organizational citizenship behavior. Test-retest data over 15 weeks are reported for this scale for a sample of 82 female and 32 male Chinese tellers (ages 18 to 54 years) from a large international bank in Hong Kong. Stability was .83, and there was no significant change between Times 1 and 2. Analysis indicated the five-factor structure and showed it to be a reliable measure when used with a nonwestern sample.

TEST-RETEST RELIABILITY AND FACTOR STRUCTURES OF ORGANIZATIONAL CITIZENSHIP BEHAVIOR FOR HONG KONG WORKERS

In 1990 Podsakoff, MacKenzie, Moorman, and Fetter developed a scale to measure the five dimensions of organizational citizenship behavior. Test-retest data over 15 weeks are reported for this scale for a sample of 82 female and 32 male Chinese tellers (ages 18 to 54 years) from a large international bank in Hong Kong. Stability was .83, and there was no significant change between Times 1 and 2. Analysis indicated the five-factor structure and showed it to be a reliable measure when used with a nonwestern sample.

Size, Growth, and Variance among the World's Largest Non-merged Banks

This paper analyses growth, size, and variance of the capital, assets, and pre-tax profits of large international banks during 1987-97.We test hypotheses on whether size matters. It turns out that there is an inverse relationship between the amount of bank capital, assets, and profits and the growth rate of these items.This is in line with the findings for US banks in the pre-BrettonWoods era. Furthermore, we did not find, in contrast with Tschoegl's observations for international banks in the 1970s, a negative relationship between the size of large banks and the variability of growth in capital, assets, or profits. We conclude that size is not a self-sustaining attribute of international banks.

The Economics of Bank Mergers in the European Union, a Review of the Public Policy Issues

The Economics of Bank Mergers in the European Union, a Review of the Public Policy Issues

New Strategic Partnerships Between Large International Banks with Small‐ and Medium‐Sized Enterprizes

New Strategic Partnerships Between Large International Banks with Small‐ and Medium‐Sized Enterprizes

Globalization and Information Technologies: New Emerging Partnerships

Globalization and Information Technologies: New Emerging Partnerships

Debt Concentration and Bargaining Power: Large Banks, Small Banks, and Secondary Market Prices

Commerical bank debts of developing countries are held by large international banks and smaller domestic banks. This paper investigates how debt concentration—the proportion of a country's debt held by large banks relative to small banks—affects the secondary market price for these loans. We find that countries with higher concentrations have higher secondary‐market prices. We explain this empirical finding in a bargaining model that endogenizes the maximum penalty that banks can credibly impose on a recalcitrant debtor. We show that the banks' bargaining power increases with the degree of debt concentration, thus increasing repayment and secondary‐market prices.

Gender Differences in Transformational Leadership: An Examination of Superior, Leader, and Subordinate Perspectives

This study examined gender differences intransformational leadership from multiple perspectives.The sample was employees of a large international bank inAustralia. Ratings were obtained from branch managers' (n = 120 female and n = 184 male), theirsuperiors (n = 32) and subordinates (n = 588). Thefindings showed that superiors evaluated female managersas more transformational than male managers. Consistent with the superior observations, at the globallevel, female managers rated themselves as moretransformational than males, however, at the morespecific, behavioral level of analysis, significantgender differences were noted only for those subscaleswhich are more interpersonally-oriented. Subordinatesevaluated their female and male leadersequally.

Managerial assessment centres: What is being rated?

Managerial assessment centres have become a popular method of assessing management competencies. However, the expanded growth of assessment centres has not been accomplished by systematic evaluation of the assessment process. This study investigated the construct validity of ratings of managerial assessment centre competencies, and three psychological correlates of these ratings were examined: verbal ability, personality type, and dominant career interests. Participants were 875 potential managers of a large international bank. There was no support for the construct validity of the proposed five managerial competencies. Rather, candidates were assessed on the basis of a single evaluative dimension. The findings suggested that assessment centre ratings reflect a global appraisal of verbal and social skills of participants. We offer a number of suggestions to improve the construct validity of assessment centre ratings, and recommend that some managerial competencies may be better assessed by psychological tests.

97/02039 Geochemical characteristics of the Oku-aizu geothermal system, Japan

Exploration for geothermal resources began in Romania in the early 1960s, based on a detailed geological exploration program for hydrocarbon resources that had a capacious budget and enabled the identification of eight geothermal areas. Over 200 wells drilled to depths between 800 and 3500 m have indicated the presence of low-enthalpy geothermal resources (40–120 °C). Completion and experimental production from over 100 wells during the past 25 years has led to the evaluation of the exploitable heat resources of the geothermal reservoirs. The proven reserves, with the wells that have already been drilled, amount to about 200,000 TJ for 20 years. The main geothermal systems discovered on Romanian territory are in porous permeable formations such as sandstones and siltstones (Western Plain and the Olt Valley) or in fractured carbonate formations (Oradea, Bors, and north of Bucharest). The total thermal capacity of the existing wells is about 480 MWt (for a reference temperature of 25 °C). Only 152 MWt of this potential is currently being exploited, from 96 wells (35 of which are used for health and recreational bathing), producing hot water in the temperature range 45–115 °C. In 2002 the annual energy utilisation from these wells was about 2900 TJ, with a capacity factor of 0.6. More than 80% of the wells are artesian producers, 18 wells require anti-scaling chemical treatment and six are reinjection wells. During the period 1995–2002, 15 exploration-production geothermal wells were drilled and completed, two of which were dry holes. Drilling was financed by the geological exploration fund of the State Budget, to depths varying between 1500 and 3500 m. Progress in the direct utilisation sector of geothermal resources has been extremely slow because of the difficulties encountered during the transition period from a centrally planned to a free-market economy; geothermal production is at present far below the level that could be expected from its assessed potential, with geothermal operations lagging behind in technology. The main obstacle to geothermal development in Romania is the lack of domestic investment capital. In order to stimulate the interest of potential investors from developed countries and to comply with the requirements of the large international banks, an adequate legal and institutional framework has been created, adapted to a market-oriented economy.

96/05711 Proceedings ‘Restructuring the electricity and gas markets: the review scene’

Exploration for geothermal resources began in Romania in the early 1960s, based on a detailed geological exploration program for hydrocarbon resources that had a capacious budget and enabled the identification of eight geothermal areas. Over 200 wells drilled to depths between 800 and 3500 m have indicated the presence of low-enthalpy geothermal resources (40–120 °C). Completion and experimental production from over 100 wells during the past 25 years has led to the evaluation of the exploitable heat resources of the geothermal reservoirs. The proven reserves, with the wells that have already been drilled, amount to about 200,000 TJ for 20 years. The main geothermal systems discovered on Romanian territory are in porous permeable formations such as sandstones and siltstones (Western Plain and the Olt Valley) or in fractured carbonate formations (Oradea, Bors, and north of Bucharest). The total thermal capacity of the existing wells is about 480 MWt (for a reference temperature of 25 °C). Only 152 MWt of this potential is currently being exploited, from 96 wells (35 of which are used for health and recreational bathing), producing hot water in the temperature range 45–115 °C. In 2002 the annual energy utilisation from these wells was about 2900 TJ, with a capacity factor of 0.6. More than 80% of the wells are artesian producers, 18 wells require anti-scaling chemical treatment and six are reinjection wells. During the period 1995–2002, 15 exploration-production geothermal wells were drilled and completed, two of which were dry holes. Drilling was financed by the geological exploration fund of the State Budget, to depths varying between 1500 and 3500 m. Progress in the direct utilisation sector of geothermal resources has been extremely slow because of the difficulties encountered during the transition period from a centrally planned to a free-market economy; geothermal production is at present far below the level that could be expected from its assessed potential, with geothermal operations lagging behind in technology. The main obstacle to geothermal development in Romania is the lack of domestic investment capital. In order to stimulate the interest of potential investors from developed countries and to comply with the requirements of the large international banks, an adequate legal and institutional framework has been created, adapted to a market-oriented economy.

The formation of a virtual global bank

Banks are undergoing dramatic changes to their organization structures, operations and information systems. The banking market is also developing because information technology (IT) is enabling the banks' business customers to create new forms of organization and trade, and there is a clear trend towards the globalisation of markets and competition. Banks are responding in a variety of ways, each of which is designed to increase their ability to act internationally and more quickly. In this paper the international payments and foreign exchange markets are analysed and a case study of an international bank is presented. The traditional methods of foreign exchange dealing and subsequent payment transfer using the Society for World-wide International Funds Transfer (SWIFT) are coming under close scrutiny, and new and better ways of operating are being devised. This paper describes one approach to redesigning the international payments process. It describes the partnership strategy which is being implemented by a large international bank in cooperation with a number of regional banks, resulting in the creation of a virtual global bank. An outline is given of the evolution of the strategy, showing how a vision of the way transactions should be carried out has enabled the bank to combine its various internal strengths and develop its market network. The virtual bank system and its implementation are presented, and issues of organizational and market network change are considered. Finally the results are compared with network theory and the inter-relationships between strategy, network structure and IT are analysed.

Systèmes monétaires et systèmes de change du XVIe et d'aujourd'hui en Europe occidentale

The fascinating story of the monetary experience of Occidental Europe that M.-T. Boyer-Xambeu, G. Deleplace and L. Gillard recount in their work, Private Money and the Power of the Princes, inspires numerous questions about the relationship between this experience and today's in the same geographical area. Is not the role of Lyons in 1533-1575 now fulfilled by the European Monetary System and the City of London? Have not the merchant-bankers of the sixteenth century simply been replaced by today's large international banks? Aren't the profits that the latter derive from the multiplicity of national monies still coming from the same source? Don't the differences stem fundamentally from the reductions of the costs of transport and communications owing to the airplane, telecommunications, and the computer? These multiple questions are the subject of this article, in which we try to cast light on the evolution of the relationship between the powers, the bankers, and the people in the determination of exchange rates since the sixteenth century.

Japanese trading companies: can they be copied?

Analysis of Japanese trading companies suggests that would-be U.S. trading companies could be emulate Japan's special, rather than general, trading companies. Factors likely to lead to success are: offering narrow high-margin product lines in geographically diversified markets; integration with manufacturing operations having strong domestic markets; well capitalized finances with access to ample credit, perhaps achieved through partnership with large international banks; efficient working capital management consisting of liberal but controlled trade credit and tight inventories; management experienced in international markets and capable of heeding national interest considerations in many countries; and patience and a long-term outlook, since during client relationships are necessary to achieve profitability.

Systematic Quality Management in Banking

This article describes the systematic approach which has been used in the management of the quality of service produced in several large international banks. A useful concept of the social, technical and managerial aspects of operations management is introduced to provide a framework for the management of quality in banking. A description of systematic quality management in practice shows how the ideas of Management by Responsibility and Self-Audit Programmes have been used successfully to reduce considerably both audit criticisms and losses written off.

Japanese Trading Companies: Can they Be Copied?

Analysis of Japanese trading companies suggests that would-be U.S. trading companies could be emulate Japan's special, rather than general, trading companies. Factors likely to lead to success are: offering narrow high-margin product lines in geographically diversified markets; integration with manufacturing operations having strong domestic markets; well capitalized finances with access to ample credit, perhaps achieved through partnership with large international banks; efficient working capital management consisting of liberal but controlled trade credit and tight inventories; management experienced in international markets and capable of heeding national interest considerations in many countries; and patience and a long-term outlook, since during client relationships are necessary to achieve profitability.

Size, Growth, and Transnationality Among the World's Largest Banks

This essay investigates the relationship between size and growth rate of large international banks and then relates these to the banks' degree of transnationality. We test two sets of three propositions each. The first three propositions are (PI) that the growth rate of each bank over some period is independent of its size; (P2) that the variability of growth rates is independent of the banks' size; and (P3) that the banks' growth rates in two consecutive periods are independent of each other. The second three propositions are (P4) that there is no association between size and transnationality; (P5) that transnationality and growth are independent; and (P6) that there is no relationship between transnationality and the variability of growth rates. The growth referred to is primarily that of assets as a measure of size. For the two propositions concerning the variability of growth rates we supplement this measure with one of the market value of the banks' equity. The results have implications for concentration in internaThis paper investigates six propositions relating to Gibrat's Law of Proportionate Growth. The growth referred to is that of book assets and total market value. The results have implications for concentration in international banking and for depositor safety and the social cost of insuring it, and provide evidence on economies of scale and on the transnational spread of the industry.

The Relationship between Managers' Budget-Oriented Behavior and Selected Attitude, Position, Size, and Performance Measures

The literature indicates that dysfunctional individual and organizational consequences may result from the use of budgeting in complex organizations. Yet, systematic measurement and empirical testing of budget-oriented behavior and its behavioral effects are lacking. This paper describes a study designed to determine whether the budget-oriented behavior of a sample of managers drawn from the branch organization of a large international bank is related to various attitude, position, size and performance measures. A survey research questionnaire was used and analyses of managers' responses show that four aspects of this budgetoriented behavior are identifiable and independent, and that derived measures of these aspects tend to correlate in expected directions with other variables measured as part of the survey.