Special Bank Research Articles

Россия и вызовы Восточной Азии

The article deals with the prospects for Russia’s “pivot to the East” taking into account main chances as well as risks in the context of growing challenges in East Asia. The author stresses that national and regional misbalances in East Asia are the results of the dynamic development of East Asian countries during the last 15 years. “Middle class trap” is at the agenda as the main common problem in China and ASEAN member countries. The analysis focuses also on such issues as broad scaled corruption and state-controlled legal system, quality of political, social institutions and social lifts, role of nationalism and culture. Regional misbalances in infrastructure and R&D as well as the crisis of regional institutions are characterized as new challenges to integration trends in East Asia and Asia-Pacific area in general. According to the author’s view, there are three different types of policies to meet the domestic challenges and to overcome “middle class trap”: Japanese, South Korean and Chinese. Prime Minister Ikeda’s “income-doubling plan” accompanied by public activity is described as an effective reform-oriented policy. South Korea’s transition from dictatorship to democratic society and more flexible economy is another type of positive reform policy. According to China’s modern domestic strategy, a lot of attention is paid to administrative measures against corruption, modification of social policy, reforms of banks, etc. At the same time, public activities and legal system, in spite of some improvements, are still under rigid administrative control. Meanwhile, the role of law will be crucial factor of successful development of East Asian countries at the stage of “middle class economy”. To a large scale, the prospects for regional integration depend on growing creative role of China (for example, investments into regional infrastructure and establishment of special bank, initiations of the Asia-Pacific Free Trade Area). At the same time, China will continue cooperation and dialogue with other countries, first of all with the USA. ASEAN members increase their activity to improve sub-regional cooperation and relations with United States and Japan in order to couterbalance China’s influence in East Asia. Finally, the author describes Russia’s policy towards East Asia and the Pacific, including brief history, main trends and key priorities at the current stage. “Free Vladivostok port” and some other initiatives to realize more flexible economic strategy towards East Asia and Pacific will give opportunity for Russia to promote its integration into the Pacific Area. Transition of Russia’s export structure from resources and energy to innovation goods and services is at the agenda.

Problem efektywności banków w literaturze przedmiotu

The purpose of this article is to analyze the literature related to the problem ofbank effectiveness. The article is divided into three parts. The first one is devotedto the various concepts of effectiveness. The second part discusses the methodsand tools used to measure the level of efficiency of a banking market. The thirdpart presents results of selected studies on this issue, with a special emphasis onthe banking sectors of economies during systematic transformation.

New National Solutions for Bank Failures: Game-changing in the UK, Germany and the Netherlands?

This article discusses the special bank insolvency laws that have been enacted in the UK, Germany and the Netherlands since the onset of the global financial crisis. By 1 January 2015, the national regimes had to be adjusted to new European bank insolvency rules. Yet we believe these common European rules will fail to eliminate some significant differences between national bank insolvency regimes. Moreover, the new European rules will not prevent governments from resolving big banks along territorial lines if not by nationalization.

Institutional bricolage in times of crisis

How may we understand the occurrence of gradual but significant change following economic crisis? Theories of gradual institutional transformation offer important insights to analyses of long-term institutional change, but have so far shied away from dealing with institutional change during and following crisis, leaving the issue to more traditional critical juncture models. Instead of seeing gradual institutional change originating only in the efforts of rule takers to circumvent existing institutions – potentially leading to gradual change over longer periods of time – the paper suggests that in more abrupt processes of change characteristic of economic crisis, rule makers may also reinterpret the meaning of rules and redeploy them under significantly altered circumstances leading to gradual change. The paper suggests that the concept of bricolage is useful for understanding how policymakers create new institutional setups through the re-ordering of existing institutional elements. The empirical relevance of these arguments is demonstrated with a study of post-crisis special bank insolvency policies in Denmark and the United States, showing how in both polities new institutions were created from existing institutional elements.

Universal Banking Service in Russia

The tendency of banking universalization, which has been predominant over the past decades, is determined by three important processes in the world: financial globalization of the world economy, reduced agency business of banks, and increase in competition among banks, non-bank financial institutions, and non-financial institutions. In this regard, it is of particular importance to define the concept, role and place of universal and specialized banks in banking system. The purpose of the study is to develop the scientifically based development model of a commercial banks as a universal one upon the footing of detailing the essence, place and role of universal banks in banking system, with due account for the modern processes of universalization and specialization of credit institutions, development of competitive strategy types, which is of great importance for improving the quality of bank management at macro-and micro levels, ensuring sustainable development of credit institutions and their increasing role in Russian economy. The study is based on the dialectic method of knowledge as a means to identify trends, patterns and contradictions in banking system development. Systematic, expert and analytical, comparative, institutional, evolutionary and methodological approaches were used in the course of the study, as well as a wide range of economic and statistical methods, such as functional analysis, sample survey, expert evaluations, generalization and statistical groups. According to the study, the concepts of “universal commercial bank” and “specialized commercial bank” have been clarified based on the study and systematization of theoretical and practical approaches to the definitions. The place and the types of universal and specialized commercial banks in Russian banking system have been identified. The role of universal banks in Russian economy has been substantiated, with due account for development trends: a) global and national banking systems; b) the practice of forming the strategy of universal banks abroad. The approaches to specialized banks risk management have been suggested.

Investing Japan: foreign capital, monetary standards, and economic development, 1859-2011

Investing demonstrates that foreign investment is a vital and misunderstood aspect of Japan s modern economic development. The drive to become a modern industrial power from the 1860s to the 1930s necessitated the adoption and internalization of foreign knowledge. This goal could only be achieved by working within the overarching financial and technological frameworks of Western capitalism. Foreign borrowing, supported by the gold standard, was the crux of Japan s pre-war capital formation. It simultaneously financed domestic industrial development, the conduct of war, and territorial expansion on the Asian continent. Foreign borrowing also financed the establishment of infrastructure in Japan s largest cities, the nationalization of railways, the interlinked capital-raising programs of special banks and parastatal companies, and the rapid electrification of Japanese industry in the 1920s.Simon James Bytheway investigates the role played by foreign companies in the Japanese experience of modernization while highlighting their identity as key agents in the processes of industrialization and technology transfer. Investing delivers a complex, multifaceted analysis, intersecting with the histories of formal and informal economic imperialism, diplomacy, war financing, domestic and international financial markets, parastatal and multinational enterprise, and Japan s internationalization vis-a-vis the emerging global market.

An Overview of School Banking Program: Its Problems, Prospects and Acceptability (A Case Study on Janata Bank Limited Shamoli Corporate Branch)

JANATA Bank Limited was born with a new concept of purposeful banking sub serving the growing and diversified financial needs of planned economic development of the country. Very recently, BANGLADESH BANK has launched a scheme for the students named ‘School Banking Scheme’ through all commercial and specialized banks in Bangladesh. This concept is new as a separate product but became a popular one within two years with a view to inspiring for savings and creating savings mentality to the school going students with an attractive interest rate, waiver of service charges like other deposit accounts. BB issued a circular on 2nd November, 2010 to all commercial Banks for all school going students to be introduced with developed technology and banking services to play role in financial activities by savings. Up to this period more than 38 banks launched this scheme. But the rules and regulation to operate this kind of account is still ambiguous to all guardians as well as officials that how to open and operate, what necessary documents are needed to open this account from the students though every banks kept about all scheme through website. According to updated statistic of Bangladesh Bank Up to June’2011 to December’2011 more than 67 thousand 220 numbers of school banking accounts was opened and operated under banking jurisdiction. Approximately taka 31 crore was deposited under 29 thousand number of school banking accounts and taka 22 core 39 lac has been increased within six month difference. According to Private statistic there are 65 thousand and 428 numbers of accounts are in the form of school banking deposit account and deposit amount came to about taka 42 core 37 lac. Due to lack in publicity school banking scheme did not overcome its objectives like other deposit schemes. By this scheme most of students can able to build up capital for their future and besides this banks not only use to recurring deposit but also play a social role in the country. This program would be the milestone for the school banking operation for the students and guardians and for the bankers who will introduce the scheme.

Slovenia: Technical Assistance Report-Bank Intervention and Resolution and the Deposit Guarantee System

This Technical Assistance Report assesses the bank resolution framework and deposit guarantee system in Slovenia. There are three necessary requirements for effective bank resolution: (1) a special bank resolution regime, (2) advance preparation for bank intervention and resolution, and (3) an adequately funded Deposit Guarantee Scheme (DGS). Slovenia’s banking law provides for the first, while the recommendation to create a Resolution Unit within Bank of Slovenia has been adopted. The extant DGS, however, is an ex post funded scheme that does not fulfill the third criteria. Slovenia must implement the European Union Deposit Guarantee Scheme Directive into national law, which calls for an ex ante funded DGS.

Does Comprehensive Banking Function Improve the Efficiency of Financial Institutions?; Case of Sri Lanka

This paper investigates the efficiency of major deposit taking financial institutions in Sri Lanka in terms of the involved level of banking activities during the period of 2009–2013. Data envelopment analysis was used to measure the efficiency of financial institutions with three inputs and three outputs. The results revealed that licensed commercial banks were more efficient over the licensed specialized banks and licensed finance companies. The results suggest that the level of banking activities is a matter of efficiency. Licensed commercial banks, which operate in a comprehensive banking function, show better efficiency scores over the other limited scope financial institutions. The efficiency scores revealed that financial institutions in Sri Lanka operate in variable returns to scale rather than constant returns to scale. Further, adoption of fair value based accounting standards has caused to decrease efficiency scores during the initial years of the adoption. This may be viewed as a mismatch of the value of input and output variables, which was arisen as a result of fair values.

Performance of Thailand banks after the 1997 East Asian financial crisis

The performance of commercial banks and government-owned specialized banks in Thailand is estimated after the 1997 East Asian financial crisis. Commercial banks exhibit increasing returns to scale, whereas government-owned specialized banks exhibit decreasing returns to scale, implying further increases in bank size and market concentration in the commercial bank sector but not for government specialized banks. Cost inefficiency varies by bank and is a function of the ratio of nonperforming loans (NPLs) to total loans, equity to total assets and liquid assets to total assets, as well as the number of branches. On average, banks with fewer NPLs, that are well capitalized and with adequate liquidity are efficient. Thus, stricter rules to regulate credit risk management and ensure capital and liquidity adequacy would enhance efficiency in the banking sector. Although estimated input substitutability appears to be low, labour and loanable fund are substitutes. However, labour and physical capital as well as physical and loanable funds are complements in commercial banks. All the three inputs of labour, physical capital and loanable funds are substitutes for the government specialized banks.

Early Detection of Potential Bank Bankruptcy Through Financial Ratio Analysis: Multinomial Logistic Regression Model

Prediction of potential bank bankruptcy based on financial ratios is a continuing research. This study is aimed to provide prediction model capable of explaining bank’s health, predicting or detecting early potential bankruptcy of bank, finding formula that can be applied to all banks, promoting sound banking and simultaneously creating economic prosperity of the country considering that bank is the country’s economic infrastructure. Statistical technique based on multinomial logistic regression model is used as method to test the model with categorical dependent variables given a set of independent variables. It is found that financial ratio related to bank’s capital adequacy is statistically significant (in two logit functions) in providing early detection of potential bank insolvency. The accuracy of predictions by the model is 75% for failed banks (BL), 62.50% for banks classified under special surveillance or banks in resolution (BDP), and 97.14% for healthy banks (BS). Financial ratios are believed to have contributed to the bankruptcy prediction model by 89.36%.

Austria: Publication of Financial Sector Assessment Program Documentation—Technical Note on Crisis Preparedness and Management Framework

This Technical Note analyzes crisis preparedness and management framework in Austria. The global crisis revealed weaknesses in Austria’s financial stability policy framework. Austria needs to put in place a special bank resolution regime to resolve problem banks in a manner that does not endanger financial stability or fiscal sustainability. Although the authorities prefer to await the formal adoption of the European Union (EU) Directive on bank recovery and resolution, it would be in Austria’s interest to swiftly introduce a full-fledged bank resolution framework, with a wide range of tools and powers, and strengthened resolution arrangements with non-EU countries.

The role of special resolution regimes in post-crisis nancial regulation: Four Danish lessons

In wake of the nancial crisis, the building of national and international special bank resolution regimes (SRRs) that can shut down failing banks of any size without upsetting systemic functions and putting tax- payers’ money at risk, has reached the top of the regulatory agenda. us, policy elites hope that SRRs can pose a credible commitment to counter the problem of nancial institutions being ‘too big to fail’. e article analyses the basic arguments behind SRRs and suggests that they should be viewed as political tools used by authorities in distributional battles between the nancial sector and the state. To support this argument, the Danish SRR – the rst SRR to actually have been used after the crisis – is analysed.

Minimum capital requirements, bank supervision and special resolution schemes. Consequences for bank risk-taking

This paper analyzes the incentive effects of special bank resolution schemes which were introduced during the recent financial crisis. These schemes allow regulators to take control over a systemically important financial institution before bankruptcy. We ask how special resolution schemes influence banks’ risk-taking and whether regulators should combine them with minimum capital requirements. We model a single bank which is supervised by a regulator who receives an imperfect signal about the bank's probability of success. We find that capital requirements are better than resolution from a welfare point of view if the quality of the signal is low, if it is difficult for the bank to attract deposits, or if the project return is low.

Ranking influencing factors on relative efficiency of banking industry

Article history: Received January 30, 2013 Received in revised format 20 May 2013 Accepted May 28 2013 Available online May 31 2013 Measuring the relative efficiency of banking industry has been one of the most interesting areas of research for the past few years. There are literally various techniques for measuring the relative performance of similar units such as banks including data envelopment analysis and stochastic frontier analysis. This paper presents an empirical investigation to measure the relative performance of some Iranian banks located in province of Alborz, Iran for two consecutive fiscal years of 2009 and 2010. The proposed study implements stochastic frontier analysis to measure the performance of these banks based on two set of criteria. In the first model, total loans devoted are considered as output and employees, total customers’ investment, total fixed assets as well as no-interest deposits are considered as inputs of the model. For the second model, special banks’ characteristics such as total economic value of branch, the ratio of fixed assets to total assets, educational backgrounds of employees as well as the level of automation in the system are considered as input parameters of the systems. The results indicate that most bank perform relatively well according to their efficiencies. © 2013 Growing Science Ltd. All rights reserved.

Zarząd komisaryczny w prawie bankowym

The appointment of a board of receivers is an instrument used in rehabilitation proceedings. The board of receivers originates from outside the bank but acts upon it from inside. The appointment of a board of receivers is an optional right of the Polish Financial Supervision Authority (Komisja Nadzoru Finansowego – KNF) and is applicable when the bank management board fails to submit a recovery program in accordance with art. 142(1) of the Banking Act or when the execution of that program is ineffective. The board of receivers is appointed by decision of the KNF. By virtue of art. 145(4) of the Banking Act, the KNF decision is administrative and, as such, can be appealed. The supervisory board of a bank subject to recovery measures may file an appeal to theSupreme Administrative Court within 7 days from the receipt of the decision. On the day the board of receivers is appointed all current governing authorities of the bank are suspended and replaced by the board of receivers, which takes over all their powers. This is why the board of receivers is often called “special bank authority”. Main tasks of the board of receivers consist in drawing up a rehabilitation program and agreeing it with the KNF, administering the execution of the program, and reporting the results achieved under the program to the KNF and the supervisory board at intervals of no less than three months.

Visual Representations of Genetic Engineering and Genetically Modified Organisms in the Online Media

Although images of biotechnology saturate the media, do they accurately portray the science and the process? A content analysis of web images collected over a seven-day period was conducted. The results show an abundance of visuals in personal and special interest group websites, stock photos, and cartoon banks. Images with a negative valence trounced those with a positive tone. The visuals presented a range of perspectives on genetic engineering, but many failed the accuracy test.

Tax Biases to Debt Finance: Assessing the Problem, Finding Solutions*

AbstractLegal, administrative and economic considerations offer no compelling reason for the current tax advantage of debt finance in many countries. Instead, this ‘debt bias’ creates significant inequities, complexities and economic distortions. These are likely to be larger than previously thought, especially in the financial sector. To tackle debt bias, the most promising reform is to introduce an allowance for corporate equity, as some countries have successfully done. Its main obstacle is a budgetary cost, estimated at around 15 per cent of current revenue, on average for a selection of advanced economies. This cost can be reduced by granting the allowance only to new investment. The allowance could also be targeted to the financial sector and financed by special bank levies.

The Current Situation and Tactics for Financing of Small and Medium Company

According to the current problems of financing for Chinese small and medium companies, the paper points out that the financing problem for small and medium company is quite serious and unbalanced. The paper also explored the main reason for financing lies in the incomplete financial system and support of policy. In terms of the tactics, the paper proposed that Chinese commercial banks should reform the operation concept, develop specialized bank in order to support small and medium companies.

Does Finance Cause Growth? Evidence from the Origins of Banking in Russia

This paper examines the effect of banking on economic growth in modern Russia. To overcome simultaneity and selection, we exploit regional banking variation induced by the creation of 'specialized banks' (spetsbanks) in the last years of the Soviet Union (1988-1991). Consistent with the qualitative work of Joel Hellman [1993] and Juliet Johnson [2000], we show that these reforms generated an ideal natural experiment in that the concentration of spetsbanks is jointly uncorrelated with 15 predictors of future growth, including pre-banking income, education, anti-market sentiment, institutional quality, and government interference in the economy. Results indicate that while the presence of one additional spetsbank per million inhabitants increased total within-state lending to private firms and individuals by 14 to 26 percent in the early 2000s, it had no effect on investment or per capita income. In contrast, we find that spetsbanks increased employment. Additional results indicate that spetsbanks increased growth in regions in which they were less connected to government and were generally more similar to non-spetsbanks, as well as in regions that were better at protecting property rights. Our results thus strongly suggest that bank origins, political connections, and property rights are important determinants of effective finance.