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Banking structure and governance: changes in regulation and technology

By Yoonhee Tina Chang


This thesis is concerned with the banking structure and its governance when the industrial policy and the banking technology change over time. The first part of the thesis briefly reviews the East Asian banking structure and its changes during the industrialisation. In chapter 2, we investigate the impact of industrial policy on banking behaviour and on the overall banking structure. We argue that the transition from a price-cap regulation (interest rate control) to a rate-of-return regulation (ROA and/or BIS ratio) induces a more concentrated banking structure as banking behaviour shifts from revenue maximising to profit maximising. Empirical evidence from Japan and Korea supports the argument.\ud \ud In chapter 3, we examine the behaviour of banks and customers when a new banking technology is introduced. The determinants of consumer adoption of internet banking are identified using survey data from Korea. Empirical issues of banking technology concerning customer inertia, risk aversion and pre-emption are assessed. During analysis finds no evidence of first mover advantage in internet banking, whilst the largest bank in commercial banking is dominant in internet banking.\ud \ud In chapter 4, we introduce ‘collective relationship banking’ as a new concept of banking to link the real and the banking sector structures. We analyse the choice between collective relationship banking and independent banking in addition to the switching between the two banking relationships using a case study. Changes in the corporate ownership structure appear to influence the banking relationship as well as its switching

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