Banking structure and governance: changes in regulation and technology

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. 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. 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

Ten Frontier Technologies for International Development

The report finds clear evidence of the potential of frontier technologies to contribute to social, economic and political development gains in a number of ways, by: • Driving innovations in business models, products and processes that provide new goods and services to ‘bottom of the pyramid’ consumers; • Providing the means by which to make better use of existing underutilised household and productive assets; • Catalysing increases in demand, nationally and internationally, which create new industries and markets, leading to macro- and microeconomic growth; and • Changing demand for labour and capital, leading to direct job creation and transformation of the workforce. For all of the potential upsides, potential downsides must also be considered. While it will largely be the private sector that will drive deployment of these technologies, the public sector through national regulation, as well as development financing, will have a major role in mediating the pace and direction of technological change, both to achieve development objectives, and to protect potential losers.As new technologies and digital business models reshape economies and disrupt incumbencies, interest has surged in the potential of novel frontier technologies to also contribute to positive changes in international development and humanitarian contexts. Widespread adoption of new technologies is acknowledged as centrally important to achieving the United Nations Sustainable Development Goals by 2030. But while frontier technologies can rapidly address large-scale economic, social or political challenges, they can also involve the displacement of existing technologies and carry considerable uncertainty and risk. Although there have been significant wins bringing the benefits of new technologies to poor consumers through examples such as mobile money or off-grid solar energy, there are many other areas where the applications may not yet have been developed into viable market solutions, or where opportunities have not yet been taken up in development practice

Chapter 2: The Financial Crisis

The financial turmoil that originated in 2007 and developed into an unprecedented crisis battering financial and real markets is the latest manifestation, on a grand scale and with new attributes, of a welldefined pathology in the process of market liberalization and integration in the post-Bretton Woods era. At the root of the crisis lies a fundamental inconsistency between financial globalisation – the process of liberalization and deregulation driving the impressive growth of world financial markets – and existing public rules and policies at both domestic and international levels. This pathology underlies virtually all the episodes of instability that have affected the developing and the emerging economies since the constraints on capital mobility started to be removed during the 1970s: from the debt crisis in the early 1980s to the financial and currency crisis in South-East Asia in 1997–98. Globalisation of financial markets has systematically and vastly outpaced the development of their governance: governments have lagged behind in reshaping domestic and international institutions as well as in changing and adapting policy behaviour.