Romanian banking system evolution and Basel II requirements

Before 1989 Romanian banking system was structured in the specific way of a centralized economy. Restructuring the banking system took its first step at the end of 1990 when the newly established commercial bank Banca Comerciala Romana (BCR) took over retail operations performed previously by the National Bank of Romania (NBR). Simultaneously some privately-owned banking companies were established and foreign banks' branches were integrated into the domestic banking activity. The unfriendly economic environment, the poor quality of bank managers and shareholders and cumbersome legal procedures led to an increase in tensions, the poor quality of credit portfolio representing the major difficulty of the banking sector. In the past years, NBR tried to control more the banking activity by implementing international settlements. More over, since Romania will be one of the European Union countries, it is absolutely necessary the harmonization of entire economic and financial system to EU regulations. The paper try to present the position of Romanian banking system in the framework of all these information.Romanian banking system, banking systems in transition, bank regulation, Basel II, credit portfolio, bank concentration,

Banking Fragility & Disclosure: International Evidence

Motivated by recent public policy debates on the role of market discipline in banking stability, the study examines the impact of greater bank disclosure in mitigating the likelihood of systemic banking crisis. In a cross sectional study of banking systems across forty-nine countries in the nineties, it finds evidence that banking crises are less likely in countries with regulatory regimes that require extensive bank disclosure and stringent auditing.http://deepblue.lib.umich.edu/bitstream/2027.42/57254/1/wp874 .pd

Bank Concentration and Crises

Motivated by public policy debates about bank consolidation and conflicting theoretical predictions about the relationship between the market structure of the banking industry and bank fragility, this paper studies the impact of bank concentration, bank regulations, and national institutions on the likelihood of suffering a systemic banking crisis. Using data on 70 countries from 1980 to 1997, we find that crises are less likely in economies with (i) more concentrated banking systems, (ii) fewer regulatory restrictions on bank competition and activities, and (iii) national institutions that encourage competition.

The Financial Services Authority:A Model of Improved Accountability?

Prior to the adoption of the FSA (Financial Services Authority) model, supervision of UK banks was carried out by the Bank of England. Although the Bank of England's informal involvement in bank supervision dates back to the mid nineteenth century, it was only in 1979 that it acquired formal powers to grant or refuse authorization to carry out banking business in the UK. Events such as the Secondary Banking Crisis of 1973-74 and the Banking Coordination Directive of 1977 resulted in legislative changes in the form of the Banking Act 1979. Bank failures through the following years then resulted in changes to the legislative framework. This article looks into the claim that the FSA model has improved in terms of accountability in comparison to its predecessor, the Bank of England. It considers the impact the FSA has made on the financial services sector and on certain legislation since its introduction. Through a comparison with the Bank of England, previous and present legislation, reports and other sources, an assessment is made as to whether the FSA provides more accountability. Evidence provided here supports the conclusion that the FSA is both equipped with better accountability mechanisms and executes its functions in a more accountable way than its predecessor

Does Internet Banking Affect the Performance of Community Banks?

This study examines the impact of online banking on bank performance. Results show that online banking improves bank earnings as well as helps in improving asset quality.Research and Development/Tech Change/Emerging Technologies,

Commentary on "Rebalancing the three pillars of Basel II."

This paper was part of the conference "Beyond Pillar 3 in International Banking Regulation: Disclosure and Market Discipline of Financial Firms," cosponsored by the Federal Reserve Bank of New York and the Jerome A. Chazen Institute of International Business at Columbia Business School, October 2-3, 2003.Bank supervision ; Bank capital ; Banking law

Assessing the Influence of Islamic Banks' Products' Quality Features on Customer Satisfaction in Nigeria

Islamic banking is essential in today’s competitive banking markets. Research in Islamic banking worldwide is focussed mainly on how distinct is Islamic banking from the conventional banking. This research aims at investigating the factors responsible for the satisfaction of Islamic banking customers. The study seeks to identify the Islamic banking products’ quality features as they relate to customer satisfaction, to examine the level of customer satisfaction on Islamic banking products’ in Nigeria. Three research questions and four hypotheses are formulated to guide the study. The methodology employed was a quantitative approach using a questionnaire as a tool for the collection of data. The respondents for this study are customers of Ja’iz bank Nigeria plc, the major Islamic bank in Nigeria. A convenient sampling technique was adopted to select the sample from the population (customers) of the Ja’iz bank plc. in Northern Nigeria. Hence self-administered questionnaire was chosen to gather the data. The data analysis was done using Statistical Package for Social Sciences (SPSS) version 23.0 and PLS-SEM 3.The results show that perceived quality of the products significantly influences customers satisfaction. It also indicates that there is a higher correlation between the cost of using the products and the level of customer satisfaction, that is to say, customers are very cost conscious as they would like to use the products at a lower cost than the current obtainable one. The customers also showed a higher level of convenience in using the Islamic banking products, and compliance score indicated that the customers are satisfied that Islamic bank in Nigeria is Shari’ah compliant. This result serves as a signal to service providers in knowing what type of the products customers enjoyed using, and which of the products needed improvement so as to provide customers with what they want most, in order for the banks to keep the existing customers intact and lure more potential customers, and to the policymakers, regulators and other relevant stakeholders to play their respective roles toward sustaining Islamic banking industry in Nigeria

Explaining the demand for free bank notes

Banks and banking - History ; Banks and banking - Minnesota ; Free banking ; Bank notes

How do financial crises affect commercial bank liquidity? Evidence from Latin America and the Caribbean

The 1990s were a turbulent time for Latin American and Caribbean countries. During this period, the region suffered from no less than sixteen banking crises. One of the most important determinants of the severity of banking crises is commercial bank liquidity. Banking systems, which are relatively liquid, are better able to deal with the large deposit withdrawals that tend to accompany bank runs. This study provides an assessment of the main determinants of bank liquidity as well as an evaluation of the impact of banking crises on liquidity. The results show that on average, bank liquidity is about 8% less than what is consistent with economic fundamentals during financial crises.Liquidity, Financial Crisis, Banks

Contingent liability in banking : useful policy for developing countries?

Bank owner contingent liability has been important in the development of many industrial countries. Unlimited liability on bank owners was an important element in the success of Scottish banking, which led Scotland to be free of the banking and monetary upheavals that occurred in Britain and the United States. The unlimited liability provision effectively minimized the losses suffered by bank noteholders and other creditors. Three factors were vital to the success of unlimited liability in Scotland: 1) the identities of bank owners were made publicly available, and their level of wealth could be verified; 2) under Scottish bankruptcy law, owner liability extended to both personal and inheritable wealth; and 3) the transfer of ownership claims in private and provincial banks required that ownership first be dissolved before a new bank could be formed. A contingent liability system has three advantages: 1) because double liability imposes postclosure losses on bank stockholders, it increases incentives for banks to hold capital and decreases moral hazard incentives; 2) a contingent liability system can ameliorate asymmetric information problems between bank creditors and owners; and 3) contingent liability can lead to more efficient capital formation if potential capital sources are predominantly in the form of fixed wealth, as is true in many developing countries. But a free-rider problem arises when less-wealthy stockholders rely on the monitoring efforts of wealthier stockholders, who have more incentive to monitor. And in a free and anonymous exchange market, investors with less personal fixed wealth will outbid those with greater wealth, so the value of double liability could collapse overtime.Payment Systems&Infrastructure,Banking Law,Banks&Banking Reform,International Terrorism&Counterterrorism,Financial Intermediation,Banks&Banking Reform,Banking Law,Financial Intermediation,Financial Crisis Management&Restructuring,Economic Theory&Research