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

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

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

Money market pressure and the determinants of baning crises

Identifying banking crises is the first step in the research on determinants of banking crises. The prevailing practice is to employ market events to identify a banking crisis. Researchers justify the usage of this method on the grounds that either direct and reliable indicators of banks’ assets quality are not available, or that withdrawals of bank deposits are no longer a part of financial crises in a modern financial system with deposits insurance. Meanwhile, most researchers also admit that there are inherent inconsistency and arbitrariness associated with the events method. This paper develops an index of money market pressure to identify banking crises. We define banking crises as periods in which there is excessive demand for liquidity in the money market. We begin with the theoretical foundation of this new method and show that it is desirable, and also possible, to depend on a more objective index of money market pressure rather than market events to identify banking crises. This approach allows one to employ high frequency data in regression, and avoid the ambiguity problem in interpreting the direction of causality that most banking literature suffers. Comparing the crises dates with existing research indicates that the new method is able to identify banking crises more accurately than the events method. The two components of the index, changes in central bank funds to bank deposits ratio and changes in short-term real interest rate, are equally important in the identification of banking crises. Bank deposits, combined with central bank funds, provide valuable information on banking distress. With the newly defined crisis episodes, we examine the determinants of banking crises using data complied from 47 countries. We estimate conditional logit models that include macroeconomic, financial, and institutional variables in the explanatory variables. The results display similarities to and differences with existing research. We find that slowdown of real GDP, lower real interest rates, extremely high inflation, large fiscal deficits, and over-valued exchange rates tend to precede banking crises. The effects of monetary base growth on the probability of banking crises are negligible. --

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,

Explaining the demand for free bank notes

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