The Labour Market Implications of Large-Scale Restructuring in the Banking Sector in Turkey

This paper is concerned with the causes, timing and effects of banking sector restructuring and financial crisis in Turkey. The main focus of the study, however, is on labour market implications of the banking crisis and banking reform in recent years. The paper is organised as follows. Section 2 presents a brief summary of the macroeconomic background to the latest banking sector crisis in Turkey. In section 3, the efforts of recent Turkish Governments towards restructuring and rehabilitation of the banking sector are considered. Then, following a statistical review of the main features of the Turkish banking sector, section 4 focuses on the labour market problems that can be linked to the Government's restructuring and rehabilitation programme in banking. Section 5 draws some lessons from this restructuring programme. Finally, section 6 concludes with some remarks on future prospects in the banking sector.restructuring; labour market; unemployment; banking sector; banking crisis; Turkey

The Impact of Banking Sector Stability on the Real Economy

This article studies the relationship between the degree of banking sector stability and the subsequent evolution of real output growth and inflation. Adopting a panel VAR methodology for a sample of 18 OECD countries, we find a positive link between banking sector stability and real output growth. This finding is predominantly driven by periods of instability rather than by very stable periods. In addition, we show that an unstable banking sector increases uncertainty about future output growth. No clear link between banking sector stability and inflation seems to exist. We then argue that the link between banking stability and real output growth can be used to improve output growth forecasts. Using Fed forecast errors, we show that banking sector stability (instability) results in a significant underestimation (overestimation) of GDP growth in the subsequent quarters.Banking sector stability, real output growth, output growth forecasts

The Market's View on the Probability of Banking Sector Failure: Cross-Country Comparisons

Considering the increasingly international banks of today, the health of a country's banking sector is crucial not only to the country's growth and prosperity but also to the rest of the international financial community. Early warning signals of a banking sector in trouble or a pending banking crisis would therefore be of great value to both banks, investors and banking regulators/supervisors world wide. Different warning signals exist and in this paper we investigate how the stock market can provide a market-based indicator of banking sector health. Hall and Miles (1990) suggests an approach of estimating default probabilities of individual banks using only their stock market valuations and volatilities. In this paper we apply an aggregated version of their approach to banking sectors around the world in both developed and emerging economies and study the market's assessment of the probability of systemic banking crises in these countries over the last decade, including the Asian Crisis 1997-98. In addition, we investigate whether there is a relationship between the probability of banking sector failure and institutional/structural features of the actual banking sector. The quality of governance and the degree of law and order in a country is found to be significantly negatively related to the market based failure probabilities as is an explicit deposit insurance during periods of crisis.banking sector; banking crisis; default probability; market discipline

Market concentration in the banking sector: Evidence from Albania

The market structure can be described by concentration ratios based on the oligopoly theory or the structure - conduct - performance paradigm. Measures of concentration and also competition are essential for banks conduction in the banking industry. Several researchers have proved concentration level to be major determinants of banking system efficiency. Theoretical characteristics of market concentration measures are illustrated with empirical evidence. The market structure of the Albanian Banking Sector has changed dramatically in recent years. On 1990s, our country has experienced deregulation, foreign bank penetration, and an accelerated process of consolidation and competition in the banking sector. Particularly, the working paper examines the nature and the extent of changes in market concentration of Albanian banking sector. It focused primarily on a descriptive and dynamic analysis of change in the concentration indices in banking sector from year to year. Also it examines how the inherited structure of the banking system affects the way of the distribution of market shares amongst the different banks that comprise on the banking sector. --Bank Concentration,Concentration ratios,HHI index,Market Structure

Have more strictly regulated banking systems fared better during the recent financial crisis?

We assess whether during the recent financial crisis banking systems in countries with more stringent prudential banking regulation have proved more stable. We find indicators of regulatory strength to be relatively well correlated with the extent to which countries have escaped damage during the recent crisis, as measured either by the degree of equity value destruction in the banking sector or by the fiscal cost of financial sector rescue.Prudential regulation; banking; stability; financial crisis; crisis cost; banking sector bail-out; banking share prices.

Systemic risk across sectors; Are banks different?

This research compares systemic risk in the banking sector, the insurance sector, the construction sector, and the food sector. To measure systemic risk, we use extreme negative returns in stock market data for a time-varying panel of the 20 largest U.S. firms in each sector. We find that systemic risk is significantly larger in the banking sector relative to the other three sectors. This result is robust to separating out correlations with an economy-wide stock market index. For the non-banking sectors, the ordering from high to low systemic risk is: insurance sector, construction sector, and food sector. The difference between the insurance sector and the construction sector is no longer significant after correcting for correlations with the economy as a whole. The correction has a large effect for the banking sector and the insurance sector, and a smaller effect for the other two sectors.

Monitoring Banking Sector Fragility

In the financial crisis literature, it is usually argued that, contrary to the case of currency crises, building a time series index to identify banking crisis episodes is highly difficult, particularly because of the lack of reliable data on banking sector variables (non-performing loans, etc.). Accordingly, existing methods applied to pinpoint banking crisis years are generally event-based, such as that used by Caprio and Klingebiel (1996 and 1999) and Lindgren et al. (1996). This paper, however, proposes a weighted banking sector fragility index to measure changes in banks' vulnerability to crisis. Using monthly sectoral data for selected 22 countries, it is argued that this type of a fragility index seems to be highly useful in measurement and monitoring of changes in banking sector fragility. That is, it significantly may contribute to policy makers' efforts towards early detection of approaching banking sector difficulties. [To download the country-specific BSF indices: http://politics.ankara.edu.tr/~kibritci/banking/]Banking sector fragility; banking crises; Argentina; Bolivia; Brazil; Chile; Indonesia; Israel; Japan; Jordan; Kenya; Malaysia; Malta; Mexico; Pakistan; Peru; Philippines; Poland; South Korea; Sweden; Thailand; Trinidad and Tobago; Turkey; and Venezuela

Development and Deployment of VoiceXML-Based Banking Applications

In recent times, the financial sector has become one of the most vibrant sectors of the Nigerian economy with about twenty five banks after the bank consolidation / merger exercise. This sector presents huge business investments in the area of Information and Communication Technology (ICT). It is also plausible to say that the sector today is the largest body of ICT services and products users. It is no gainsaying the fact that so many Nigerians now carry mobile phones across the different parts of the country. However, applications that provide voice access to real-time banking transactions from anywhere, anytime via telephone are still at their very low stage of adoption across the Nigerian banking and financial sector. A versatile speech-enabled mobile banking application has been developed using VXML, PHP, Apache and MySQL. The developed application provides real-time access to banking services, thus improving corporate bottom-line and Quality of Service (QoS) for customer satisfaction

Koszty restrukturyzacji sektora bankowego w Polsce

The aim of this paper is to estimate the costs of banking sector restructuring in Poland, borne by the government and the central bank in the years 1993-2006. The authors focused mainly on the assistance measures that directly contributed to generating costs. Aggregated costs of the banking sector restructuring borne in the years 1993-2006 by public bodies amounted to 18.6 billion zloty (22.4 billion zloty in 2006 prices), corresponding to 2.61% of the annual GDP. The largest costs related to the tools employed in the banking sector restructuring process were those of servicing restructuring bonds allocated by the State Treasury to finance threatened banks (over 80% of total costs). The largest share of assistance went to state-owned banks, i.e. 90.3% in current prices. Total costs of banking sector restructuring in Poland are not high when compared to such costs in other transition countries.banking sector restructuring, banking crises, fiscal costs, financial stability

Financial intermediation in the pre-consolidated banking sector in Nigeria

This paper uses unique bank-by-bank balance sheet and income statement information to investigate the intermediation efficiency in the Nigerian pre-consolidated banking sector during 2000-05. The author analyzes whether the Central Bank of Nigeria's policy of recent banking consolidation can be justified and rationalized by looking at the determinants of spreads. A spread decomposition and panel estimations show that the reform of the banking sector could be the first step to raise the intermediation efficiency of the Nigerian banking sector. The author finds that larger banks have enjoyed lower overhead costs, increased concentration in the banking sector has not been detrimental to the spreads, both increased holdings of liquidity and capital might have led to lower spreads in 2005, and a stable macroeconomic environment is conducive to a more efficient channeling of savings to productive investments.Banks&Banking Reform,Economic Theory&Research,Financial Intermediation,Financial Crisis Management&Restructuring,Investment and Investment Climate