The regulation and supervision of banks around the world - a new database

International consultants on bank regulation, and supervision for developing countries, often base their advice on how their home country does things, for lack of information on practice in other countries. Recommendations for reform have tended to be shaped by bias rather than facts. To better inform advice about bank regulation, and supervision, and to lower the marginal cost of empirical research, the authors present, and discuss a new, and comprehensive database on the regulation, and supervisionof banks in a hundred and seven countries. The data, based on surveys sent to national bank regulatory, supervisory authorities, are now available to researchers, and policymakers around the world. The data cover such aspects of banking as entry requirements, ownership restrictions, capital requirements, activity restrictions, external auditing requirements, characteristics of deposit insurance schemes, loan classification and provisioning requirements, accounting and disclosure requirements, troubled bank resolution actions, and (uniquely) the quality of supervisory personnel, and their actions. The database permits users to learn how banks are currently regulated, and supervised, and about bank structures, and deposit insurance schemes, for a broad cross-section of countries. In addition to describing the data, the authors show how variables ay be grouped, and aggregated. They also show some simple correlations among selected variables. In a comparison paper ("Bank regulation and supervision: What works best") studying the relationship between differences in bank regulation and supervision, and bank performance and stability, they conclude that: 1) Countries with policies that promote private monitoring of banks, have better bank performance, and more stability. Countries with more generous deposit insurance schemes tend to have poorer bank performance, and more bank fragility. 2) Diversification of income streams, and loan portfolios - by not restricting bank activities - also tends to improve performance, and stability. (This works best when an active securities market exists). Countries in which banks are encouraged to diversify their portfolios, domestically and internationally, suffer fewer crisis.Banks&Banking Reform,Economic Theory&Research,Payment Systems&Infrastructure,Financial Intermediation,Financial Crisis Management&Restructuring,Banks&Banking Reform,Financial Intermediation,Financial Crisis Management&Restructuring,Economic Theory&Research,Insurance&Risk Mitigation

Ongoing Negotiations on the GATS FSA: Bangladesh’s Concerns and Position

The paper is based on the Financial Services Agreement under the GATS which was made as a result of global negotiations on financial services, including areas such as insurance, merchant and consumer banking. The study is aimed to understand Bangladesh’s position (in terms of financial liberalisation and internationalisation measures) for fulfilling the GATS and FSA requirements. The paper also gives an overview of current level of commitments by countires under the FSA, Doha agenda and ongoing negotiations, GATS commitment on financial services and policy concerns, Bangladesh’s commitment for financial services under GATS.GATS FSA, Bangladesh

The reasons behind the absence of a comprehensive Shariah Governance Framework of Islamic banks in Bangladesh

Purpose: The main objective of the study is to examine the reasons behind the absence of a comprehensive Shariah Governance Framework (SGF) of Islamic banks in Bangladesh. Design/Methodology/Approach: The study has covered 17 respondents through semistructured interviews from the Islamic banks and the Central Bank of Bangladesh with a combination of Shariah supervisory board members, Shariah department executives, Central Bank executives, and banking experts. Findings: Based on findings, this study outlines that the knowledge gap of management, unqualified Shariah supervisory boards members, executives in Central Bank and Islamic banks, and intention of the regulators, policymakers, Shariah experts, government executives, Islamic bankers, Board of directors, stakeholders and civil societies are responsible for the absence of a comprehensive SGF. Practical Implications: The study has significantly contributed to the national regulators, government, and the Central Bank of Bangladesh on the subject for developing a comprehensive Shariah Governance Framework. Originality/Value: The study highlights the reasons for the absence of a comprehensive Shariah Governance Framework which was unexplored for more than 30 years.peer-reviewe

Corporate governance and stakeholders'financial interests in institutions offering Islamic financial services

This paper focuses on the corporate governance arrangements of institutions offering Islamic financial services (IIFS) aimed at protecting stakeholders'financial interests. Many IIFS corporate governance issues are common with those of their conventional counterparts. Others are distinctive. In particular they offer unrestricted investment accounts that share risks with shareholders but without a voting right. This paper first reviews internal and external arrangements put in place by IIFS to protect stakeholders'financial interests. It discusses shortcomings notably in terms of potential conflict of interest between shareholders and holders of unrestricted investment accounts. It then suggests a corporate governance framework that combines internal and external arrangements to provide safeguards to unrestricted investment account holders without overburdening IIFS'financial performance. The paper uses a review of 13 IIFS and regulatory information from countries where IIFS have developed the most.Banks&Banking Reform,Financial Intermediation,Corporate Law,Non Bank Financial Institutions,Investment and Investment Climate

Role of Central Bank in Islamic Finance

The rapid growth in Islamic finance industry urges us to not only look for alternatives in the Islamic commercial banking, but also focus on the regulator and its role and functions to enable it to work in conformity with Islamic principles. This study reviews limited, but precious academic literature on central banking and monetary management in an environment where Islamic finance is in vogue. Refinance ratio and Qard-e-Hasan ratio and Mudarabah between central bank and Islamic commercial banks are in line with Islamic principles and helps meet liquidity requirements in the banking sector. Mudarabah can be done with profit sharing ratio benchmarked on economy’s nominal income growth. We have presented the evidence on statistical equivalence of nominal Interest rates (being used in conventional banking) and Nominal GDP growth rate (we are recommending to use). The nominal GDP growth linked rate of remuneration can be used to benchmark for external loan arrangements including those from IMF, WB and IDA etc. We suggest central banks particularly in Muslim countries to use nominal income targeting as a rule for the conduct of monetary policy.Islamic Finance, Islamic Banking, Central Bank,Nominal Income Targetting, Inflation Targetting.

A Comparison of Non-financial Performance and Earnings Quality Between QIIB and BIB

This study aims to evaluate and compare the non-financial performance and earnings quality of Islamic Banks in two different counties complying two different accounting standards, namely Qatar International Islamic Bank (QIIB) and Bahrain Islamic Bank (BIB). This study used a quantitative method with secondary data from the annual report of QIIB and BIB. This study sheds light on the financial and non-financial performance of QIIB and BIB as well as the difference between them. It provides a picture for the Islamic Finance industry regarding the performance of these two banks and what the implication of adopting different accounting standard on this case. Additionally, it helps to raise the awareness of society about the existence of Islamic banks and how well they have performed. As far as we are concerned, there is only small number of research on finding the significance of accounting standard adoption toward the performance of Islamic banks, although the urgency is increasingly growing for better convergence and significant development of Islamic banks. This work is an attempt to fill in this gap

Mixed capital of Islamic financial institutions, is it Islamic?

Among the most debated issue concerns the initial capital of Islamic banks and takaful companies, especially when initiated by a conventional parent company. Some people doubt the purity of the capital in Islamic banks and takaful and eventually deny the benefits of Islamic banking. Hence, the question here is could Islamic banks and takaful be truly Islamic when its capital is not completely halal

SOME CONSIDERATIONS FOR IMPROVEMENT ROMANIAN TAXATION

The two terms, improvement and modernization are increasingly used to analyze tax issues, because the trend is towards ensuring optimal in terms of taxation and tax settlement to the criteria of normality, so that it becomes a key component of economic and social life of any nation. Through this article, we try to address some aspects to be taken into account when it comes to improving a tax system or tax activity, especially for the situation in Romania.improvement, optimal taxation, efficiency, fiscal management, fiscal rules