Opportunity of Hydrogen Production in Renewable Power Plants : Case of Island of Mauritius

Postprin

Integration in European Retail Banking : Evidence from savings and lending rates to non-financial corporations

The aim of this paper is to investigate the integration process in the European Union retail banking sector during the period 1995-2008, by analysing deposit and lending rates to nonfinancial corporations which represent one of the main constituents of retail banking. An important contribution of the paper is the application of the recently developed Phillips and Sul (2007a) panel convergence methodology which has not hitherto been employed in this area. This method analyses the degree as well as the speed of convergence, identifies the presence of club formation, and measures the behaviour of each country’s transition path relative to the panel average. The results obtained point to the presence of close convergence in all deposit rates and in the short-term lending rates to non-financial corporations. However, we also detect the presence of heterogeneity in the European retail banking sector with notably some diverse convergence patterns observed for the transition paths for the deposit and lending rates with longer maturities.Submitted Versio

Financial fragmentation and SMEs’ access to finance

This paper focuses on the impact of financial fragmentation on small and medium enterprises (SMEs)’ access to finance. We combine country-level data on financial fragmentation and the ECB’s SAFE (Survey on the Access to Finance of Enterprises) data for 12 European Union (EU) countries over 2009-2016. Our findings indicate that an increase in financial fragmentation not only raises the probability of all firms to be rationed but also to be charged higher loan rates; in addition, it increases the likelihood of borrower discouragement and it impairs firms’ perceptions of the future availability of bank funds. Less creditworthy firms are even more likely to become credit rationed, suggesting a flight to quality effect in lending. However, our study also documents a potential adverse effect of increasing bank market power resulting from greater integration. This suggests that financial integration could impair firms’ financing, if not accompanied by policy initiatives aimed at maintaining an optimal level of competition in the banking sector

Technological Change and Catching-Up in the Indian Banking Sector: A Time-Dependent Nonparametric Frontier Approach

This paper investigates whether there has been any improvement in efficiency convergence of banks in India during the post-reform period considering bank ownership structures, using a balanced panel for 73 banks over the time period 1996–2014. Utilizing nonparametric frontier estimators, we compute time-dependent bank efficiency scores, which allow us to examine the dynamics of technological frontier and catch-up levels of Indian banks, and to explore the convergence patterns in the estimated efficiency levels. Our results signify that the state-owned banks, which dominate the banking activity in India, establish themselves as the best performers, ahead of the private, foreign and cooperative banks during post-2005. Even during the recent global financial crisis period, we find that bank efficiency levels increased, except for foreign banks which have had the greatest adverse impact. The convergence results show that heterogeneity is present in bank efficiency convergence, which points to the presence of club formation suggesting that Indian banks’ efficiency convergence is partly driven by the ownership structure. © 2020, The Author(s)

Bank performance and convergence during the financial crisis: Evidence from the ‘old’ European Union and Eurozone

This paper investigates the process of banking integration in the EU15 countries and the Eurozone by testing for convergence in bank efficiency among commercial banks. We use a two-step approach: First we estimate efficiency by applying an innovative methodological approach that treats banks’ non-performing loans as an undesirable output. Second, we apply the Phillips and Sul (2007) panel convergence methodology to assess the convergence process in European banking. Our results indicate an overall decline in efficiency and no evidence of group convergence following the financial crisis. However, we find the presence of club formation with typically weak convergence. The heterogeneity displayed by the transition parameters for the individual countries and the notable decrease in competition levels post 2008 highlight the impact of the financial crisis on the integration process

Bank Lending Margins in the Euro Area: The Effects of Financial Fragmentation and ECB Policies

In the present paper we study the determinants of the margins paid by euro-area non-financial corporations (NFCs) for their bank loans on top of the rates they earn for their deposits (bank lending margins). We use panel VAR techniques, in order to test for causality relationships and produce impulse response functions for eleven euro-area countries from 2003:1 to 2014:12. The countries are separated into two groups (distressed and non-distressed), in order to examine for heterogeneities in the relationships between lending margins; the period is also separated with reference to the peak of the global financial crisis (before and after the collapse of Lehman in September 2008). We find that significant heterogeneities existed even before the global financial crisis and remained in its aftermath, although the magnitude and the direction of the effects exercised by the explanatory variables have changed. Furthermore, apart from finding that market concentration and the prudence of banks' management increase the lending margins NFCs pay for their loans, there is evidence of substitution effects between financing obtained from banks and corporate bond markets. The provision of ample liquidity from the ECB, in the aftermath of the global financial crisis was found to be effective only for the core countries, suggesting that further policy actions are needed in order to reduce the fragmentation of bank lending and promote financial integration to the benefit of the euro-area real economy