Cyclicality of bank liquidity creation

This paper investigates the cyclicality of bank liquidity creation. Since liquidity creation is a major economic function of banks, their liquidity creation behavior may amplify business cycle fluctuations. Using the methodology of Berger and Bouwman (2009) to compute liquidity creation measures, we analyze the relation between GDP growth and liquidity creation of Russian banks from 2004 to 2015. Detailed quarterly data on a very large sample of banks and coexistence of different bank ownership types (state-owned, domestic private and foreign banks), makes Russia an ideal natural laboratory for study of cyclicality of liquidity creation for banks. We find that liquidity creation of banks is procyclical. We show that the liquidity creation behavior of state-owned banks and foreign-owned banks is similar to that of domestic private banks in terms of procyclicality. We further find that the magnitude of procyclicality is higher for liquidity creation than for lending. Thus, while ownership of banks does not influence the cyclicality of bank liquidity creation, liquidity creation behavior of banks can amplify business cycle fluctuations.fi=vertaisarvioitu|en=peerReviewed

Persistent and Transient Inefficiency : Explaining the Low Efficiency of Chinese Big Banks

We thank Ifthekar Hasan, Chun-Yu Ho, Iikka Korhonen, Jun Wu, Yanrui Wu, the participants of the Conference on China’s Financial Markets and Growth Rebalancing in New York (October 2017), AEA/ASSA meeting in Philadelphia (January 2018), Finnish Economic Association XL Annual Meeting in Turku (February 2018), ESCB China Expert Network workshop in Helsinki (March 2018), XIX April International Academic Conference in Moscow (April 2018), China Financial and Banking System Workshop in Aberdeen (June 2018), CEA Annual Meeting in Edinburgh (June 2018) and the research seminars at the Bank of Finland Institute for Economies in Transition (October 2017), Aix-Marseille School of Economics (January 2018), Leibniz‐Institut für Ost‐ und Südosteuropaforschung in Regensburg (June 2018) for their valuable comments and suggestions.Peer reviewedPostprin

Ethnocatering - Tradiční strava jako cesta k integraci

Migrácia v sebe zahŕňa mnoho aspektov na ktoré bola upriamená pozornosť rôznych vedných disciplín. Jedným z týchto aspektov je integrácia, ktorú možno v tomto prípade vnímať ako začleňovanie imigrantov do spoločnosti hostiteľskej krajiny. Prístupy a spôsoby integrácie sa môžu vzhľadom na nevyhranenosť tohto pojmu líšiť. Práca je zameraná na konkrétny príklad snahy o integráciu imigrantiek pomocou využitia tradičnej stravy, ktorá vzišla z pôdy občianskeho združenia InBáze, o.s. Združenie vypracovalo projekt s názvom Ethnocatering, ktorý pomáha imigrantkám, presadiť sa na trhu práce prostredníctvom svojich vlastných skúseností z oblasti gastronómie, čím sa opiera o princípy sociálneho podnikania. Ženy z rôznych krajín sveta tak majú možnosť pripravovať a priblížiť tamojšej spoločnosti kulinárne špeciality typické pre krajiny z ktorých pochádzajú. V práci je uprená pozornosť na imigrantky z krajín južného Kaukazu, konkrétne Gruzínska a Arménska ako i na tradičnú stravu typickú pre tieto krajiny. Kľúčové slová: tradičná strava, etnická kuchyňa, sociálne podnikanie, imigrácia, integrácia(anglicky): Migration includes a lot of aspects and a lot of scientific disciplines focus on this. One of these aspects is integration, which we can perceive in this case as integration of immigrants into host country society. Approaches and methods of integration can be different depending on ambiguity of this term. This dissertation is focused on specific example of effort to integrate women immigrants with help of traditional food, which came from the ground of civil association InBáze, o.s. The association developed a project named Ethnocatering which helps to immigrants to become successful on job market via their own experience from gastronomy and it`s supporting itself by social entrepreneurship. Women from different countries of the world then have an opportunity to prepare specialties typical for countries they come from and introduce those to the local society. This essay is focused on immigrants from countries such as South Caucasus - Georgia and Armenia and also on traditional food typical for these countries. Kľúčové slová (anglicky): traditional food, different ethnic background cuisine, social entrepreneurship, immigration, integrationInstitute of EthnologyÚstav etnologieFilozofická fakultaFaculty of Art

The Politics of Bank Failures in Russia

We study whether bank failure probability systematically varies over the election cycle in Russia. Using monthly data for 2002-2020 and controlling for standard bank risk indicators we find that bank failure is less likely during periods preceding presidential elections. We explore whether this effect is more pronounced for banks whose failure is associated with greater political costs, such as important players in the household deposit market or important players in regional markets. We find no evidence for this latter effect. Overall, our results provide mixed evidence that political cycles matter for the occurrence of bank failures in Russia

Does bank competition reduce cost of credit? Cross-country evidence from Europe

Despite the extensive debate on the effects of bank competition on economic welfare and growth, only a handful of single-country studies deal with the impact of bank competition on the cost of credit. We contribute to the literature by investigating the impact of bank competition on the cost of credit in a cross-country setting. Using a panel of firms from 20 European countries covering the period 2001–2011, we consider a broad set of measures of bank competition, including two structural measures (Herfindahl–Hirschman index and CR5), and two non-structural indicators (Lerner index and H-statistic). We find that bank competition increases the cost of credit and observe that the positive influence of bank competition is stronger for smaller companies. Our findings accord with the information hypothesis, whereby a lack of competition incentivizes banks to invest in soft information and conversely increased competition raises the cost of credit. This positive impact of bank competition is however influenced by the institutional and economic framework, as well as by the crisis

Financial Inclusion in China: Use of Credit

Limited access to credit can cause financial vulnerability for a household and economic loss for a country. Previous studies have shown that only small portions of populations in developing countries use formal credit, but few studies have focused on Chinese populations. Analyzing data from the 2011 China Household Financial Survey, this study explored Chinese households’ credit use. Over half of the sample (53.21%) reported using credit, and only 19.77% of the sample used formal credit. Use of formal credit was associated with the socioeconomic characteristics of household heads (e.g., employment and education) and of households (e.g., income and net worth). The findings suggest that promoting financial inclusion in China involves expanding access to formal credit among socially and economically disadvantaged households

Does competition make banks riskier in dual banking system

This paper investigates competition and risk-taking behaviour of Islamic banks taking a sample of 59 Islamic banks and 149 conventional banks from 10 highly developed Islamic banking countries between 2006 and 2016. The level of competitiveness between the two types of banks is determined using Lerner index and estimations show that Islamic banks have lower market power than conventional banks. After controlling all the bank and country-specific variables, the results show that competition and risk are positively related for the overall banking system and inversely related for Islamic banks which undoubtedly emphasize that inherent difference between risk-competition relationships among these two distinct bank types. Overall, in the case of Islamic banks, the results provide evidence in favour of “competition stability view” where higher competitive market associated with fierce competition from conventional banks and its peers' reduces Islamic banks' risk-taking behaviour

Interdependencies between Leverage and Capital Ratios in the Banking Sector of the Czech Republic

In this paper we discuss the implications of the Basel III requirements on the leverage ratio for the banking sector in the Czech Republic. We identify the potential binding constraints from regulatory limits and analyze the interactions among leverage and capital ratios over the country’s economic cycle (during the period 2007-2014). The historical data confirm stronger capital ratios of the banks and an overall solid leverage level with only 5% of the total historical observations being lower than the regulatory recommendations. By analyzing the components of ratios, we conclude that the banks are focusing more on the optimization of risk weighted assets. Strong co-movement patterns between leverage and assets point to the active management of leverage as a means of expanding and contracting the size of balance sheets and maximizing the utility of the capital. The analysis of correlation patterns among the variables indicates that the total assets (and exposure) in contrast to Tier 1 capital are the main contributors to the cyclical movements in the leverage. The leverage and the total assets also demonstrate a weak correlation with GDP, but a strong co-movement with loans to the private sector

Market power in CEE banking sectors and the impact of the global financial crisis

The aim of this study is to undertake an up-to-date assessment of market power in Central and Eastern European banking markets and explore how the global financial crisis has affected market power and what has been the impact of foreign ownership. Three main results emerge. First, while there is some convergence in country-level market power during the pre-crisis period, the onset of the global crisis has put an end to this process. Second, bank-level market power appears to vary significantly with respect to ownership characteristics. Third, asset quality and capitalization affect differently the margins in the pre-crisis and the crisis periods. While in the pre-crisis period the impacts are similar for all banks regardless of ownership status, in the crisis period non-performing loans have a negative effect and capitalization a positive effect only for domestically-owned banks

Firm efficiency, foreign ownership and CEO gender in corrupt environments

We study the effects of corruption on firm efficiency using a unique dataset of private firms from 14 Central and Eastern European countries from 2000 to 2013. We find that an environment characterized by a high level of corruption has an adverse effect on firm efficiency. This effect is stronger for firms with a lower propensity to behave corruptly, such as foreign-controlled firms and firms managed by female CEOs, while local firms and firms with male CEOs are not disadvantaged. We also find that an environment characterized by considerable heterogeneity in the perception of corruption is associated with an increase in firm efficiency. This effect is particularly strong for foreign-controlled firms from low corruption countries, while no effect is observed for firms managed by a female CEO. © 2016 The Authors