Bank capital and portfolio risk among Islamic banks

Minimum capital requirements are often implemented under the notion that increased capital improves bank safety and stability. However, an unintended consequence of higher capital requirements could arise if increasing capital induces banks to invest in riskier assets. Several researchers have examined this relationship between bank capital and risk among conventional banks, and interest around this topic has intensifi�ed since the 2007-2008 fi�nancial crisis. However, the fi�ndings are rather mixed. Moreover, very few studies have focused on Islamic banks, which differ greatly from their conventional counterpart's due to their need to be Shariah-compliant. In this paper a sample of 22 Islamic banks is analyzed over a seven year period from 2007-2013. The empirical approach is fully parametric and Bayesian utilizing techniques developed by Kessler and Munkin (2015) and building on previous banking research by Shrives and Dahl (1992) and Jacques and Nigro (1997). Some evidence is found suggesting that increases in total capital positively affect the levels of asset risks among Islamic banks

Bank capital and portfolio risk among Islamic banks

Minimum capital requirements are often implemented under the notion that increased capital improves bank safety and stability. However, an unintended consequence of higher capital requirements could arise if increasing capital induces banks to invest in riskier assets. Several researchers have examined this relationship between bank capital and risk among conventional banks, and interest around this topic has intensifi�ed since the 2007-2008 fi�nancial crisis. However, the fi�ndings are rather mixed. Moreover, very few studies have focused on Islamic banks, which differ greatly from their conventional counterpart's due to their need to be Shariah-compliant. In this paper a sample of 22 Islamic banks is analyzed over a seven year period from 2007-2013. The empirical approach is fully parametric and Bayesian utilizing techniques developed by Kessler and Munkin (2015) and building on previous banking research by Shrives and Dahl (1992) and Jacques and Nigro (1997). Some evidence is found suggesting that increases in total capital positively affect the levels of asset risks among Islamic banks

Incentives and Selection Effects of Drug Coverage on Total Drug Expenditure: a Finite Mixture Approach.

This paper takes a nte mixture approach to model heterogeneity in incentives and selection effects of drug coverage on the total drug expenditure among the Medicare elderly US population. Evidence is found that the positive drug expenditures of the entire elderly popultion can be decomposed into two groups of relatively healthy with lower average expenditures and relatively unhealthy with higher average expenditures, accounting for approaximately 25% and 75% of the population, respectively. The incentive effects of drug insurance, i.e. ex post moral hazard, are much stronger in magnitude for the unhealthy group. There is also evidence of adverse selection into drug insurance, and this appears to be greater for the higher-expenditure component.

Simulating the Contribution of a Biospecimen and Clinical Data Repository in a Phase II Clinical Trial: A Value of Information Analysis

The potential contributions of a centralized data warehouse or repository in clinical research include the expedited accrual of subjects for phase II trials. Understanding the contribution of data warehouses that integrate clinical, biospecimen, and molecular data for the conduct of clinical trials is essential to inform private and public decisions on resource allocation and investment. We conducted a value of information analysis using data from recent trials at the Moffitt Cancer Center and simulated the potential reductions in trial size due to possible alternative scenarios of expedited accrual. In this study, we compared alternative data sets using a single model to assess value of information. Our findings suggest that the reductions in trial size range from 0% to 43%, depending on the amount of censoring in overall survival. The ability to expedite the accrual of patients for clinical trial studies using large data repositories that store data on inclusion/exclusion criteria and response to standard of care therapies demonstrated significant improvement in reducing the number of subjects needed to achieve similar end-results, as evaluated using value of information analysis with a limited number of parameters and a parsimonious model of overall survival