Deregulation and productivity growth: a study of Indian commercial banking

This paper examines the impact of regulatory reform on the performance of Indian commercial banks. Using a balanced panel data set covering from the beginning of the deregulation period (1992) to the most recent years (2004) and employing a DEA-based Malmquist index of total factor productivity change, this paper attempts to quantify the magnitude of total factor productivity change and identify its main sources. We also explore whether deregulation has had a different impact on the performance of public, private and foreign banks and whether it affected the risk-taking behaviour of market participants. The empirical results seem to indicate that, after an initial adjustment phase, the Indian banking industry experienced sustained productivity growth, driven mainly by technological progress. Banks’ ownership structure seems to have an impact on bank efficiency but does not appear to have an influence on total factor productivity change. Although ownership per se does not seem to matter as much as increased competition, during the deregulation process foreign banks appear to have acted as technological innovators, thereby increasing even further the competitive pressure in the Indian banking market. Finally, our results also indicate an increase in risk-taking behaviour along with the whole deregulation process.Deregulation; Indian banking; Productivity Change; Malmquist Index

Joint Cuts and Matching of Partitions in One Graph

As two fundamental problems, graph cuts and graph matching have been investigated over decades, resulting in vast literature in these two topics respectively. However the way of jointly applying and solving graph cuts and matching receives few attention. In this paper, we first formalize the problem of simultaneously cutting a graph into two partitions i.e. graph cuts and establishing their correspondence i.e. graph matching. Then we develop an optimization algorithm by updating matching and cutting alternatively, provided with theoretical analysis. The efficacy of our algorithm is verified on both synthetic dataset and real-world images containing similar regions or structures

Bank competition, risk taking and productive efficiency: Evidence from Nigeria’s banking reform experiments

We propose a three-stage procedure for investigating the interrelationships among bank competition, risk taking and efficiency. The procedure is applied to Nigeria’s banking reforms (1993-2008). Stage I measures bank productive efficiency, using Data Envelopment Analysis, and the evolution of bank competition, using Conjectural Variations (CV) methods. Stage II uses the CV estimates to test whether regulatory reforms influence bank competition. Stage III investigates the impact of the reforms and concomitant changes in competition on bank behaviour. The evidence suggests that deregulation and prudential re-regulation influence bank risk taking and bank productive efficiency directly (direct impact) and via their impact on competition (indirect impact). Further, it is found that as competition increases, excessive risk taking decreases and efficiency increases. Overall, the evidence affirms policies that foster bank competition, at least in the Nigerian context

How Does the Institutional Setting for Creditor Rights Affect Bank Lending and Risk-Taking?

This paper investigates how the institutional setting for protection of creditor rights affects bank lending and risk-taking. An analytical model is specified to underpin banks‟ portfolio decisions, between loans and other earning assets such as government securities. The model is augmented with various metrics, which proxy the institutional setting for creditor rights, and is estimated and tested on an unbalanced three-dimensional dataset of commercial banks in 20 African countries for 1995-2008. It is found that three specific metrics induce banks to allocate a high proportion of their earning assets to loans: legal creditor rights; the efficient enforcement of creditor rights; and availability of information sharing mechanisms among banks. However, the three metrics appear to work through different channels. The enforceability of legal rights works not only through mitigating credit risks, but also through a composite effect of market competition and lower costs of information acquisition and contract enforcement. The legal rights metric and information sharing metric exclusively rely on the composite effect

La entonación de las preguntas del español hablado por chinos

Aquest estudi té com a objectiu descriure els trets de l'entonació dels enunciats interrogatius absoluts de l'espanyol parlat per xinesos en parla espontània. Per a tal finalitat, s'ha establert un corpus de 82 enunciats emesos per cinc informants xinesos nadius que parlen espanyol. Després d'analitzar tots els enunciats amb el mètode Anàlisi Melòdica de la Parla (AMP), s'ha trobat que dins del corpus només hi ha 16 enunciats (19,5%) que segueixen els patrons /+ interrogatius/ de l'espanyol peninsular, mentre que la majoría, un 80,5%, es caracteritzen per presentar melodies pròpies d’enunciats suspesos i, en menys casos, declaratius i emfàtics. A més, els resultats mostren que hi ha diferències entre els parlants del nord i del Sud de Xina quan parlen espanyol, la qual cosa indica que cal fer un estudi més complet en el futur per comprovar si és un fenomen significatiu.This study aims to describe the intonation features of the absolute interrogative sentences of Spanish spoken by Chinese in spontaneous speech. The corpus includes 82 utterances obtained from five Chinese Spanish speakers. The research has been carried out following the Melodic Analysis of Speech (MAS) methodology. After the analysis of all the utterances, we found that only 16 utterances (19.5%) conformed to the /+interrogative/ sentence’s pattern of Spanish, while the majority, 80.5%, are characterized by presenting melodies typical of the suspense sentences and, to a lesser degree, declarative and emphatic ones. In addition, we also found that there was a significant difference between the Spanish spoken by people from the north and south in China who had attended the research, which need a further study to verify whether that is a common phenomenon.Este estudio tiene como objetivo describir los rasgos de la entonación de los enunciados interrogativos absolutos del español hablado por chinos en habla espontánea. Para tal finalidad, se ha establecido un corpus de 82 enunciados emitidos por cinco informantes chinos nativos que hablan español. Después de analizar todos los enunciados con el método Análisis Melódico del Habla (AMH), se ha encontrado que dentro del corpus, solo hay 16 enunciados (19,5%) que siguen los patrones /+interrogativos/ del español peninsular, mientras que la mayoría, un 80,5%, se caracterizan por presentar melodías propias de los enunciados suspensos y, en menor grado, declarativos y enfáticos. Además, los resultados muestran diferencias entre los hablantes del norte y del sur de China cuando hablan español, lo que requeriría un estudio más completo en el futuro para comprobar si es un fenómeno significativo

Competitiveness and market contestability of major UK banks

We undertake an empirical assessment of the competitiveness and market contestability of the major British banks post-1980 – a period of major structural changes, mergers, demutualizations and acquisitions. Specifically, we estimate and test the Rosse-Panzar model on a panel of 12 banks for the period 1980-2004; furthermore, we buttress the Rosse-Panzar methodology by estimating the ratio of Lerner indices obtained from interest rate setting equations. The sample of banks corresponds closely to the major British Banking Groups as specified by the British Banking Association. Our results confirm the consensus finding that the British banking market can be described as monopolistically competitive. We also find that on the core business of balance sheet activity, British banks have remained as competitive in the 1990s as in the 1980s. This finding is further supported by evidence from the ratio of Lerner indices for loans and deposits. However, we find a significant worsening of competitiveness on the non-core (off-balance sheet) business of the banks

Neither true nor fairweather friend: relationship banking and SME borrowing under Covid-19

A growing literature addresses the costs and benefits associated with relationship banking, particularly for smaller firms, but with much of this work focused on normal trading conditions. Covid-19 provides an ideal testbed to explore the resilience of relationship banking. We examine whether the presence of closer pre-Covid ties between SMEs and their banks helps in accessing funds in the Covid-19 pandemic period. Then are ties between relationship bankers and SME borrowers a case of ‘true love’ or rather are the parties more akin to ‘fair-weather friends?’ Data from the UK SME Finance Monitor from 2018Q2-2020Q3 is used in this paper to examine this question. Our analysis suggests that relationship banking was important for the acquisition of bank credit pre-Covid-19 but was of limited influence in post-Covid-19 lending behaviour. Banks treated SMEs that had a good relationship with them in the same way as those that did not and with public interventions to support lenders material in this

Cross-Selling, switching costs and imperfect competition in British banks

This paper attempts to evaluate the competitiveness of British banking in the presence of cross-selling and switching costs during 1993-2008. It presents estimates of a model of banking behaviour that encompasses switching costs as well as cross-selling of loans and off-balance sheet transactions. The evidence from panel estimation of the model lends support to our theoretical priors on the cross-selling behaviour of British banks, which helps explain the rapid growth of non-interest income during the last two decades. We also find that the consumer faced high switching costs in the loan market in the latter part of the sample period, as a result of lower competitiveness

Competitiveness and market contestability of major UK banks

We undertake an empirical assessment of the competitiveness and market contestability of the major British banks post-1980 – a period of major structural changes, mergers, demutualizations and acquisitions. Specifically, we estimate and test the Rosse-Panzar model on a panel of 12 banks for the period 1980-2004; furthermore, we buttress the Rosse-Panzar methodology by estimating the ratio of Lerner indices obtained from interest rate setting equations. The sample of banks corresponds closely to the major British Banking Groups as specified by the British Banking Association. Our results confirm the consensus finding that the British banking market can be described as monopolistically competitive. We also find that on the core business of balance sheet activity, British banks have remained as competitive in the 1990s as in the 1980s. This finding is further supported by evidence from the ratio of Lerner indices for loans and deposits. However, we find a significant worsening of competitiveness on the non-core (off-balance sheet) business of the banks