Cooperative banks: What do we know about competition and risk preferences?

Clark, Ephraim; Mare, Davide Salvatore; Radic, Nemanja

doi:10.1016/j.intfin.2017.09.008

Cited by 54 publications

(41 citation statements)

References 46 publications

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“…On the one hand, banks with a high market share or performance can wield a greater market power because of cost advantages and the capability to set higher prices (e.g. Fernandex De Guevera et al, 2005, Carbò et al, 2009Clark et al, 2018).…”

Section: The Link Between Risk and Competitionmentioning

confidence: 99%

See 1 more Smart Citation

Competition and stability in the credit industry: Banking vs. factoring industries

Degl’Innocenti¹,

Fiordelisi

Trinugroho

2020

The British Accounting Review

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Over the last decade, most credit-industries registered a decline in lending volumes, while factoring industries instead registered a substantial growth in terms of turnover. Surprisingly, only a handful of papers so far investigate factoring companies. Do factoring firms display the same stability levels of banks? Is the competition similar in factoring and banking industries? Is the relationship between competition and stability the same in these industries? Focusing on Italy (one of the largest factoring and banking markets in Europe) and using a unique dataset, we show three main results: factoring companies are (on average) more stable than banks; 2) the stability of factoring companies increase when competition declines (competition-fragility view); 3) the competition-fragility view is weaker in the factoring industry than in the banking industry. Our findings indicate that competition in the Italian credit industry was greater in factoring than in banking.

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Section: The Link Between Risk and Competitionmentioning

confidence: 99%

“…Particularly, we use the Lerner index of monopoly power (LER), that has been largely adopted in past studies analysing competition in banking (recently, Turk-Ariss, 2010; Mare, 2014 Forssbaeck andShehzad, 2014;Degl'Innocenti et al, 2018, 2019Clark et al, 2018).…”

Section: Measuring Industry Competitionmentioning

confidence: 99%

Competition and stability in the credit industry: Banking vs. factoring industries

Degl’Innocenti¹,

Fiordelisi

Trinugroho

2020

The British Accounting Review

View full text Add to dashboard Cite

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“…Čihák & Hesse, 2008;Martin Čihák & Hesse, 2010;Fu et al, 2014;Ghassan et al, 2013;Ghosh, 2014). Nevertheless, the recent study of Clark et al (2018) who have used a new approach of the Z-score formula (as shown in 1 and the appendix of summary of all variables" measures, data resources and related references are shown) which is produced by Mare et al (2017). Mare et al (2017) criticized all previous approaches of Z-score index as they are deemed to be less effective.…”

Section: Financial Stability Measurementioning

confidence: 99%

“…Mare et al (2017) criticized all previous approaches of Z-score index as they are deemed to be less effective. Against this backdrop, this paper will follow Clark et al (2018), who adopted the following formula:…”

Section: Financial Stability Measurementioning

confidence: 99%

Capital and Liquidity Risks and Financial Stability: Pre, During and Post Financial Crisis Between Islamic and Conventional Banks in GCC Countries, in the Light of Oil Prices Decline

Al-Wesabi¹,

Yusof²

2019

IJFR

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Purpose: The main purpose of this paper is to investigate the impact of capital ratio and liquidity risks and the effects of the Global Financial Crisis (GFC) periods on financial stability of conventional and Islamic banks before, during, and after GFC in the year of 2008 five GCC countries. To examine empirically the comparison between conventional and Islamic banks based on financial stability and soundness, as well as capitalization and liquidity in the light of the adverse effects of GFC and oil prices declining during the period of (2000-2017).Design/methodology/approach: By using time series data, this study employs Pedroni’s panel cointegration analysis to test the long run relationship between financial stability of conventional banks and Islamic banks as a dependent variable and independent variables including financial crisis under three periods; pre (2006-2007), during (2008-2009) and post (2010-2011) crisis. As well as employing Generalized Least Squares (GLS) to examine the effects between independent variables which are GDP, inflation, financial crisis periods, oil prices fluctuations risk, banking competition, financial sector development, liquidity risk and capital adequacy ratio and dependent variable which is financial stability of conventional and Islamic banks in GCC countries before (2000-2006) during (2006-2009) and after (2010-2017) crisis.Findings: The findings of this research suggest that there is a long run relationship between financial stability of conventional and Islamic banks and capital ratios, liquidity risk and other independent variables. As well as study’s findings support some previous studies and it generally concludes that Islamic banks were performed better during the crisis than conventional banks. Whereas Islamic banks were more stable during crisis as their business model helped to limit the adverse effects of crisis in 2008, they were also more capitalized and less exposure to liquidity risk. Nevertheless, decrease in Islamic banks’ liquidity led some Islamic banks in GCC countries to declare significant losses in 2009.Originality/value: The result of the study contributes towards understanding the determinants of financial stability of both Islamic banks and conventional banks during financial crisis periods. It is important for policy ramifications by the Central Banks in GCC in terms of treating both types of banks differently to mitigate against future financial crises.

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“…Čihák & Hesse, 2008;Martin Čihák & Hesse, 2010;Fu et al, 2014;Ghassan et al, 2013;Ghosh, 2014). Nevertheless, the recent study of Clark et al (2018) who have used a new approach of the Z-score formula (as shown in 1), which is produced by Mare et al (2017). Mare et al (2017) criticized all previous approaches of Z-score index as they are deemed to be less effective.…”

Section: Literature Reviewmentioning

confidence: 99%

Does Financial Instability of Conventional Banks Affect Financial Stability of Islamic Banks in GCC Countries?

Al-Wesabi¹,

Yusof²

2019

IJFR

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Purpose: The main purpose of this paper is to investigate the relationship between financial stability in Islamic banks and financial stability and soundness in conventional banks for five GCC countries.Design/methodology/approach: By using time series data, this study employs Pedroni’s panel cointegration to test the long-run relationship between financial stability of Islamic banks and financial stability of conventional banks in GCC countries during the period of (2000-2017). Besides, the study also employs Granger causality to test the causal link between stability of two types of banks (Islamic and Conventional). As well as employing Generalized Least Squares (GLS) to examine the effects between independent variables which are financial stability of conventional banks and their profitability, impact of period of financial crisis (2008/2009), oil prices fluctuations, banking concentration and financial sector development and financial stability of Islamic banks (as the dependent variable).Findings: The findings of this research suggest that there is a long-run, significant and positive relationship between the financial stability of conventional banks and its Islamic counterpart. At the same time, the financial stability of conventional banks is found to Granger caused the stability of Islamic banks.Originality/value: The results of the study contribute towards understanding the determinants of the financial stability of both Islamic banks and conventional banks and how they affect each other. This is important for policy ramifications by the Central Banks in GCC in terms of treating both types of banks differently to mitigate against future financial crises.

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Cooperative banks: What do we know about competition and risk preferences?

Cited by 54 publications

References 46 publications

Competition and stability in the credit industry: Banking vs. factoring industries

Competition and stability in the credit industry: Banking vs. factoring industries

Capital and Liquidity Risks and Financial Stability: Pre, During and Post Financial Crisis Between Islamic and Conventional Banks in GCC Countries, in the Light of Oil Prices Decline

Does Financial Instability of Conventional Banks Affect Financial Stability of Islamic Banks in GCC Countries?

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