Does government intervention affect banking globalization?

Kleymenova, Anya; Rose, Andrew K.; Wieladek, Tomasz

doi:10.1016/j.jjie.2016.11.001

Cited by 9 publications

(8 citation statements)

References 19 publications

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“…The demand for the US dollar might have increased during the QE period because the QE policy did not benefit non-US financial institutions. SeeKleymenova, Rose, and Wieladek (2016) for supportive evidence.…”

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confidence: 99%

Monetary policy and covered interest parity in the post GFC period: Evidence from the Australian dollar and the NZ dollar

Fukuda

Tanaka

2017

Journal of International Money and Finance

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Unlike the other major currencies, the Australian Dollar and the NZ dollar had lower interest rate than the US dollar on forward contract in the post GFC period. The purpose of this paper is to explore why this happened through estimating the covered interest parity (CIP) condition. In the analysis, we focus on a unique feature of Australia and New Zealand where short-term interest rates remained significantly positive even after the GFC. The paper first constructs a theoretical model where increased liquidity risk causes deviations from the CIP condition. It then tests this theoretical implication by using daily data of six major currencies. We find that both money market risk measures and policy rates had significant effects on the CIP deviations. The result implies that unique monetary policy feature in Australia and New Zealand made deviations from the CIP condition distinct on the forward contract.

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confidence: 99%

Monetary policy and covered interest parity in the post GFC period: Evidence from the Australian dollar and the NZ dollar

Fukuda

Tanaka

2017

Journal of International Money and Finance

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“…Their study also suggests that smaller banks are more subjected to national politics compared to larger banks which are highly capitalized which makes them unaffected by risky political environment. In the case of the UK, Kleymenova et al (2016) show that after nationalization, non‐British banks increased their external funding and locate their lending away from the UK in the sample of 334 banks in the UK from 1999Q1 to 2011Q4. Ashraf (2017) shows that political and legal institutions affect banks risk‐taking behaviour.…”

Section: Theoretical Framework: Political Economy Public Choice Institutional Economics and Regulation Schoolmentioning

confidence: 99%

Political economy of Islamic banking growth: Does political regime and institutions, governance and political risks matter?

Asutay

Sidek

2020

Int. J Fin Econ

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This article explores the political economy of Islamic banking by examining the impact of political regime types, institutional environment, government and political risk on the development of Islamic banking proxied by financing or loan growth in the case of 16 Muslims majority countries with autocratic and democratic regimes over the period of 2000–2013. The performance of Islamic banking loan growth is examined from three different perspectives—political regime and institutions, governance and political risks in both regime settings. Results suggest that loan growth is positive and significant in democratic regimes where political and civil rights are predominant. In addition, loan growths are slower during election years but higher throughout pre‐election year in democratic regimes, suggesting the opportunistic behaviour of incumbent government artificially boosting the economy in preparation for the upcoming election. It is also found that the good quality of public services, policy formulation and implementation, and credibility of government's commitment to realizing the policies are vital in ensuring positive loan growth. The lack of differences in the reaction of loan growth to the governance in democratic and autocratic regimes shows some convergence in the regimes despite having significantly different political perspective. This implies that political commitment of the ruling government is vital to set forth a strong and robust Islamic banking standing regardless of its political standpoint.

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“…risk (Dell'Ariccia and Marquez, 2010), regulation (Buch, 2003;Houston et al, 2012), comparative advantage (de Blas andRuss, 2013;Niepmann, 2016), and nationalizations (Kleymenova et al, 2016). We also contribute to the more specialized literature on proprietary trading.…”

Section: Introductionmentioning

confidence: 98%

Trading offshore: evidence on banks’ tax avoidance*

Langenmayr

Reiter

2022

Scandinavian J Economics

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Little is known about how banks shift profits to low-tax countries. Because of their specific business model, banks use profit shifting channels different from those of other firms. We propose a novel and bank-specific method of profit shifting: the strategic relocation of proprietary trading to low-tax jurisdictions. Using regulatory data from the German central bank, we show that a one percentage point lower corporate tax rate increases banks' fixedincome trading assets by 4.0% and trading derivatives by 9.0%. This increase does not arise from a relocation of real activities (i.e. traders); instead, it stems from the relocation of book profits.

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Does government intervention affect banking globalization?

Abstract: NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

Cited by 9 publications

References 19 publications

Monetary policy and covered interest parity in the post GFC period: Evidence from the Australian dollar and the NZ dollar

Monetary policy and covered interest parity in the post GFC period: Evidence from the Australian dollar and the NZ dollar

Political economy of Islamic banking growth: Does political regime and institutions, governance and political risks matter?

Trading offshore: evidence on banks’ tax avoidance*

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