International Harmonization of Financial Regulation?

Chey, Hyoung‐kyu

doi:10.4324/9781315890197

Cited by 12 publications

(29 citation statements)

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“…Capital adequacy has not only been emphasized in bank regulation (Chey, 2014; De Moraes and De Mendonça, 2017), but also is regarded as an important determinant of bank profitability (e.g. Trujillo-Ponce, 2013).…”

Section: Theoretical Framework Previous Empirical Studies and Hypothesis Developmentmentioning

confidence: 99%

“…These standards, tied to regulatory requirements for financial stability laws, have been adjusted since the financial crisis. Among other requirements, banks must now ensure capital adequacy, and capital adequacy tests are a frequent element of the ongoing supervision of banks (Chey, 2014). There are several examples of banks being forced to spend significant amounts of money to meet these regulatory requirements (Goodhart, 2011), and of small banks having difficulties amassing the resources necessary to meet the stricter regulatory requirements (Klomp and De Haan, 2011).…”

Section: Introductionmentioning

confidence: 99%

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Organizational-level profitability determinants in commercial banks: Swedish evidence

Yazdanfar

2018

JES

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Purpose The purpose of this paper is to examine organizational-level determinants of commercial bank profitability. Design/methodology/approach Using bank-level longitudinal panel data for the 2005–2014 period, this study conducts univariate and multivariate statistical analyses, i.e. ordinary least squares (OLS), fixed-effects and feasible generalized least-squares (FGLS) regressions, to analyze profitability variables in Swedish commercial banks. Findings The findings indicate that the organizational-level determinants growth, lagged profitability and capital adequacy are positively related to banks’ current profitability. No relationship was found between banks’ size and their profitability. Moreover, no relationship was found between the macroeconomic control variable gross domestic product (GDP) and bank profitability. Practical implications Given that organizational-level determinants explain sustainable bank profitability, the findings can be used by bank managers as a basis for low-risk bank policy formulation, and by regulators in monitoring banks relative to international standards (i.e. the Basel Accords). Originality/value To the best of the authors’ knowledge, this is the first study to investigate determinants of bank profitability in Sweden, a country with a strong tradition of bank-based financing, with previous experience of a domestic bank crisis in the 1990s, and where the recent global financial crisis had relatively little impact on domestic banks.

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Section: Theoretical Framework Previous Empirical Studies and Hypothesis Developmentmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Organizational-level profitability determinants in commercial banks: Swedish evidence

Yazdanfar

2018

JES

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“…Countries' level of compliance with global financial standards varies, usually falling between the extremes of full compliance and non‐compliance (Walter 2008; Chey 2014; Jones 2020). In studying compliance outcomes, we consider whether states have formal rules in place, enforce them, and take corrective action when behavior deviates from those rules.…”

Section: The Politics Of Sustained Mock‐compliancementioning

confidence: 99%

“…Our second proposition is that the domestic political costs of compliance incentivize developing countries to practice forbearance. The economic costs associated with global financial standard compliance are widely recognized (Kapstein 1989; Singer 2004; Walter 2008; Chey 2014). However, there exist many examples of developing countries complying with global banking standards despite the high economic costs involved (Jones 2020), pointing to the importance of political costs.…”

Section: The Politics Of Sustained Mock‐compliancementioning

confidence: 99%

Tussle for space: The politics of mock‐compliance with global financial standards in developing countries

Dafe

Engebretsen

2021

Regulation & Governance

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As efforts to harmonize policies globally intensify, developing countries increasingly face pressures to adopt international standards. Yet, we know little about the circumstances under which developing countries manage to circumvent such pressures, or about their strategies to maintain policy space. We explore under which conditions developing countries are willing and able to sustain mock‐compliance, a situation where countries comply on paper but not in practice. Using country comparisons of Angola's, Nigeria's, Tanzania's, and Vietnam's engagement with the Basel banking standards, we show how three factors combine to produce sustained mock‐compliance: high costs of outright non‐compliance due to outward‐orientated banking sectors; high political costs of substantive compliance; and state control over profitable markets. Our article contributes to theory‐building in the literature on compliance and structural power as well as to broader debates about developing countries' policy autonomy in their engagement with global financial norms.

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“…The principal goal of this paper is to explore uncertainties in the interaction between Basel II and banking practices. Basel II is suitable for an empirical investigation because it has generally been well accepted worldwide following its introduction in 2007 and had been implemented in banks by the time of data collection (Chey, 2014; Ojo, 2010; Van Hoose, 2007). Related to banking practices, the paper focuses on commercial loans, which comprise the major share of banks’ loans (DeYoung, 2010).…”

Section: Introductionmentioning

confidence: 99%

Basel II and the associated uncertainties for banking practices

Rad

2016

QRFM

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Purpose This paper aims to explore uncertainties in the interaction between Basel II and banking practices. Design/methodology/approach The research setting is a centralized bank's risk control organization and its commercial lending operations. The bank, despite its early adoption of the Basel II Accord, experienced severe credit losses during the global financial crisis. The data consist of interviews with twelve decision-makers and risk specialists at the bank and interviews with four professionals outside the bank after the global financial crisis. Findings This paper finds that there are three types of uncertainties in the interaction between Basel II and banking practices. The paper also describes corroborative examples of efforts to reduce such uncertainties. Among such efforts, the decision-makers excluded the risk specialists from decision-making and decentralized decision-making to branch offices. Research limitations/implications Although the literature generally portrays bank decision-makers and risk specialists as opposing groups, this research finds that the bank interviewees present complementary and confirmatory accounts on three types of uncertainties. Practical implications The findings suggest that increased regulatory pressure have operational implications for banking practices. Originality/value The paper has contemporary relevance with its sole focus on credit risk after the transition period provided for Basel II Accord.

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International Harmonization of Financial Regulation?

Cited by 12 publications

References 0 publications

Organizational-level profitability determinants in commercial banks: Swedish evidence

Organizational-level profitability determinants in commercial banks: Swedish evidence

Tussle for space: The politics of mock‐compliance with global financial standards in developing countries

Basel II and the associated uncertainties for banking practices

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