Liquidity Requirements, Bank Deposits and Financial Development

Limodio, Nicola; Strobbe, Francesco

doi:10.1111/ecca.12453

Cited by 4 publications

(3 citation statements)

References 36 publications

(55 reference statements)

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“…This evidence demonstrates how a bank's strategy regarding the supply or demand of interbranch resources is relevant to their consideration of whether or not to implement a fund transfer pricing policy. This evidence is in line with previous research, which highlights the relevance of a bank's strategy to their implementation of a fund transfer pricing policy (Limodio & Strobbe, 2023;Peters et al, 2015).…”

Section: The Effect On Bank Branch Incomesupporting

confidence: 91%

“…However, few studies explore the factors related to the different strategies of commercial banks and the geographic locations of their bank branches (e.g., Crocco et al, 2002;Limodio & Strobbe, 2023;Sicsú & Crocco, 2003). Differences arising from factors related to different geographic locations should be accounted for when comparing the performance of bank branches.…”

Section: The Performance Evaluation Of Bank Branchesmentioning

confidence: 99%

“…Bank branch performance is also subject to macroeconomic factors as well as factors specific to the geographic location of each branch (e.g., business environment, population income) (Crocco et al, 2002;Limodio & Strobbe, 2023;Peters et al, 2015;Sicsú & Crocco, 2003); in such circumstances, implementing a fund transfer price can be used to adjust the performance of bank branches to account for such factors. Commercial banks that do not adopt 6 transfer pricing fail to reward those branches (holding an excess of funds) that are funding other branches (with a shortage of funds).…”

Section: Fund Transfer Pricingmentioning

confidence: 99%

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The Effect of Fund Transfer Pricing on Brazilian Bank Branch Performance

Bicudo de Castro,

Morch

2024

SCG

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Financial institutions have implemented fund transfer pricing in response to demands from regulatory bodies to better manage their risk and as part of their cash-pooling strategies. For banks, implementing a fund transfer price causes a redistribution of income between the various bank branches depending upon the determined transfer price and the volume of resources demanded or offered by each branch. In this context, this study's objective is to examine the effect of the potential implementation of fund transfer pricing on the performance of Brazilian bank branches. This study examines and runs a linear regression of 21 years of monthly banking statistics (2000-2020), lists the most relevant factors contributing to interbranch transfer volume, and demonstrates how an interbranch transfer volume analysis determines the fund transfer price effect in the performance of bank branches. Contrary to the expectations of prior studies, the total volume of interbranch transfers between Brazilian bank branches for the period examined is not zero, which means that, on average, bank branches generate resources that are allocated to other parts of the bank that are not bank branches. This study finds evidence that branches short of funds may be financing their income with resources from branches with excess funds and that implementing funds transfer pricing does not have a null effect in Brazilian bank branches. On average, the branches' incomes increase. While implementing a price for the transfer of funds leads to an increase in the bank branches' average income, it is not necessarily the case that a greater number of bank branches will register an increase in their income. This evidence is important because it demonstrates that a bank's strategy regarding the supply or demand of interbranch resources should inform decisions on whether or not to implement a fund transfer pricing policy.

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Section: The Effect On Bank Branch Incomesupporting

confidence: 91%

Section: The Performance Evaluation Of Bank Branchesmentioning

confidence: 99%

Section: Fund Transfer Pricingmentioning

confidence: 99%

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The Effect of Fund Transfer Pricing on Brazilian Bank Branch Performance

Bicudo de Castro,

Morch

2024

SCG

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Roads, competition, and the informal sector

Perra,

Sanfilippo,

Sundaram

2024

Journal of Development Economics

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Mediating Effect of Human Capital on the Correlates of Corporate Governance, Credit Administration on Asset Quality: Evidence from Ghana Financial Industry

Ameyaw,

Peprah,

Anowuo

et al. 2024

Rev. Pac. Basin Finan. Mark. Pol.

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It is essential to understand the variables that affect asset quality because of their implications on the risk to financial institutions and for financial supervision and financial stability. There exist empirical studies establishing significant relationships between corporate governance and asset quality, and credit administration and asset quality. What was missing that this study investigated based on Ghanaian financial institutions was the mediating role of human capital. Based on a correlational research design and randomly selecting financial institutions and their employees as respondents. The study resulted that human capital fully and significantly mediates the relationships between corporate governance and asset quality, and credit administration and asset quality. Therefore, human capital elements of the knowledge, skills, and experience of the board members and employees are fully critical in the attainment of good asset quality. The study recommends that financial institutions must fully include the level of the human capital of their employees and board members when evaluating the factors that must exist to ensure that they have good asset quality.

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Liquidity Requirements, Bank Deposits and Financial Development

Cited by 4 publications

References 36 publications

The Effect of Fund Transfer Pricing on Brazilian Bank Branch Performance

The Effect of Fund Transfer Pricing on Brazilian Bank Branch Performance

Roads, competition, and the informal sector

Mediating Effect of Human Capital on the Correlates of Corporate Governance, Credit Administration on Asset Quality: Evidence from Ghana Financial Industry

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