The South African small banks’ crisis of 2002/3

Havemann, Roy

doi:10.1080/20780389.2021.1943348

Cited by 4 publications

(4 citation statements)

References 45 publications

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“…For example, the drop of the JSE weight in the period 2003–2004 may be triggered by small bank crisis in South Africa with seven small banks experiencing runs in the country (see Havemann, 2021). Moreover, the rise of the US interest rate from 1 to 5.35% during the period 2004–2006, not only affected the US housing market but also a number of stock markets globally, including the JSE.…”

Section: Estimation and Discussion Of The Resultsmentioning

confidence: 99%

“…For example, the drop of the JSE weight in the period 2003-2004 may be triggered by small bank crisis in South Africa with seven small banks experiencing runs in the country (see Havemann, 2021) Figure 3 shows the computed Sharpe ratio of the JSE-NSE portfolio during the period 2000-2019. The display in Figure 3 shows that the expected standardised excess returns is close to zero, showing the possibility of an economic profit for an investor that combines the two assets in a portfolio.…”

Section: Returns and Volatility Shocksmentioning

confidence: 99%

“…4. We follow Havemann (2021) and Bonga-Bonga (2018) for the identification of the discussed crisis periods.…”

Section: Notesmentioning

confidence: 99%

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Return and volatility spillovers between South African and Nigerian equity markets

Phume

Bonga‐Bonga

2022

AJEMS

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PurposeThe paper evaluates the cross-transmission of returns and volatility shocks between Nigeria and South Africa stock markets to infer the extent of interdependence between the two markets. The paper also makes inference to optimal portfolio weights of holding assets in the two markets.Design/methodology/approachThe paper uses an asymmetric vector autoregressive-exogenous generalised autoregressive conditional heteroscedasticity (VAR-X GARCH) model to assess the extent of returns and volatility spillovers between Nigeria and South Africa.FindingsThe results of the empirical analysis show evidence of shock spillovers from the South African stock market to the Nigerian stock market. Moreover, based on the dynamic Sharpe ratio and portfolio weight optimisation, the results indicate the possibility of portfolio diversification when holding simultaneous positions in the two stock markets.Practical implicationsThe results imply the possibility of economic profit for investors who take positions in the two stock markets. The lack of synchronisation of stock markets in the two largest economies in Africa is in contrast with the situations in other regions where stock markets returns of large economies often co-move.Originality/valueThe paper is the first to use the asymmetric VAR-X GARCH model to assess the cross-transmission of shocks between stock markets.

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Section: Estimation and Discussion Of The Resultsmentioning

confidence: 99%

Section: Returns and Volatility Shocksmentioning

confidence: 99%

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Return and volatility spillovers between South African and Nigerian equity markets

Phume

Bonga‐Bonga

2022

AJEMS

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“…Examples of leading global banks caught in acts of disrepute abound: Wells Fargo (opening fictitious accounts), HSBC (facilitating transactions for Saudi Arabian banks with ties to terrorist groups), Bank of America, JPMorgan Chase, Wells Fargo, Citigroup (the subprime debacle), Barclays, the Royal Bank of Scotland, and UBS (London Inter-Bank Offered Rate [LIBOR] rigging). On the local scene, some banks caught on the wrong side of banking norms and regulations were forced into liquidations, sell-offs, mergers, and others were deregistered (Havemann, 2021). The main ones include: Saambou Bank (poor management of unsecured lending), Regal Treasury Bank (improper accounting practices), African Bank (poor management leading to liquidity problems), and VBS Mutual Bank (poor management, fraud, improper accounting).…”

Section: Corporate Reputation In the Banking Industrymentioning

confidence: 99%

Surveying the reputation-regulation interface in the SABI industry: Perspectives of private banking customers

Murimbika

2024

South African Journal of Business Management

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Purpose: Bank reputations took a severe knock following the global financial crisis of 2007–2009. To get the global banking industry back on its feet, regulations existing at the time were strengthened and new ones were introduced. While the industry has come a long way in clawing back its reputation, research on the present state of reputations of some global banks suggests that these reputations are still underpinned by national regulators. In the South African context, it is not clear to what extent bank reputations are underpinned by the reputation of the main banking regulator: the South African Reserve Bank (SARB). This article looks at perceptions of private banking customers to ascertain whether they believe that bank reputations derive from the reputation of the regulator.Design/methodology/approach: A quantitative research methodology was applied. Purposive sampling was used to collect data from 111 banking customers using a Likert scale. Four hypotheses on reputation-regulation relationships were then tested using the non-parametric Wilcoxon Signed Rank test.Findings/results: The results show that regulation plays no role in how private banking customers perceive bank reputations.Practical implications: This study highlights that there is little scope for banks to accrue ‘reputational rent’ by free riding on the reputation of the regulator. Banks must therefore take steps to proactively engage in their own reputation building exercises.Originality/value: This research is the first to look at the reputation–regulation interface in the local banking industry from private banking customers’ perspective. It highlights that each bank must work hard to build the reputation it desires.

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The distributive effects of macroprudential policy: evidence from the South African credit market

Merrino,

Lesame,

Chondrogiannis

2023

SSRN Journal

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The South African small banks’ crisis of 2002/3

Cited by 4 publications

References 45 publications

Return and volatility spillovers between South African and Nigerian equity markets

Return and volatility spillovers between South African and Nigerian equity markets

Surveying the reputation-regulation interface in the SABI industry: Perspectives of private banking customers

The distributive effects of macroprudential policy: evidence from the South African credit market

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