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Chris Veld - One of the best experts on this subject based on the ideXlab platform.
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the effects of Bank Regulation stringency on seasoned equity offering announcements
Journal of International Money and Finance, 2019Co-Authors: Hui Li, Chris VeldAbstract:We study the relation between Bank Regulation stringency and announcement effects of seasoned equity offerings across 21 countries. Under a low to moderate Bank Regulation environment, the market reacts more positively to the Bank SEO announcements for an increase in the level of Bank Regulation. However, the Bank SEO announcement effects become more negative if the Bank Regulation becomes too stringent. This inverted U-shaped relation is robust after we use the exogenous cross-country and cross-year variation in the timing of the Basel II adoption as an instrument to assess the causal impact of Bank Regulation on SEO announcement effects. Bank Regulation has no significant impact of SEO announcement effects if the equity offering is involuntary.
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The Effects of Bank Regulation Stringency on Seasoned Equity Offering Announcements
SSRN Electronic Journal, 2017Co-Authors: Hong Liu, Chris VeldAbstract:We study the relation between Bank Regulation stringency and announcement effects of seasoned equity offerings across 21 countries. Under a low to moderate Bank Regulation environment, the market reacts more positively to the Bank SEO announcements for an increase in the level of Bank Regulation. However, the Bank SEO announcement effects become more negative if the Bank Regulation becomes too stringent. This inverted U-shaped relation is robust after we use the exogenous cross-country and cross-year variation in the timing of the Basel II adoption as the instrument to assess the causal impact of Bank Regulation on SEO announcement effects. Bank Regulation has no significant impact of SEO announcement effects if the equity offering is involuntary.
Jakob De Haan - One of the best experts on this subject based on the ideXlab platform.
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Bank Regulation the quality of institutions and Banking risk in emerging and developing countries an empirical analysis
Emerging Markets Finance and Trade, 2014Co-Authors: Jeroen Klomp, Jakob De HaanAbstract:Abstract:Using data for 371 Banks from nonindustrial countries for the period 2002–8, we examine the effect of Bank Regulation and supervision on Banking risk. Our main findings suggest that stricter Regulation and supervision reduces Banking risk. Notably, capital Regulations and supervisory control reduce Bank riskiness. Liquidity Regulation and activities restrictions also restrain Banking risk but only when there is a high level of institutional quality. Finally, we find that the effect of Regulation and supervision also depends on the level of development.
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Banking risk and Regulation does one size fit all
2011Co-Authors: Jeroen Klomp, Jakob De HaanAbstract:Using data for more than 200 Banks from 21 OECD countries for the period 2002 to 2008, we examine the impact of Bank Regulation and supervision on Banking risk using quantile regressions. In contrast to most previous research, we find that Banking Regulation and supervision has an effect on the risks of high-risk Banks. However, most measures for Bank Regulation and supervision do not have a significant effect on low-risk Banks. As Banking risk and Bank Regulation and supervision are multifaceted concepts, our measures for both concepts are constructed using factor analysis.
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Banking risk and Regulation does one size fit all
2010Co-Authors: Jeroen Klomp, Jakob De HaanAbstract:Using data for more than 200 Banks from 21 OECD countries for the period 2002 to 2008, we examine the impact of Bank Regulation and supervision on Banking risk. Supervisory control, and Regulations on capital and market entry have a significant impact on 'capital and asset risk', while supervisory control and Regulations on activities restrictions, private monitoring, market entry, and liquidity, have a significant effect on 'liquidity and market risk'. However, quantile regressions suggest that the effect of Regulation and supervision differs across Banks: most indicators of Bank Regulation and supervision do not have a significant effect on low-risk Banks, while they do affect high-risk Banks.
Hui Li - One of the best experts on this subject based on the ideXlab platform.
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the effects of Bank Regulation stringency on seasoned equity offering announcements
Journal of International Money and Finance, 2019Co-Authors: Hui Li, Chris VeldAbstract:We study the relation between Bank Regulation stringency and announcement effects of seasoned equity offerings across 21 countries. Under a low to moderate Bank Regulation environment, the market reacts more positively to the Bank SEO announcements for an increase in the level of Bank Regulation. However, the Bank SEO announcement effects become more negative if the Bank Regulation becomes too stringent. This inverted U-shaped relation is robust after we use the exogenous cross-country and cross-year variation in the timing of the Basel II adoption as an instrument to assess the causal impact of Bank Regulation on SEO announcement effects. Bank Regulation has no significant impact of SEO announcement effects if the equity offering is involuntary.
James R. Barth - One of the best experts on this subject based on the ideXlab platform.
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Do Bank Regulation, supervision and monitoring enhance or impede Bank efficiency?
Journal of Banking & Finance, 2013Co-Authors: James R. Barth, Chen Lin, Jesús Seade, Frank M. SongAbstract:Abstract The recent global financial crisis has spurred renewed interest in identifying those reforms in Bank Regulation that would work best to promote Bank development, performance and stability. Building upon three recent world-wide surveys on Bank Regulation ( Barth et al., 2004 , Barth et al., 2006 , Barth et al., 2008 ), we contribute to this assessment by examining whether Bank Regulation, supervision and monitoring enhance or impede Bank operating efficiency. Based on an un-balanced panel analysis of 4050 Banks observations in 72 countries over the period 1999–2007, we find that tighter restrictions on Bank activities are negatively associated with Bank efficiency, while greater capital Regulation stringency is marginally and positively associated with Bank efficiency. We also find that a strengthening of official supervisory power is positively associated with Bank efficiency only in countries with independent supervisory authorities. Moreover, independence coupled with a more experienced supervisory authority tends to enhance Bank efficiency. Finally, market-based monitoring of Banks in terms of more financial transparency is positively associated with Bank efficiency.
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Interest Groups and Bank Regulation
SSRN Electronic Journal, 2013Co-Authors: James R. Barth, Apanard Penny PrabhaAbstract:It is clear that the organization and operation of political and institutional systems shape Bank Regulations. Political and institutional systems are also important because they can limit the degree to which narrowly-focused interest groups can unduly influence policy choices. This paper presents illustrative results supporting this position. Specifically, evidence is provided indicating that political and institutional characteristics exist in countries that will determine the degree to which special interest groups will be able to exert undue influence on government leaders and regulatory officials to favor narrow special interests rather than the broader public interests.
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Do Bank Regulation, Supervision and Monitoring Enhance or Impede Bank Efficiency?
SSRN Electronic Journal, 2010Co-Authors: James R. Barth, Chen Lin, Jesús Seade, Frank M. SongAbstract:The recent global financial crisis has spurred renewed interest in identifying those reforms in Bank Regulation that would work best to promote Bank development, performance and stability. Building upon three recent world-wide surveys on Bank Regulation (Barth et al., 2004, 2006, and 2008), we attempt to contribute to this assessment by examining whether Bank Regulation, supervision and monitoring enhance or impede Bank operating efficiency. Based on an unbalanced panel analysis of more than 4,050 Banks observations in 72 countries over the time period 1999-2007, we find that tighter restrictions on Bank activities are negatively associated with Bank efficiency while greater capital Regulation stringency is marginally and positively associated with Bank efficiency. In addition, we find that a strengthening of official supervisory power is positively associated with Bank efficiency only in countries with independent supervisory authorities. Moreover, independence coupled with a more experienced supervisory authority tends to enhance Bank efficiency. Finally, market-based monitoring of Banks in terms of more financial transparency is positively associated with Bank efficiency.
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Rethinking Bank Regulation
2006Co-Authors: James R. Barth, Gerard Caprio, Ross LevineAbstract:This volume assembles and presents a database on Bank Regulation in over 150 countries (included also on CD). It offered the first comprehensive cross-country assessment of the impact of Bank Regulation on the operation of Banks, and assesses the validity of the Basel Committee's influential approach to Bank Regulation. The treatment also provides an empirical evaluation of the historic debate about the proper role of government in the economy by studying Bank Regulation and analyzes the role of politics in determining regulatory approaches to Banking. The data also indicate that restrictions on the entry of Banks, government ownership of Banks, and restrictions on Bank activities hurt Banking system performance. The authors find that domestic political factors shape both Regulations and their effectiveness.
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Rethinking Bank Regulation: Till Angels Govern
2005Co-Authors: James R. Barth, Gerard Caprio, Ross LevineAbstract:1. Introduction: 1.A Motivation 1.B Objectives and contributions 1.C Key findings: a brief synopsis 1.D Guide to the book 2. Contrasting approaches to Bank Regulation: 2.A Two approaches to Bank Regulation: 2.A.1 Public interest approach 2.A.2 Private interest view of Regulation 2.B Bank Regulation: how 2.C The Basel Committee and regulatory convergence 2.D Conclusion 3. How are Banks regulated and supervised around the world?: 3.A Overview 3.B Structure, scope and independence of Regulation and supervision 3.C What is a 'Bank'? 3.D Entry into Banking, capital requirements and supervisory powers 3.E Explicit deposit insurance schemes 3.F Private monitoring and external governance 3.G Does Bank ownership type affect the choice of Regulations and supervisory practices? 3.H Forces for greater harmonization of Regulation and supervision among countries 4. What works best: 4.A Goals and boundaries 4.B Bank Regulation and supervision and Bank development 4.C Bank supervision, Regulation, and stability 4.D Bank supervision, Regulation, and Bank efficiency 4.E Bank supervision, Regulation, and Bank lending 4.F Supervision, Regulation, and Bank governance 4.G Summary of results 5. Choosing Bank Regulations 5.A Recap and motivation 5.B Motivating example: Mexico and the United States 5.C Conceptual framework 5.D Empirical framework and data 5.E Summary remarks 6. Rethinking Bank Regulation: 6.A Approach and context 6.B Lessons and implications.
Ross Levine - One of the best experts on this subject based on the ideXlab platform.
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Bank Regulation and Income Distribution: Evidence from Branch DeRegulation
2007Co-Authors: Thorsten Beck, Ross Levine, Alexey LevkovAbstract:Policymakers and economist disagree about the impact of Bank Regulations on the distribution of income. In this paper, we test whether liberalizing restrictions on intra- state branching in the states of the Unite d States from the mid-1970s to the mid-1990s intensified, ameliorated, or had no effect on the Gini coe fficient of income distribution. Besides boosting average incomes, branch deRegulation lowered income inequality. Furthermore, deRegulation reduced income inequality among female wage and salary earners and among the self-employed. .
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Rethinking Bank Regulation
2006Co-Authors: James R. Barth, Gerard Caprio, Ross LevineAbstract:This volume assembles and presents a database on Bank Regulation in over 150 countries (included also on CD). It offered the first comprehensive cross-country assessment of the impact of Bank Regulation on the operation of Banks, and assesses the validity of the Basel Committee's influential approach to Bank Regulation. The treatment also provides an empirical evaluation of the historic debate about the proper role of government in the economy by studying Bank Regulation and analyzes the role of politics in determining regulatory approaches to Banking. The data also indicate that restrictions on the entry of Banks, government ownership of Banks, and restrictions on Bank activities hurt Banking system performance. The authors find that domestic political factors shape both Regulations and their effectiveness.
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Rethinking Bank Regulation: Till Angels Govern
2005Co-Authors: James R. Barth, Gerard Caprio, Ross LevineAbstract:1. Introduction: 1.A Motivation 1.B Objectives and contributions 1.C Key findings: a brief synopsis 1.D Guide to the book 2. Contrasting approaches to Bank Regulation: 2.A Two approaches to Bank Regulation: 2.A.1 Public interest approach 2.A.2 Private interest view of Regulation 2.B Bank Regulation: how 2.C The Basel Committee and regulatory convergence 2.D Conclusion 3. How are Banks regulated and supervised around the world?: 3.A Overview 3.B Structure, scope and independence of Regulation and supervision 3.C What is a 'Bank'? 3.D Entry into Banking, capital requirements and supervisory powers 3.E Explicit deposit insurance schemes 3.F Private monitoring and external governance 3.G Does Bank ownership type affect the choice of Regulations and supervisory practices? 3.H Forces for greater harmonization of Regulation and supervision among countries 4. What works best: 4.A Goals and boundaries 4.B Bank Regulation and supervision and Bank development 4.C Bank supervision, Regulation, and stability 4.D Bank supervision, Regulation, and Bank efficiency 4.E Bank supervision, Regulation, and Bank lending 4.F Supervision, Regulation, and Bank governance 4.G Summary of results 5. Choosing Bank Regulations 5.A Recap and motivation 5.B Motivating example: Mexico and the United States 5.C Conceptual framework 5.D Empirical framework and data 5.E Summary remarks 6. Rethinking Bank Regulation: 6.A Approach and context 6.B Lessons and implications.
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Bank Regulation and Supervision
2005Co-Authors: Ross LevineAbstract:A large body of research suggests that Banks matter for human welfare. Most noticeably, Banks matter when they fail. Indeed, the fiscal costs of Banking crises in developing countries since 1980 have exceeded $1 trillion, and some estimates put the cost of Japan's Banking problems alone over this threshold. (1) Recent research also finds that Banks matter for economic growth. (2) Banks that mobilize and allocate savings efficiently, allocate capital to endeavors with the highest expected social returns, and exert sound governance over funded firms foster innovation and growth. Banks that instead funnel credit to connected parties and the politically powerful discourage entrepreneurship and impede economic development. Recent work further shows that Banks matter for poverty and income distribution. (3) Well-functioning Banks that extend credit to those with the best projects, rather than to the wealthy or to those with familial, political, or corrupt connections, exert an equalizing affect on the distribution of income and a disproportionately positive impact on the poor by de-linking good ideas and ability from past accumulation of wealth and associations. The important relationship between Banks and economic welfare has led researchers and international institutions to develop policy recommendations concerning Bank Regulation and supervision. The International Monetary Fund, World Bank, and other international agencies have developed extensive checklists of "best practice" recommendations that they urge all countries to adopt. Most influentially, the Basel Committee on Bank Supervision recently revised and extended the 1988 Basel Capital Accord. Data Until recently, the absence of data on Bank Regulation and supervision made it impossible to conduct broad cross-country studies of which Regulations and supervisory practices promote sound Banking. While analysts used models, country-studies, and the experiences of supervisors to make policy recommendations, there were simply insufficient data with which to conduct extensive international comparisons and to test the validity of Basel II or other proposals for reform. Clearly expert advice and evidence from individual countries should inform Banking policies; but just as clearly, cross-country econometric evidence can provide a valuable input. Consequently, James Barth, Gerard Caprio, and I assembled an international database on Banking policies. We conducted two surveys. The first was conducted in 1998-9 and involved over 100 countries and included information on almost 200 Regulations and supervisory practices. The second covered 2003-4 and included 50 more countries and 100 additional questions, many of which were recommended by users of the first survey. (4) Using these data, I am working with others to assess which Banking sector policies promote sound Banking around the world. In terms of defining "sound Banking," many take for granted that stability is the primary objective of Bank Regulation. While we study stability, my co-authors and I also examine the impact of Banking policies on Bank development, efficiency, corruption in lending, and corporate governance of Banks. Banks are not simply safe places to stash funds. Banks play pivotal roles in mobilizing and allocating resources, monitoring firms, and providing liquidity and risk management services. Thus, Bank Regulation and supervision should be judged by more criteria than stability alone. A Political Economy Approach Consistent with research on the political economy of Banking policies, the patterns we observe in the data suggest that countries do not choose individual Regulations in isolation; rather, individual choices reflect broad approaches to the role of government in the economy. (5) Some governments choose an active, hands-on approach, where the government owns much of the Banking industry, restricts Banks from engaging in non-lending activities such as securities underwriting, insurance, real estate, and non-financial services, limits the entry of new Banks, and creates a powerful supervisory agency that directly oversees and disciplines Banks. …
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Bank Regulation and Supervision: What Works Best? - Bank Regulation and Supervision: What Works Best?
Journal of Financial Intermediation, 2004Co-Authors: James R. Barth, Gerard Caprio, Ross LevineAbstract:The authors draw on their new database on Bank Regulation and supervision in 107 countries to assess different governmental approaches to Bank Regulation and supervision and evaluate the efficacy of different regulatory and supervisory policies. First, the authors assess two broad and competing theories of government Regulation: the helping-hand approach, according to which governments regulate to correct market failures, and the grabbing-hand approach, according to which governments regulate to support political constituencies. Second, they assess the effect of an extensive array of regulatory and supervisory policies on the development and fragility of the Banking sector. These policies include the following: Regulations on Bank activities and the mixing of Banking and commerce. Regulations on entry by domestic and foreign Banks. Regulations on capital adequacy. Design features of deposit insurance systems. Supervisory power, independence, and resources; stringency of loan classification; provisioning standards; diversification guidelines; and powers to take prompt corrective action. Regulations governing information disclosure and fostering private sector monitoring of Banks. Government ownership of Banks. The results raise a cautionary flag with regard to reform strategies that place excessive reliance on a country's adherence to an extensive checklist of regulatory and supervisory practices that involve direct government oversight of and restrictions on Banks. The findings, which are much more consistent with the grabbing-hand view of Regulation than with the helping-hand view, suggest that the regulatory and supervisory practices most effective in promoting good performance and stability in the Banking sector are those that force accurate information disclosure, empower private sector monitoring of Banks, and foster incentives for private agents to exert corporate control.
