The presence of moral hazard in the banking sector can have worrying results. This paper examines the role of government guarantees to banks in generating moral hazard in Iran. We test for moral hazard among bank creditors by determining whether protected banks received more funds from creditors than non-protected banks. Empirically, to determine the existence of moral hazard among bank manag...

This study proposes a political interference hypothesis to explain how political considerations depress government banks performance. In here, we define the political interference as the situation in which the executives of government banks are replaced within 12 months after the presidential elections. We classify government banks into political and non-political banks when the government bank...

The purpose of this paper is to examine the impact of internal and external factors on the ratio of outstanding claims in those banks which are accepted in Tehran Stock Exchange. For this purpose, we used the data obtained from 8 banks and credit institution active in the Tehran Stock Exchange and using data regression panel.  The present survey was examined over the period 2011 till 2015. The ...

This paper analyses structural and cyclical determinants of banking profitability in 16 Western European countries. We find that financial structure matters, particularly through the beneficial effect of the capital market orientation in the respective national financial system. Furthermore, higher diversification regarding banks’ income sources shows a positive effect. The industry concentrati...

We present a locational model of banking with two types of private banks, honest and opportunistic, and a state bank that is assumed to be less efficient. Opportunistic banks choose whether to honor their contracts with depositors depending on the probability of contract enforcement. We derive three types of equilibria, which depend on institutional quality: a “low” equilibrium in which private...

corporate governance (cg) is an important effort to ensure accountability and responsibility and is a set of principles, which should be incorporated into every part of the organization. this study focused on the state of corporate governance (cg) in two categories of the banking industries: conventional banks and islamic banks. as conventional banks and islamic banks differ a great deal in the...

Do commercial banks invest less in information gathering activity when they compete more aggressively with each other? Does intensifying competitive pressure in bank loan markets affect the quality of informational ties that bind borrowers and lending banks? Using survey data from German manufacturing firms, we are able to directly measure information flows from loan applicants to banks. We fin...

We extend beyond healthiness assessment of banks using quantitative financial data by applying textual sentiment analysis. Looking at 10-K annual reports for a large sample of banks in the 2000-2014 period, 52 public bank holding companies that were associated with bank failures during the global financial crisis serve as a natural experiment. Utilizing negative and positive dictionaries propos...

Using data for 1238 banks located in 94 developing and emerging countries, we explore whether the impact of bank regulation and supervision on banking risk (measured by the banks’ Z-scores) depends on bank structure. Our findings suggest that stricter regulation and supervision increases the banks’ Z-scores. Notably capital requirements and supervisory control diminish banking risk. However, th...