Economic Value Added, or EVA is one of the popular tools that bankers can use to measure the financial performance of their bank. EVA helps management to conduct internal goal-setting. The long-term goal is preferred than short-term implications. It measures the company’s financial performance based on the residual wealth calculated by deducting its cost of capital from its operating profit, ad...

Traditionally, the literature on financial intermediation and credit channels, especially credit crunches, emphasized the relation between banks and entrepreneurs requiring credit, neglecting the funding of banks. With this paper, we want to be much more precise in this respect and study the impact of funding on credit. Indeed, regulation that has become world wide with the Basle Accord puts li...

It is well established that equity issuance for most non-financial firms is procyclical. This paper shows that, in contrast, equity issuance for banks is countercyclical across credit cycles after 1980, as is retained income. Thus, during credit booms, banks raise less equity, even though more equity might help banks better absorb shocks. This paper shows that government guarantees play a cruci...

We re-examine the relationship between the degree of deposit market competition and bank risk taking in a model where banks compete in differentiated deposit services. When banks invest their deposits directly, as has already been established in the extant literature, an increased degree of competition, measured either by greater degree of substitutability or by greater number of banks, induces...

The banking industry in Nigeria has been faced with enormous challenges that affect performance, management, and reliability. There are 24 banks in Nigeria today. These banks are referred to as consolidated banks. They emerged after the recapitalisation initiative of the central bank of Nigeria in 2005. Specifically, the central bank of Nigeria (CBN) raised the minimum capital requirement for e...

Using monthly balance-sheet data of all major German credit banks, we analyze deposit withdrawals and bank failures in the German banking and currency crisis of 1931. We Þnd that deposit withdrawals were driven by the run on the currency, but were also related to banks’ liquidity positions; that branch banks were no more stable than unit banks; and that large banks were privileged, being bailed...

Background: Internet finance has grown rapidly in China over the past years. Through introducing internet finance’s “reducing management cost” and “raising capital cost” effects into bank risk-taking model, this paper systematically investigates the dynamic and heterogeneous influence of internet finance on China commercial banks’ risk-taking. Methods: Using internet finance index based on “tex...

The development of shadow banking system in China catalyzes the expansion of banks’ off-balance-sheet activities, resulting in a distortion of China’s traditional credit expansion and underestimation of its commercial banks’ overall risk. This paper is the first to incorporate banks’ overall risk, endogenously into bank’s production process as undesirable by-product for the estimation of banks’...

This study estimated cost inefficiency, scale & scope measures and cost productivity growth rates of banks in United Arab Emirates during 1998 (a bad year for banks due to lower oil price) and 2000 (a good year for banks as the oil prices were higher). The study provided evidence that: Substantial cost X-inefficiencies and scope economies existed in UAE banks. Average small banks improved their...

U ninsured depositors, whose deposits are not fully protected by federal deposit insurance, have an incentive to monitor banks' activities and impose additional funding costs on risky banks. This pricing is a form of market discipline, since the market penalizes banks for taking on greater risk. For banks that become troubled, market discipline can take a more severe form: Market participants m...