Academic literature on the topic 'Banks and banking – Tanzania'

Purpose This study aims to examine the relationship between service quality and customers’ satisfaction, and the effect of service quality on customers’ satisfaction in Tanzanian Islamic banking. Design/methodology/approach This study applied six service quality dimensions of CARTER model, i.e. compliance, assurance, reliability, tangible, empathy and responsiveness, to measure Tanzania Islamic banks’ service quality. The questionnaire was also used to measure the level of customers’ satisfaction to the Islamic banking services provided. A total of 384 questionnaires were randomly distributed to the customers of People’s Bank of Zanzibar Islamic banking division, whereby 255 questionnaires were returned and used for analysis. By using SPSS version 19, descriptive analysis, correlation analysis and regression analysis have been used to meet the research objectives. Findings The study findings indicate that customers are satisfied with the Islamic banking services provided by Tanzania banks. However, it has been found that customers are attracted by compliance, tangibility and reliability of the banks. The findings further indicate a significant relationship between service quality and customers’ satisfaction. Indeed, empathy, compliance and reliability were found to be the only significant predictors of customers’ satisfaction. Research limitations/implications Further researches should be considered to involve more banks to generalize the findings. Again, the study has focused on the influence of service quality on customer satisfaction; however, there may be other issues that have direct or indirect influence on customers’ satisfaction on Tanzania Islamic banking. It is, therefore, suggested that future researchers may broaden their scope and conduct research in these areas. Practical implications The findings of the study suggest that there is large number of Muslim and non-Muslims communities who are interested in Islamic modes of finance and banking. Banks have potential to increase customers’ base by improving the quality of their services. Essentially, banks must focus on complying with Islamic principles, improving reliability and empathy, as they statistically influence customers’ satisfaction. Social implications The study creates awareness about the nature of the quality of services provided by Islamic banks in Tanzania. Hence, the study may influence more customers to join Islamic banks for better services. Originality/value This study is important for Tanzania Islamic banks considering that the country has a large number of Muslim communities and non-Muslims who are interested in Islamic modes of finance and banking. While most of the other studies on customers’ preferences in Tanzania are based on conventional banking services, this study focuses on Islamic modes of finance and banking.

This paper investigates the challenges faced by Islamic banks in practicing Mudarabah financing under conventional regulatory regime by interviewing eleven Islamic bank managers from three selected banks. Thematic data analysis was employed to understand hindrances for Islamic banks in operating Mudarabah financing under conventional regulatory regime. Findings of the study have provided a number of major challenges that hinder Islamic banks performance in Tanzanian context. The challenges include irregularities of policies and regulations, non-supportive operational and technical structure, and missed perceptions of Mudarabah among the public. However, a new challenge of the impact of the central bank on Islamic banks was identified. It is expected that Tanzanian Islamic banking performance will enhance if the central bank introduces sharia regulations for Islamic banking, initiates the central sharia supervisory board, and harmonize country regulations with financial regulations regarding Islamic perspectives.

Purpose This paper aims to examine how banks in Tanzania have been vulnerable to money laundering activities and how the banking institutions have been implicated in enabling or aiding the commission of money laundering offences, and highlights the banks’ failure or inability to prevent, detect and thwart money laundering committed through their financial systems. Design/methodology/approach The paper explores Tanzania’s anti-money laundering law and analyzes non-law factors that make the banks exposed to money laundering activities. It looks at law-related, political and economic circumstances that impinge on the banks’ efficacy to tackle money laundering offences committed through their systems. The data are sourced from policy documents, statutes, case law and literature from Tanzania and other jurisdictions. Findings Both law-related and non-law factors create an enabling environment for the commission of money laundering offences, and this exposes banks in Tanzania to money laundering activities. Some banks have been implicated in enabling or aiding money laundering offences. These banks have abdicated their obligations to fight against money laundering. This is attributed to the fact that the banks’ internal anti-money laundering policies, regulations and procedures are inefficient, and Tanzania’s legal framework is generally ineffective to tackle money laundering offences. Originality/value This paper uncovers a multi-faceted nature of money laundering affecting banks in Tanzania. It is recommended that Tanzania’s anti-money laundering policy should address law-related, political, economic and other factors that create an enabling environment for the commission of money laundering offences. Tanzania’s anti-money laundering law should be reformed to enhance its efficacy and, lastly, banks should reinforce their internal anti-money laundering policies and regulations and policies.

Purpose This paper aims to examine the legal challenges to electronic banking and initiatives taken to address them in Tanzania. It is based on the results of a comparative analysis of policies and laws of other countries from which Tanzania can pick a leaf on how to deal with challenges brought by information and communication technology-induced innovations in the banking sector. Design/methodology/approach The study upon which this paper is based employed comparative analysis methods by analysing different policies and laws of Tanzania in line with attendant laws of other jurisdictions such as the USA, Malaysia, South Africa, Rwanda and Kenya and international instruments in a bid to establish the best practice pertaining to controlling and containing legal challenges brought by developments in electronic banking. Findings This paper confirms that, the prevailing laws guiding electronic banking in Tanzania do not adequately address the challenges the banks and customers face during electronic banking transactions. Thus, there is a need to amend the Tanzanian laws guiding this sector to put in place legislation capable of facilitating the development of electronic banking whilst addressing the associated challenges the users encounter. Originality/value This paper underscores the value of amending existing or enacting new laws in line with the development of technology/innovation to protect consumers in nascent electronic banking of the country. Moreover, it advocates for the development of innovation in banking sector should not be left to grow without amending/enacting laws that will promote its development and at the same time protect the users to avoid far-reaching and often unpleasant implications.

The objective of this study is to measure the efficiency of commercial banks in Tanzania using a non-parametric approach, the input-oriented data envelopment analysis (DEA), both by constant return to scale (CRS) and variable return to scale (VRS). For this purpose, two outputs representing total loans and total interest income, and three inputs representing total deposits, the number of employees and total expenses are selected for seven-years (2006-2012) period in the analysis. The findings under CRS model identify four banks to be fully efficient in the year 2006, two banks in 2007 and one bank in 2008, 2009, 2010, 2011 and 2012, while VRS model results identify five banks to be fully efficient in the year 2006 and 2012, three banks in 2007 and two banks in 2008 and 2009, one bank 2010 and 2011. Four banks, Standard Charted bank, National Commercial Bank (NBC), Citibank and Barclays bank are found to be the most efficiency banks in Tanzania, which serve as the benchmark peers for inefficient banks in the sample, In addition Tobit regression has been used to determine the efficiency drivers.

The negative consequences of customer switching behaviour in the banking industry cannot be underestimated. Since there are limited studies addressing customer switching intentions and actual switching behaviour in the banking sector of Tanzania, this study intended to bridge the knowledge gap by addressing factors influencing customer switching intentions in the context of Tanzanian commercial banks. The study followed a positivism research paradigm out of which a deductive research approach was adopted. In the same line, an explanatory research design was used. The study was conducted in the city of Dar es Salaam with 400 respondents who were customers from NMB Bank Plc, TPB Bank Plc and NBC Bank Ltd. Multi-stage sampling method was used to generate sample size for this study. Multiple linear regression was employed to analyze the collected data. The findings of Thé study indicated that subjective norms were insignificant in influencing customer switching intentions in commercial banks. These findings suggested that commercial banks customers in the city of Dar es Salaam are not under robust social pressure that requires a vital social group to approve their switching intentions. Further findings revealed that perceived control of bank charges, attitude toward service quality and convenience significantly influenced customer switching intentions in commercial banks.

Purpose This paper aims to examine the prospects of a dispute resolution framework for the Islamic banking industry in Tanzania under the existing legal framework. Design/methodology/approach This paper is based on comparative study by drawing significant lessons from other jurisdictions, and argues that to avoid some of the initial drawbacks in the dispute resolution framework for Islamic banking transactions in more advanced jurisdictions like Malaysia and United Kingdom, it is important for Tanzania to get it right from the onset to effectively manage Islamic banking disputes. Findings The study finds that apart from the court system which provides the main avenue for Islamic finance litigation, other processes such as arbitration and mediation which are deemed to be more sustainable could also be developed for effective dispute management. Research limitations/implications The study focuses on Tanzania banking system with comparison to other jurisdictions. Practical implications An increase of Sharī’ah-compliant products in Tanzania has led to the establishment of a number of Islamic banks. This study demonstrates the need for Tanzania to make use and/or make adjustment of its laws for effective dispute settlement of banking-related disputes. Originality/value This study appears to be the first paper to draw significant experiences from other jurisdictions to resolve Islamic banking disputes in Tanzania. It is expected to provide a good policy framework for the stakeholders in the Islamic banking industry in Tanzania.

This paper analyses the development of mobile money in Tanzania and the politics of financial inclusion that enhanced it. Mobile money has played a significant part in reaching the financially unreached and excluded people overtaking banking and other financial services in Tanzania. There is no doubt that mobile money emerged at a time when financial exclusion was a major issue, and that the advent of mobile money was opposed by the banks who thought that it was entering the money business, and that the banks were in a better position to do money business better than any other institutions. For this reason, it is crucial to understand the development of mobile money and the politics of financial inclusion that allowed it to succeed. I have chosen the case study of Tanzania because not only that mobile money has thrived there, but also mobile money as we perceive it today was firstly invented by the e-Fulusi, a Tanzanian company, and failed before it was relaunched in Kenya by MPesa and succeeded. Moreover, the development of mobile money and the politics of financial inclusion have proven their importance in fighting financial exclusion and in increasing access to formal financial services for the poor, which is key to economic growth and poverty alleviation.

Prior to the advent of mobile money, the banking sector in most of the developing countries excluded certain segments of the population. The excluded populations were deemed as a risk to the banking sector. The banking sector did not work with cash stripped and the financially disenfranchised people. Financial exclusion persisted to incredibly higher levels. Those excluded did not have: bank accounts, savings in financial institutions, access to credit, loan and insurance services. The advent of mobile money moderated the very factors of financial exclusion that the banks failed to resolve. This paper explains how mobile money moderates the factors of financial exclusion that the banks and microfinance institutions have always failed to moderate. The paper seeks to answer the following research question: 'How has mobile money moderated the factors of financial exclusion that other financial institutions failed to resolve between 1960 and 2008? Tanzania has been chosen as a case study to show how mobile has succeeded in moderating financial exclusion in the period after 2008.

Prior to the advent of mobile money, the banking sector in most of the developing countries excluded certain segments of the population. The excluded populations were deemed as a risk to the banking sector. The banking sector did not work with cash stripped and financially disenfranchised people. Financial exclusion persisted to incredibly higher levels. Those excluded did not have bank accounts, savings in financial institutions, access to credit, loans, and insurance services. The advent of mobile money moderated the very factors of financial exclusion that the banks failed to resolve. This paper explains how mobile money moderates the factors of financial exclusion that the banks and microfinance institutions have always failed to moderate. The paper seeks to answer the following research question: 'How has mobile money moderated the factors of financial exclusion that other financial institutions failed to resolve between 1960 and 2008? Tanzania has been chosen as a case study to show how mobile has succeeded in moderating financial exclusion in the period after 2008.

Thesis (MComm)--Stellenbosch University, 2014.
ENGLISH ABSTRACT: In recent years the African banking industry has received much attention from international investors. The international attention received by Africa is due to trends such as globalisation and the profit potential that exists at the bottom of the economic pyramid. Within Africa, Tanzania has become a hub of investment for both international and South African banks. Banks such as South African based First National Bank have publically stated that one of their main priorities at the moment is securing the bank as a participator in the Tanzanian financial service industry. The Tanzanian banking market is currently served by fourty-eight banks and the minister of finance encourages further investment and entry into the country. Despite the large number of banks in Tanzania, the penetration rate of banked individuals remains low with approximately nine per cent of the population being members of the formal banking system. The low penetration indicates the Tanzanian population’s reluctance or inability to partake in the banking sector. Research suggests that poor attitudes held by Tanzanians towards the banking industry are a key factor causing the low penetration rate of banking in the country. While consumer behaviour literature has found that attitudes exert a critical influence on consumers’ behavioural intention, attitudes cannot be viewed as the sole predictor of behaviour. The Theory of Planned Behaviour, that evolved from the Theory of Reasoned Action, extends the relationship between attitudes and intentions to include the influence of subjective norms and perceived behavioural control. Thus the Theory of Planned Behaviour states that behavioural intentions are determined by: (1) attitudes, (2) subjective norms and (3) perceived behavioural control. This study was conducted in Dar es Salaam, Tanzania, and utilised the Theory of Planned Behaviour as a guideline to measure the influence of attitudes, subjective norms and perceived behavioural control on unbanked consumers’ intentions to open a formal bank account. Unbanked individuals were studied to provide banks doing business in Tanzania with insight into the factors that influence these consumers’ to become banked. The knowledge gained about unbanked individuals can be used to develop marketing strategies to increase the banked population of Tanzania. Research has shown that the average Tanzanian banking client is between the ages of twenty-seven and thirty-four and has a tertiary education. Thus the sample selected for the study was individuals who where studying towards a tertiary education in Tanzania between the ages of eighteen and twenty-seven. These individuals were selected as they are the most likely potential clients of Tanzanian banks. They are also potentially the most profitable clients for banks as they will likely earn more than other individuals once commencing formal employment. The Theory of Planned Behaviour was adapted to account for the unique characteristics of the Tanzanian financial services industry. Exploratory research identified the following dimensions as being possible influencers of intention to open a formal bank account in Tanzania: (1) trust, (2) attitude towards saving, (3) perceived relative advantage, (4) access convenience, (5) perceived value and (6) attitude towards banks. After data collection in Tanzania the model was further revised by conducting an exploratory factor analysis. The exploratory factor analysis identified the following dimensions as influencing intention to open a formal bank account: (1) attitude towards saving, (2) attitude towards banks, (3) self-efficacy, (4) access convenience, (5) reference groups, (6) perceived relative advantage, (7) perceived value, (8) attitudes towards banking, (9) trust, (10) future financial independence and (11) future benefits. Regression analyses were used to test the relationships suggested in the model. Significant relationships were found between the independent variables (1) future financial benefits and (2) reference groups and the dependent variable intentions. Relationships were also found between the independent variable future benefits and the dependent variable attitude towards banking. The empirical findings were used to develop strategies suggesting ways to increase the banked population of Tanzania. By increasing the banked population of Tanzania the Tanzanian economy, Tanzanian citizens and banks doing business in Tanzania will benefit. As banking facilitates economic growth an increase in the banked population of Tanzania would likely lead to increased economic growth in the country. Tanzanian citizens will benefit from the study as by opening formal bank accounts they will experience the many benefits of banking. Lastly banks doing business in Tanzania are likely to experience increased profitability as a result of the increased customer base.
AFRIKAANSE OPSOMMING: Oor die afgelope paar jaar het die bankbedryf in Afrika baie aandag ontvang van internasionale beleggers. Hierdie aandag is die gevolg van tendense soos globalisering en die winspotensiaal wat bestaan aan die onderkant van die ekonomiese piramide. Binne Afrika het Tanzanië heelwat beleggings van sowel internasionale as Suid-Afrikaanse banke gelok. Banke soos die Suid-Afrikaans gebaseerde First National Bank het amptelik verklaar dat een van hulle vernaamste prioriteite op die oomblik is om te verseker dat die bank ’n rolspeler is in die Tanzaniese finansiëledienstesektor. Die Tanzaniese bankmark word tans deur agt en veertig banke bedien en die minister van finansies moedig verdere beleggings en toegang tot die land aan. Ten spyte van die groot aantal banke in Tanzanië is die persentasie individue wat gebruik maak van formele bankdienste, slegs ongeveer nege persent van die bevolking. Die lae syfer dui op die onwilligheid of onvermoë van die Tanzaniese bevolking om aan die banksektor deel te neem. Navorsing dui daarop dat die negatiewe houdings van die Tanzaniese bevolking teenoor die banksektor ’n deurslaggewende faktor is wat die lae deurdringingskoers van die bankwese in die land veroorsaak. Alhoewel literatuur oor verbruikersgedrag aantoon dat houdings ’n kritiese invloed uitoefen op verbruikers se voorgenome gedrag, kan houdings nie beskou word as die enigste voorspeller van gedrag nie. Die Teorie van Beplande Gedrag, wat ontwikkel het uit die Teorie van Beredeneerde Optrede, brei die verhouding tussen houdings en voornemens uit om die invloed van subjektiewe norme en waargenome gedragsbeheer in te sluit. Die Teorie van Beplande Gedrag stel dit dus dat gedragsintensies bepaal word deur: (1) houdings; (2) subjektiewe norme; en (3) waargenome gedragsbeheer. Hierdie studie is uitgevoer in Dar es Salaam, Tanzanië, en het die Teorie van Beplande Gedrag gebruik as ’n riglyn om die invloed te bepaal van houdings, subjektiewe norme en waargenome gedragsbeheer op die niebankgebruikers se voornemens om ’n formele bankrekening te open. Niebankgebruikers (individue sonder bankrekeninge) is bestudeer om aan banke wat in Tanzanië sake doen, insigte te voorsien oor die faktore wat hierdie individue beïnvloed om bankdienste te begin gebruik. Die kennis wat opgedoen is oor niebankgebruikers kan gebruik word om bemarkingstrategieë te ontwikkel om die getal bankgebruikers in Tanzanië te verhoog. Navorsing het getoon dat die gemiddelde Tanzaniese bankkliënt tussen seween- twintig en vier-en-dertig jaar oud is en tersiêre onderrig ondergaan het. Die steekproef wat gekies is vir die studie, het dus bestaan uit individue wat besig was met tersiêre opleiding in Tanzanië. Hulle is bes moontlik die mees winsgewende kliënte vir banke, want hulle sal waarskynlik meer verdien as ander individue wanneer hulle formeel begin werk. Die Teorie van Beplande Gedrag is aangepas om die unieke eienskappe van die Tanzaniese finansiëledienstesektor in ag te neem. Verkennende navorsing het die volgende dimensies geïdentifiseer as moontlike oorsake van intensies om ’n formele bankrekening in Tanzanië te open: (1) vertroue; (2) houding teenoor spaar; (3) vermeende relatiewe voordeel; (4) toegangsgerief; en (5) vermeende waarde. Na data-insameling in Tanzanië is die model verder hersien deur ’n verkennende faktorontleding uit te voer. Hierdie faktorontleding het die volgende dimensies geïdentifiseer wat die intensies om ’n formele bankrekening te open beïnvloed: (1) houding teenoor spaar; (2) houdings teenoor banke; (3) selfdoeltreffendheid; (4) toegangsgerief; (5) verwysingsgroepe; (6) vermeende relatiewe voordeel; (7) vermeende waarde; (8) houdings teenoor bankdienste; (9) vertroue; (10) toekomstige finansiële onafhanklikheid; en (11) toekomstige voordele. Regressie-ontledings is gebruik om die verhouding, wat voorgestel is in die model, te toets. Betekenisvolle verhoudings is aangetoon tussen toekomstige finansiële voordele en verwysingsgroepe as onafhanklike veranderlikes en intensies oftewel voornemens as afhanklike veranderlike. Daar is ook verhoudings gevind tussen toekomstige voordele as onafhanklike veranderlike en houding teenoor bankdienste as afhanklike veranderlike. Die empiriese bevindinge is gebruik om strategieë te ontwikkel wat maniere voorstel om die getal bankgebruikers in Tanzanië te verhoog. Dit sal tot voordeel strek van die Tanzaniese ekonomie, die Tanzaniese bevolking, asook banke wat besigheid doen in Tanzanië. Bankdienste fasiliteer ekonomiese groei, wat die land se ekonomie bevoordeel. Tanzaniese burgers sal voordeel trek uit die studie, want hulle sal die voordele van bankgebruik beleef wanneer hulle bankrekenings open. Daarbenewens sal banke wat in Tanzanië funksioneer, groter inkomste genereer. Die Tanzaniese bevolking en ekonomie sal egter eers die volle voordele beleef indien die getal bankgebruikers beduidend toeneem.

The thrust of this research is the "MARKET-ORIENTATION OF TANZANIAN BANKING INSTITUTIONS: A CASE STUDY OF CRDB BANK". Being the first of its kind within the context of the study, it is largely an exploratory study on the marketorientation (MO) with twin purposes of: (a) examining the extent of MO in CRDB Bank as perceived by employees and (b) exploring the development and implementation of MO culture in the bank, with a special focus on the facilitating and hindering factors. Emanating from these purposes are four main objectives of the research that underpinned the research namely (1) to explore the existing marketing philosophies in the bank, (2) to measure the employees perceived level of MO and its constituent dimensions, including the development of the MO scale that is suitable to a banking institution, (3) to explore whether the perception of the level of MO differs according to the following attributes (a) hierarchical levels of the organisation (top, middle and lower management and between head office and branches offices of the bank), (b) employee-specific(personal) attributes(c) size of branches ( large, medium and small), (d) location of branches ( between those in competitive areas and in least competitive areas) and (e) profitability performance ( between above-median and below-median performing branches), and (4) to explore the facilitating and hindering factors for the development and implementation of MO in CRDB Bank and Tanzanian financial sector in general. The main methodology used in this research is a case study. This enabled us to use method triangulation, whereby both qualitative and quantitative methods were used. Principally, we applied the following research tools/techniques in data gathering: interviews, documentary analysis, survey questionnaire and personal observation. The field research involved two phases. The first was a pilot study that entailed conducting discovery-oriented interviews with 9 bankers in six banks. The second phase was conducting the substantive research in CRDB Bank. The findings of the study are fascinating and may have far- reaching implications both in terms of theory and practice. From a themantic dimension, we successfully reconceptualised MO, by developing a scale for measuring the extended MO. We clarified this as the Simultaneous Market orientation, SMO, which composes five key dimensions: external customer-orientation, competitor-orientation, interfunctional orientation, internal 111 customer-orientation and profit-orientation. The scale was tested and validated for its psychometric properties. In other words, the SMO scale was found, reliable and valid, implying that the five components fully represented the SMO. External customerorientation and profit-orientation were ranked as first and second most important dimension of SMO in the bank. Competitor-orientation, interfunctional co-ordination and internal customer-orientation were ranked third, fourth and fifth, respectively. From the practice perspective, our findings indicates that marketing-orientation and salesorientation are the dominant marketing philosophies, while production-orientation and societal marketing-orientation are the less marketing philosophies. This in practice indicates a co-existence of different marketing philosophies in the organisation contrary to the main stream literature exhortations. Also, the research revealed an integration perspective of employees on SMO culture. Essentially, this has established the importance of internal customer-orientation in influencing or leading to employees' participation, morale, training, job satisfaction and retention as a critical determinants of successful SMO implementation. Furthermore, we have identified the main facilitative and hindering factors for the development and implementation of MO in the specific context of CRDB bank and the Tanzanian financial sector in general. These antecedent factors have a profound effect on MO implementation. In general, our findings have set a solid base and raised issues that are likely to chart the future direction of MO situation not only in Tanzania, but also in other African countries that are undergoing market-driven transformation of their economies. The main public policy implication of this study is that there is a need to strengthen the macroenvironment and to mount public education in order to foster MO behaviour and practice. Similarly, at the management level, there is a need for effective and adequate management leadership and support for adoption and implementation of MO culture and the need for sustained or continuous changes given the emergent internal and external environment. The essential role of informed "change agents" in fostering MO could not be discounted.

This thesis is composed of three empirical chapters each of which examines separate segments of Turkish banking system from different perspectives. First empirical chapter investigates regional loan distribution of development banks. The findings in this chapter suggest that political connection has played a significant role in development lending. There is also geographical bias which leads to higher volumes of loans in the regions close to the capital city. Second empirical chapter examines Islamic banks and compares them with conventional banks in terms of profitability and competition grounds. The results reveal that Islamic banks earn more returns with respect to conventional banks. The results also suggest that the regulatory changes of the last decade improve market power of these banks. The last empirical chapter investigates micro structure of Repo and Reverse Repo Market of Turkey in which only commercial banks can transact. This chapter initially presents the network topologies of this market that helps one to understand the characteristics of complex network in this market. This chapter then computes a connectivity measure and investigates the drivers of connectivity out of domestic and external factors. Although results provide very rich insights, external factors dominate the behaviour of network in this market.

This is an exploratory qualitative case study of the state of sustainability programs within a set of 12 mid-sized U.S. banks compared among themselves and then compared to a set of 12 global banks. This research was designed in two phases. Phase One presented the current state of sustainability within mid-sized U.S. banks and global banks based upon each bank’s public data as organized into three sections: a bank profile, major strategic initiatives, and bank sustainability initiatives and programs. Phase Two data were analyzed from 24 interviews with key executives within each bank. A structured interview format was used, and the interviews were conducted in-person, by phone, or via email depending on the respondent’s preference.

The research found that the majority of mid-sized U.S. banks had, from a regulatory view point, achieved the broader aspects of sustainability. Mid-sized U.S. banks had not seized the spirit of sustainability by organizing and communicating their efforts in the context of a voluntary formal reporting mechanism. Mid-sized banks generally relied on government compliance reports to communicate their efforts. By relying on compliance reporting, mid-sized U.S. banks are missing an opportunity to enhance their image and improve reputational and risk management efforts. It was found that the global banks demonstrated a willingness to embrace the spirit of sustainability past any regulatory requirements, but found their efforts were still in the process of integration within their many business units. It was also found that there is a need for one globally accepted reporting mechanism for sustainability performance. At present, there appear to be many competing requirements for reporting on sustainability efforts, which are beginning to tax internal departments of global banks in an effort to meet the information needs of all their stakeholders.

Using thematic analysis, five key contributions resulted: The first contribution is an understanding of the key components of mid-sized U.S. banks and global bank sustainability programs. The second contribution is identification of the motivators for mid-sized U.S. banks and global banks to establish a sustainability program. Third, a set of criteria was identified to help determine the success of a bank’s sustainability program that can be used by mid-sized U.S. banks and global banks (criteria for success). The fourth contribution is the presenting of the current state of sustainability programs for the set of banks used in the study. The fifth contribution is a set of guiding elements and impact benefits that can be used by any size bank executives to improve business results through implementation of a sustainability initiative.

Thesis (Ph. D.)--University of Sydney, 2004.
Title from title screen (viewed 8 May 2008). Submitted in fulfilment of the requirements for the degree of Doctor of Philosophy to the Discipline of Work and Organisational Studies, School of Business, Faculty of Economics and Business. Includes bibliographical references. Also available in print form.

AbstractThis chapter develops further the role of a central bank and its interplay with commercial banks. Together, the two ensure the provision of liquidity to the economy, such that the real sectors are shielded from flows of funds originating from household and investors. We also disaggregate the banking system into two banks to represent deposit flows between banks and their impact on the central bank’s balance sheet, and to distinguish between what we call “relative” and “absolute” central bank intermediation. We then integrate deposit money creation by commercial banks into our system of financial accounts, and revisit some old debates, such as the limits of bank money creation and the role of related parameters that the central bank can set (not only the reserve requirement ratio, but also the collateral framework). Finally, we explain the concepts of “plain money” and “full reserve banking” within the financial accounts, and also discuss in this framework the recent proposals regarding central bank digital currency (CBDC).

In this paper, I consider the Turkish Banking Industry, which is dominated by a few large banks. Using a conjectural variation approach, I estimate a structural model to examine the market conduct of the largest banks for the period 1988-2009. Estimation results suggest that the Turkish banks colluded in the loan market during the sample period where the average mark-up is estimated to be in the range of 44% to 86% depending on the empirical specification. This evidence demonstrates a conflict between market concentration and competition in the Turkish banking industry. Thus, regulatory agencies should be cautious against attempts to increase concentration in the banking industry.

Banking activities exhibit highly dynamic and evolving feature in recent years. Healthy financial position of the banks therefore gains importance in assuring well-being of all economic agents in a country. Because of banks’ key role in financial markets and real economy, banking failures or inefficient performances may have profound effects on the whole economy. For this reason, it is important to monitor the bank ratios as a strength indicator. Therefore, this paper aims to investigate financial position of the banks in Turkey. To this end, we select particular 29 ratios of the present day banks which are matching the ratios of previously failed banks between the period 1997-2003. Therefore, we construct a data set by which the banks can be categorized into two groups, namely failed and non-failed banks. Data covering the period 1996-2014 extracted from Banking Regulation and Supervision Agency. In the first place, we perform ANOVA test to evaluate the most relevant ratios for bank failure. The ANOVA test results reveal that 13 of 29 ratios are not significant. The remaining ratios are used to implement factor analysis in order to categorize ratios and calculate factor scores. Lastly, we estimate a Probit regression model to determine conditional probability of failure for a given bank. Our results show that financial position of the banks exhibits substantial variations in Turkey. Furthermore, given the data set and methods employed, most of the banks have a robust financial position and are unlikely to fail.

Bank soundness is crucially important for the stability of the whole financial system. The goal of the paper is to reveal the contributing factors to bank soundness in the Latvian banking market. Multifactor regression analysis was applied as a core research method. Bank soundness was proxied by Risk index calculated for Latvian banks. Profitability, liquidity and asset quality ratios of individual banks extracted from BankScope data warehouse were used as explanatory variables. Research period covers 2007–2014. The regression model was created, based on financials of Latvian banks as for 2013. The reliability of the model was tested, using the financials from 2014 reports.

1.1 Macroeconomic summary Economic recovery has consistently outperformed the technical staff’s expectations following a steep decline in activity in the second quarter of 2020. At the same time, total and core inflation rates have fallen and remain at low levels, suggesting that a significant element of the reactivation of Colombia’s economy has been related to recovery in potential GDP. This would support the technical staff’s diagnosis of weak aggregate demand and ample excess capacity. The most recently available data on 2020 growth suggests a contraction in economic activity of 6.8%, lower than estimates from January’s Monetary Policy Report (-7.2%). High-frequency indicators suggest that economic performance was significantly more dynamic than expected in January, despite mobility restrictions and quarantine measures. This has also come amid declines in total and core inflation, the latter of which was below January projections if controlling for certain relative price changes. This suggests that the unexpected strength of recent growth contains elements of demand, and that excess capacity, while significant, could be lower than previously estimated. Nevertheless, uncertainty over the measurement of excess capacity continues to be unusually high and marked both by variations in the way different economic sectors and spending components have been affected by the pandemic, and by uneven price behavior. The size of excess capacity, and in particular the evolution of the pandemic in forthcoming quarters, constitute substantial risks to the macroeconomic forecast presented in this report. Despite the unexpected strength of the recovery, the technical staff continues to project ample excess capacity that is expected to remain on the forecast horizon, alongside core inflation that will likely remain below the target. Domestic demand remains below 2019 levels amid unusually significant uncertainty over the size of excess capacity in the economy. High national unemployment (14.6% for February 2021) reflects a loose labor market, while observed total and core inflation continue to be below 2%. Inflationary pressures from the exchange rate are expected to continue to be low, with relatively little pass-through on inflation. This would be compatible with a negative output gap. Excess productive capacity and the expectation of core inflation below the 3% target on the forecast horizon provide a basis for an expansive monetary policy posture. The technical staff’s assessment of certain shocks and their expected effects on the economy, as well as the presence of several sources of uncertainty and related assumptions about their potential macroeconomic impacts, remain a feature of this report. The coronavirus pandemic, in particular, continues to affect the public health environment, and the reopening of Colombia’s economy remains incomplete. The technical staff’s assessment is that the COVID-19 shock has affected both aggregate demand and supply, but that the impact on demand has been deeper and more persistent. Given this persistence, the central forecast accounts for a gradual tightening of the output gap in the absence of new waves of contagion, and as vaccination campaigns progress. The central forecast continues to include an expected increase of total and core inflation rates in the second quarter of 2021, alongside the lapse of the temporary price relief measures put in place in 2020. Additional COVID-19 outbreaks (of uncertain duration and intensity) represent a significant risk factor that could affect these projections. Additionally, the forecast continues to include an upward trend in sovereign risk premiums, reflected by higher levels of public debt that in the wake of the pandemic are likely to persist on the forecast horizon, even in the context of a fiscal adjustment. At the same time, the projection accounts for the shortterm effects on private domestic demand from a fiscal adjustment along the lines of the one currently being proposed by the national government. This would be compatible with a gradual recovery of private domestic demand in 2022. The size and characteristics of the fiscal adjustment that is ultimately implemented, as well as the corresponding market response, represent another source of forecast uncertainty. Newly available information offers evidence of the potential for significant changes to the macroeconomic scenario, though without altering the general diagnosis described above. The most recent data on inflation, growth, fiscal policy, and international financial conditions suggests a more dynamic economy than previously expected. However, a third wave of the pandemic has delayed the re-opening of Colombia’s economy and brought with it a deceleration in economic activity. Detailed descriptions of these considerations and subsequent changes to the macroeconomic forecast are presented below. The expected annual decline in GDP (-0.3%) in the first quarter of 2021 appears to have been less pronounced than projected in January (-4.8%). Partial closures in January to address a second wave of COVID-19 appear to have had a less significant negative impact on the economy than previously estimated. This is reflected in figures related to mobility, energy demand, industry and retail sales, foreign trade, commercial transactions from selected banks, and the national statistics agency’s (DANE) economic tracking indicator (ISE). Output is now expected to have declined annually in the first quarter by 0.3%. Private consumption likely continued to recover, registering levels somewhat above those from the previous year, while public consumption likely increased significantly. While a recovery in investment in both housing and in other buildings and structures is expected, overall investment levels in this case likely continued to be low, and gross fixed capital formation is expected to continue to show significant annual declines. Imports likely recovered to again outpace exports, though both are expected to register significant annual declines. Economic activity that outpaced projections, an increase in oil prices and other export products, and an expected increase in public spending this year account for the upward revision to the 2021 growth forecast (from 4.6% with a range between 2% and 6% in January, to 6.0% with a range between 3% and 7% in April). As a result, the output gap is expected to be smaller and to tighten more rapidly than projected in the previous report, though it is still expected to remain in negative territory on the forecast horizon. Wide forecast intervals reflect the fact that the future evolution of the COVID-19 pandemic remains a significant source of uncertainty on these projections. The delay in the recovery of economic activity as a result of the resurgence of COVID-19 in the first quarter appears to have been less significant than projected in the January report. The central forecast scenario expects this improved performance to continue in 2021 alongside increased consumer and business confidence. Low real interest rates and an active credit supply would also support this dynamic, and the overall conditions would be expected to spur a recovery in consumption and investment. Increased growth in public spending and public works based on the national government’s spending plan (Plan Financiero del Gobierno) are other factors to consider. Additionally, an expected recovery in global demand and higher projected prices for oil and coffee would further contribute to improved external revenues and would favor investment, in particular in the oil sector. Given the above, the technical staff’s 2021 growth forecast has been revised upward from 4.6% in January (range from 2% to 6%) to 6.0% in April (range from 3% to 7%). These projections account for the potential for the third wave of COVID-19 to have a larger and more persistent effect on the economy than the previous wave, while also supposing that there will not be any additional significant waves of the pandemic and that mobility restrictions will be relaxed as a result. Economic growth in 2022 is expected to be 3%, with a range between 1% and 5%. This figure would be lower than projected in the January report (3.6% with a range between 2% and 6%), due to a higher base of comparison given the upward revision to expected GDP in 2021. This forecast also takes into account the likely effects on private demand of a fiscal adjustment of the size currently being proposed by the national government, and which would come into effect in 2022. Excess in productive capacity is now expected to be lower than estimated in January but continues to be significant and affected by high levels of uncertainty, as reflected in the wide forecast intervals. The possibility of new waves of the virus (of uncertain intensity and duration) represents a significant downward risk to projected GDP growth, and is signaled by the lower limits of the ranges provided in this report. Inflation (1.51%) and inflation excluding food and regulated items (0.94%) declined in March compared to December, continuing below the 3% target. The decline in inflation in this period was below projections, explained in large part by unanticipated increases in the costs of certain foods (3.92%) and regulated items (1.52%). An increase in international food and shipping prices, increased foreign demand for beef, and specific upward pressures on perishable food supplies appear to explain a lower-than-expected deceleration in the consumer price index (CPI) for foods. An unexpected increase in regulated items prices came amid unanticipated increases in international fuel prices, on some utilities rates, and for regulated education prices. The decline in annual inflation excluding food and regulated items between December and March was in line with projections from January, though this included downward pressure from a significant reduction in telecommunications rates due to the imminent entry of a new operator. When controlling for the effects of this relative price change, inflation excluding food and regulated items exceeds levels forecast in the previous report. Within this indicator of core inflation, the CPI for goods (1.05%) accelerated due to a reversion of the effects of the VAT-free day in November, which was largely accounted for in February, and possibly by the transmission of a recent depreciation of the peso on domestic prices for certain items (electric and household appliances). For their part, services prices decelerated and showed the lowest rate of annual growth (0.89%) among the large consumer baskets in the CPI. Within the services basket, the annual change in rental prices continued to decline, while those services that continue to experience the most significant restrictions on returning to normal operations (tourism, cinemas, nightlife, etc.) continued to register significant price declines. As previously mentioned, telephone rates also fell significantly due to increased competition in the market. Total inflation is expected to continue to be affected by ample excesses in productive capacity for the remainder of 2021 and 2022, though less so than projected in January. As a result, convergence to the inflation target is now expected to be somewhat faster than estimated in the previous report, assuming the absence of significant additional outbreaks of COVID-19. The technical staff’s year-end inflation projections for 2021 and 2022 have increased, suggesting figures around 3% due largely to variation in food and regulated items prices. The projection for inflation excluding food and regulated items also increased, but remains below 3%. Price relief measures on indirect taxes implemented in 2020 are expected to lapse in the second quarter of 2021, generating a one-off effect on prices and temporarily affecting inflation excluding food and regulated items. However, indexation to low levels of past inflation, weak demand, and ample excess productive capacity are expected to keep core inflation below the target, near 2.3% at the end of 2021 (previously 2.1%). The reversion in 2021 of the effects of some price relief measures on utility rates from 2020 should lead to an increase in the CPI for regulated items in the second half of this year. Annual price changes are now expected to be higher than estimated in the January report due to an increased expected path for fuel prices and unanticipated increases in regulated education prices. The projection for the CPI for foods has increased compared to the previous report, taking into account certain factors that were not anticipated in January (a less favorable agricultural cycle, increased pressure from international prices, and transport costs). Given the above, year-end annual inflation for 2021 and 2022 is now expected to be 3% and 2.8%, respectively, which would be above projections from January (2.3% and 2,7%). For its part, expected inflation based on analyst surveys suggests year-end inflation in 2021 and 2022 of 2.8% and 3.1%, respectively. There remains significant uncertainty surrounding the inflation forecasts included in this report due to several factors: 1) the evolution of the pandemic; 2) the difficulty in evaluating the size and persistence of excess productive capacity; 3) the timing and manner in which price relief measures will lapse; and 4) the future behavior of food prices. Projected 2021 growth in foreign demand (4.4% to 5.2%) and the supposed average oil price (USD 53 to USD 61 per Brent benchmark barrel) were both revised upward. An increase in long-term international interest rates has been reflected in a depreciation of the peso and could result in relatively tighter external financial conditions for emerging market economies, including Colombia. Average growth among Colombia’s trade partners was greater than expected in the fourth quarter of 2020. This, together with a sizable fiscal stimulus approved in the United States and the onset of a massive global vaccination campaign, largely explains the projected increase in foreign demand growth in 2021. The resilience of the goods market in the face of global crisis and an expected normalization in international trade are additional factors. These considerations and the expected continuation of a gradual reduction of mobility restrictions abroad suggest that Colombia’s trade partners could grow on average by 5.2% in 2021 and around 3.4% in 2022. The improved prospects for global economic growth have led to an increase in current and expected oil prices. Production interruptions due to a heavy winter, reduced inventories, and increased supply restrictions instituted by producing countries have also contributed to the increase. Meanwhile, market forecasts and recent Federal Reserve pronouncements suggest that the benchmark interest rate in the U.S. will remain stable for the next two years. Nevertheless, a significant increase in public spending in the country has fostered expectations for greater growth and inflation, as well as increased uncertainty over the moment in which a normalization of monetary policy might begin. This has been reflected in an increase in long-term interest rates. In this context, emerging market economies in the region, including Colombia, have registered increases in sovereign risk premiums and long-term domestic interest rates, and a depreciation of local currencies against the dollar. Recent outbreaks of COVID-19 in several of these economies; limits on vaccine supply and the slow pace of immunization campaigns in some countries; a significant increase in public debt; and tensions between the United States and China, among other factors, all add to a high level of uncertainty surrounding interest rate spreads, external financing conditions, and the future performance of risk premiums. The impact that this environment could have on the exchange rate and on domestic financing conditions represent risks to the macroeconomic and monetary policy forecasts. Domestic financial conditions continue to favor recovery in economic activity. The transmission of reductions to the policy interest rate on credit rates has been significant. The banking portfolio continues to recover amid circumstances that have affected both the supply and demand for loans, and in which some credit risks have materialized. Preferential and ordinary commercial interest rates have fallen to a similar degree as the benchmark interest rate. As is generally the case, this transmission has come at a slower pace for consumer credit rates, and has been further delayed in the case of mortgage rates. Commercial credit levels stabilized above pre-pandemic levels in March, following an increase resulting from significant liquidity requirements for businesses in the second quarter of 2020. The consumer credit portfolio continued to recover and has now surpassed February 2020 levels, though overall growth in the portfolio remains low. At the same time, portfolio projections and default indicators have increased, and credit establishment earnings have come down. Despite this, credit disbursements continue to recover and solvency indicators remain well above regulatory minimums. 1.2 Monetary policy decision In its meetings in March and April the BDBR left the benchmark interest rate unchanged at 1.75%.