Dissertations / Theses on the topic 'Banks and banking – Tanzania'

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.

Cette thèse analyse les conséquences de l’intégration d’un milieu bancaire conventionnel pour une banque islamique. Elle est composée de trois chapitres. Un premier traité de la conformité Sharia des banques islamiques. Cette conformité est assurée par un comité de supervision éthique. Nous détaillons le rôle et les tâches de ce comité de supervision éthique et montrons comment les contraintes réglementaires internationales ainsi que la pénurie éventuelle de personnels compétents pour alimenter ces sharia boards incitent la banque islamique à externaliser ce contrôle de conformité Sharia. En se proposant sur modèle théorique inspiré de Kornai, Maskin and Roland (2003), ce premier chapitre examine ainsi l'impact de l'externalisation de ce comité sur le business model de la banque islamique. Le deuxième chapitre est essentiellement empirique : nous comparons l'efficacité des deux modèles de banque, l’un internalisant (l’autre externalisant) le processus d’examen/ validation de la conformité Sharia. Pour procéder à cette étude empirique, nous examinons un échantillon d'une centaine de banques qui se divise en deux groupes de banques un premier qui externalise le contrôle de conformité Sharia et le deuxième l'internalise. Nous montrons que les banques sont plus efficaces lorsqu'elles externalisent ce processus de conformité. Finalement, un troisième chapitre traite la question de la création de liquidité au sein des deux banques, conventionnelle et islamique. Dans ce chapitre nous développons un modèle théorique inspiré de Diamond (2007) et nous comparons la création de liquidité de ces deux banques. Nous mettons en évidences les contraintes qui pèsent sur la banque islamique, elles se manifestent dans la structure du bilan des banques islamiques, un bilan qui présente un volume important d'actifs tangibles. On montre que la structure de ce bilan limite la possibilité pour les banques islamiques de concurrencer les banques conventionnelles et ainsi remet en cause leur capacité à intégrer un milieu bancaire conventionnel
This dissertation analyses the consequences of the integration of an Islamic bank into a conventional banking environment. The dissertation is composed of three chapters. The first examines the Islamic banks' compliance, which is ensured by a supervisory ethical committee. We examine the role and the tasks of this committee in detail, showing how international regulatory constraints, as well as a general lack of individuals with the required skills to sit on the Sharia boards, provide incentives for the Islamic bank to outsource the monitoring of Sharia compliance. Basing our study on a theoretical model, inspired by Kornai, Maskin and Roland (2003), this first chapter analyses how the outsourcing of this committee has an impact on the business model of the Islamic bank. The second chapter is largely empirical; we compare the effectiveness of two bank models, one in which the Sharia compliance validation process is internal, and one in which it is external. To test this empirical study, we analyze a sample of around 100 banks which are divided into two groups, one which outsources the Sharia compliance and monitoring and one which internalizes this process. We show that banks are more effective when they outsource the compliance monitoring process. Finally, the third chapter approaches the question of liquidity creation within two types of bank: Islamic and conventional. In this chapter, we develop a theoretical model inspired by Diamond (2007) and we compare the liquidity creation process in these two banks. We demonstrate the constraints that burden the Islamic bank, shown by the high volume of tangible assets in their balance sheets. We demonstrate that the structure of this balance sheet limits the possibilities for Islamic banks to compete with conventional banks, and thus brings into question their capacity to integrate a conventional banking environment

Against the background of growing competition in the global marketplace, understanding customers, is a significant aspect of marketing. In the search for competitive advantage, there is a need to measure service quality to better understand its antecedents and consequences, and establish methods for its improvement. In the Libyan economy, the banking sector is one of the most important. Its significance increased after the 2003 lifting of the United Nations sanction. This was followed by entry to the sector of a number of domestic and multinational firms. Despite this increased competition, domestic banks are still widely considered to suffer from low levels of service quality. The main purpose of this study is to evaluate the actual level of service quality provided by Libyan public commercial banks as perceived by their customers. A modified SERVQUAL model was developed to measure service quality in Libyan commercial public banks. The resulting instrument is intended to help these banks to measure their service quality and focus on the service quality dimensions of most importance to their customers. It also aimed to gain an understanding of cultural and environmental influences on service quality in the Libyan banking sector, and their effect on banking management practices. It is also expected that this instrument, and its results, will contribute to future research into service quality. The findings of the present study have produced some important results. Firstly, the level of service quality offered by the Libyan public commercial banks as it was perceived by their customers was relatively high. Secondly, the theoretical five-factor structure of the SERVQUAL model was not confirmed in the Libyan banking context, and the service quality structure in the Libyan context appears to be four-dimensional. Furthermore, the study offers suggestions to banking managers to allocate their resources more efficiently to the most important dimensions, i. e. reliability and tangibles, to improve service quality, since the factor analysis indicates that these are the most important dimensions to customers. Finally, reflections on the methods used to modify SERVQUAL to make it more sensitive to a particular cultural context have implications for future researchers in terms of methodology, method and data analysis.

Thesis (Master of Laws (Hons.)) -- University of Western Sydney, 2002.
"A thesis submitted in fulfillment of the requirement for the degree of Master of Laws (Honours)" Bibliography : leaves 215-221.

In the European Union the borders are being wiped out and this is creating new business markets for companies that before never had dreamt of going international. Today we see it as natural that companies act world-wide to gain success and increase the growth and profit. They need to do this to be competitive on the ever changing market that we have nowadays. One of the most important things to have in mind when thinking of expanding to other countries is which entry mode to choose. There are several ways of entering a market and if you do it right you might be very successful, but if you do not spend time on this decision the internationalization process can become very short and the company can lose a lot of capital. With this thesis we want to investigate how two large Scandinavian banks made their presence into the Baltic market in the mid 90’s, which kind of entry modes they went for and if one of them made a wiser choice than the other. In the thesis we have also gone in to the factors that have been of high importance when making the decision on why they chose the Baltic market and also which kind of entry mode. Our main findings after having made this thesis is that it was the profit and growth potential that was the main driving force for establishing on the Baltic market, but also the short distance and the low costs of going in on the market. The choice of entry mode differs between the two banks and that was expected since they have different strategies when going international. And even the know-how of the market in question and resources of the company have been important factors.

Thesis (M. Phil.)--Hong Kong University of Science and Technology, 2004.
Includes bibliographical references (leaves 37-38). Also available in electronic version. Access restricted to campus users.

Thesis (Ph. D.)--Ohio State University, 2000.
Advisor: Claudio Gonzalez-Vega, Dept. of Agricultural, Environmental, and Development Economics. Includes bibliographical references (leaves 114-120). Available online via OhioLINK's ETD Center.

Thesis (Ph. D.)--Ohio State University, 2003.
Title from first page of PDF file. Document formatted into pages; contains xii, 121 p.; also includes graphics Includes bibliographical references (p. 117-121). Available online via OhioLINK's ETD Center

Thesis (Ph. D.)--West Virginia University, 1999.
Title from document title page. Document formatted into pages; contains x, 91 p. : ill. Vita. Includes abstract. Includes bibliographical references.

Growth in information and communication technology (ICT) is drastically changing the way businesses, especially in the service industries, are conducted. The financial services industry and banking in particular, is not excluded from this technology explosion. Internet banking, even though not new in advanced countries, is a new transaction channel being used by banks in some parts of Africa, especially Ghana, to offer various products and services to their customers. However, this medium has not been fully exploited by these banks as there are many hurdles the banks must triumph over. In deploying this technology and these systems, there are several factors which banks must take into consideration before fully deploying such a system to their customers, hence the motivation for this study. The absence of suitable and sufficient knowledge on this topic also exposes a “rhetoric versus reality” argument of whether the intention to adopt Internet banking is critical to the strategies and ultimate success of banks in Ghana. For banks to stay ahead of competition as well as to attract and maintain their clientele, it is of paramount importance to gather and link the perspectives of both clients and bank managers in order for banks to ensure that they perform according to the needs and expectations of their clients. In order to achieve the intended results, an empirical study was conducted by taking into consideration the viewpoints of both bank clients and bank managers in determining the factors that customers take into consideration before adopting the Internet banking medium. The primary aim of this study was to quantify significant relationships between the selected variables. Therefore the positivism research paradigm was used, while the phenomenological paradigm was employed for the measuring instruments. Because multiple sources of data were used, from the perspectives of banking clients and managers in Ghana, methodological triangulation was adopted for this study. The results of the empirical investigation showed that both groups (clients and managers) considered the variables of market share, technology acceptance, diffusion of innovation, organisational variables, organisational efficiency, and business strategy to have direct influence on the adoption of Internet banking. However, they differed in opinion concerning the degree of influence of these variables. The bank managers’ responses leaned more towards strong agreement with the importance of these variables than did those of the bank clients. Thus, for bank clients to readily adopt the Internet banking medium for their banking transactions, bank managers must take a closer look at these determinant factors described in the study. The study showed that the population group, educational and income levels exerted an influence on the perceptions clients have regarding Internet banking adoption factors. It was found that the higher the education and income levels of the clients, the easier it was for them to adopt Internet banking. Also, the male group dominated the use of the Internet banking. This is supported by the fact that there is a growing middle class in Ghana that falls within this category of banking clients.

This thesis makes a theoretical contribution to the design of the capital adequacy assessment framework for Islamic banks. The proposed capital regulation is aimed at enhancing the Islamic banks' operational sustainability. The first analytical section in the thesis discusses the nature of sharing contracts. The analysis helps to explain the current reluctance to use sharing contracts by the players in the Islamic banking system. Each individual will always try to optimise his utility, monetarily as well as religiously, as a form of compliance with religious rules. However, in an adverse condition, religious and risk-averse customers will compromise the two utility objectives (i.e. adopting hybrid types of contract that, to some extent, deliver his minimum required financial return besides also complying with religious norms). The second analytical section in the thesis discusses possible improvements to the capital regulation of Islamic banks. This includes the possibility of enhancing the fiduciary as well as the agency roles performed by the Islamic banks. The analysis produces a number of propositions. The first proposition is to require the banks to have prudent assets-liabilities (capital) structures and to have adequate financial cushions. The second proposition is to require the shareholders of Islamic banks to observe a minimum level of financial participation; and to require the banks to disclose crucial financial information to investors. Theoretically, the higher the level of financial participation and the higher the quality of information provided, the better the quality of the contract entered into by the banks and 'their customers. The last part of the discussion, embracing empirical analysis, shows the important role played by capital in absorbing temporary financial shocks (especially when debt-based deposits are dominant). The discussion also covers the possibility of using statistical techniques for assessing the soundness of Islamic banks' operational activities.

The stylized fact of co-movement of lending and economic activity has been widely interpreted as evidence of a destabilizing feedback mechanism between the banking and real sectors, suggesting the special role of credit supply in amplifying financial and macroeconomic instability. Indeed, this “procyclicality” view significantly influences bank regulations internationally. Under the Basel III, the countercyclical capital buffer is exclusively designed to dampen the volatility of credit supply over the business cycle. The strong co-movement of lending and economic activity, however, is insufficient to confirm the existence of the procyclicality, given that both demand and supply of loans decline during economic downturns. If loan supply does not play a causal role, then any measure to strengthen lending capacity of banks would be ineffective in addressing this procyclicality issue. The literature, however, provides limited, otherwise inexistent, cross-country evidence to answer these fundamental questions. This research gap calls into question the sufficiency of international evidence to assess the effectiveness of the new capital measure, and more broadly, the regulatory reform. This cross-country econometric study covering 39 economies for the period 1990– 2009 examines these fundamental issues in detail. There are three main findings and policy implications. For banking stability, a significant procyclical pattern of loan supply exists, and such pattern is negatively associated with bank capital. These findings together support the view that the countercyclical capital buffers of Basel III could be effective tools for dampening loan volatility over the business cycle. For the regulatory reform, there is prevalent evidence that capital and liquidity are determinants of loan supply. This finding bears out the main Basel III argument that stronger capital and liquidity could strengthen the resilience of the global banking sector to macroeconomic shocks. For macroeconomic stability, empirical findings suggest a moderate macroeconomic effect of loan supply, particularly for developed economies. However, the finding does not imply a small impact of banking instability on the real sector. In fact, banking crises are estimated to have a larger independent negative effect on economic growth after controlling for the macroeconomic effect through impacts of banking crises on loan supply. There are two main policy implications of these findings. First, the main channel through which stronger capital and liquidity of banks help reduce macroeconomic instability would have an impact on reducing the likelihood of the occurrence of a banking crisis. Second, during non-crisis periods, bank regulations aiming at smoothing loan supply may have a relatively moderate impact on reducing macroeconomic instability. For policy to address banking procyclicality, the results show that aside from higher quantitative capital and liquidity requirements, more stringent definitions of capital could dampen loan supply procyclicality, which speaks in favor of recent policy initiatives to strengthen the quality of regulatory capital. More stringent bank regulations are also found to reduce loan supply procyclicality in countries with deposit insurance schemes. To reduce the propagations of loan supply shocks to the real sector, policy to improve the breadth of the stock market and the size of the domestic bond market would be useful.
published_or_final_version
Economics and Finance
Doctoral
Doctor of Philosophy

This thesis examines the evolution, quality and measures of improvement of Tanzania's commercial banking regulation and supervision. It is based on the belief that regulation and supervision play an essential role in maintaining a sound and stable banking industry. Although the subject of banking regulation and supervision has been widely discussed in European Union countries and in the United States, it is only now that the subject is becoming of growing importance to Tanzania. The move is necessitated by the need to conform to the political, social and economic transformation that has been taking place in the country since 1986 under the structural adjustment programs (SAPs). The study divides the country's banking and its regulation and supervision into three periods: the pre and colonial (1880-1960), the post-colonial (1961-1989) and finally, the contemporary (1991-2000). Each of these periods is examined separately, and then comparedt o eacho ther. The researcherb elieves that, in reviewing the past, we are able to determine future developments. The findings of the study indicate that the main features of Tanzania's commercial banking sector and its legal framework during the colonial and post-colonial era have been largely determined by the experiences of colonialism. Despite the Arusha Declaration policies established six years after independence, the banking industry and its legal framework of regulation and supervision remained overshadowed by government directives and Bank of Tanzania sector guidelines. The year 1991 saw major reforms of the industry by government, partly in response to the International Monetary Fund and the International Bank for Reconstruction and Development initiatives, (SAPs). However, in an attempt to establish a contemporary banking legal framework, the government relied on models that ignored the growing difference between developed economies and developing economies. Consequently, the current framework though satisfactory, has some loopholes and is in certain cases unable to take into account the realities of the local environment. Furthermore, the empirical findings of the study have illustrated that the practical aspects of the regulation and supervision of commercial banks have significant shortcomings. These problems are particularly acute because the banking industry is still vulnerable to major structural change through economic frailty, mergers, bankruptcy and failures. After identifying these weaknesses, the study makes recommendations designed to help policy-makers strengthen the law, regulatory and supervisory structure, by taking into account the local banking industry environment. Finally, the study is concluded with a summary assessment of the period under review. It is argued that the 1990's changes were indeed a step towards prudential banking regulation and supervision in Tanzania. Nevertheless, in the light of the shortcomings mentioned above and as part of the emphasis on an effective and efficient framework, the need constantly to review the system and adapt changes that are designed to improve the banking industry and its regulation and supervision remain essential in achieving prudential standards.

The worldwide financial services industry has undergone in the past two decades an unprecedented wave of consolidation within and across its three main sub-sectors: banking, securities activities and insurance. Today's observers assert that in ten years, most of the financial sector will be controlled by a small group of huge diversified banks. By enacting the Gramm-Leach-Bliley Act in 1999, Congress repealed the depression-era "Glass-Steagall" Act of 1933 and thereby officially removed the longstanding legal barriers that insulated banks from securities firms and insurance companies. As promoters of financial convergence have long been claiming that the introduction of universal banks in the United States would produce numerous benefits for themselves, but also for the economy and for their customers, these predictions can be assessed today in the light of empirical analysis. Now that "financial supermarkets" are totally legal in the United States, it is essential to assess whether they are economically and morally viable.

Bank performance is one of the vital issues for the healthy functioning of the Turkish economy. This study aims to measure performance levels of the banks in Turkey and to find the factors affecting those levels for the period of 2006-2010. Although the measures evaluating bank performance are ample in amounts we choose two different approaches: Data Envelopment Analysis (DEA) measuring bank efficiency and CAMELS analysis. DEA is carried out in different levels: first for top 14 banks in the economy
then separating the banks as the state banks, the domestic private banks and the foreign private banks. Also long term and short term, and public and non-public assets and liabilities distinctions are made in the analyses. The bank performance measures obtained from DEA and CAMELS analysis are compared and the factors affecting the performances of the Turkish banks are analyzed. The results show that high efficiency levels of the state banks decrease when the public assets and liabilities are excluded. The state banks and domestic private banks have high CAMELS'
ratios, while the foreign banks have low ones. Both the bank-specific and macroeconomic factors, like ownership type, publicly trading and ATM net, play important roles in the determination of the efficiency levels of the banks in Turkey.

Banks play a primary role in the intermediation of savings and investments. As a result, the stability and development of the financial sector is of paramount importance to most countries. In developed countries, the global financial crisis which led to the shocking collapse of Lehman Brothers and distress in other global financial giants such as AIG, Merrill Lynch, Royal Bank of Scotland (RBS) and Northern Rock have raised concerns about corporate governance in the financial sector and more specifically, the importance of a stable banking sector worldwide. In developing countries, financial systems are heavily reliant on banking firms since they are the largest intermediaries. The institutional environment which includes substantial ownership by insider owners, poor legal and regulatory systems, corruption and the existence of distributional cartels underscore the need for effective regulation and sound corporate governance aimed at curbing excessive risk taking by owners. The effects of different ownership structures on banks have received little attention particularly in developing countries. Literature suggests that whether the ownership rights of a bank are held by just a few shareholders or by many and whether these shareholders are insiders or outsiders has differing effects on corporate governance. This study analyses the effects of ownership structure on corporate governance in Zimbabwean banks. The Zimbabwean banking sector has experienced major changes since the liberalisation of the financial markets in 1991. The sector expanded due to the entry of a significant number of private indigenous banks in a market previously dominated by foreign banks. Following this expansion, the sector suffered a near-systemic crisis in 2003 which resulted in the collapse of 13 of these newly registered banks and the arrest of several owner managers for abusing depositor’s funds. After the financial sector crisis, the central bank implemented new corporate governance regulations in 2004 which introduced a separation between ownership and management. The objective of the regulation was to address the problems relating to insider ownership concentration address corporate governance weaknesses in banks. The findings from this study indicate ownership concentration in all the banks across ownership types, and insider ownership concentration in private indigenous banks before and after the 2004 regulations. The empirical evidence also find that banks with insider ownership concentration suffered corporate governance weaknesses which resulted in problems such as related party transactions, frauds, tunnelling and abuse of depositor’s funds compared to those with outside ownership concentration. In this regard, the study finds that in developing countries, insider ownership concentration may result in corporate governance weaknesses whilst outsider ownership concentration can result in increased monitoring. The study also finds evidence of a weak legal and regulatory framework, poor enforcement and regulatory forbearance as some of the institutional arrangements which affected ownership structure and corporate governance in banks. The analysis in this study also indicate that the regulatory changes introduced by the central bank in 2004 have not been ineffective in tackling the corporate which resulted from insider ownership concentration. As a result, the study questions the a wholesome adoption of Anglo-Saxon type provisions relating to separation between ownership and management without an empirical analysis of their appropriateness to developing countries in developing countries.