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Chikoko, Laurine. "Liquidity risk management by Zimbabwean commercial banks." Thesis, Nelson Mandela Metropolitan University, 2012. http://hdl.handle.net/10948/d1020344.
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Macroeconomic and financial market developments in Zimbabwe since 2000 have led to an increase in many banks‟ overall exposure to liquidity risk. The thesis highlights the importance of understanding and building comprehensive liquidity frameworks as defenses against liquidity stress. This study explores liquidity and liquidity risk management practices as well as the linkages and factors that affected different types of liquidity in the Zimbabwean banking sector during the Zimbabwean dollar and multiple currency eras. The research sought to present a comprehensive analysis of Zimbabwean commercial banks‟ liquidity risk management in challenging operating environments. Two periods were selected: January 2000 to December 2008 (the Zimbabwean dollar era) and March 2009 to June 2011 (the multiple currency era). Explanatory and survey research designs were used. The study applied econometric modeling using panel regression analysis to identify the major determinants of liquidity risk for 15 commercial banks in Zimbabwe. The financing gap ratio was used as the proxy for liquidity risk. The first investigation was on liquidity risk determinants in the Zimbabwean dollar era. The econometric investigations revealed that an increase in capital adequacy reduced liquidity risk and that there was a positive relationship between size and bank illiquidity. Liquidity risk was also explained by spreads. Inflation was positively related to liquidity risk and was a significant explanatory variable. Non-performing loans were not significant in explaining commercial banks‟ illiquidity, which is contrary to expectations. The second investigation was on commercial banks‟ liquidity risk determinants in the multiple currency era by using panel monthly data. The results showed that capital adequacy had a significant negative relationship with liquidity risk. The size of the bank was significant and positively related to bank illiquidity. Unlike in the Zimbabwean dollar era, spreads were negatively related to bank liquidity risk. Again, non-performing loans were a significant explanatory variable. The reserve requirements ratio and inflation also influenced bank illiquidity in the multiple currency regime. In both investigations, robustness tests for the main findings were done with an alternative dependent variable to the financing gap ratio. To complement the econometric analysis, a survey was conducted using questionnaires and interviews for the same 15 commercial banks. Empirical analysis in this research showed that during the 2000-2008 era; (i) no liquidity risk management guidelines were issued by the Reserve Bank of Zimbabwe until 2007. Banks relied on internal efforts in managing liquidity risk (ii) Liquidity was managed daily by treasury (iii) The operating environment was challenging with high inflation rates, which led to high demand for cash withdrawals by depositors (iv) Locally owned banks were more exposed to liquidity risk as compared to the foreign owned banks (v) Major sources of funds were new deposits, retention of maturities, shareholders, interbank borrowings, offshore lines of credit and also banks relied on the Reserve Bank of Zimbabwe as the lender of last resort (vi) Financial markets were active and banks offered a wide range of products (vii) To manage liquidity from depositors, banks relied on cash reserves, calculating and analysing the withdrawal patterns. When faced with cash shortages, banks relied on the daily limits set by the Reserve Bank of Zimbabwe (viii) Banks were lending but when the challenges deepened, they lent less in advances and increased investment in government securities. (ix) Inflation had major effects on liquidity risk management as it affected demand deposit tenors, fixed term products, corporate sector deposit mobilisation, cost of funds and investment portfolios (x) The regulatory environment was not favourable with RBZ policy measures designed to arrest inflation having negative repercussions on banks` liquidity management (xi) Banks had no liquidity crisis management frameworks. During the multiple currency exchange rate system (i) Commercial banks had problems in sourcing funds. They were mainly funded by transitory deposits with little coming in from treasury activities, interbank activities and offshore lines of credit. There was no lender of last resort function by the Reserve Bank of Zimbabwe. (ii) Some banks were still struggling to raise the minimum capital requirements (iii) Commercial banks offered narrow product ranges to clients (iv) To manage liquidity demand from clients, banks relied on the cash reserve ratio, and calculated the patterns of withdrawal, while some banks communicated with corporate clients on withdrawal schedules. (v) Zimbabwe commercial banks resumed the lending activity after dollarisation. Locally owned banks were aggressive, while foreign owned banks took a passive stance. There were problems with non-performing loans, especially from corporate clients, which exposed many banks to liquidity risk. (vi) Liquidity risk management in Zimbabwe was still guided by the Reserve Bank of Zimbabwe Risk Management Guideline BSD-04, 2007. All banks had liquidity risk management policies and procedure manuals but some banks were not adhering to them. Banks also had liquidity risk limits in place but some violated them. Furthermore, some banks were not conducting stress tests. Although all banks had contingency plans in place, none were testing them. Specifically, the research study highlighted the potential sources of liquidity risk in the Zimbabwean dollar and multiple currency periods. Based on the results, the study recommends survival strategies for banks in managing liquidity risk in such environments. It proposes a comprehensive liquidity management framework that clearly identifies, measures and control liquidity risk consistent with bank-specific and the country‟s macroeconomic developments. The envisaged framework would assist banks in dealing with illiquidity in a manner that would be less disruptive and that could render any future crisis less painful. Of importance is the recommendation that the central bank might not need to be too strict or too relaxed, but be moderate in ensuring an enabling regulatory environment. This would help banks to manage liquidity risk and at the same time protect depositors in any challenging operating environment. In both the studied time periods, there were transitory deposits. Generally there is need to inculcate a savings culture in Zimbabwe.
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McConnell, Patrick J. "Information technology for market risk management in international banks." Thesis, Henley Business School, 1996. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.320861.
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Martins, Henry Bola. "Risk management of U.S. banks in less developed countries : a country-risk analysis." Thesis, University of Sheffield, 1990. http://etheses.whiterose.ac.uk/1889/.
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The object of this research is to determine whether U.S. commercial banks could have predicted in advance the debt crises of the developing countries, i.e., whether a particular LDC would reschedule or default on its loans. A secondary purpose was to determine whether the debt crisis was the fault of the banks or the developing countries who reneged on their loan contracts. What do the banks have to do to prevent this from happening? What do they have to do to manage country risk effectively? The study begins with a historical account of the United States banking system to the period of debt rescheduling by the LDCs. It continues by describing the different types of risks in international banking. Next it discusses the theoretical issues of LDC debt, including sustainability of debt policy, optimal level of country borrowing, optimal bank foreign lending, and credit rationing by the banks. This is followed by a description of the regulatory aspects of country risk management. The important issue of country risk management by U.S. banks is next, including a discussion of the various assessment methods used and a review of the major empirical studies that used econometric methods for predicting the incidence of external debt defaults. The empirical research investigates debt rescheduling by less developed countries. Linear discriminant function and logistic discrimination approaches were used to determine the predictive ability of any particular subset of economic variables. The sample comprises data on 37 countries over a period of 10 years, 1974-1983. This period was chosen because it was a time of important economic transition. The results of the discriminant and logistic analyses show modest discriminatory power for predicting the rescheduling of debt of a country with the set of economic predictors used.
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Fick, William. "A framework to investigate risk management in commercial banks." Thesis, Nelson Mandela Metropolitan University, 2012. http://hdl.handle.net/10948/d1009429.
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Businesses are continuously exposed to a changing business environment which may either exert positive or negative influences on profitability. The banking industry, in particular, is highly competitive and bank failures can have significant consequences for customers. Commercial banks, therefore, have a responsibility to protect their customers by implementing sound risk management strategies. In light of the recent financial crises (since 2007), risk management has once again become a popular topic of discussion since adequate risk management should have prevented or minimised the impact of the risks faced by failed banks. The primary objective of this study was to develop a framework that could be used by South African commercial banks to investigate risk management. Qualitative research was conducted in this regard. From this, findings and recommendations were derived in order to provide banks with a tool by which they could assess their exposure to risk. Various journals, websites, newspapers, bank reports and textbooks were consulted in support of the literature. The literature provided background information on the history and development of the risk management process. Considerable attention was given to the categories of risk that an adequate risk management framework should address. Furthermore, the current models used to manage risk in commercial bank were provided, as well as the specific reasons for bank failures. The main findings of this study were the identification of the most significant reasons for banking failures. These were identified as capital inadequacy, credit risk due to non-performing loans and a lack of banking supervision. In addition to these reasons, several other contributing principles were identified as important factors to be included in a risk management framework. A risk management framework was thus constructed in Table 5.1 based on the literature regarding global banking failures and the relevant conclusions made by the researcher.
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Sroka, Martin. "Risk management of multinational banks operating in CEE." Master's thesis, Vysoká škola ekonomická v Praze, 2011. http://www.nusl.cz/ntk/nusl-125137.
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Multinational banks dominate the banking sectors in Central- and Eastern European countries and are an important partner for the domestic real economies. The aim of this paper is to examine the risk-return variations of these financial institutions in different macroeconomic stages in and around the global financial and economic crisis. The capital adequacy ratio (CAR) is used as a representation of the overall risk a bank is exposed to. The question is if a change in GDP growth implies a reciprocal change in CAR of a bank and if a change in CAR leads to a reciprocal change in net income. In addition, it will be tried to assess the consistency of the risk strategies of different subsidiaries of the same banking group. To conduct the research CAR is firstly derived as a suitable holistic risk measure in the theoretical part of this paper. Then, in the empirical part a case study is carried out that comprises the Czech and Slovak subsidiaries of four multinational banking groups and that is designed for the time horizon from 2008 to 2010. Qualitative as well as quantitative methods are applied.
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Crawford, Jason. "Regulation's Influence on Risk Management and Management Control Systems in Banks." Doctoral thesis, Uppsala universitet, Företagsekonomiska institutionen, 2017. http://urn.kb.se/resolve?urn=urn:nbn:se:uu:diva-332037.
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This dissertation explores regulation’s influence on risk management and management control systems (MCS) in banks. The dissertation comprises of an introductory chapter, two published book chapters, one of which is an extensive literature review, and two working papers, presented at several European conferences. The overall objective of this dissertation is to explore how banks are responding to banking regulation in light of the 2007-08 financial crisis and what the implications of those responses are, particularly in relation to risk management and MCS, and their interactions. The overall research question is therefore: what influence does regulation have on risk management and management control systems in banks over time? The intended ambition is to contribute to existing knowledge on the relationship between bank regulation, risk management, and MCS by providing several practical and theoretical contributions. The dissertation employs an adapted theoretical framework and uses institutional theory and contingency theory to expose tensions between, the demands for uniformity residing in banking regulation, and the demands for uniqueness residing inside banks themselves as they seek to maintain control over the design and use of their organizational controls. The empirical material used in the longitudinal case study is gathered from a large European bank. The main findings of the dissertation are as follows. In Paper I, the findings show that banking regulation’s influence on risk management and management control is mixed, which in turn can influence risk management’s integration with MCS. The paper also finds that very little knowledge exists about regulation’s influence on risk management and MCS. In Paper II, the findings show that while regulatory influence in IT control has increased over time, banks continue to exercise significant influence over regulatory demands. In Paper III, the findings show how regulation’s influence varies considerably over time and that increased regulatory pressure can lead to a higher degree of integration between risk management and MCS across the three dimensions of integration. In Paper IV, the findings show how regulation’s influence is shaping the mental processes of management and employees, and can vary significantly based on several identified factors.
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Laurent, Marie-Paule. "Essays in financial risk management." Doctoral thesis, Universite Libre de Bruxelles, 2003. http://hdl.handle.net/2013/ULB-DIPOT:oai:dipot.ulb.ac.be:2013/211221.
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Derrocks, Velda Charmaine. "Risk management." Thesis, Nelson Mandela Metropolitan University, 2010. http://hdl.handle.net/10948/1480.
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The objective of the study is to establish a perspective of risk management by doing an assessment of current risk management practices, especially in the aftermath of the 2008/2009 global financial crisis. Risk management, as a component of corporate governance, was analysed by addressing the following: - The nature of value-creating assets in business; - The primary challenges for risk management over the next three years; - The changing approaches towards risk management; - The role of legislation and external stakeholders; - The role of risk management in strategic planning; - The cost of risk management; and - The benefits of improved risk management capabilities. A survey was conducted in the form of a questionnaire in order to obtain primary information from business owners on the current role of risk management in their organisations as well as their view on the role of risk management going forward. Businesses operating in the Port Elizabeth and surrounding area with an existing relationship with Absa Business Banking Services participated in the study. Quantitative techniques were used to analyse the data that were obtained from the sample group. The study revealed that the role of risk management in enterprises is evolving into an integrated, enterprise wide risk management function that can be utilised as a source of competitive advantage, from both a funding perspective for Banks and a business perspective for business owners. Capitalising on risk management as a competitive advantage will ultimately lead to long term sustainability and profitability of South African business enterprises and the South African Banking system.
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Parfenova, Alina, and Lena Karlsson. "The effects of regulations on risk management within the Swedish Banking Sector." Thesis, Uppsala universitet, Företagsekonomiska institutionen, 2016. http://urn.kb.se/resolve?urn=urn:nbn:se:uu:diva-298784.
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This research shed the light on regulations and their effects on operational risk management within the Swedish Swedish Banking Sector. The focus lies on operational risk management due to the introduction of new regulations such as FFFS 2014:1, FFFS 2014:4 and FFFS 2014:5. What could be found in the empirical analysis is that the regulations affected organizational changes. Additionally, differences between large and small banks could be seen. All changes in terms of implementation of regulations are strongly performed throughout the Three Lines of Defence model where clear organization structure and work description are of importance. The Three Lines of Defence is tightly combined with the COSO framework and operational risk management to conduct compliant organization that is adaptable for any regulatory changes.
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Fleifel, Bilal A. "Risk management in Islamic banking and finance the Arab Finance House example /." View electronic thesis (PDF), 2009. http://dl.uncw.edu/etd/2009-3/fleifelb/bilalfleifel.pdf.
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Ahmad, Rubi 1962. "Bank capital, risk and performance : Malaysia evidence." Monash University, Dept. of Accounting and Finance, 2005. http://arrow.monash.edu.au/hdl/1959.1/5121.
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Terblanché, Janet René. "The legal risks associated with trading in derivatives in a Merchant Bank /." Link to the online version, 2006. http://hdl.handle.net/10019/1233.
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Shamieh, Jamal Mousa Salim. "An investigation into operational risk mitigation in the United Arab Emirates commercial banking industry : case study approach." Thesis, University of South Wales, 2011. https://pure.southwales.ac.uk/en/studentthesis/an-investigation-into-operational-risk-mitigation-in-the-united-arab-emirates-commercial-banking-industry(1578929a-c648-4f15-8939-4b058596ba48).html.
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This study researches a rapidly growing area of interest in the financial services industry, that is,operational hsk management, with special focus on the mitigation phase. Operational risk management has accelerated in importance in the financial services over the last two decades for many reasons, not least of which is the well-known catastrophic failure of large banks such as BCCI, Barings and Indymac, as well as the recent Global Financial Crisis. One of the main drivers behind such bank failures was the failure of the banks' managements to manage effectively and efficiently their operational risk exposure. The focus of this study is operational risk mitigation in the United Arab Emirates Commercial banking industry. A controversial issue with operational risk was deciding on an agreed and accepted definition within the financial services industry. It has been defined by Basel Committee on Banking Supervision as "the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. This definition includes legal risk, but excludes strategic and reputational risk." This definition captures a wide spectrum of risk categories such as fraud risks, people risks, legal risks and compliance risks, to name a few. Basel Committee on Banking Supervision, a Committee of banking supervisory authorities established by the central bank Governors of the Group often countries in 1974, published in June 2006 a document called the "International Convergence of Capital Measurement and Capital Standards - A Revised Framework Comprehensive Version" known as Basel II Accord, which requires banks, among many other things, to sustain capital adequacy to cover their operational risk exposures. This Accord was the result of a number of consultative documents issued by the same Committee which focused increasing attention on the need for operational risk adequate and efficient management. Bank managements are facing increasing pressure to ensure that operational risk exposures are being managed effectively and efficiently. This extended the main momentum for the study, being the first independently sponsored study of how the UAE commercial banks have developed their operational risk management frameworks as a basis for mitigating the range of operational risk exposures they encounter. The operational risks that prompted the current Financial Crisis and how they were mitigated in the context of the UAE commercial banks gave further momentum to the research. The study addresses the various key players in operational risk management and is, therefore, interdisciplinary. The foundations from which the field work was undertaken were based on theoretical propositions in the area of decision making since the process of mitigating an operational risk is rooted in making a decision. Multiple case studies were used in the design for the research to answer the research question and establish the practices in operational risk mitigation in the UAE commercial banking industry. Leading UAE commercial banks were carefully chosen as representatives of this industry. The findings of the research are in line with the conclusions of Basel Commiltee on Banking Supervision that the main responsibility for operational risk management, and therefore mitigation, is vested in operational managers. The analysis demonstrates that (hey do not do this independently, but are supported by other experienced people in this field. A model and check-lists of operational risk management, and therefore mitigation, is proposed demonstrating the complexity of the whole process due to the nature and the scale of operational risks. The thesis concludes by discussing some further potential research suggestions in this ever-growing area of interest.
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Sule, Friday Eneojo. "Effects of credit risk and portfolio loan management on profitability of microfinance banks in Lagos, Nigeria." Thesis, Stellenbosch : Stellenbosch University, 2012. http://hdl.handle.net/10019.1/97163.
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Thesis (MDF)--Stellenbosch University, 2012.The study was carried out to find out the effect of credit risk and portfolio loan management on profitability of microfinance Banks (MFBs) in Lagos, Nigeria. To achieve the objective of the study, an econometric model was developed. A sample size of 14 microfinance banks was randomly selected, comprising four national, five state and five unit microfinance banks respectively. Five year annual financial statements of these 14 selected microfinance banks were obtained for this analysis using panel data that produce 70 observations for the period 2006 to 2010 The result reveals that the current value of all independent variables follow an expected relationship with the profitability of microfinance banks. That is, the net interest margin, asset mix proxied by ratio of loan to total asset, and ratio of equity to total assets have a positive relationship with the profitability of microfinance banks (MFBs) in Lagos state, Nigeria. Asset quality (ratio of non-performing loan to total loan) and the interest earnings to total assets ratio have a negative relationship with profitability of microfinance banks. However, the result reveals that of the five immediate past value of these independent variables, only net interest margin and interest earnings to total assets ratio maintained expected relationship with the performance (profitability) of microfinance banks. From the hypothesis test, it was found that credit risk management has a significant effect on the profitability of microfinance banks in Lagos state, Nigeria The study is set against the background and realisation that many MFBs in Lagos seem to continue to seek growth and profit without much attention to addressing credit risk issues – a necessity for their survival on a sustainable basis. The results indicated that the credit evaluation process was positively and significantly related to the quality of the loan portfolio in MFBs. The study also found out that internal rather than external to the MFB’s are more likely to provide the main explanation for MFBs’ profitability. To enhance their profitability, loan products which seem to have various defects which make loans even more risky need to be reviewed. The defects include: long loan processing procedures, absence of training to clients on proper utilisation of loans, lack of mechanisms to assess the suitability and viability of the business proposal for which loans were applied, inappropriate mechanism for assessing character for loan applicants, absence of moratorium periods between taking of a loan and repayment of a first instalment as clients were requested to repay their first instalment within the first month. The study recommended that MFBs should have a broad outlook in its credit risk and portfolio management strategy and this calls for radical reforms within the MFB’s operations and policies as well as more aggressive approaches most especially before availing credit and in its loan recovery as it had a direct impact on profitability.
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Keegan, Jason M. "Three Essays on Market Discipline in the Banking Industry." Diss., Temple University Libraries, 2016. http://cdm16002.contentdm.oclc.org/cdm/ref/collection/p245801coll10/id/398898.
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EconomicsPh.D.
This dissertation topic is on the market discipline of banking institutions during the most recent business cycle (i.e., the business cycle surrounding the Great Recession of 2007). Market discipline has been a focal point of banking regulation since the implementation of Basel II in June 2004. In an attempt to provide a comprehensive framework that provides international standards on bank supervision, the Basel Committee on Banking Supervision designed a complementary three-pillar structure. These include: capital requirements, the supervisory review process, and market discipline. Recent research has shown that the success of capital requirement ultimately lies in how well it serves market discipline (Gordy and Howells, 2006). The FDIC defines market discipline as: The forces in a free market (without the influence of government regulation) which tend to control and limit the riskiness of a financial institution’s investment and lending activities. Such forces include the concern of depositors for the safety of their deposits and the concern of bank investors for the safety and soundness of their institutions. Source: FDIC Glossary of Definitions Thus, regulators must account for market discipline in their design of a new regulatory framework. In Chapter 1, I investigate how the yield spreads of debt issued by U.S. Systemically Important Banks (SIBs) in the secondary market are associated with their idiosyncratic risk factors, as well as bond features, and macroeconomic factors, over a complete business cycle across the pre-crisis (2003:Q1 to 2007:Q3), crisis (2007:Q4 to 2009:Q2), and post-crisis (2009:Q3 to 2014:Q3) periods. Both Global and Domestic SIBs (G-SIBs and D-SIBs) are considered. Economic theory suggests that as SIB risk-levels increase, bond-buyers demand a higher yield spread (lower price) on the debt security (Evanoff and Wall, 2000). However, explicit and implicit government safety nets before, during, and after the crisis complicate the market discipline mechanism and make a priori predictions of the yield changes in response to increases in risk inconclusive. This renders the issue an empirical exercise. By stratifying across the most recent business cycle, I am able to investigate two broad objectives. First, I study how bond-buyers react to increases in SIB risk across the recent business cycle. Second, I investigate the degree to which the proportion of the variance in yield spreads explained by macroeconomic factors changed across the phases of the cycle. Unusual volatility during and after the financial crisis in the macroeconomic realm, and the keen focus by regulators, investors, and other stakeholders on idiosyncratic risk makes it theoretically unclear which countervailing force is the primary driver of yield spreads in the secondary market. The data includes over 9.7 million bond trades across the 26 SIBs based in the U.S. I obtain several interesting results. First, bond-buyers do react to increases in bank risk factors (leverage, credit risk, inefficiency, lack of profitability, illiquidity, and interest rate risk) by charging higher yield spreads. Second, bond buyer response to risk is sensitive to the phase of the business cycle. Third, the proportion of variance in yield spreads driven by issuing-firm-specific and bond-specific risk factors (as opposed to macroeconomic factors) increased from 29% in the pre-crisis period to 48% and 77% during the crisis and post-crisis periods, respectively. This last finding indicates that market discipline greatly improved in the two latter phases of the business cycle, and while the literature on market discipline following the 2007-2009 crises is still scant, this result is consistent with some extant studies (Balasubramnian and Cyree, 2014). Despite unprecedented accommodative fiscal and monetary policies during and after the financial crisis, market discipline in the secondary bond market has strengthened considerably, providing evidence that regulatory intervention and market discipline can work in tandem. These results can advise regulators, investors, bank risk managers, and others, on how bond traders react to issuing-bank, bond, and macroeconomic factors. For example, regulators and policy makers should account for the effect of market discipline in formulation of their monetary and fiscal policies designed to achieve specific targets because, otherwise, they may miss the targets. In Chapter 2, I study the impact of bank risk taking and macroeconomic factors on the growth of interest-bearing deposits and interest rates paid on those deposits for U.S. commercial banks with less than $10 billion in total assets (known as commercial banking organizations or CBOs). The sample period for deposit growth covers the recent business cycle (2003:Q1 to 2014:Q4) and it is broken down into pre-crisis (2003:Q1 to 2007:Q3), crisis (2007:Q4 to 2009:Q2), and post-crisis (2009:Q3 to 2014:Q4) sub-periods in order to contrast the patterns of effects over these phases of the business cycle. Deposit pricing equations are estimated over the post-crisis period only due to data limitations. Separate deposit growth rate equations are estimated across four deposit types (transaction, savings, large, and small time deposits), while separate deposit pricing equations are estimated across 30 deposit types (including various terms and balances for certificates of deposits as well as personal and business money market accounts and interest checking accounts, among others). Bank heterogeneity is accounted for via fixed effects estimation. I obtain several interesting results. First, there is a relationship between bank risk taking and subsequent deposit withdrawals over the three sub-sample periods, indicating that depositors do respond to bank riskiness under the pre-crisis, crisis, and post-crisis environments (market discipline). Second, there is also market discipline in deposit pricing as evidenced by the statistically significant and consistent relationship between bank risk taking and deposit pricing across all 30 different product types I study. Third, when deposits are disaggregated into insured and uninsured components, I find that the uninsured depositors react to changes in bank credit risk via deposit withdrawals (during the pre-crisis period) and pricing (during the post-crisis period) to a greater extent than do the fully insured depositors, supporting the presence of moral hazard. Fourth, since the pre-crisis period, macroeconomic factors have become even a greater force in driving the changes in deposit growth because of market intervention and implicit and explicit government guarantees. As macroeconomic factors drive more of the variation in deposit growth, mechanisms to keep CBO risk in check depend less on the depositors and banks and more on macroeconomic policy. In Chapter 3, I investigate the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) of 2010 on accounting fees for commercial banks with less than $10 billion in total assets (known as commercial banking organizations or CBOs), while controlling for their litigation risk via legal fees spent on outside counsel. Using panel data from 2008 through 2014 for U.S. CBOs, I find that litigation risk is the primary driver of accounting fees for “large” CBOs with $1 billion - $10 billion in total assets. This finding is contrary to previous studies, which attribute the majority of explained variance in those fees to firm size alone. To my knowledge, these results are the first to explicitly confirm the litigation risk-audit fee hypothesis (Seetharaman et al., 2002) for the banking industry. In terms of magnitude, I find that for every one percent increase in legal fees, accounting fees will increase from two to nine basis points, depending on CBO size. Controlling for bank-specific risk and the general business cycle, our results show that Dodd-Frank has the greatest impact on accounting fees for small CBOs (<$500 million in total assets), which experience an increase in these expenses of 73% due to the drafting of the Act, and an increase of 105% due to the subsequent passage (compared to an increase of 56% and 86% in accounting fees for the large CBO cohort during the drafting and subsequent passage of Dodd-Frank, respectively). I also find that a decrease in bank leverage (for CBOs of all sizes) and an increase in real estate loans to total loans (for large CBOs) are indicative of higher accounting fees.
Temple University--Theses
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Dietrich, David Roland. "An analysis of bank risk management and its relevance for the non-bank corporate sector." Thesis, Rhodes University, 2007. http://hdl.handle.net/10962/d1002683.
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This thesis, entitled “An analysis of bank risk management and its relevance for the non-bank corporate sector”, investigates the extent to which financial risk management by the banking sector can be applied to the non-bank corporate sector. As banks’ risk management techniques are more sophisticated than those of the non-bank corporate sector we have endeavoured to ascertain the applicability of these established risk management methods to the non-bank corporate sector. The main objectives of this study were to analyse the banking sectors’ risks and management thereof, and compare them to the risks faced by the nonbank corporate sector. This analysis was then used to present a theoretical financial risk management model for the corporate sector. This analysis was conducted using qualitative research. The thesis engaged in an in-depth investigation of financial risk management through a documentary, literature and media analysis. It was elucidated that not all companies face the same financial risks and therefore each company requires its own unique financial risk management model. Furthermore, it was established that there are several risks that both banks and non-bank corporates are subjected to. However, the management of these risks is not necessarily the same for these two types of institutes. This thesis concludes by putting forward a financial risk management model which presents all the possible financial risks that non-bank corporates may face.
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Yung, Mo Fung. "The relationship between corporate governance and bank performance in Hong Kong a dissertation submitted in partial fulfilment of the requirements for the degree of Master of Business (MBus), in the Faculty of Business, Auckland University of Technology, 2009 /." Click here to access this resource online, 2009. http://hdl.handle.net/10292/739.
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Rostagno, Luciano Martin. "Essays on exchange rates central banks' interventions, effects on gold mining activity, and anticipating market risk /." abstract, 2008. http://0-gateway.proquest.com.innopac.library.unr.edu/openurl?url_ver=Z39.88-2004&rft_val_fmt=info:ofi/fmt:kev:mtx:dissertation&res_dat=xri:pqdiss&rft_dat=xri:pqdiss:3316377.
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Teka, Babalwa. "The credit risk management skills shortage in Nelson Mandela Bay Metropole." Thesis, Nelson Mandela Metropolitan University, 2012. http://hdl.handle.net/10948/d1019893.
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Tito Mboweni (2011) said one of South Africa’s biggest tests is the overwhelming the skills shortage. He was echoing the views of Higher Education Minister Blade Nzimande who himself said “South Africa could not afford to have an economy "constrained by a severe lack of skills". There are numerous initiatives that having been undertaken by government in an attempt to solve the skills shortage problem. However, these initiatives are not aimed at the tertiary education system. The tertiary education system is the focus of this study as the author investigates how the NMMU Business School can play a significant role in addressing the skills shortage in the credit risk management sector. Following a literature review, surveys were completed by the NMMU Business School MBA students (ninety of them completed it) and personal interviews were conducted with three Provincial HR managers from South Africa’s “four big banks” in Nelson Mandela Bay (Nedbank, Standard Bank and ABSA). The study found that the skills shortage is indeed a problem. The study found that reasons including the legacy left by apartheid and students pursuing the wrong degrees were highlighted as some of the reason for this skills shortage. An opportunity for the NMMU Business School was identified to support the banking industry in addressing credit risk management skills shortage. The benefits include financial reward and more importantly an opportunity to differentiate the Business School and the courses offered at the school from the rest. Some of the recommendations included sourcing of the best practices from institutions like the Millpark Business School on effective partnering with the banking industry as well as a proactive approach to be adopted by the banking industry in terms of lobbying support from other potential role players for example but not limited to, student bodies, BankSeta and the smaller banks in the industry.
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Mu, Yuan. "Chinese bank's credit risk assessment." Thesis, University of Stirling, 2007. http://hdl.handle.net/1893/210.
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This thesis studies the Chinese banks’ credit risk assessment using the Post Keynesian approach. We argue that bank loans are the major financial sources in emerging economies and it is uncertainty, an unquantifiable risk, rather than asymmetric information about quantifiable risk, as held by the mainstream approach, which is most important for the risk attached to credit loans, and this uncertainty is particularly important in China. With the universal existence of uncertainty, borrowers and lenders have to make decisions based on convention and experience. With regard to the nature of decision-making, this implies the importance of qualitative methods rather than quantitative methods. The current striking problem in Chinese banking is the large amount of Non-Performing Loans (NPLs) and this research aims to address the NPLs through improving credit risk management. Rather than the previous literature where Western models are introduced into China directly or with minor modification, this work advocates building on China’s conventional domestic methods to deal with uncertainty. We briefly review the background of the Chinese banking history with an evolutionary view and examine Chinese conventions in the development of the credit market. Based on an overview of this history, it is argued that Soft Budget Constraints (SBC) and the underdeveloped risk-assessing mechanism contributed to the accumulation of NPLs. Informed by Western models and experience, we have made several suggestions about rebuilding the Chinese convention of credit risk assessment, based on an analysis of publications and interviews with Chinese bankers. We also suggest some further development of the Asset Management Companies (AMCs) which are used to dispose of the NPLs.
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Meyer, Petrus Gerhardus. "Determinants of credit risk mitigation in lending to Black Economic Empowerment (BEE) companies, from a banker's perspective." Diss., Unisa, 2005. http://hdl.handle.net/10500/163.
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Credit risk mitigation that can be applied by commercial banks in assessing the lending decision /credit risk when advances and equity investments are considered for BEE classified companies.A research report presented to the Graduate School of Business Leadership, University of South Africa
The previous political dispensation limited black people’s participation in the South African economy. Poor credit records, lack of training, resulting in skills and capacity gaps further limited entry into the lending market. These aspects are considered the main limitations in obtaining finance for the Small, Medium and Micro Enterprises (SMMEs). This research report focuses on how credit risk can be mitigated by commercial banks in lending to Black Economic Empowerment (BEE) companies in the medium to large market. Exploratory research was conducted using various methods to achieve methodological triangulation. These methods consisted of a literature review, interviewing experts in the field and case studies. A qualitative research approach was followed. It was found that the lack of own contribution and security were still prevalent in the medium to large market, but the quality of management (little training and skills) was deemed not to be a limitation as suitable credit risk mitigants were identified. No credit risk mitigants were identified to mitigate poor credit records. It is postulated that by adopting and applying the identified credit risk mitigants, commercial banks can increase their success rate in lending to BEE companies. It will further assist in the transformation of black people and compliance with the Financial Services Charter. It is recommended that a similar study be conducted in the agriculture, hunting, forestry and fishing industry. The reasons why BEE companies applications are declined could also be investigated. Further studies could also explore other external factors such as economical, legal and social that could have an influence on the funding of BEE companies.
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Benade, Jean. "An analysis of the risk-return relationship in the primary agriculutral sector in the Western Cape from a commercial bank's perspective." Thesis, Stellenbosch : University of Stellenbosch, 2009. http://hdl.handle.net/10019.1/6421.
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Thesis (MBA (Business Management))--University of Stellenbosch, 2009.ENGLISH ABSTRACT: The research report investigates the risk/return relationship in the primary agricultural sector in the Western Cape from a commercial bank's perspective. The study investigated the correlation between credit risk and return within a randomly selected portfolio of agricultural borrowers. Different risk categories were investigated to detennine which category correlates best with return. The effect of below prime and above prime pricing on return was also investigated. The study was conducted in the context of the turmoil in financial markets since the beginning of 2008, caused by excessive credit risks. This has led to the need for better regulation in the financial services industry and better pricing decisions. Factors supporting this need for better regulation include securitisation of debt, consolidation, globalisation and the systemic risk that banks impose on the economy. The Basel Capital Accord introduced new regulatory requirements for the banking industry to ensure more effective management of credit risk. Risk management processes in agriculture are also subject to the requirements of this accord. The agricultural sector is characterised by unpredictable climatological conditions, poor governmental support, low profitability, overcapitalisation and price volatility, which cause this sector to be especially exposed to credit risk. The credit risk of borrowers within the case study bank was measured in tenns of a default grade using a behavioural risk rating model. Risk ratings are used for profitability analysis, risk management and regulatory reporting. These ratings are assigned during the annual review process, when borrowers are exposed to a business viability assessment. Banks incur risk costs when accommodating a borrower's credit risk, which has a negative effect on the return that the borrower generates for the bank. This emphasises the importance of correlation between credit risk and pricing and by implication return for sustainable profit margins. The research results indicated that no correlation exists between credit risk and pricing. This lack of correlation can be attributed to eontracrual agreements, relationship banking, technological constraints, asset growth, price sensitivity in the agricultural sector and the nature of the risks in agriculture. The study also found that a negative correlation exists between credit risk and return. This can be attributed to the fact that the higher the credit risk, the more economic capital is required to support this risk and the more it costs. This implies a lower return on capital. It is recommended that the risk/return relationship should be improved by reducing credit risk, increasing non-interest income, ensuring that new borrowers are priced adequately, differentiating the existing portfolio in terms of value and improving the negotiating skills of bankers. No meaningful conclusion could be drawn with regard to the effect that below prime and above prime pricing have on return.
AFRIKAANSE OPSOMMING: Die studieverslag ondersoek die verwantskap tussen risiko en opbrengs in die primere landbousektor in die Wes-Kaap vanuit die perspektief van 'n kommersiele bank. Dit ondersoek die korrelasie tussen kredietrisiko en opbrengs in 'n ewekansige steekproef van landboukliente. Verskillende risikokategoriee is ondersoek om te bepaal watter kategorie die beste korrelasie tussen risiko en opbrengs verteenwoordig. Die invloed van beprysing onder en bo prima op opbrengskoers word ook ondersoek. Die studie is gedoen in die konteks van die krisis in die finansiele markle sedert die begin van 2008, wat veroorsaak is deur oornatige kredietrisiko. Dit het die behoefte aan beter regulering in die finansiiHedienste-industrie asook beter beprysingsbesluite laat ontstaan. Faktore wat hierdie behoefte aan beter regulering ondersteun, sluit in die verhandelbaarheid van krediet, konsolidasie, globalisasie en die sistemiese risiko wat banke vir die ekonomie inhou. Die Baselooreenkoms het nuwe regulatoriese vereistes aan die bankindustrie gesteil om meer effektiewe bestuur van kredietrisiko te verseker. Risikobestuursprosesse in die landbou is ook onderhewig aan die vereistes van die Baselooreenkoms. Die landbousektor word gekenmerk deur onvoorspelbare klimatologiese toestande, swak regeringsondersteuning, lae winsgewendheid, oorkapitalisering en prysskommelinge, wat veroorsaak dat hierdie sektor buitengewoon blootgestel is aan kredietrisiko. Die kredietrisiko van die kliente van die gevallestudiebank is gemeet volgens 'n waarskynlikheidsgradering wat verkry word vanaf 'n risikomodel wat op gedragspatrone gebaseer is. Risikograderings word gebruik vir winsgewendheidsontledings, risikobestuur en regulatoriese verslaggewing. Dit word tydens die jaarlikse hersieningsproses toegeken, wanneer kliente aan 'n lewensvatbaarheidstudie blootgestel word. Banke gaan risikokostes aan om die kredietrisiko van kliente te akkommodeer, wat 'n negatiewe uitwerking het op die opbrengs wat daardie klient vir die bank genereer. Dit beklemtoon die belangrikheid van korrelasie tussen kredietrisiko en beprysing en by implikasie opbrengs vir volhoubare winsgrense. Die navorsingsresultate toon dat daar geen korrelasie tussen kredietrisiko en beprysing bestaan nie. Hierdie gebrek aan korrelasie kan toegeskryf word aan leningskontrakte, verhoudingsbankwese, tegnologiese beperkings, bategroei, pryssensitiwiteit in die landbousektor en die aard van die risiko's in die landbou. Die studie het ook bevind dat daar 'n negatiewe korrelasie is tussen kredietrisiko en opbrengs. Dit kan toegeskryf word aan die feit dat hoe hoer kredietrisiko is, hoe meer ekonomiese kapitaal vereis gaan word om hierdie risiko te ondersteun en hoe hoer gaan die risikokostes wees. Dit impliseer 'n laer opbrengs op kapitaal. Om die verwantskap tussen risiko en opbrengs te verbeter, word aanbeveel dat kredietrisiko verminder word, nie-rente-inkomste verhoog word, nuwe kliente korrek beprys word, differensiasie van die bestaande portefeulje plaasvind in terme van waardetoevoeging en die onderhandelingsvermoe van bankiere verbeter word. Geen betekenisvolle gevolgtrekking kon gemaak word aangaande die effek wat beprysing onder en bo prima op die opbrengskoers het nie.
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Schneider, Thomas. "Möglichkeiten und Grenzen der Umsetzung der gesellschaftsrechtlichen und bankenaufsichtsrechtlichen Anforderungen an Risikomanagement auf Gruppenebene /." Berlin : Duncker & Humblot, 2009. http://d-nb.info/997399570/04.
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Williamson, Gareth Alan. "Interest rate risk management : a case study of GBS Mutual Bank." Thesis, Rhodes University, 2008. http://eprints.ru.ac.za/1585/.
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Chadwick, Warren. "A study of the New Basel Capital Accord and its impact on South Africa and other emerging markets." Thesis, Stellenbosch : Stellenbosch University, 2002. http://hdl.handle.net/10019.1/52710.
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Thesis (MBA)--Stellenbosch University, 2002.ENGLISH ABSTRACT: The new Basel Capital Accord is intended to align capital adequacy of banks more closely with the key components of banking risk and to provide incentives for banks to improve their risk measurement and management capabilities. This has important implications for banks, particularly in the area of credit risk management. The purpose of this study is to take an in-depth look at the implications for banks in the area of credit risk management and the choice of approach (i.e. standardised versus internal ratings based approach) to be adopted. These changes in approach to credit risk will have broader economic implications and the study will in its final analysis explore these in the context of South Africa, as an emerging market. The study is split into three sections: Section A • Introduction and background to the New Basel Capital Accord; • Detailed overview on the New Basel Capital Accord with a particular emphasis on the internal ratings based approach to calculating minimum capital. Section B An in-depth discussion of credit risk management and the practical implications of moving towards an internal ratings based approach, which will eventually allow banks to take on a full portfolio approach to credit risk management. This will enable banks to manage credit risk across sub-portfolios and set economic capital based on the portfolio loss distribution of the banks entire lending book. This is an extremely important development in credit risk management and as a consequence is covered in some detail. The adoption of an internal ratings based approach offers significant rewards in the form of lower statutory capital. A profile of the current capitalisation of SA banks is provided followed by the likely effect of the standardised versus the internal ratings based approach to credit risk management, on the minimum level of statutory capital of banks. Section C The final section covers the envisaged macro effects of the New Accord on emerging markets (procyclical trends, lending concentrations, foreign capital flows and bank failures) with specific comment provided on the implications for the SA banking environment and economy. In conclusion, South African banks should as a priority move towards an internal ratings based approach to credit risk management in order to benefit from the lower statutory requirements, which accrue in the advanced phase. While the accord is likely to impact significantly on emerging markets, South Africa fortunately has a sophisticated banking system by international standards, making the adoption of an internal ratings based approach by the larger SA banks inevitable. The benefits for smaller banks are questionable and at this stage they are unlikely to move beyond the standardised approach, unless compelled to do so.
AFRIKAANSE OPSOMMING: Die "New Basel Capital Accord" het ten doel om die kapitaal vereistes neergelê vir banke meer in lyn te bring met die risiko komponent gekoppel bankwese. Dit hou 'n belangrike implikasie vir banke in en verskaf voorts ook 'n dryfveer vir banke om die bestuur van krediet risiko en algehele bestuursvaardighede te verbeter. In hierdie studie word 'n indiepte ondersoek onderneem aangaande die implikasie op banke van krediet risiko-bestuur en die keuse van die benadering wat gevolg word. Hierdie veranderings in die benadering (dws.standard teenoor interne-graderings benadering) tot krediet risiko hou breër ekonomiese implikasies vir banke in. Hierdie ekonomiese implikasies op SA as 'n ontwikkelende mark word in die finale analise ondersoek. Die studie kan in drie afdelings verdeel word: Afdeling A: • Inleiding en agtergrond tot die "New Basel Capital Accord" en • 'n Gedetaileerde oorsig van die "New Basel Capital Accord" met spesifieke verwysing na die interne-graderings benadering om die minimum vereiste kapitaal te bepaal. Afdeling B: Hierdie afdeling ondersoek krediet risiko bestuur en die praktiese implikasies van die aanvaarding/instelling van 'n interne graderings benadering, en die effek wat dit sal hê op 'n totale portefeulje benadering tot krediet risiko. Die gevolg is dat banke krediet risiko oor sub-portefeuljes sal kan bestuur en kapitaal vlakke vasstel gebaseer op verwagte portefeulje verliese. Hierdie is 'n belangrike ontwikkeling in krediet risiko bestuur en word vervolgens in diepte behandel. Die aanvaarding van 'n interne-graderings benadering tot gradering hou voordele in vir banke in die vorm van laer statutêre kapitaal vereistes. 'n Profiel van die kapitalisasie van SA banke word verskaf, gevolg deur die verskil in die effek van die standaard benadering tot die interne graderings benadering op krediet risiko bestuur en die vereiste minimum statutêre kapitaal. Afdeling C: Die finale afdeling ondersoek die beoogde makro ekonomiese effek van die "New basel capital Accord" op ontwikkelende marke (pro-sikliese neiging, lenings konsentrasies en bank mislukkings) met spesifieke verwysing na die implikasies op SA bankwese en ekonomie. Ter afsluiting moet SA banke so spoedig moontlik die interne-graderings benadering tot krediet risiko aanvaar om voordeel te trek uit die laer kapitaal vereistes wat "ophoop in die gevorderde stadium." Daar word verwag dat die "New Basel Capital Accord" 'n wesenlike invloed op die ontwikkelende mark sal hê. SA het egter 'n gesofistikeerde en gevestigde bankstelsel wat goed vergelyk met internasionale standaarde. Die aanvaarding van 'n interne-graderings benadering deur die die groter SA banke is onafwendbaar. Die voordele wat dit vir kleiner banke inhou kan bevraagteken word en is op hierdie stadium onwaarskynlik dat so 'n benadering deur hulle geïmplimenteer sal word.
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Anagnostopoulos, Ioannis. "IAS39 and value perceptions in banking : bankers in Greece and the UK : implications for financial reporting, capital management and regulation." Thesis, University of Aberdeen, 2010. http://digitool.abdn.ac.uk:80/webclient/DeliveryManager?pid=128193.
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This thesis investigates the impact of accounting standard IAS39 on banking institutions in Greece and the UK. It specifically addresses preparers’ perceptions of that standard’s effects on the banking books of banks. The research involves a mixed methodology, namely: (i) a survey analysis of the perceptions of banking practitioners in Greece and the UK, in order to identify the standard’s impact on the banking sector as well as to gauge the standard’s acceptance of banks, in order to facilitate a deeper understanding of the implications of the standard for their organisations. ‘Elite’ interviews also advocate that such high powered individuals are the key holders to privy information. The results suggest that IAS39 is a highly controversial standard that introduces concerns not only for the banks’ valuation of assets and liabilities but also regulatory concerns over issues of policy formulation and stability. Generally, bankers are negative and largely sceptical of the standard, on the grounds of relevance and reliability. They do not view the standard as particularly useful, relevant, reliable or transparent for banking disclosures and financial stability when compared to the current mixed methodology approach followed currently for the valuation of assets and liabilities in the banking books of banks. Most concerns revolve around the standard’s effects on valuation of assets and liabilities, provisioning and hedging issues and bank capital management for regulatory capital purposes. In the introduction of accounting standards attention should be paid to the nature of the industry and the system (i.e. credit versus market-based) in which firms operate, as well as to establishing particular methodologies. It touches upon a contemporary issue of critical topical and international interest, of how accounting information standards relate to the systemic, operating, credit, market and liquidity risks of a modern, internationalised banking system.
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Coleman, Anthony Dale Franklin Banking & Finance Australian School of Business UNSW. "The determinants of supervisory risk ratings of Australian deposit-taking institutions." Publisher:University of New South Wales. Banking & Finance, 2008. http://handle.unsw.edu.au/1959.4/41221.
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A key feature of best practice prudential supervision of financial institutions is the use of a risk rating system to formalise the outcome of supervisory reviews and ongoing monitoring processes. The Australian Prudential Regulation Authority (APRA) implemented the Probability and Impact Rating System (PAIRS) in 2002. Given the favourable economic conditions in which PAIRS was developed and has so far operated, any form of validation using backtesting methods is prevented. Consequently, this thesis seeks to develop a framework with which to evaluate and better understand the PAIRS risk rating system for authorised deposit-taking institutions. Specifically, we specify and estimate models in which the risk ratings are related to the statistical data that supervisors have access to when forming their expert judgement assessments of the PAIRS risk components. Whereas prior studies have generally focused on the overall supervisory rating, we model the primary components of the PAIRS rating (inherent risk, management and control risk, and capital support risk) as well as the aggregate risk of failure rating. Using a sample of ratings from 2002 to 2006, we find that the statistical data is able to explain much of the variability in ratings for credit unions and building societies (CUBS) and Australian and foreign subsidiary banks but not foreign bank branches. As expected, the regressions are stronger for inherent risk and capital support risk ratings than management and control risk ratings. However, supervisors?? consideration of adverse qualitative factors adds considerable explanatory power to a model based solely on statistical data, particularly for management and control risk ratings. We also model the determinants of supervisory exceptions and capital adequacy breaches over 1992 to 2006 and find that the risk indicators associated with a higher likelihood of an exception and/or breach are generally consistent with the risk indicators associated with supervisory risk ratings. The outcomes of the thesis have a number of policy implications and practical applications. For example, the estimated models have the potential to be used as a quality and consistency tool to detect rating outliers within PAIRS. We also propose some improvements to APRA??s exception reporting system for CUBS.
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Van, Roy Patrick. "Essays on the economics of banking and the prudential regulation of banks." Doctoral thesis, Universite Libre de Bruxelles, 2006. http://hdl.handle.net/2013/ULB-DIPOT:oai:dipot.ulb.ac.be:2013/210882.
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This thesis consists of four independent chapters on bank capital regulation and the issue of unsolicited ratings.The first chapter is introductory and reviews the motivation for regulating banks and credit rating agencies while providing a detailed overview of the thesis.
The second chapter uses a simultaneous equations model to analyze how banks from six G10 countries adjusted their capital to assets ratios and risk-weighted assets to assets ratio between 1988 and 1995, i.e. just after passage of the 1988 Basel Accord. The results suggest that regulatory pressure brought about by the 1988 capital standards had little effect on both ratios for weakly capitalized banks, except in the US. In addition, the relation between the capital to assets ratios and the risk-weighted assets to assets ratio appears to depend not only on the level of capitalization of banks, but also on the countries or groups of countries considered.
The third chapter provides Monte Carlo estimates of the amount of regulatory capital that EMU banks must hold for their corporate, bank, and sovereign exposures both under Basel I and the standardized approach to credit risk in Basel II. In the latter case, Monte Carlo estimates are presented for different combinations of external credit assessment institutions (ECAIs) that banks may choose to risk weight their exposures. Three main results emerge from the analysis. First, although the use of different ECAIs leads to significant differences in minimum capital requirements, these differences never exceed, on average, 10% of EMU banks’ capital requirements for corporate, bank, and sovereign exposures. Second, the standardized approach to credit risk provides a small regulatory capital incentive for banks to use several ECAIs to risk weight their exposures. Third, the minimum capital requirements for the corporate, bank, and sovereign exposures of EMU banks will be higher in Basel II than in Basel I. I also show that the incentive for banks to engage in regulatory arbitrage in the standardized approach to credit risk is limited.
The fourth and final chapter analyses the effect of soliciting a rating on the rating outcome of banks. Using a sample of Asian banks rated by Fitch Ratings, I find evidence that unsolicited ratings tend to be lower than solicited ones, after accounting for differences in observed bank characteristics. This downward bias does not seem to be explained by the fact that better-quality banks self-select into the solicited group. Rather, unsolicited ratings appear to be lower because they are based on public information. As a result, they tend to be more conservative than solicited ratings, which incorporate both public and non-public information.
Doctorat en sciences économiques, Orientation économie
info:eu-repo/semantics/nonPublished
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Du, Toit Johannes Gerhardus. "An overview of the relationship between the South Africa banking sector and the South African wine industry." Thesis, Stellenbosch : Stellenbosch University, 2006. http://hdl.handle.net/10019.1/50573.
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Thesis (MBA)--Stellenbosch University, 2006.ENGLISH ABSTRACT: This study shows that a close relationship exists between the South African wine industry and South African financial institutions. Research indicated a need to understand the characteristics and complexity of the wine industry, as well as that of credit assessment. This is important for both industries to further develop and strengthen their relationships. SA WIS provides statistics about various aspects of the South African wine industry. The wine industry is characterised by a fragmented basis. To strategically focus the industry, the South African Wine and Brandy Company (SAWB) was established in 2002. In the application for finance it is important for the applicant to know how credit is evaluated by financial institutions, and which aspects are of importance in the application. One cannot predict the future. The credit assessor therefore bases his credit decision on historical financial data, with the assumption that the trend will continue unless there are indications to the contrary. A specific wine industry credit application and evaluation process is discussed in the study. The final decision is only as good as the analysis, and the analysis is only as good as the information gathered. This study thus provides evidence that with a better understanding of the South African wine industry, financial institutions will be able to assess credit risks better. Similarly, the wine industry will benefit by a better understanding of credit assessment when applying for finance. A detail SWOT analysis was done on this industry. A summary was done of the most important finance needs of the South Afican wine industry, compared to the financial products offered by the South African banking industry and the information required to do the credit assessment. The additional information that the wine industry can supply to help the assessor to assess the application, is also listed. The study closes with proposals to the South African wine and banking industries on what to implement, in an effort to achieve a better relationship.
AFRIKAANSE OPSOMMING: Die studie toon dat 'n verwantskap bestaan tussen die Suid-Afrikaanse wynindustrie en Suid-Afrikaanse finansiele instellings. Navorsing toon aan dat daar 'n behoefte bestaan om die karaktereienskappe en kompleksiteit van die wynindustrie te verstaan, sowel as die van krediet keuring. 'n Beter verstandhouding is nodig om die twee industriee se verwantskap te versterk. SAWIS verskaf statistieke oor 'n verskeidenheid van die wynindustrie se aktiwiteite. Die wynindustrie het 'n gefragmenteerde basis. Die Suid-Afrikaanse Wyn en Brandewyn Maatskappy (SAWB) is in 2002 gestig, juis ten doel om die bedryf strategies te fokus. Dit is belangrik vir 'n aansoeker van krediet om te verstaan hoe die finansiele instelling kredietaansoeke evalueer, asook watter aspekte belangrik is om aan te spreek in 'n kredietaansoek. Die toekoms kan nie met sekerheid bepaal word nie. Die kredietkeurder baseer dus sy kredietkeuring op historiese data, met die aanname dat die tendens sal aanhou, tensy daar aanduidings is van die teendeel. 'n Spesifieke wynindustrie kredietaansoek en evaluasieproses word bespreek in die studie. Die finale krediet besluit is slegs soos goed soos die analise en die analise op sy beurt is weer net so goed soos die inligting wat versamel is. Die studie bewys dus dat met 'n beter begrip van die Suid-Afrikaanse wynindustrie, finansiele instellings 'n beter kredietanalise evaluasie sal kan doen. Terselfdertyd sal die wynindustrie bevoordeel word deur beter te verstaan hoe kredietaansoeke geevalueer word wanneer vir finansiering aansoek gedoen word. 'n Detail SWOT-analise is op die bedryf gedoen. 'n Opsomming word gedoen van die mees algemene finansieringsbehoeftes in die wynbedryf, gemeet teenoor die finansiele produkte aangebied en inligting vereis deur die finansiele instellings. Addisionele inligting wat die wynbedryf kan bied ten einde die kredietkeurder te help om die aansoek beter te kan evalueer, word ook gelys. Die studie sluit af met voorstelle aan die Suid Afrikaanse wyn- en bank industriee wat geimplimenteer kan word teneinde 'n beter verhouding te bewerkstellig.
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Kjellberg, Mattias, David Uhlmann, and Ivana Zubac. "Basel II - Det nya kapitaltäckningsregelverkets påverkan på de svenska nischbankernas kredit- och riskhantering." Thesis, Halmstad University, School of Business and Engineering (SET), 2007. http://urn.kb.se/resolve?urn=urn:nbn:se:hh:diva-759.
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ABSTRACT
Title: Basel II – The New Basel Capital Accord and its influence on small Swedish banks and their retail banking and risk management.
Seminar: May 24th, 2007
Course: FEK318 Bachelor thesis in Business Administration, 10 Swedish credits
Authors: Mattias Kjellberg, David Uhlmann & Ivana Zubac
Advisor: Joakim Winborg
Keywords: Capital cover, capital requirements, Basel II, credit giving, credit risk, risk management, retail banking, small banks, pillar 2
Problem: What influence does Basel II and the new updated management of credit risks in pillar 1 and the active risk control in pillar 2 have on small Swedish banks retail banking?
Purpose: Our essay seeks to explore what influence pillar 1 and the new updated management of credit risks in the new capital accord Basel II have on small Swedish banks and what influence pillar 2 have. We also want to explain if Basel II has influences on small Swedish banks credit analysis and possible effects in their risk management and pricing.
Methodology: In our essay we use an inductive approach and our chosen research method is the qualitative one. We have chosen to look into four small Swedish banks, and the empirical data is obtained from telephone interviews with selected respondents from Länsförsäkringar Bank, SkandiaBanken, GE Money Bank and ICA Banken.
Conclusions:
• The work with credit scoring does not get influenced by Basel II if the Standardised Approach is chosen.
• Banks that’ve early implemented high technological systems in the organization, that small banks normally do, have gotten an easier transition to Basel II.
• Basel II will result in a risk adjusted pricing and a more fair credit market.
• Internal Ratings-based Approaches is very demanding to develop, but at the same time it’s a more risk sensitive approach.
• Pillar 2 results in a more sophisticated work for the small banks.
• Basel II results in a further price press on residential loans in Sweden.
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Terblanche, Janet Rene. "The legal risks associated with trading in derivatives in a merchant bank." Thesis, Stellenbosch : University of Stellenbosch, 2006. http://hdl.handle.net/10019.1/2693.
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Thesis (LLM (Mercantile Law))--University of Stellenbosch, 2006.The research defines derivatives as private contracts, with future rights and obligations imposed on all parties, used to hedge or transfer risk, which derives value from an underlying asset price or index, which asset price or index may take on various forms. The nature of derivatives is that the instruments are intended to be risk management tools. The objectives of derivatives are either to hedge a risk, or to speculate. Derivatives may be classified by the manner in which they are traded, either over the counter (OTC) or on exchange. Alternatively, derivatives may be classified on the basis of structure and mechanisms, i.e. forwards, futures, options or swaps. Risk and risk management are defined in the third chapter with the focus on merchant banking. The nature of risk is that it is inherent in all activities. The nature of risk management is that it aims to ensure that the risks faced by the merchant bank are managed on a daily basis. The objective of risk management is to ensure that losses are minimised and the appropriate level of risk is taken in order to maximise profits. Risk may be classified as operational, operations, market, systemic, credit and legal risk. A comprehensive discussion of credit risk is presented, as it pertains to the legal risk in derivatives in a merchant bank. This includes insolvency, set-off, netting, credit derivatives and collateral. Legal risk is defined as the risk of loss primarily caused by legal unenforceability (i.e. a defective transaction, for instance a contract), legal liability (i.e. a claim) or failure to take legal steps to protect assets (e.g. intellectual property). The nature of legal risk is that it is caused by jurisdictional and other cross-border factors, inadequate documentation, the behaviour of financial institutions, a lack of internal controls, financial innovation or the inherent uncertainty of the law. The objectives of legal risk management in derivatives are to avoid the direct and indirect costs associated with legal risk materialising. This includes reputational damage. Derivatives attract specific legal risks due to the complexity of the instruments as well as the constant innovation in the market. There remains some legal uncertainty regarding derivatives in terms of gaming, wagering and gambling, as well as insurance. The relationship between risk and derivatives is that due to the complexity and constant innovation associated with derivatives, there are some inherent risks to trading in derivatives. It is therefore important to ensure that there is a vested risk management culture in the derivatives trading environment. Chapter four gives an overview of derivatives legislation in foreign jurisdictions and in South Africa. The contractual and documentation issues are discussed with reference to ad hoc agreements, master agreements and ISDA agreements. The practical implementation issues of master agreements and ad hoc agreements are also discussed. The recommendations are that legal risk management be approached in a similar manner to credit, market and other risk disciplines. A legal risk management policy needs to be developed and implemented. The second recommendation is that a derivative to manage the legal risk in derivatives be developed.
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Cardoso, Marcelo de Oliveira. "Determina????o do patrim??nio de refer??ncia exigido frente ??s novas regras de Basileia III: estudo de caso no setor financeiro - BICBANCO." FECAP - Faculdade Escola de Com??rcio ??lvares Penteado, 2014. http://132.0.0.61:8080/tede/handle/tede/368.
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Previous issue date: 2014-05-08This Objective of this study is to investigate challenges in the determination of the Required Referential Net Equity, of financial institutions, with the entry into force of the new Central Bank regulations that meet the recommendations of the Committee on Banking Supervision Basel III. The application of standards subject to the Resolution 3897/2010 revoked by Resolution 4194/2013 will address the implementation and management of liquidity risk, the new methodology of calculating the Reference Equity and the introduction of additional core capital, among other issues. Changes brought by the withdrawal of tax credits for purposes of computing the capital and changes in the form of acceptance of subordinated debt will have a strong impact on all financial institutions, with repercussions on the levels of capitalization and leverage. In this Risk management in banking and capital management with emphasis on the determination of the reference net equity required. The results suggest the need to strengthen the management of new sources of capital and line-of-business and customers, as circular 3644, especially for the average banks
O objetivo desse estudo ?? investigar as principais mudan??as na determina????o do Patrim??nio de Refer??ncia Exigido das institui????es financeiras, com a entrada em vigor das novas regulamenta????es do Banco Central, que atendem as recomenda????es do Comit?? de Supervis??o Banc??ria de Basileia III. A aplica????o das normas que s??o objeto da Resolu????o 3897/2010 revogada pela Resolu????o 4194/2013 tratar??o da implementa????o e do gerenciamento do risco de liquidez e Cr??dito, da nova metodologia de apura????o do patrim??nio de refer??ncia e da introdu????o do adicional de capital principal, entre outras quest??es. Mudan??as como a dedu????o gradativa do saldo dos cr??ditos tribut??rios diretamente do Capital e altera????es na forma de aceita????o das d??vidas subordinadas t??m forte impacto sobre todas as institui????es financeiras, com repercuss??o nos seus n??veis de capitaliza????o e alavancagem. Nesse contexto, foi realizado revis??o da literatura sobre os assuntos: Basileia I, II e III, riscos na gest??o banc??ria e gerenciamento de capital com ??nfase na determina????o do Patrim??nio de Refer??ncia Exigido. Os resultados encontrados sugerem a necessidade de refor??ar a gest??o de novas fontes de capital e de linhas de neg??cios e clientes, conforme circular 3644, sobretudo para os bancos m??dios
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Zungunde, Matildah. "The multi-dimensionality of trustworthiness of banks midst a confidence crisis : the case of retail banks in Zimbabwe." Thesis, 2018. http://hdl.handle.net/10500/25058.
Full textAbstract:
The strategic importance of a well-established banking sector in an economy and the pivotal role trust plays in this sector is well-documented in banking literature. Given this accepted importance of trust, it is surprising that some banks are still exhibiting more signals of distrust than of trust as expected, shattering consumer trust and confidence in the process. In response, governments, through their central banks, occasionally resort to implementing policies that focus heavily on regulation and control. These interventions are usually designed to restore consumer confidence in the banks’ future behaviours as well as providing assurance that exchanges taking place within a banking sector are safe and secure. Surprisingly, consumer trust and confidence are still elusive in some banking sectors, despite all these measures.
This mixed-methods, sequential explanatory study explores the concept of trustworthiness by investigating trustworthiness dimensions of banks that drive consumer trust in the Zimbabwean banking sector that is experiencing low trust and confidence levels. To fulfil the objectives of this study, a quantitative research approach (survey) was first employed to explore bank customers’ trustworthiness perceptions on a sample of 400 customers. A qualitative research approach (semi-structured interviews), was then employed to gain a better understanding and clarification of the survey findings. Structural Equation Modeling (SEM) was applied to determine the statistical model that sought to explain the relationship among the variables. Hypotheses were then tested between model constructs to determine their influence on one another.
Study findings revealed that shared values, structural assurance and integrity (consistency) are the trustworthiness determinants with the highest positive influence on bank trustworthiness. A negative relationship was found between communication and bank trustworthiness. Competence was found to have an insignificant correlation with trustworthiness. Additionally, both behavioural intentions and affective commitment (relational outcomes) were found to positively influence bank trustworthiness. This study has brought to light how trustworthiness of banks is perceived in a banking sector that is not only experiencing a confidence crisis but also in a country that is experiencing an uncertain economic and political environment within an African banking context. The final model presented in this study can be applied in trustworthiness studies in the financial services sectors, particularly in sectors that are operating in similar uncertain environments.
In order to reignite consumer confidence in the banking sector, the RBZ is advised to set tighter corporate governance measures that can put a stop to activities such as insider lending that end up defrauding depositors within the banks. It is also imperative that departments such as Treasury, Risk and Credit within the RBZ and in banks are managed by competent personnel who adhere to the prudential standards of banking. Bank custodians are advised to continuously exhibit trustworthiness behaviours because customers’ trust and confidence can only be restored if there is evidence of sincere behaviours that are regarded as reflecting a trustworthy image. Planning for peak periods in terms of cash and personnel, to avoid prolonged queues and cash shortages that have become an everyday occurrence in the Zimbabwean banking sector is one way banks can improve trust and confidence. Banks should also consider providing services such as financial hardship advisory services and extended loan repayment options that can go a long way in not only assisting their customers to manage their debts, but also to show that banks are taking into consideration their customers’ current challenges and needs.
Key stakeholders in the banking sector are also encouraged to share information on key developments integral to the smooth functioning of the banking sector. This information should then be disseminated to the banking public in a unified voice to avoid distortion of information that leads to financial anxiety and further erosion of trust. In the absence of formal timeous communication, bank customers may resort to relying on the grapevine and engage in speculative behaviours which can be very destructive and difficult to correct.Business Management
D.B.L.
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Dambaza, Marx. "Credit risk measurement model for small and medium enterprises : the case of Zimbabwe." Thesis, 2020. http://hdl.handle.net/10500/26765.
Full textAbstract:
Abstracts in English, Zulu and Southern SothoThe advent of Basel II Capital Accord has revolutionised credit risk measurement (CRM) to the extent that the once “perceived riskier bank assets” are now accommodated for lending. The Small and Medium Enterprise (SME) sector has been traditionally perceived as a riskier and unprofitable asset for lending activity by Commercial Banks, in particular. But empirical studies on the implementation of the Basel II internal-ratings-based (IRB) framework have demonstrated that SME credit risk is measurable. Banks are still finding it difficult to forecast SME loan default and to provide credit to the sector that meet Basel’s capital requirements. The thesis proposes to construct an empirical credit risk measurement (CRM) model, specifically for SMEs, to ameliorate the adverse effects of SME credit inaccessibility due to high information asymmetry between financial institutions (FI) and SMEs in Zimbabwe. A well-performing and accurate CRM helps FIs to control their risk exposure through selective granting of credit based on a thorough statistical analysis of historical customer data. This thesis develops a CRM model, built on a statistically random sample, known-good-bad (KGB) sample, which is a better representation of the through-the-door (TTD) population of SME loan applicants. The KGB sample incorporates both accepted and rejected applications, through reject inference (RI). A model-based bound and collapse (BC) reject inference methodology was empirically used to correct selectivity bias inherent in CRM domain. The results have shown great improvement in the classification power and aggregate supply of credit supply to the SME portfolio of the case-studied bank, as evidenced by substantial decrease of bad rates across models developed; from the preliminary model to final model designed for the case-studied bank. The final model was validated using both bad rate, confusion matrix metrics and Area under Receiver Operating Characteristic (AUROC) curve to assess the classification power of the model within-sample and out-of-sample. The AUROC for the final model (weak model) was found to be 0.9782 whilst bad rate was found to be 14.69%. There was 28.76% improvement in the bad rate in the final model in comparison with the current CRM model being used by the case-studied bank.
Isivumelwano seBasel II Capital Accord sesishintshe indlela yokulinganisa ubungozi bokunikezana ngesikweletu credit risk measurement (CRM) kwaze kwafika ezingeni lapho izimpahla ezazithathwa njengamagugu anobungozi “riskier bank assets” sezimukelwa njengesibambiso sokuboleka imali. Umkhakha wezamaBhizinisi Amancane naSafufusayo, phecelezi, Small and Medium Enterprise (SME) kudala uqondakala njengomkhakha onobungozi obukhulu futhi njengomkhakha ongangenisi inzuzo, ikakhulu njengesibambiso sokubolekwa imali ngamabhange ahwebayo. Kodwa izifundo zocwaningo ezimayelana nokusetshenziswa nokusetshenziswa kwesakhiwo iBasel II internal-ratings-based (IRB) sezikhombisile ukuthi ubungozi bokunikeza isikweletu kumabhizinisi amancane nasafufusayo (SME) sebuyalinganiseka. Yize kunjalo, amabhange asathola ukuthi kusenzima ukubona ngaphambili inkinga yokungabhadeleki kahle kwezikweletu kanye nokunikeza isikweletu imikhakha enemigomo edingekayo yezimali kaBasel. Lolu cwaningo beluphakamisa ukwakha uhlelo imodeli ephathekayo yokulinganisa izinga lobungozi bokubolekisa ngemali (CRM) kwihlelo lokuxhasa ngezimali ama-SME, okuyihlelo elilawulwa yiziko lezimali ezweni laseZimbabwe. Imodeli ye-CRM esebenza kahle futhi eshaya khona inceda amaziko ezimali ukugwema ubungozi bokunikezana ngezikweletu ngokusebenzisa uhlelo lokunikeza isikweletu ababoleki abakhethekile, lokhu kususelwa ohlelweni oluhlaziya amanani edatha engumlando wekhasimende. Imodeli ye-CRM ephakanyisiwe yaqala yakhiwa ngohlelo lwamanani, phecelezi istatistically random sample, okuluphawu olungcono olumele uhlelo lwe through-the-door (TTD) population lokukhetha abafakizicelo zokubolekwa imali bama SME, kanti lokhu kuxuba zona zombili izicelo eziphumelele kanye nezingaphumelelanga. Indlela yokukhetha abafakizicelo, phecelezi model-based bound-and-collapse (BC) reject-inference methodology isetshenzisiwe ukulungisa indlela yokukhetha ngokukhetha ngendlela yokucwasa kwisizinda seCRM. Imiphumela iye yakhombisa intuthuko enkulu mayelana namandla okwehlukanisa kanye nokunikezwa kwezikweletu kuma SME okungamamabhange enziwe ucwaningo lotho., njengoba lokhu kufakazelwa ukuncipha okukhulu kwe-bad rate kuwo wonke amamodeli athuthukisiwe. Imodeli yokuqala kanye neyokugcina zazidizayinelwe ibhange. Imodeli yokugcina yaqinisekiswa ngokusebenzisa zombili indlela isikweletu esingagculisi kanye negrafu ye-Area under Receiver Operating Characteristic (AUROC) ukulinganisa ukwehlukaniswa kwamandla emodeli engaphakathi kwesampuli nangaphandle kwesampuli. Uhlelo lwe-AUROC lwemodeli yokugcina (weak model) lwatholakala ukuthi luyi 0.9782, kanti ibad rate yatholakala ukuthi yenza i-14.69%. Kwaba khona ukuthuthuka nge-28.76% kwi-bad rate kwimodeli yokugcina uma iqhathaniswa nemodeli yamanje iCRM model ukuba isetshenziswe yibhange elithile.
Basel II Capital Accord e fetotse tekanyo ya kotsi ya mokitlane (credit risk measurement (CRM)) hoo “thepa e kotsi ya dibanka” ka moo e neng e bonwa ka teng, e seng e fuwa sebaka dikadimong. Lekala la Dikgwebo tse Nyane le tse Mahareng (SME) le bonwa ka tlwaelo jwalo ka lekala le kotsi e hodimo le senang ditswala bakeng sa ditshebetso tsa dikadimo haholo ke dibanka tsa kgwebo. Empa dipatlisiso tse thehilweng hodima se bonweng kapa se etsahetseng tsa tshebetso ya moralo wa Basel II internal-ratings-based (IRB) di supile hore kotsi ya mokitlane ya SME e kgona ho lekanngwa. Leha ho le jwalo, dibanka di ntse di thatafallwa ke ho bonelapele palo ya ditlholeho tsa ho lefa tsa diSME le ho fana ka mokitla lekaleng leo le kgotsofatsang ditlhoko tsa Basel tsa ditjhelete. Phuputso ena e ne sisinya ho etsa tekanyo ya se bonwang ho mmotlolo wa kotsi ya mokitlane (CRM) tshebetsong ya phano ya tjhelete ya diSME e etswang ke setsi sa ditjhelete (FI) ho la Zimbabwe. Mmotlolo o sebetsang hantle hape o fanang ka dipalo tse nepahetseng o dusa diFI hore di laole pepeso ya tsona ho kotsi ka phano e kgethang ya mokitlane, e thehilweng hodima manollo ya dipalopalo ya dintlha tsa histori ya bareki. Mmotlolo o sisingwang wa CRM o hlahisitswe ho tswa ho sampole e sa hlophiswang, e leng pontsho e betere ya setjhaba se ikenelang le monyako (TTD) ya batho bao e kang bakadimi ba tjhelete ho diSME, hobane e kenyelletsa bakopi ba amohetsweng le ba hannweng. Mokgwatshebetso wa bound-and-collapse (BC) reject-inference o kentswe tshebetsong ho nepahatsa tshekamelo ya kgetho e leng teng ho lekala la CRM. Diphetho tsena di bontshitse ntlafalo e kgolo ho matla a tlhophiso le palohare ya phano ya mokitlane ho diSME tsa banka eo ho ithutilweng ka yona, jwalo ka ha ho pakilwe ke ho phokotseho ya direite tse mpe ho pharalla le dimmotlolo tse hlahisitsweng. Mmotlolo wa ho qala le wa ho qetela e ile ya ralwa bakeng sa banka. Mmotlolo wa ho qetela o ile wa netefatswa ka tshebediso ya bobedi reite e mpe le mothinya wa Area under Receiver Operating Characteristic (AUROC) ho lekanya matla a kenyo mekgahlelong a mmotlolo kahare ho sampole le kantle ho yona. AUROC bakeng sa mmotlo wa ho qetela (mmotlolo o fokotseng) e fumanwe e le 0.9782, ha reite e mpe e fumanwe e le 14.69%. Ho bile le ntlafalo ya 28.76% ho reite e mpe bakeng sa mmotlolo wa ho qetela ha ho bapiswa le mmotlolo wa CRM ha o sebediswa bankeng yona eo.
Graduate School of Business Leadership
D.B.L.
35
"Credit risk management in state-owned commercial banks in China." 2000. http://library.cuhk.edu.hk/record=b5890177.
Full textAbstract:
by Cheng Chi Kin, Wong Siu Yuen, Michael.Thesis (M.B.A.)--Chinese University of Hong Kong, 2000.
Includes bibliographical references (leaves 61-63).
ABSTRACT --- p.ii
TABLE OF CONTENTS --- p.iii
LIST OF TABLES --- p.v
ACKNOWLEDGMENT --- p.vi
Chapter
Chapter I. --- INTRODUCTION --- p.1
Chapter II. --- BASIC PRINCIPLES OF CREDIT RISK MANAGEMENT --- p.5
Establishing an appropriate Credit Risk Environment --- p.7
Operating under a Sound Credit Granting Process --- p.9
"Maintaining an Appropriate Credit Adminstration, Measurement and Monitoring Process " --- p.13
Ensuring Adequate Controls over Credit Risk --- p.17
Chapter III. --- CREDIT RISK MANAGEMENT IN CHINA BANKING INDUSTRY --- p.19
Development of Chinese Banking Industry --- p.19
Business Lending in China --- p.22
Special Issues --- p.24
Chapter IV. --- CREDIT GRANTING IN HONG KONG BANKS --- p.33
The Lending Process --- p.35
Internal Rating System --- p.38
Internal Control --- p.40
Illustrative Scenarios --- p.41
Credit Control Principles --- p.43
Chapter V. --- COMPARISON BETWEEN PRACTICES IN HONG KONG AND CHINESE BANKS --- p.45
Structures and Responsibility --- p.45
Internal Rating System --- p.47
Division of Labour and Performance Appraisal --- p.51
Monitoring Process --- p.52
Overdraft --- p.52
Non-performing Loan --- p.53
Chapter VI. --- CONCLUSION --- p.54
APPENDIX --- p.58
BIBLIOGRAPHY --- p.61
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Young, Jacobus. "A structured approach to operational risk management in a banking environment." Thesis, 2002. http://hdl.handle.net/10500/690.
Full textAbstract:
Operational risk was identified as one of the primary risk types that a bank faces.
Neglected for many years, there is a growing awareness in the banking industry
that the management of operational risk is crucial for their future existence. The
effective management of operational risk, however, requires a structured
approach. This study, therefore, investigates the management of operational risk
by way of a literature study and empirical research in order to develop a
framework for a structured approach to operational risk management in banking.
The framework comprises the primary risk factors of operational risk, namely:
people, processes, systems and external events, as well as a definition of
operational risk. The operational risk exposures that apply to the aforementioned
primary risk factors are identified. It, furthermore, illustrates that operational risk
management is an ongoing process that consists of risk identification, risk
evaluation, risk control and risk financing and addresses the methods that could
be applied in the management process.
As operational risk management in the banking industry is still in a development
stage it is believed that this study could assist banks with establishing formal
operational risk management processes.
The framework demarcates the area of operational risk properly and provides
insight into all the activities that should be performed in the operational risk
management process, but the following issues still require further research:
• The practical implementation of methods for the quantification of
operational risk and determining a capital charge for it;
• The effect of the requirements of corporate governance on banks
as it relates to the management of operational risk; and
• The interaction between operational risk and the other primary
risk types to ensure an effective, enterprise-wide risk management
process.
The framework that has been developed could also be applied to any other
enterprise as operational risk management is not unique to banks and the basic principples are generic.Business Management
D. Com. (Business Management)
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Lee, Taekyu. "Bank risk-taking, regulations and market discipline three essays /." 2002. http://wwwlib.umi.com/cr/utexas/fullcit?p3099476.
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Ford, Guy 1961, University of Western Sydney, College of Law and Business, and School of Economics and Finance. "Achieving risk congruence in a banking firm." 2005. http://handle.uws.edu.au:8081/1959.7/12022.
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One of the reasons for firms decentralising aspects of their operations is to enable managers to gain specialised knowledge of local conditions. For credit managers in a banking firm, this may take the form of knowledge of investment opportunities and the risk profiles of each of these opportunities. In light of principal-agent problems that arise when information is asymmetrical, the focal point of this dissertation is the development of incentive-compatible mechanisms that facilitate the free and accurate disclosure of the private information of managers on the risk profile of investments to the centre of the bank at the time investment decisions are being implemented. These mechanisms are required because managers may have strong incentives to misrepresent their private information when doing so has the potential to favourably impact on the size of their remuneration. This, in turn, has a direct impact on the ability of the centre to optimally allocate the capital of the bank and effectively price risk into bank investments. The dissertation commences by examining which internal risk measures act to align the investment decisions of managers in a bank with the risk/return goals of the centre of the bank. This requires knowledge of the bank risk preference function. It is initially assumed that managers have developed specialised knowledge of the opportunity set of available investments, and have no reason to misrepresent this information to the centre. This assumption is later removed and the implications assessed. In order to ensure incentive-compatibility between the centre and managers, a truth-revealing mechanism is employed in the capital allocation process and tied to the compensation payment function of the bank. This mechanism acts to ensure managers disclose their private information on the expected risks and returns in the investments under their control, and facilitates the efficient investment of capital within the bank.Doctor of Philosophy (PhD)
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Kashora, Trust. "The effect of the application of "E"-communication on commercial banking in Zimbabwe." Diss., 2005. http://hdl.handle.net/10500/1461.
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This study investigates to what extent "e"-communication is used successfully by Zimbabwean commercial banks. The study was done using the literature survey method and the questionnaire. The closed and open-ended questionnaires used for gathering data were administered personally by the researcher leading to 99% return rate of questionnaires. The major conclusions from this study are that "e"-communication is widely adopted by the commercial banks in Zimbabwe, examples being the use of email, statement
enquiries or bill payment services. Recommendations drawn from this research are that commercial banks' top management should be committed to the establishment of more effective information systems programmes and invest substantially more in Information Technology to meet the demanding needs and expectations of customers. The study could be replicated in other sectors of business in order to strengthen the reliability and validity of the results revealed here.Financial Accounting
M. Com. (Accounting)
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Roux, Pieter Alexander. "A risk-based strategic business model for a bank." Thesis, 2012. http://hdl.handle.net/10210/7411.
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D.Comm.Strategic management is a concept that is interpreted in many different ways in business. Banks have all subscribed to the process, but to various levels of application. In a highly competitive market and with the ever changing needs of customers, top management of banks have to utilise all resources optimally through their strategic management processes. What has made the task of banks more complex and difficult is that they have to take risk into account, more particularly interest rate risk. The risk concept has to be integrated into a bank's activities to form an integral part of the strategic management process. How to practically deal with the strategic management process of a bank by taking risk into account, was dealt with. An insight was given into the important role that risk focused strategic management can play in a bank to gain a competitive advantage. The study was limited to the four major bank players within the banks and financial services industry in South Africa, being ABSA, FNB, Nedcor and SBIC. Risk management has had many shifts in focus during modern day banking. On the threshold of the twenty-first century the banking and financial services industry is faced with even greater challenges than before. The industry is in an ever larger global arena which is very competitive and highly regulated. Many large non-bank competitors, that are well equipped with similar products and services, are entering this market. They have low barriers to entry as they have real advantages in that they have substantially less capital requirements and fewer regulatory constraints than those of the banking industry. A risk-based strategic business model was devised and developed by following a top-down approach to a firm. Models and theories were incorporated in this process. An organisation was broken down into activities, inherent risks identified, the levels of risk determined through the assessment of risk factors and elements, with the extent of control being determined. After having conceptually modelled the risk-based SBM, it was put to practice, more specifically for a bank. The risk-based strategic management model was then applied to a bank's strategic management process. The four different phases of the strategic management process, namely strategic information gathering, planning with formulation, implementation and control, were all dealt with. It was ascertained through interviews that all four of the major local banks had subscribed to strategic management, but applied it with different intensities. Strategic management, however, was still in an infant or start-up phase within the banking industry. In conclusion, the assessment of a bank's internal situation, by taking risk into account, will provide it with an objective view on its own capabilities. A competitive edge over its rivals can be obtained by taking calculated business risks and outcontrolling rivals.
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Gibson, Michael David. "Critical success factors for the implementation of an operational risk management system for South African financial services organisations." Diss., 2012. http://hdl.handle.net/10500/5967.
Full textAbstract:
Operational risk has become an increasingly important topic within financial institutions of late,
resulting in an increased spend by financial service organisations on operational risk management
solutions. While this move is positive, evidence has shown that information technology
implementations have tended to have low rates of success. Research highlighted that a series of
defined critical success factors could reduce the risk of implementation failure. Investigations into
the literature revealed that no critical success factors had been defined for the implementation of
an operational risk management system.
Through a literature study, a list of 29 critical success factors was identified. To confirm these
factors, a questionnaire was developed. The questionnaire was distributed to an identified target
audience within the South African financial services community. Reponses to the questionnaire
revealed that 27 of the 29 critical success factors were deemed important and critical to the
implementation of an operational risk management system.Business Management
M. Com. (Business Management)
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"A South African retail bank’s readiness to knowledge management implementation." Thesis, 2015. http://hdl.handle.net/10210/13660.
Full textAbstract:
M.Com. (Business Management)This study focuses on one specific knowledge management process, namely the knowledge sharing process within an operational risk management cluster of a chosen South African retail bank. The study specifically focuses on the bi- weekly meetings that are used as platforms for knowledge sharing sessions. The primary objective of the study, is to ascertain how well the corporate investment bankers, shared services and CIB Africa operational risk management cluster is effectively utilising its meetings in terms of knowledge sharing to ensure that the operational risk management strategies of the chosen bank, provides optimal assurance to its stakeholders that the bank operates within its operational risk appetite. The study is divided into five chapters. The first chapter provides the readers with a thorough understanding of the research problem and topic. The second chapter provides the theoretical framework of the literature pertaining to the context of knowledge management with a specific focus of knowledge sharing. The third chapter discusses the research methodology adopted to conduct the study. The fourth chapter discusses the empirical findings and discussion of the study. Lastly, chapter five provides conclusions, recommendations and possibilities for further research. The theoretical framework of study began by focusing broadly on the concept of knowledge management weaving its way to the specific concept of knowledge sharing. A single case research approach was adopted. All respondents were attendants of the bi-weekly knowledge sharing sessions held in the chosen bank. The empirical findings of the study revealed that there is no common awareness and understanding of the concepts of knowledge management and knowledge sharing within the chosen bank. It was further established that factors such as the role of organisational culture, leadership involvement and participation, and rewards and incentives were key factors that had the ability to either enable or hinder the knowledge-sharing within the chosen bank.
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"Impact of Basel II on the South African banking system." Thesis, 2008. http://hdl.handle.net/10210/273.
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The overall objective of this study was to determine the effect of Basel ll on the South African banking system through possible changes in the way in which a bank conducts its business. This purpose arose from the publication of the new Basel ll Framework on 26 June 2004, which has been adopted for implementation by the South African Reserve Bank. South Africa has set January 1, 2008 as the implementation date for Basel ll. The South African banks have mainly been focussing their efforts on becoming Basel ll compliant. Business line management and marketers have up until now not paid much attention to the likely impact of Basel ll on their markets and product offerings. A literature study was undertaken which included a review of the Basel ll Framework, impact studies and a review of the relevant literature on the topic. The Framework was analysed in order to determine the major impact themes. Once these impact themes were identified, the literature on those areas of impact was researched. The analysis of the Basel ll Framework identified three important themes that will have a significant impact on banks. There will firstly be an impact on market segments and product offerings. Secondly, there will be an internal impact on the banks in the form of increased costs, decision-making and capital management. The final theme identified was the global impact on the banks, especially regarding procyclicality and mergers and acquisitions. vii The research indicates that there will be both winners and losers. Banks that have large retail and mortgage exposures will benefit the most from Basel ll, whereas banks that have large exposures to sovereigns, banks and specialised lending portfolios will be negatively impacted. A capital charge for operational risk will mean that some areas such as corporate finance and asset management will be allocated capital, which was not the case under Basel l. Studies indicate that this new operational risk capital requirement more than outweighs any reduction in credit risk capital requirements. Customers that have high credit ratings are more likely to benefit from lower credit spreads. Similarly customers that have poor credit ratings can expect an increase in their pricing due to the higher capital requirements for these customers, unless they can provide a bank with ancillary revenues. Competition in the retail and mortgage markets will intensify due to the favourable capital requirements for these portfolios. The large South African banks will become takeover targets because of their large exposures to these markets. Basel ll will have a major impact on the way in which banks will do business in the future and as a result banks should view the implementation of the Framework as an opportunity to gain strategic advantages rather than just a compliance obligation.Prof. A. Boessenkool
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Mamvura, Douglas. "A comparative study of how banks responded to a turbulent and chaotic environment in Zimbabwe, 2000 – 2008." Thesis, 2015. http://hdl.handle.net/10500/19167.
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The concept of strategy has advanced significantly from when the emphasis fell on comprehensive, systematic and rational planning. However, many of the assumptions that were embedded in traditional strategy models were deemed to be inadequate and outdated as we approached a new competitive milieu (Maritz, 2010).
Strategic Management is still a comparatively young field and the existing toolbox of concepts and techniques remains woefully inadequate (Grant, 2010). This reality should force a re-examination of the traditional strategy paradigms (Maritz, 2010). The literature review has confirmed the observations by Maritz (2010) and Grant (2010) that indeed current strategic management paradigms or approaches were inadequate for unique business environments obtaining in a developing country in Africa, such as Zimbabwe.
The motivation for this research, therefore, was to identify and recommend strategic management approaches or paradigms applicable to banks operating in a turbulent and chaotic environment.
Based on an extensive literature review, in-depth interviews were conducted with six commercial banks (three that survived the turbulence and three that failed) during the period under review.
The study established that the banks that survived the turbulence had a different strategic management approach from the traditional designed ones. It was also noted in this study that in turbulent environments, strategy-making is birthed through an emergent process. When events are moving at an unprecedented speed, as was happening in Zimbabwe, the time intervals between obtaining information, analysing information, taking decisions and implementing those decisions need to be tightly compressed. The researcher coined this process Strategic Intensity (SI).
On the other hand, diversification as a strategy was found to be very risky for businesses that did not have a strong foundation and that were lacking in the appreciation of the risk complexion of the businesses into which they were diversifying.
This research makes a significant contribution by identifying and recommending Strategic Management approaches applicable to businesses operating in a turbulent and chaotic environment in developing markets such as Zimbabwe.
Furthermore, this research also contributes towards the current debate in academic literature amongst practitioners of strategy, about how strategy is really made in organisations (Maritz, 2010). The debate centres around two opposing views: one associated with strategy-making as a formal, deliberate plan, and the other associated with strategies as evolving, ever-changing sets of outcomes that are eventually realised.
Finally, the researcher proposes that further studies be conducted at the end of this study.Business Management
DBL
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Chiarawongse, Anant. "Financial intermediaries and inter-regional risk-sharing : an empirical investigation /." 2000. http://gateway.proquest.com/openurl?url_ver=Z39.88-2004&res_dat=xri:pqdiss&rft_val_fmt=info:ofi/fmt:kev:mtx:dissertation&rft_dat=xri:pqdiss:9965066.
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"The effect of credit risk management on the profitability of the four major South African banks." Thesis, 2015. http://hdl.handle.net/10210/14705.
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M.Com. (Financial Management)It has been argued that inadequate credit risk management practices and high levels of credit risk was the cause of the 2007 to 2009 global financial crisis, as well as the banking crises over the two past decades, including the 1997 East Asian crisis. As a result, banks have increasingly prioritised credit risk management to ensure acceptable levels of profitability and to keep them from collapsing. However, research on the relationship between credit risk management and profitability in banks in South Africa remains limited. Therefore, this study addressed the question of whether credit risk management has an effect on profitability in South Africa’s four major banks. A quantitative approach was used to establish the relationship between profitability, represented by return on equity (ROE), and credit risk management, represented by two variables, namely capital adequacy ratio (CAR) and the non-performing loans ratio (NPLR). Secondary data for the years 2002 to 2013 was analysed using panel regression and the study concludes that not only does credit risk management have an effect on profitability in South African banks, but that bank size, operating expenses and economic growth also affect the profitability of South African banks. These findings would enable the enhancement of profitability in South Africa through constantly improving credit risk management practices and policies, and by addressing other factors that can negatively affect profitability.
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Kahari, Lynda Rosie. "Impact of Basel Accords in mitigating banking fragility in Africa." Thesis, 2016. http://hdl.handle.net/10539/23702.
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Thesis submitted in fulfilment of the requirements for the degree of Master of Management in Finance and InvestmentMitigating bank fragility provokes interest from governments, regulators, economists, and academia because have a “special role” in the development of an economy, hence the search for effective risk management tools. Basel framework provides risk management tools that use capital requirements, supervision and market discipline. However, this study examines the impact of regulatory capital requirements and macroeconomic variables on net interest margin (efficiency), equity to total assets (solvency), liquidity and growth to total assets for Botswana, Kenya, Mauritius, Namibia, Tanzania and Uganda in the periods 1999 to 2014. Given that the Basel Accords were initially designed for OECD countries; the argument is that they are not suited for African countries because they restrict the development agenda set by governments. However, the trend and regression analysis indicate that regulatory capital ratio has a significant impact on the equity to total assets ratio, liquidity and net interest margin demonstrating their effectiveness in minimising bank fragility. Conversely the results show that regulatory capital ratio does not have an effect on the growth to total assets, indicating that banks should be able to lend out to households and private sector to stimulate economic development. Additionally, the results show that an increase in GDP growth, a declining inflation rate, a falling real interest rate and an appreciating exchange rates have a significant influence on the financial soundness indicators
GR2018
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"The impact of the National. Credit Act (NCA) on risk in the South African banking system." Thesis, 2014. http://hdl.handle.net/10210/11175.
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M.Phil. (Economics)There has been increasing focus on banking system stability worldwide, particularly due to the recent financial crisis experienced and the resultant adverse economic effects. In the case of a developing country like South Africa (SA), the stability of the banking system is even more important as it is crucial for the achievement of the country’s development goals. Credit extension is also a core component for facilitating economic and social development in the country. The downside risk attached to credit extension is that once it reaches a point of being excessive it can have a destabilising effect on the banking system and the economy. SA has experienced a rapid increase in credit extension since 2001, which prompted the implementation of the National Credit Act (NCA), with the intention of regulating the credit industry and improving the practices therein. More recently, further concerns have been raised by regulatory authorities around the possibility of an asset bubble in the SA economy as a result of the level of unsecured credit extended in the country. The objective of this study therefore is to investigate the impact of the NCA on risk, both credit and systemic, in the banking system. This is important, as investigating and understanding the impact of credit controls, like the NCA, on risk in the banking system is critical to supporting the SA development agenda. The findings of this study show that the NCA has been successful in reducing credit risk in the banking system, even though this was by default and not through the stated intention of the Act. This was achieved through the introduction of the affordability requirement into the credit assessment process. This study highlights however, that there are still areas of improvement which can be made to the NCA to increase its effectiveness in preventing excessive credit extension.
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Moyo, Delani. "A critical analysis of how CBZ Bank Ltd can gain competitiveness, sustenance and growth in the hyper-inflationary environment." Thesis, 2006. http://hdl.handle.net/10413/9928.
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The aim of the study was to determine whether CBZ Bank's strategic intent was aligned to action on the ground and how the bank could consolidate its
competitiveness in the market. Organisations in the services industry rely on their human resources to manage other resources in order to deliver superior service. The employees are also responsible for executing operational strategies on the ground and getting feedback directly from the market. Branch employees are directly in the competition zone and they can provide invaluable insight into the competitive dynamics of the banking industry. In order to obtain the employees' perspective of the
bank's strategic intent, whether events on the ground are reflective of it and ascertain the competitiveness of the bank, responses from thirty one (31) supervisory and managerial cadres were used. The population frame was composed of (five) 5 senior managers, thirteen (13) middle managers and thirty three (33) supervisory personnel. A self administered questionnaire was e-mailed to the targeted fifty one (51) staff members. Thirty one (31) responses were received. The choice of the sample was
driven by the fact that strategic business unit leaders drive the bank's strategy hence they are able to shed invaluable information regarding the bank. Eighty two (82%) of the respondents indicated that the bank's strategic intent was on course as opposed to eighteen (18%) who felt otherwise. Seventy one (71 %) of the respondents also felt that the bank was competitive. A salient feature of this study was that the majority of
respondents concurred that the bank's strategic intentions were on track. However due to the volatile and hyper inflationary conditions prevailing, shareholder value should be preserved by adopting growth strategies that hedge against the effects of inflation. Such strategies should include creating new external markets by going regional and international.Thesis (MBA)-University of KwaZulu-Natal, 2006.
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Paul, Jean Michel. "The impact of BIS credit risk regulations on international banks and real estate markets in Japan." 1999. http://catalog.hathitrust.org/api/volumes/oclc/44054989.html.
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