• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.36
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• pp.195-262
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• 2007

This paper attempts to assess the Basel Committee's bank supervisory standards and capital adequacy rules, and thereby rethink whether global convergence in banking regulation is desirable. To that end, it seeks to address the impetus for the creation of the Basel Committee, and explore driving forces behind the internationalization of bank regulatory and supervisory standards. Following the historical and theoretical analysis of the internationalization of bank regulatory standards, the movement toward global standards in banking is reviewed. More importantly, this paper seeks to explore the origins of the Basel Accord on bank capital adequacy. To do so, it largely relies on current theories on the process of negotiating the capital adequacy standards in the areas of political science and international political economy. At this point, this study takes a position as a break against the force of international market failure logic that has enjoyed an exceptionally positive reception among economists, political scientists, and legal experts. Nonetheless, it does not intend to freeze the international coordination and cooperation of banking regulation. Given the understanding of the politics behind the creation of the Basel Accord, this paper evaluates the Basel Accord of 1988 and the new capital adequacy framework(Basel II), and then moves beyond the assessment of the capital adequacy standards In doing so, this study draws lessons from Basel in search of a just world order in the global finance.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.11
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• pp.747-757
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• 2020

This study investigates the impact of bank regulation and supervision on the efficiency of banking sectors on 108 Islamic banks from 26 countries offering Islamic banking and finance products and services. The technical efficiencies of individual Islamic banks have been analyzed using the data envelopment analysis method (DEA). The ordinary least square estimation method is employed to examine the impact of country supervision and regulation on the technical efficiency of Islamic banks. The empirical findings suggest that supervisory power, activity restrictions and private monitoring positively influence the efficiency of Islamic banks. The study revealed that Islamic banks that are operating in Middle East and North Africa (MENA) and middle-income countries are more technically efficient given the less stringent rules on capital requirement and we found that there is statistically significant evidence that higher capital requirements are negatively associated with the efficiency of Islamic banks. The empirical findings of this study are expected to help policy-makers and government officials to better understand how their decisions affect the performance.

• The Journal of Asian Finance, Economics and Business
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• v.9 no.6
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• pp.23-32
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• 2022

This paper examines the effects of regulatory capital on a bank's profitability and risk. We employ annual data from Vietnamese commercial banks from 2005 to 2020 and use the dynamic GMM regression method to address the potential endogeneity issue, more suitable for panel data with relatively low time dimensions. Our panel regressions indicate that higher regulatory capital would significantly improve the bank's profitability and lower the bank risks. In particular, a one percent increase in the regulatory capital would significantly increase the bank's return on assets by 1.9%. We further explore the heterogeneous impacts of regulatory capital on the Vietnamese bank's performance across bank characteristics. We find that smaller, non-state-owned and non-listed banks would benefit from stringent regulatory capital requirements. The improvements in bank performance are mainly driven by reductions in the risk premium of the banks, resulting in lower funding costs and higher profitability. These findings are essential since Vietnam, as an emerging market, has only implemented the Basel II reform recently on a stable and fast-growing background rather than as a reaction to the global financial crisis. Thus, our empirical results support stringent regulatory capital in emerging countries to ensure a stable banking sector and boost economic growth.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.12
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• pp.519-551
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• 1999

When an issuing bank issues a documentary credit, it must decide if the reimbursement will be a direct or simple or a bank-to-bank reimbursement. This decision is based on the bank that is nominated to pay, incur a deferred payment undertaking, accept drafts or negotiate. If an issuing bank decided bank-to-bank reimbursement, it must include the information in the credit instructing the nominated bank on how to obtain reimbursement. This instruction includes the name of the reimbursing bank, an indication that the reimbursement is subject to the Uniform Rules for Bank-to-Bank Reimbursements Under Documentary Credits ('URR'), ICC Publication 525 and any additional information that affects the nominated bank's ability to receive reimbursement. Until recently, reimbursements were the subject of outline regulation by Article 19 of the Uniform Customs and Practice for Documentary Credits ('UCP') and national law. Now, however, the International Chamber of Commerce has drafted URR, designed to emulate the harmonization of rules governing documentary credits achieved by the UCP. The URR are complementary to the UCP, which they are not intended to override or change. They became effective on July 1, 1996. The purpose of this study is to promote understanding on the Uniform Rules for Bank-to-Bank Reimbursements under Documentary Credits. In this paper, I studied the following subjects:(1) Bank-to-Bank Reimbursements tranaction under Documentary Credits, (2) Meaning of the URR's promulgation, (3) Analysis on the URR's Article. (1) General provisions and definitions, (2) Liabilities and responsibilities, (3) Form and notification of authorisations, amendments and claims, (4) Miscellaneous provisions.

• International Commerce and Information Review
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• v.11 no.1
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• pp.27-43
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• 2009

This article explored the customers protection regulations in electronic payment system by Article 4A of the UCC and EFTA of 1978 and by Electronic Financial Transaction Act of Korea. Both Korea and America have various regulations to protect concerned parties(customers). For examples, the errors of payment order, money-back guarantee, and unauthorized payment order etc. First, this Article focuses on the allocation of risk of loss caused by ambiguous term in payment orders that do not express the subjective intention of the senders. Second, most rights and obligations created by Article 4A of America can be varied with the agreement of affected parties. But there are some exceptions. The exceptions include the money-back guarantee. So Receiving bank have to pay to originator the ordered money included interest. However, Korea also has money-back guarantee but bank do not pay interest to sender. Lastly, Electronic Funds Transfer Act of 1978 and Regulation E has US$ 50 regulation in order to protect customers on the unauthorized payment order. Article 4A imposes duty to detect unauthorized payment orders to originator in relation to the establishment of commercially reasonable security procedure, while Korean law imposes the duty to notify the bank in order to decrease the loss resulted from unauthorized payment order.

• Proceedings of the KIEE Conference
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• 2001.07a
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• pp.285-288
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• 2001

In this paper we proposed the on line volt/var control schemes of the load Tap Changer (LTC) transformer and shunt capacitor bank for distribution volt/var regulation. In the existing volt/var control of the distribution substation, the voltage of feeders and var of distribution systems is mainly controlled by the LTC transformer tap position and on/off status of the shunt capacitor. The LTC and shunt capacitor bank has discrete operation characteristics and therefore it is very difficult to control volt/var at the distribution networks within the satisfactory levels. Also there is limitation of the operation times of the LTC and shunt capacitor bank because it is affects on their functional lifetime. The proposed volt/var control algorithm determine an optimal tap position of LTC and on/off status of shunt capacitors at a distribution network with the multiple feeders. The mathematical equations of the proposed method are introduced. Simple case study was performed to verify the effectiveness of the proposed method.

• East Asian Journal of Business Economics (EAJBE)
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• v.9 no.3
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• pp.15-28
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• 2021

Purpose -In the credit transaction, the issuing bank must examine the documents to pay the credit amount. In order to smoothly execute the credit transaction, document review is a key element, so the 5th revised credit unification rule specifically defines the document review procedure. Research design, data, and methodology - The document review procedure specified in the UCP Rules can be largely divided into the document review period and the rejection procedure for inconsistent documents. First of all, confusion was caused by the ambiguous regulation.. Result - With regard to the document review period, in the actual credit transaction, the issuing bank often negotiates with the issuing client about the waiver of the document inconsistency. Next, in the process of notifying the rejection of inconsistent documents, the issuing bank shall send the rejection notice. Conclusion - This study suggests that the requirement to list all inconsistencies makes it impossible for the issuing bank to further notify the refusal, thereby limiting the right to defend against inconsistencies not listed in the first refusal notice and consequently having the effect of matching them. In addition, the issuing bank's rejection notice is closely related to the beneficiary's exercise of the right to replenish documents.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.12
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• pp.721-730
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• 2020

This study investigates the impact of the country's governance on the revenue efficiency of 108 Islamic banks from 26 countries offering Islamic banking and finance products services. The technical efficiencies of individual Islamic banks have been analyzed using the Data Envelopment Analysis method. The data will be pooled across the selected countries and utilize the intermediation approach. The Ordinary Least Square estimation method is employed to examine the impact of country supervision and regulation on the technical efficiency of Islamic banks. As robustness check, the study examines the impact of the level of bank regulations and supervision on the efficiency of Islamic banks operating in different income-level countries. The results found that the stricter the supervisory power, the less strict capital requirement, the tighter the restrictions on non-banking activities, and the stricter the private monitoring enhance statistically significantly the level of efficiency of Islamic banks. In upgrading the regulations and supervision of the Islamic banks, the existing regulatory framework based on the Basel Committee on Banking Supervision (BCBS) must be complemented with the prescriptions on Islamic banking or Shariah compliance diligently, so that the Islamic banks could be regulated accurately and further improve the technical efficiency of their operations.

• The Journal of Fisheries Business Administration
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• v.47 no.1
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• pp.87-100
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• 2016

Suhyup Bank became to be subject to regulation of capital ratio by Basel III which was introduced in order to enhance stability of the financial institution. Accordingly, Suhyup Bank will require recapitalization. It is important to estimate the risk-weighted assets in calculating of Suhyup Bank's recapitalization scale. Therefor, this study aimed to present a scientific model as estimated the risk-weighted assets. Risk-weighted assets are calculated by applying different risk weights for loans, may have a certain relationship with the loans. Results show that the risk-weighted assets is affected by the previous year's risk-weighted assets and influenced the increase in loans during the year. Since the required basic capital adequacy ratio was specified, the risk-weighted assets should be predicted reasonably. Accordingly, on this study it was tried to derive the accounting equation to predict the risk-weighted assets based on management data of a bank since introduction of Basel III. As the risk-weighted assets were weighted differently according to the type of loans, if the accounting equation is derived by using the type of loans, then it would be helpful for the risk management of banks in the long-term. According to this, the increase of loan would be predicted on the basis of past management performance of Suhyup Bank, and for this reason, the future risk-weighted assets of Suhyup Bank were predicted. The result of this study was showed that 98.3% of risk-weighted assets of the previous year, 62.4% of the secured loan changes and 95.1% of the credit loan changes affected risk-weighted assets.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.12
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• pp.245-254
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• 2020

This study investigates the impact of the country's governance on the revenue efficiency in the banking sectors of 42 Islamic banks in 15 countries offering Islamic banking and financial services. Technical efficiencies of individual Islamic banks were analyzed using the Data Envelopment Analysis method. The Ordinary Least Square estimation method is employed to examine the impact of country supervision and regulation on the technical efficiency of Islamic banks. With robustness check, the study assesses the impact of bank regulations and supervision on the efficiency of Islamic banks operating in different regions. The empirical findings suggest that supervisory power, activity restrictions, and private monitoring positively influence the efficiency of Islamic banks. On the other hand, we observe a negative impact of capital requirement on Middle East and North Africa (MENA) countries. The findings indicate that supervisory power, activity restrictions, and private monitoring positively influence the efficiency of Islamic banks in Asia, but vice versa on capital requirement in MENA countries. This study will contribute to the body of knowledge by assessing the types of reforms in bank regulations and supervision that work best for Islamic banks in order to increase the level of efficiency and the level of regulations and supervision of Islamic banks.