• The Journal of Asian Finance, Economics and Business
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• v.9 no.8
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• pp.183-196
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• 2022

Bank stability serves as a prerequisite for the smooth functioning of economic and financial activities in the country. Banks face numerous risks, and liquidity plays an essential role in determining a bank's long-term growth and financial stability. By using the sample of 70 banks of the Gulf Cooperation Council, this study examines the association between funding the liquidity and the creation of liquidity and their impact on bank stability. Firstly, the reciprocal relationship reveals between funding the liquidity and the creation of liquidity by employing the 2SLS regression model. Further, by employing the dynamic GMM model, the research finds that funding liquidity is significant and positively influences bank stability. However, bank stability is significantly negatively influenced by the creation of liquidity, but the combined effect of funding the liquidity and creation of liquidity positively explains the bank stability. Additionally, this study reveals that managerial optimism biases contribute to determining the bank's liquidity and long-term stability. The finding of this study supports the executives, policymakers, and management of banks in understating liquidity risks, efficiency, and bank stability. The findings support regulatory guidelines mainly by the Basel III framework, which places more importance on the joint management of funding the liquidity and creation of liquidity in the economy.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.2
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• pp.317-328
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• 2021

This study examines the impact of bank competition and efficiency in the financial stability of the banking sector in Bangladesh. The study used the Lerner index and the Boone indicator to represent the bank competition, while the non-performing loan (NPL) and Z-score are used to represent financial stability. The secondary data were collected from the annual reports of 28 DSE listed commercial banks of Bangladesh over the period from 2011 to 2018. Using a dynamic panel GMM model, the study found the Lerner index is significantly negatively related with Z-score, which means that higher bank competition results in higher bank stability. It is also seen that higher cost efficiency results in higher bank stability. The Lerner index has negative, but insignificant impact on NPL. Similarly, using the Boone indicator, this study found that lower competition increases NPL. In terms of the Z-score, the Boone indicator found that 1 unit of increment results in decrease of the Z-score by 6.15 units. The study suggests that, as more competition results in more financial soundness, the banking industry competition should be ensured by policymakers or regulators. Banks could enhance financial stability by cost control to achieve cost efficiency as well as by improving loan-to-asset ratio.

• The Journal of Asian Finance, Economics and Business
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• v.9 no.2
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• pp.1-14
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• 2022

The implications of bank-specific risks and macroeconomic risks on the growth, profitability, and stability of Islamic and conventional banks are examined and compared in this article. The study also investigates whether corporate governance mitigates the effects of both bank-specific and macroeconomic risks on Islamic and conventional banks' development, profitability, and stability. For the period 2007-2019, we examined a panel data set of 22 banks in Pakistan, including both Islamic and conventional banks. We discovered considerable evidence that both bank-specific risks and macroeconomic risks have negative effects on the growth, profitability, and stability of Pakistani banks using a dynamic panel data estimator, the two-step Generalized Method of Moments (GMM) approach. Furthermore, the findings show that bank-specific and macroeconomic risks have different consequences in both types of banking. The impacts of liquidity risk, operational risk, capital risk, inflation risk, and exchange rate risk are higher for Islamic banks than for conventional banks. Conventional banks, on the other hand, are more vulnerable to credit risk and interest rate risk. Finally, the findings show that good corporate governance reduces the negative consequences of both categories of risks on bank development, profitability, and stability. This is true for Islamic and conventional banks alike.

• Journal of Distribution Science
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• v.20 no.9
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• pp.23-28
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• 2022

Purpose: Research on banking sustainability plays an important role in helping banks understand the level of risk in different types of companies. Therefore, this study was conducted to determine the factors affecting the sustainability of Joint Stock Commercia l Banks in Vietnam. Research design, data and methodology: The following theories, the factors affecting the bank's sustainability include: Business model diversification (income diversification), bank size, loan ratio, and net interest margin. Data was collected from Joint Stock Commercial banks in Vietnam from 2015 to 2019. With GLS model on panel data with banks listed on Vietnam stock exchange. Results: The analysis results show that net interest income has a positive impact on the sustainable business results of banks through the rate of return on total assets (ROA). The non-interest income hasn't impact on bank stability. From this result, there aren't positive signs of income diversification in banks. At the same time, with the obtained results, the study also provides a policy implication for banks. Conclusions: The study also provides some policy implications to improve the bank stability. Diversifying income in banks is necessary, but how to make it influential banks has not yet been done. Therefore, the adjustments in non-interest business activities need to be carefully considered by banks.

• The Journal of Asian Finance, Economics and Business
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• v.2 no.4
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• pp.31-38
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• 2015

During the last two decades the idea that central bank independence and transparency helps to maintain price stability, became popular among economists and central bankers. Many countries' governments give their monetary authorities higher independence and transparency to achieve the price stability goal. However, emerging countries such as Kazakhstan, suffer from high inflation. This inflation occurs largely due to a low level of independence and transparency of central banks. This research project measures the current level of independence and transparency of central bank of Kazakhstan. Indices were used to measure central bank independence and transparency. Central bank independence was measured by two types of indices: based on central bank laws (legal independence) and based on central banks governor's turnover (TOR). Developing countries have a weak legal framework, implying that a legal independence index cannot be appropriate to use as a measures of actual independence. Therefore, by paying attention to the other two indices, we can say that the central bank of Kazakhstan has a low level of independence and transparency. This, in turn, can be one of the causes of high inflation in Kazakhstan.

• KDI Journal of Economic Policy
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• v.38 no.1
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• pp.53-70
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• 2016

This paper examines market concentration and its effect on competition in the Chinese commercial banking market. This study also investigates how changes in competition have affected the financial stability of Chinese commercial banks. To test the competitive conditions, we obtained the H statistic of the Panzar-Rosse model from a revenue function equation. The degree of financial stability is estimated by the Z-score formula. The Chinese banking industry has become an increasingly less concentrated market with an increased number of banks. Along with a decreased market concentration, competition in the Chinese banking industry has improved moderately. However, its market structure is still far from a competitive market. An individual bank's ability to earn higher markup or charge a higher net interest margin contributes to its financial soundness, although a higher degree of market concentration may have negative effect on the financial stability of the entire banking system.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.1
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• pp.833-840
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• 2021

This paper examines the effect of the interest rate set by Bank Indonesia on financial system stability as measured by the credit gap in Indonesia for quarterly data for the period 1976 Q1 to 2019 Q4. We suppose that the relationship between the Central Bank rate and the credit gap is non-linear. Hence, this study applies a smooth transition regression (STR) model to investigate the relationship between these variables. Our results are: first, by performing STR estimation we obtained a threshold level of Central Bank rate of 2.01. Second, a decrease in the Central Bank rate results in a reduction in the credit gap when the Central Bank rate is above or below the threshold level. The effect of the Central Bank rate is five times greater for the high regime than for the low regime. Third, we find evidence that the effect of the exchange rate, economic growth, inflation, and GDP per capita on the credit gap for the high regime is the opposite of the low regime. We suggest that policymakers need to keep the Central Bank interest rate low and stable so that the role of the bank as a financial intermediary remains stable and conducive to strengthening financial stability.

• Journal of Korea Water Resources Association
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• v.56 no.12
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• pp.895-903
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• 2023

This study investigates the impact of riparian vegetation in the floodplain on channel stability, changes in bend curvature, and meandering channel migration. In channels with riparian vegetation, over time, meander width remains relatively constant, but selective bank erosion leads to meander development and downstream movement. During this process, bank erosion and changes in the riverbed are not significant, and the channel maintains relatively constant conditions with reduced sediment discharge and minimal variability. As the density of vegetation increases, bank erosion rates decrease. The erosion rates along the riverbanks increase with the density of vegetation on the floodplain, thus affecting the development of meanders. This factor notably contributes to enhancing riverbank stability and influencing channel changes through floodplain vegetation. Bank erosion rates and dimensionless bend curvature are greatest when there is no riparian vegetation but decrease in conditions with vegetation. Furthermore, the relationship between lateral migration rate and dimensionless bend curvature is similar to that of bank erosion rates. Therefore, riparian vegetation enhances channel stability, influencing bank erosion, meander curvature, and meander migration.

• Journal of Korean Society of Forest Science
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• v.101 no.1
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• pp.130-137
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• 2012

This study has conducted to develop new gabion wall systems with vegetation base materials for stream bank stability and rapid rehabilitation. Vegetation base materials are primarily compounded with fine soil, organic composts and peat moss as plant fibers, a water retainer and a soil improver. Normally gabion wall systems resist the lateral earth pressures or stream power by their own weight. Therefore, fill material must have suitable weight, compressive strength and durability to resist the loading, as well as the effects of water and weathering. In this project, 100 to 200-mm clean, hard stones are basically specified, and about 50-mm rubbles are also used. Test application of new gabion wall system carried out in the stream bank of a small stream in the Gwangreung experimental forest, belonging to Korea Forest Research Institute (KFRI) in December 16th, 2006. As a result of the analysis of hydraulic stability of new gabion wall system, gabion wall system has highest threshold shear stress when the gabion wall covered by vegetation. New gabion wall system is highly resistant to sliding and overturning because safety coefficients exceed 1.5. As a result of term of slope stability analysis of new gabion wall system by Bishop and Fellenius methods, stability of stream bank was highly increased after the construction of gabion wall. Therefore, new gabion wall system is effective to stabilize unstable stream bank.

• Journal of Korea Water Resources Association
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• v.55 no.10
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• pp.801-810
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• 2022

This study investigates the evolution processes of alternate bars in the channel with bank stability by vegetation by laboratory experiment. Laboratory experiments are conducted to elucidate the behavior of alternate bars by the influence of riparian vegetation on the rivers with erodible banks. To control bank stability of the channel, the actual vegetation, alfalfa, is grown by adjusting the density of alfalfa on the flood plain. As the vegetation density increases in the flood plain, the bank erosion rates and the channel widening rates decrease and the bank stability increases. The alternate bars migrate slow downstream over time. Moreover, the bars in a channel with strong banks migrate rapidly, which is related with the aspect ratio, that is, width to depth ratio. The bar wavelength decrease with vegetation density. Our laboratory experiments show that the behavior of bars differ according to bank strength.