Ring-Fencing, Banking Reform, and Taxpayer Exposure

2016 ◽  
Author(s):  
Oz Shy ◽  
Rune Stenbacka
Keyword(s):  
Banking Reform

Banking reform in China: International standards and Chinese specifics

2008 ◽  
Vol 58 (4) ◽  
pp. 403-426
Author(s):  
Z. Kudrna
Keyword(s):  
Best Practices ◽  
Development Policy ◽  
Institutional Reform ◽  
International Standards ◽  
State Control ◽  
Banking Reform ◽  
Reform Strategy ◽  
Regulatory Frameworks ◽  
Bank Governance ◽  
Credit Boom

This paper reviews the progress of banking reforms in China. Since 2002, the reform strategy has relied on publicly-financed bailouts, implementation of international best practices in bank governance and regulation, and listing of major banks in Hong Kong. The three largest banks have been stabilised, but we find little reason to expect this to be sustainable. Prudential indicators are comparable to international averages, but this is an outcome of bailouts and ongoing credit boom. Reforms of bank governance and regulatory frameworks that would alter banker’s incentives are implemented in a selective manner; principles that concentrate key powers in the centre are implemented vigorously, whereas those that require independent boards and regulators are ignored. Selectiveness of institutional reform means that the largest banks remain under state control and can be used as means of development policy for the better or the worse.

Enterprise risk management and sustainability of banks performance

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Babajide Oyewo
Keyword(s):  
Risk Management ◽  
Banking Sector ◽  
Management Practice ◽  
Enterprise Risk Management ◽  
Annual Reports ◽  
Banking Reform ◽  
Content Type ◽  
Enterprise Risk ◽  
The Impact

PurposeThis study investigates firm attributes (namely level of capitalisation, scope of operation, organisational structure, organisational lifecycle, systemic importance and size) affecting the robustness of enterprise risk management (ERM) practice, the extent to which ERM affects the performance of banks and the impact of ERM on the long-term sustainability of banks in Nigeria. This was against the backdrop that the 2012 banking reform was a major regulatory intervention that mainstreamed ERM in the Nigerian banking sector.Design/methodology/approachThe study employed a mixed methodology of content, trend and quantitative analyses. Ex post facto research design was deployed to analyse performance differential of banks, with respect to the implementation of ERM, over a 10-year period (2008–2017). A disclosure checklist developed from the COSO ERM integrated framework was used to assess the robustness of ERM by content-analysing divulgence on risk management in published annual reports. The banking reform periods were dichotomised into pre- (2008–2012) and post- (2013–2017) reform periods. Jonckheere–Terpstra test, independent sample t-test and Mann–Whitney test were applied to analyse a total of 1,036 firm-year observations over the period 2008–2017.FindingsResult shows that bank attributes significantly affecting the robustness of risk management practice are level of capitalisation, scope of operation, systemic importance and size. Performance of banks improved slightly during the post-2012 banking reform period. This suggests that as banks consolidate on the gains of ERM, benefits of the regulatory policy on risk management may be realised in the long run. Result also shows that ERM enhances long-term performance, connoting that effective risk management could serve as a competitive strategy for surviving turbulence that typically characterises the banking sector.Practical implicationsThe emergence of level of capitalisation, scope of operation, systemic importance and size as determinants of ERM provides empirical evidence to support the practice of reviewing the capital requirements for banking business from time to time by regulatory authorities (i.e. recapitalisation policy) as a strategy for managing systemic risk. Top management of banks may consider instituting mechanisms that will ensure risk management is given prominence. A proactive approach must be taken to convert risks to opportunities by banks and other financial institutions, going forward, to cope with the vicissitudes of financial intermediation.Originality/valueThe originality of the study stems from the consideration that it provides some new insights into the impact of ERM on banks long-term sustainability in a developing country. The study also contributes to knowledge by exposing the factors determining the robustness of risk management practice. The study developed a checklist for assessing ERM practice from annual reports and other risk management disclosure documents. The paper also adds to the scarce literature on risk governance and risk management.

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