scholarly journals Non-Traditional Systemic Risk Contagion within the Chinese Banking Industry

2021 ◽  
Vol 13 (14) ◽  
pp. 7954
Author(s):  
Tonmoy Choudhury ◽  
Simone Scagnelli ◽  
Jaime Yong ◽  
Zhaoyong Zhang
Keyword(s):  
Systemic Risk ◽  
Banking Sector ◽  
Banking Industry ◽  
Risk Measures ◽  
Banking System ◽  
Policy Implications ◽  
System Stability ◽  
Chinese Banking Industry ◽  
Contagion Risk ◽  
Chinese Banking

Systemic risk contagion is a key issue in the banking sector in maintaining financial system stability. This study is among the first few to use three different distance-to-risk measures to empirically assess the domestic interbank linkages and systemic contagion risk of the Chinese banking industry, by using bivariate dynamic conditional correlation GARCH model on data collected from eight prominent Chinese banks for the period 2006–2018. The results show a relatively high correlation among almost all the banks, suggesting an interconnectedness among the banks. We found evidence that the banking system is exposed to significant domestic contagion risks arising from systemic defaults. Given that Chinese markets deliver weak signals of forthcoming stress in banking sectors, new policy intervention is crucial to resolve the hidden stress in the system. The results have important policy implications and will provide scholars and policymakers further insight into the risk contagion originating from interbank networks.

scholarly journals Risk, competition, efficiency and its interrelationships: evidence from the Chinese banking industry

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yong Tan ◽  
Vincent Charles ◽  
Doha Belimam ◽  
Shabbir Dastgir
Keyword(s):  
Credit Risk ◽  
Banking Sector ◽  
Banking Industry ◽  
Bank Competition ◽  
Content Type ◽  
Frontier Analysis ◽  
Different Types ◽  
Chinese Banking Industry ◽  
The Impact ◽  
Chinese Banking

PurposeThis study investigates the interrelationships between efficiency, competition and risk in the Chinese banking industry.Design/methodology/approachParametric stochastic frontier analysis is used to estimate bank efficiency; the Lerner index is used as the competition indicator; accounting ratios and a translog function are used to measure different types of risk and finally, the three-stage least square estimator is used to investigate the interrelationships.FindingsThe results of this study show that the impact of competition on different types of risk is significant and positive, while there is a significant and positive impact of credit risk, liquidity risk and capital risk on bank competition. In addition, the findings demonstrate that the interrelationships between efficiency and competition are significant and negative. The authors do not find any robust interrelationships between different types of risk and different types of efficiency; the authors find that diversification and higher levels of profitability reduce bank credit risk. The results suggest that a higher developed banking sector reduces the level of bank competition in China.Originality/valueThis is the first piece of research that comprehensively investigates the interrelationships between different types of risk, competition and different efficiencies in China.

scholarly journals Stability and profitability in the Chinese banking industry: evidence from an auto-regressive-distributed linear specification

2016 ◽  
Vol 13 (4) ◽  
pp. 120-129 ◽  
Author(s):  
Yong Tan ◽  
John Anchor
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Banking Industry ◽  
Generalized Method Of Moments ◽  
Least Square ◽  
System Gmm ◽  
Auto Regressive ◽  
The Government ◽  
Chinese Banking Industry ◽  
Chinese Banking

The important role played by the Chinese commercial banks in the development of China’s economy has made the government and banking regulatory authority concerned about the performance of these banks.Indeedthe stability of the banking sector has attracted greater attention since the financial crisis of 2007-2009. The principal objective of this study is to investigate the inter-relationships between profitability and stability in the Chinese banking industry. Using a sample of Chinese commercial banks over the period 2003-2013, the study examines the inter-relationships under an auto-regressive-distributed linear model. Both Z-score and stability inefficiency were used as measures of stability, while Return on Assets (ROA) was used as the indicator of profitability. Different types of Generalized Method of Moments (GMM) estimators including difference GMM, one-step system GMM, two-step system GMM as well as two-step robust GMM were used. In order to the check the robustness of the results, alternative econometric techniques were used, such as ordinary least square (OLS) estimator, between effect estimator, as well as fixed effect estimator. The results show that higher insolvency risk/lower bank stability leads to higher profitability of Chinese commercial banks and also that higher profitability leads to higher bank fragility. Keywords: bank profitability, bank risk, China. JEL classification: G21, C23

scholarly journals Competition, Innovation, Risk-Taking, and Profitability in the Chinese Banking Sector: An Empirical Analysis Based on Structural Equation Modeling

2016 ◽  
Vol 2016 ◽  
pp. 1-10 ◽  
Author(s):  
Ti Hu ◽  
Chi Xie
Keyword(s):  
Structural Equation Modeling ◽  
Risk Taking ◽  
Structural Equation ◽  
Banking Sector ◽  
Banking Industry ◽  
Market Competition ◽  
Equation Modeling ◽  
Chinese Banking Industry ◽  
New Perspective ◽  
Chinese Banking

We introduce a new perspective to systematically investigate the cause-and-effect relationships among competition, innovation, risk-taking, and profitability in the Chinese banking industry. Our hypotheses are tested by the structural equation modeling (SEM), and the empirical results show that (i) risk-taking is positively related to profitability; (ii) innovation positively affects both risk-taking and profitability, and the effect of innovation on profitability works both directly and indirectly; (iii) competition negatively affects risk-taking but positively affects both innovation and profitability, and the effects of competition on risk-taking and profitability work both directly and indirectly; (iv) there is a cascading relationship among market competition and bank innovation, risk-taking, and profitability.

scholarly journals Banking Sector Reforms: Policy Implications and Fresh Outlook

2011 ◽  
Vol 2 (2) ◽  
pp. 55-64
Author(s):  
R. K. Uppal
Keyword(s):  
Public Sector ◽  
Banking Sector ◽  
Banking Industry ◽  
Banking System ◽  
Policy Implications ◽  
Foreign Banks ◽  
Public Sector Banks ◽  
Global Challenges ◽  
The Future ◽  
Global Banks

Various reform measures introduced in India have indeed strengthened the Indian banking system in preparation for the fresh global challenges ahead. The present paper reviews the banking sector reforms policy, crucial issues and agenda for the future. On the basis of certain parameters, like productivity, profitability and NPAs’ management, the paper concludes that foreign banks and new private sector banks are much better in performance as compared to our nationalized banks in the post-banking sector reforms period. The paper ends with the future agenda for the Indian banking industry, particularly for public sector banks to make them efficient and strong, to compete with the global banks.

scholarly journals CHALLENGES FACING ISLAMIC BANKING IN IRAN: EVALUATION AND POLICY IMPLICATIONS

2020 ◽  
Vol 6 (3) ◽  
Author(s):  
Hossein Meisamy ◽  
Hassan Gholipour
Keyword(s):  
Delphi Study ◽  
Banking Sector ◽  
Banking Industry ◽  
Banking System ◽  
Policy Implications ◽  
Islamic Banking ◽  
Consensus Building ◽  
Relative Importance ◽  
Free Banking ◽  
Auditing Standards

Iran is one of the few countries that has instituted shariah-compliant banking nationwide and does not have a conventional banking sector. However, since the Riba-Free Banking Act (RFBA) was passed and put into practice in 1983, the Iranian Islamic banking system has experienced some significant challenges and shortcomings. The main purpose of this paper is to identify the various impediments facing the Iranian Islamic banking industry and to suggest a prioritized listing of these challenges. To achieve this goal, a three-round Delphi study (a method designed to aid consensus building) is used to determine the major challenges and rank them based on relative importance. The research panel consulted consists of 32 Iranian Islamic banking experts with in-depth knowledge and experience. The results show that the top five challenges to the Islamic banking system in Iran are (1) the governmental attitude towards Islamic banking; (2) lack of competition; (3) not revising the law (RFBA); (4) lack of shariah supervision; and (5) lack of accounting and auditing standards. This paper contributes to the literature addressing Islamic banking by critically analysing the more than three decades of Iranian experience in implementing shariah-compliant banking.

scholarly journals The Thinking Path of Deepening Transformation and Innovation of Chinese Banking Industry under the Background of “New Normal” Economy

2019 ◽  
Vol 2 (4) ◽  
Author(s):  
Guaili Zhang
Keyword(s):  
Customer Value ◽  
Banking Industry ◽  
Operation Mode ◽  
Banking System ◽  
System Innovation ◽  
Supply Side ◽  
Comprehensive Management ◽  
Chinese Banking Industry ◽  
New Situation ◽  
Chinese Banking

This paper analyzes the three big impact in the development of Chinese banking industry and discusses the limitations of financial innovation of Chinese banking industry. The results showed that: (1) deepening the banking system innovation to adapt to the new situation; (2) improving customers’ experience by deepening model innovation of the internet financial; (3) improving intensive of bank branch operation and the intelligent of network service with the aid of informatization; (4) Providing individualized, characteristic and differentiated services for high-quality customers of banks and enhancing customer value through lightweight network outlets; and (5) Adapting to the development of new entity economy by comprehensive management, optimizing the operation mode of outlets, and strengthening the supply side reform of commercial banks themselves.

EMERGING TRENDS IN BANKING SECTOR - ITS CHALLENGES AND OPPORTUNITIES

2018 ◽  
Vol 6 (26) ◽  
Author(s):  
Karigoleshwar .
Keyword(s):  
Banking Sector ◽  
Banking Industry ◽  
Banking System ◽  
Major Change ◽  
Commercial Banking ◽  
Foreign Banks ◽  
Emerging Trends ◽  
Reserve Bank ◽  
Challenges And Opportunities ◽  
Multiple Regions

In financial sector the banking industry is the largest player, has also been undergoing a major change. Today the banking industry is stronger and capable of withstanding the pressures of competition. Today, we are having a fairly well developed banking system with different classes of banks – public sector banks, foreign banks, private sector banks – both old and new generation, regional rural banks and co-operative banks with the Reserve Bank of India as the fountain Head of the system. In the banking field, there has been an unprecedented growth and diversification of banking industry has been so stupendous that it has no parallel in the annals of banking anywhere in the world. The banking industry has experienced a series of significant transformations in the last few decades. Among the most important of them is the change in the type of organizations that dominate the landscape. Since the eighties, banks have increased the scope and scale of their activities and several banks have become very large institutions with a presence in multiple regions of the country.' The paper examines the new trends in commercial banking. The present era the cashless transactions, E-cheques, mobile wallets. The paper attempts to present the emerging trends and its challenges that recently emerged in the banking sector with special emphasis on digitization. It will be useful to the academicians, banking and insurance personnel, students and researchers. Common readers also know the latest innovations in banking sector

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