18,270 research outputs found
Understanding the high profitability of Chinese banks
No full textThe big Chinese state-owned banks came as winners out of the global financial crisis. According to the Banker ranking, Chinese banks led the global banking profitability ranking through the years from 2008 to 2010 and contributed one fifth of global banking profits in 2010. The Chinese banking sector, which was deemed as wholly insolvent ten years ago, was reborn like a phoenix from the fire of the Asian financial crisis and the current financial crisis. The banking reform in the last decade with large-scale capital injection, assets carve-outs, restructuring and public listing celebrated great success. However, the low efficiency in Chinese banks is still persistent, as evident in many empirical studies (e.g. Feyzioglu, (2009)). The contradiction of high profitability and low efficiency causes great confusion in understanding banking in China. Our paper aims to reveal the real sources of the high profitability of the big Chinese banks. We compare their profitability pattern with peer banks from Asia, Europe and North America. We first test the hypothesis that the average asset return of the big five Chinese banks will fall below the international comparative level if the current high net interest margin given by the managed interest system in China falls to the international peer average level. Surprisingly, the hypothesis has to be rejected. Instead, our results show that the profitability of Chinese banks stays at international comparative level, despite the high inefficiency in Chinese banks. We therefore test a second hypothesis stating that the profitability of Chinese banks will fallbelow their international peers if staff costs increase by 30 percent in average to reach the international level, with the joint condition of margin decrease. This hypothesis can be proved, which means that the big five Chinese banks compensate its inefficiency by a combination of a non-competitive high interest margin and unsustainable lower labor cost. The above results of course raise the question how the big Chinese banks can stay competitive if China continues to liberalize its interest rate system and labor cost increases. In our concluding remarks, we discuss the possibility that Chinese banks change their business model towards universal banking with additional non-interest income to compensate the drop in interest margin. --China,banks,finance,banking business model,universal banking
Lewis H. Gold ’62 Lecture on Ethics & Professional Responsibility: Watergate Girl - Jill Wine-Banks
No full textThe Girard-diCarlo Center will host the 2023 Lewis H. Gold ’62 Lecture on Ethics and Professional Responsibility on Tuesday, April 4. Jill Wine-Banks, author of The Watergate Girl: My Fight for Truth and Justice Against a Criminal President, will talk with Dean Mark C. Alexander about her book and experience as the only woman on the Watergate prosecution team.
This lecture honors the memory of Lewis H. Gold ’62, an exceptional advocate with a strong sense of ethics. The naming was made possible through the generosity of an anonymous donor in collaboration with his family
Mid Cretaceous fossil forests of Alexander Island, Antarctica
No full textSpectacular fossil trees and shrubs are preserved within fossil soils in their original growth positions in mid Cretaceous rocks on Alexander Island, Antarctic Peninsula. These fossils indicate that diverse forest communities grew upon the floodplain areas of Alexander Island during the
Albian at a palaeolatitude of 69-75 ° S. The fossil forests are preserved within the fluvial sediments of the Triton Point Formation of the Fossil Bluff Group, which represents the infill of a fore-arc basin.
The fluvial environment matured from a braided river system, with frequent floods and unstable channel banks, to a more mature meandering river system with more stable floodplain areas. Low energy floods preserved plants that grew on the river channel banks in fine muds and silts. Catastrophic floods occurred rarely, possibly as a result of volcanic activity upon the magmatic arc 200 km away. These high-energy floods covered floodplain areas in coarse sands, entombing trees. Well-drained mollisols formed on emergent surfaces becoming rich and fertile and supporting diverse forest communities.
The flora within the forests occurred as well structured communities that occupied different parts of the river floodplain. Open-woodland forests dominated by araucarian conifers, ferns and shrubs, occupied stable areas of the floodplain characterised by low-energy floods. Disturbance
vegetation dominated by Taeniopteris, liverworts, angiosperms and ferns, occupied river channel banks where frequent floods provided fresh surfaces for these early colonising plants to flourish. Patch forest communities dominated by podocarp conifers, ginkgo trees, cycadophytes and ferns, grew on stable areas of the floodplain distal to the river channel. These mature climax forests were rarely disturbed by catastrophic floods.
Evidence from the palaeosols, sediments and fossil wood of Alexander Island suggest that the climate was warm, temperate, and semi-arid with seasonal precipitation and intermittent wet phases. In structure and composition the Alexander Island forest are very similar to the warm temperate rainforests of New Zealand which experience mean summer temperatures of 16-22 °C and mean winter temperatures of 3-8 ° C. This study and other palaeobotanical data suggests that the Alexander Island forests are likely to have grown under similar temperatures
Do banks diversify loan portfolios? A tentative answer based on individual bank loan portfolios
No full textTheory of financial intermediation gives contradicting answers to the question whether banks should diversify or focus their loan portfolios. Our aim is to find out which of the two strategies is predominant in the German banking market. To this end we measure diversification for all German banks in the period from 1993 to 2002. As measures we use a broad set of heuristic approaches which capture the deviation of a bank's portfolio from a specified benchmark. Conceivable benchmarks are naive diversification across all industries or, alternatively, the economy's industry structure. With this framework our analysis comprises the widespread measures of concentration, like the Hirschman-Herfindahl index, but also the less known and in this context innovative group of distance measures. We find that different statistical measures of diversification may indicate contradicting results on the individual bank level. Since distance measures are more appealing from a theoretical point of view, the common practice to rely on measures of concentration only in the debate about diversification and focus, may be misleading. We further find that, despite these differences on the individual bank level, both approaches reveal that the majority of banks significantly increased loan portfolio diversification over the last decade. This tendency is especially driven by the large number of credit cooperatives and savings banks. However, some banks (especially regional banks and subsidiaries of foreign banks) reveal a strategy that seems to be more focused on certain industries. --bank lending,loan portfolio,portfolio theory,diversification,concentration measures,distance measures,focus
Does capital regulation matter for bank behaviour? Evidence for German savings banks
No full textThe aim of this paper is to assess how German savings banks adjust capital and risk under capital regulation. We estimate a modified version of the model developed by Shrieves and Dahl (1992). This paper contributes to the literature in three ways. First, we test the capital buffer theory (Marcus 1984, Milne and Whalley 2002). Second, we use dynamic panel data techniques that explicitly take unobserved heterogeneity into account. And third, we provide new evidence for non-US banks by using a new dataset of supervisory data collected by the Deutsche Bundesbank. We find evidence that the coordination of capital and risk adjustments depends on the amount of capital the bank holds in excess of the regulatory minimum (the "capital buffer"). Banks with low capital buffers try to rebuild an appropriate capital buffer by raising capital while simultaneously lowering risk. In contrast, banks with high capital buffers try to maintain their capital buffer by increasing risk when capital increases. These findings support the capital buffer theory. --bank regulation,risk taking,bank capital
Podiumsdiskussion "The Kick: Soccer as a Cultural Phenomenon", mit Alexander Osang und Eric Banks, Deutsches Haus at NYU, 16. Mai 2014.
No full textCost implications of compliance with Basel III and competitiveness of internationally active banks
No full textThis dissertation investigates the third Basel Accord designed to provide a global regulatory standard on bank capital adequacy, stress testing and agreed market liquidity risk. Amongst other requirements, Basel III expects banks to hold top quality capital totalling 9.5% of their risk bearing assets by January 2019. Any bank that fails to meet the new requirements is expected to be banned from paying dividends to shareholders until it has improved its balance sheet. Full compliance with Basel III is expected to kick in by 2019. The author suggests that this new regulatory frame is arguably the most topical issue today amongst internationally active banks as they plan to be compliant, with the market already applying a multiple discount to banks with weaker capital positions especially the systemically important banks
Universal Banks and Relationships with Firms
No full textSome of the most widely expressed myths about the German financial system are concerned with the close ties and intensive interaction between banks and firms, often described as Hausbank relationships. Links between banks and firms include direct shareholdings, board representation, and proxy voting and are particularly significant for corporate governance. Allegedly, these relationships promote investment and improve the performance of firms. Furthermore, German universal banks are believed to play a special role as large and informed monitoring investors (shareholders). However, for the very same reasons, German universal banks are frequently accused of abusing their influence on firms by exploiting rents and sustaining the entrenchment of firms against efficient transfers of firm control. In this paper, we review recent empirical evidence regarding the special role of banks for the corporate governance of German firms. We differentiate between large exchange-listed firms and small and medium sized companies throughout. With respect to the role of banks as monitoring investors, the evidence does not unanimously support a special role of banks for large firms. Only one study finds that banks’ control of management goes beyond what non-bank shareholders achieve. Proxy-voting rights apparently do not provide a significant means for banks to exert management control. Most of the recent evidence regarding small firms suggests that a Hausbank relationship can indeed be beneficial. Hausbanks are more willing to sustain financing when borrower quality deteriorates, and they invest more often than arm’s-length banks in workouts if borrowers face financial distress.relationship lending, Hausbank, universal banking, corporate finance, corporate governance
Douglas Alexander Stewart, poet, author and playwright
No full textDouglas Alexander Stewart, poet, author and playwrigh
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