3,548 research outputs found
The corporate governance of banks
No full textThe study argues that commercial banks pose unique corporate governance problems for managers and regulators as well as for claimants on the banks' cash flows, such as investors and depositors. The authors support the general principle that fiduciary duties should be owed exclusively to shareholders. However, in the special case of banks, they contend that the scope of the fiduciary duties and obligations of officers and directors should be broadened to include creditors. In particular, the authors call on bank directors to take solvency risk explicitly and systematically into account when making decisions or else face personal liability for failure to do so.Bank management ; Bank supervision ; Corporate governance ; Stockholders
Deregulation, the Internet, and the competitive viability of large banks and community banks
No full textDeregulation, technological change, and increased competitive rivalry are transforming U.S. commercial banking from an industry dominated by thousands of small, locally focused banks into an industry where a handful of large banks could potentially span the nation and control the majority of its bank deposits. This paper examines the comparative strengths and weaknesses of large and small banks in this new environment, and outlines the strategic opportunities and threats that new technology - especially the Internet - pose for U.S. banks. We begin by documenting recent trends in bank size, industry structure, competitive conditions, and bank product mix. We argue that these trends are consistent with a simple competitive strategy framework in which commercial banks choose between two profitable business strategies: (a) a community bank business model in which banks have a local focus, a high cost structure, and sell low volumes of personalized service at high margins, and (b) a global bank business model in which banks have a national or international focus, a low cost structure, and sell high volumes of standardized financial products at low margins. Finally, we discuss how Internet banking is likely to affect this strategic equilibrium. In particular, we analyze how a shift away from brick and mortar branches and toward the Internet delivery channel will reduce the switching costs that currently dissuade retail deposit customers from changing banks. Based on the foregoing analysis, we conclude that the number of small banks will continue to decline in the future - not because the community bank business model is flawed, but because most of the small banks that use this model are poorly run. In the long-run, our analysis suggests that well-run community banks should be able to adapt their business practices to technological change and profitably co-exist with large, globally focussed banks.Banks and banking ; Financial institutions
The past, present, and probable future for community banks
No full textWe review how deregulation, technological advance, and increased competitive rivalry have affected the size and health of the U.S. community banking sector and the quality and availability of banking products and services. We then develop a simple theoretical framework for analyzing how these changes have affected the competitive viability of community banks. Empirical evidence presented in this paper is consistent with the model's prediction that regulatory and technological change has exposed community banks to intensified competition on the one hand, but on the other hand has left well-managed community banks with a potentially exploitable strategic position in the industry. We also offer an analysis of how the number and distribution of community banks may change in the future.Community banks
Panel IV: Terrorism and the Use of Force
No full textPart of the conference: National Security Challenges and the Obama Administration.
Noah Weisbord (Visiting Assistant Professor, Duke Law), chair ; Michael J. Glennon (Tufts University), Jonathan A. Ophardt (JD Candidate \u2710, Duke Law), and William C. Banks (Syracuse University), panelists
A Note on Productivity Change in European Co-operative Banks: The Luenberger Indicator Approach
No full textThis paper proposes a framework for benchmarking European co-operative banks and the rationalization of their operational activities. The analysis is based on the Luenberger productivity indicator. A key advantage of this method is that it allows for both input contraction and output expansion in determining relative efficiencies and productivity changes. Benchmarks are provided for improving the operations of those banks which perform worse than others. Several interesting and useful managerial insights and implications arise from the study. The general conclusion is that, between 1996 and 2003, productivity increased for the majority of European co-operative banks analyzed.Europe; Co-operative banks; Luenberger productivity indicator.
How Banks Construct and Manage Risk: A Sociological Study of Small Firm Lending in Britain and Germany
No full textThis paper analyses the role of banks in financing SMEs in Britain and Germany. It applies a sociological institutionalist approach to understand how banks construct and manage risk, relating to SME business. The empirical analysis is based on the results of a comparative survey of a sample of British and German banks and also refers to statistical material produced by the banks themselves. The paper concludes that, even though bank- firm relations are still deeply embedded in national institutional frameworks, some tendencies towards convergence can also be observed, particularly among commercial banks from the two countries. These flow from both internationalisation and from the political influence of the EU.Bank Lending; SMEs; Britain; Germany
When do special interests run rampant ? disentangling the role in banking crises of elections, incomplete information, and checks and balances
No full textThe author investigates the political determinants of government decisions that benefit special interest groups - especially government decisions to deal with banking crises. He finds that the better informed the voters, the more proximate elections, and the larger the number of political veto players ( conditional on the costs to voters of relevant policy decision), the smaller the government's fiscal transfer are to the financial sector and the less likely the government is to exercise forbearance in dealing with insolvent financial institutions. The results suggest that policies thatmight be appropriate for mitigating banking crises in the United States might be less effective in settings where voters are less informed, where elections are less competitive, and where there are fewer veto players, because in these settings checks and balances are missing. These policies include: a) Disseminating information about the costs of inefficient government decisions. b) Improving the structure of legislative regulatory oversight. c) Intervening early in insolvent banks. The author concludes that the more veto players there are, the less likely policies are to favor special interest groups (contrary to previous views). Moreover, the closer the elections, the less likely policies are to favor special interest groups.
Executive compensation and business policy choices at U.S. commercial banks
No full textThis study examines whether and how the terms of CEO compensation contracts at large commercial banks between 1994 and 2006 influenced, or were influenced by, the risky business policy decisions made by these firms. We find strong evidence that bank CEOs responded to contractual risk-taking incentives by taking more risk; bank boards altered CEO compensation to encourage executives to exploit new growth opportunities; and bank boards set CEO incentives in a manner designed to moderate excessive risk-taking. These relationships are strongest during the second half of our sample, after deregulation and technological change had expanded banks' capacities for risk-taking.
Risk management of U.S. banks in less developed countries : a country-risk analysis.
No full textThe object of this research is to determine whether
U.S. commercial banks could have predicted in advance the
debt crises of the developing countries, i.e., whether a
particular LDC would reschedule or default on its loans. A
secondary purpose was to determine whether the debt crisis
was the fault of the banks or the developing countries who
reneged on their loan contracts. What do the banks have to
do to prevent this from happening? What do they have to do
to manage country risk effectively?
The study begins with a historical account of the
United States banking system to the period of debt
rescheduling by the LDCs. It continues by describing the
different types of risks in international banking. Next it
discusses the theoretical issues of LDC debt, including
sustainability of debt policy, optimal level of country
borrowing, optimal bank foreign lending, and credit
rationing by the banks. This is followed by a description
of the regulatory aspects of country risk management.
The important issue of country risk management by U.S.
banks is next, including a discussion of the various
assessment methods used and a review of the major empirical
studies that used econometric methods for predicting the
incidence of external debt defaults.
The empirical research investigates debt rescheduling
by less developed countries. Linear discriminant function
and logistic discrimination approaches were used to
determine the predictive ability of any particular subset
of economic variables. The sample comprises data on 37
countries over a period of 10 years, 1974-1983. This
period was chosen because it was a time of important
economic transition.
The results of the discriminant and logistic analyses
show modest discriminatory power for predicting the
rescheduling of debt of a country with the set of economic
predictors used
Jonathan Belcher: Colonial Governor
No full textAs early as the eighteenth century, New England\u27s ministers were decrying public morality. Evangelical leaders such as Jonathan Edwards called for rulers to become spiritual as well as political leaders who would renew the people\u27s covenant with God. The prosperous merchant Jonathan Belcher (1682-1757) self-consciously strove to become such a leader, an American Nehemiah. As governor of three royal colonies and early patron of the College of New Jersey (later Princeton University), Belcher became an important but controversial figure in colonial America.
In this first biography of the colonial governor, Michael C. Batinski depicts a man unusually riddled with contradictions. While governor of Massachusetts, Belcher deftly maneuvered longstanding rivals toward a political settlement; yet as chief executive of New Hampshire, he plunged into bitter factional disputes that destroyed his administration. The quintessential Puritan, Belcher learned to thrive in London\u27s cosmopolitan world and in the whiggish realm of the marketplace. He was at once the courtier and the country patriot.
An insightful blend of social and political history, this biography demands that Belcher be recognized as the embodiment of the Nehemiah, perhaps as important in his own realm as Cotton Mather was in religious circles. Grappling with the contradictions of Belcher\u27s actions, the author explains much about the complexities of the world in which Belcher lived and wielded influence.
Michael C. Batinski is professor emeritus of history at Southern Illinois University.https://uknowledge.uky.edu/upk_united_states_history/1044/thumbnail.jp
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