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The paper’s purpose was to assess whether the effects on the regulatory capital of the ECL model in European banks differs among those that adopted IRB or standardized approaches to credit risk management. The empirical tests revealed that there was a significant reduction in the level of capita buffers of European banks when the IFRS 9 was first adopted, and that this reduction was more pronounced among banks using a standardized approach to credit risk than for those that relied on an IRB approach. Further testing confirmed the premise that there was an underestimation of capital requirements in the period prior to the adoption of the ECL. The study fills a gap in literature, by evaluating the difference in the impact of adopting the ECL model on the banking system, as a function of the credit risk management approach for capital purposes. The assessment of what happened in the European banking system can be used as a guidance to other jurisdictions still in transition to the ECL model.

Using Q investment model to scrutinize investment-cash flow sensitivity, a measure of financial constraint, has been a subject of controversy in literature. By using an alternative model called Error Correction model, this study aims to check the sensitivity between firm’s internal finance and investment level for the case of lower middle income country. Literature has shown that firms’ specific characteristics affect the relation between investment and cash flow of the firms. By considering the unique characteristics of Pakistani corporate sector, this study further target to check whether the investment-cash flow sensitivity differs across size of the firms, group affiliation of the firms and dividend policy of the firms. Our findings indicate that Pakistani listed firms are financially constrained. We find a strong relationship between investment and cash flow for small and non-dividend-paying firms; whereas group-affiliation does not affect investment- cash flow sensitivity of firms.

Ghana, like most other developing countries, is not isolated from the global financial crisis through the impact of such a crisis on economies. This paper examines the financial sector reforms and its effect on the Ghanaian economy, within the developing country context in general and in sub-Saharan Africa (SSA) in particular. The paper seeks to enhance the understanding of relevant policy measures and reflects on what else could be done. The article further studies the effect of change in the institutional environment on bank governance practices primarily to improve the industry’s supervision and regulation, related to the post-crisis exit strategies. This paper discusses the development of ICT infrastructure and application as a basis for the main dimension of Ghana’s digital transformation in financial services. This paper is, therefore, motivated by the lack of empirical studies that examines how the impact of the banking reforms play a substantial role in promoting innovative digital payment systems to replace cash transactions. From the perspective of institutional theory, the study looked at why (and how) a number of policy measures have a significant impact on the financial performance of banks? And how the applications of e-finance in ICT and financial practices, provides several benefits within the banking sector improve the sector’s image and leads to a broader, faster and more efficient market? The application of Koppenjan and Groenewegen (2005) ‘s four-layer model ‘levels of institutional analysis’ perspective seems to be the most useful starting point, which provides the basis for an improved understanding of revealing the inefficient delivery of Ghanaian banking industry in the past. A combination of a review of secondary and empirical data, interviewed used in the analysis. Findings indicate that the financial and banking sector reforms help the industry   advance digital banking culture and impact on the general expansion of the financial and the infusion of financial inclusion in Ghana. These conclusions would be particularly useful in a similar picture in other developing countries, as well as by the bank authorities to create their future policy. It also joins the debate on the impact of the banking reform, a key turning point towards better regulation to refine crisis prevention and resolution mechanisms.

Data quality in banking and financial sector is one of the most researched topics nowadays. With the increasing regulatory burden and increased importance of targeted sales, data quality directly influences funds and performance of banking system. In this paper, the author is aiming to define universal reasons and causes of data quality problem and apply the case to local Azerbaijani banks taking into account local managers’ personal view based on their banking experience. Key finding of the research is that unintegrated software, wrong data insertion, aging of data with the growing speed of market, corporate governance and inability to calculate true costs of low data quality to the local banks are the reasons of data quality issue in the local banks. Moreover, main costs of the data quality issue are time and money, appearance of hidden data factories, obstacles to apply and measure KPIs, uncorrelations in sensitivity analysis and ineffective marketing strategies.

Iran’s banking industry as a developing country is comparatively very new to risk management practices. An inevitable predictive implication of this rapid growth is the growing concerns with regard to credit risk management which is the motivation of conducting this research. The paper focuses on the credit scoring aspect of credit risk management using both logit and probit regression approaches. Real data on corporate customers are available for conducting this research which is also a contribution to this area for all other developing countries. Our questions focus on how future customers can be classified in terms of credibility, which models and methods are more effective in better capturing risks. Findings suggest that probit approaches are more effective in capturing the significance of variables and goodness-of-fitness tests. Seven variables of the Ohlson O-Score model are used: CL_CA, INTWO, OENEG, TA_TL, SIZE, WCAP_TA, and ROA; two were found to be statistically significant in logit (ROA, TL_TA) and three were statistically significant in probit (ROA, TL_TA, SIZE). Also, CL_CA, ROA, and WCAP_TA were the three variables with an unexpected correlation to the probability of default. The prediction power with the cut-off point is set equal to 26% and 56.91% for defaulted customers in both logit and probit models. However, logit achieved 54.85% correct estimation of defaulted assets, 0.37% more than what probit estimated.

<p>The paper employs various measures of law enforcement to provide new evidence on the importance of legal institutions for different dimensions of financial development in transition economies. It offers a critical assessment of law enforcement measures employed in recent studies by showing that some proxies for law enforcement in the credit market may not be appropriate. Hence, care should be taken in how the quality of institutions is measured and the context which it represents. An original approach to measuring law enforcement in the credit market is developed by embodying the legal theory of dispute resolution and assessing this approach by collecting primary data for Kosovo. The findings suggest that Kosovo compares well with countries in the region and other transition economies in terms of the enforcement of creditor rights.</p>

The paper employs various measures of law enforcement to provide new evidence on the importance of legal institutions for different dimensions of financial development in transition economies. It offers a critical assessment of law enforcement measures employed in recent studies by showing that some proxies for law enforcement in the credit market may not be appropriate. Hence, care should be taken in how the quality of institutions is measured and the context which it represents. An original approach to measuring law enforcement in the credit market is developed by embodying the legal theory of dispute resolution and assessing this approach by collecting primary data for Kosovo. The findings suggest that Kosovo compares well with countries in the region andother transition economies in terms of the enforcement of creditor rights.

By employing non-parametric methods, namely Data Envelopment Analysis and Malmquist Index, this paper investigates efficiency of banks using a database of almost all banks in four countries in South-East Europe. The superior efficiency of foreignowned banks in intermediation is supported. It is argued that the improvement in efficiency of banks originated from the change in technology rather than scale and technical efficiency, and banks on average have not been able to catch-up with best-performers, thus widening the efficiency gap. The largest sources of inefficiency are found to be cost and scale inefficiencies and lending shortfalls. Because of its peculiarities, Kosovo banking sector is assessed relative to other economies. Findings suggest that despite some improvements, the banking system in Kosovo remained less efficient. A number of policy implications emanate from the findings, aiming at enhancing the intermediation efficiency of banks in the context of South-East European transition.