BANK RISK AND MARKET DISCIPLINE
This paper investigates the issue of bank risk taking. Specifically we investigate two main issues: (1) determinants of bank risk, and (2) market discipline to the banks either in implicit, explicit guarantee systems, and all periods. Using Indonesian data, we find that domestic, foreign, and owners...
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| Veröffentlicht in: | Journal of Indonesian economy and business 2012-09, Vol.27 (3), p.303 |
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| creator | Taswan Tandelilin, Eduardus Husnan, Suad Hanafi, Mamduh M |
| description | This paper investigates the issue of bank risk taking. Specifically we investigate two main issues: (1) determinants of bank risk, and (2) market discipline to the banks either in implicit, explicit guarantee systems, and all periods. Using Indonesian data, we find that domestic, foreign, and ownership concentration have positive impact on bank risk. Bank shareholders engage in entrenchment behaviour, rather than convergence behaviour. We further find that charter value and compliance to regulation have negative impact on bank risk. Next, we find that market disciplines the banks. Market disciplines the banks at the same degree in implicit and explicit deposit guarantee systems. Our findings highlight the importance of paying close attention to banks ownership, charter value, and compliance to regulation. Furthermore, since we find that market disciplines the Banks at the same degree in explicit and implicit guarantee systems, we need to investigate this issue further. This finding highlights research potential in the future: to investigate disciplining behaviour from various types of depositors. [PUBLICATION ABSTRACT] |
| format | Article |
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Specifically we investigate two main issues: (1) determinants of bank risk, and (2) market discipline to the banks either in implicit, explicit guarantee systems, and all periods. Using Indonesian data, we find that domestic, foreign, and ownership concentration have positive impact on bank risk. Bank shareholders engage in entrenchment behaviour, rather than convergence behaviour. We further find that charter value and compliance to regulation have negative impact on bank risk. Next, we find that market disciplines the banks. Market disciplines the banks at the same degree in implicit and explicit deposit guarantee systems. Our findings highlight the importance of paying close attention to banks ownership, charter value, and compliance to regulation. Furthermore, since we find that market disciplines the Banks at the same degree in explicit and implicit guarantee systems, we need to investigate this issue further. This finding highlights research potential in the future: to investigate disciplining behaviour from various types of depositors. 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Specifically we investigate two main issues: (1) determinants of bank risk, and (2) market discipline to the banks either in implicit, explicit guarantee systems, and all periods. Using Indonesian data, we find that domestic, foreign, and ownership concentration have positive impact on bank risk. Bank shareholders engage in entrenchment behaviour, rather than convergence behaviour. We further find that charter value and compliance to regulation have negative impact on bank risk. Next, we find that market disciplines the banks. Market disciplines the banks at the same degree in implicit and explicit deposit guarantee systems. Our findings highlight the importance of paying close attention to banks ownership, charter value, and compliance to regulation. Furthermore, since we find that market disciplines the Banks at the same degree in explicit and implicit guarantee systems, we need to investigate this issue further. This finding highlights research potential in the future: to investigate disciplining behaviour from various types of depositors. 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Specifically we investigate two main issues: (1) determinants of bank risk, and (2) market discipline to the banks either in implicit, explicit guarantee systems, and all periods. Using Indonesian data, we find that domestic, foreign, and ownership concentration have positive impact on bank risk. Bank shareholders engage in entrenchment behaviour, rather than convergence behaviour. We further find that charter value and compliance to regulation have negative impact on bank risk. Next, we find that market disciplines the banks. Market disciplines the banks at the same degree in implicit and explicit deposit guarantee systems. Our findings highlight the importance of paying close attention to banks ownership, charter value, and compliance to regulation. Furthermore, since we find that market disciplines the Banks at the same degree in explicit and implicit guarantee systems, we need to investigate this issue further. This finding highlights research potential in the future: to investigate disciplining behaviour from various types of depositors. [PUBLICATION ABSTRACT]</abstract><cop>Yogyakarta</cop><pub>Universitas Gadjah Mada, Faculty of Economics & Business</pub><oa>free_for_read</oa></addata></record> |
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| identifier | ISSN: 2085-8272 |
| ispartof | Journal of Indonesian economy and business, 2012-09, Vol.27 (3), p.303 |
| issn | 2085-8272 2338-5847 |
| language | eng |
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| source | Directory of Open Access Journals |
| subjects | Bank compliance Banking industry Business ownership Central banks Charters Compliance Corporate governance Deposit insurance Developing countries Enterprise risk management LDCs Majority stockholders Minority stockholders Moral hazard Organizational behavior Ownership changes Regulation Regulation of financial institutions Studies |
| title | BANK RISK AND MARKET DISCIPLINE |
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