Utjecaj prudencijalne politike na financijsku stabilnost post-tranzicijskihzemalja (original) (raw)
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This paper analyses the effects of prudential policies on leverage and insolvency risk in eleven Central and Eastern Europe banking systems in the 2005-2014 period. It explores the relationship between leverage, insolvency risk and regulation variables, and the temporal patterns of this relationship. It also examines whether the effects of prudential policies on leverage and insolvency risk are influenced by bank ownership structure and financial cycle. The paper finds a consistent link between prudential regulation and leverage, which varies over the sample period. Conversely, the insolvency risk shows a stronger relationship with macroprudential policies. The estimates reveal that prudential policies work better on leverage and z-score for foreign banks. Both leverage and insolvency risk are better mitigated over booms. Finally, prudential policies have similar effects on both domestic and foreign banks' stability in normal times, while the effects are opposite during turbulences. These dissimilarities are raising challenges to the conduct of prudential policies.
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Jurnal Ekonomi & Studi Pembangunan
The implementation of macroprudential supervision, significantly tighter capital regulation in developing economies, has recently been debated, which focuses on reducing bank risk-taking and promoting financial stability in the banking sector. Our study investigates the impact of prudential capital on commercial bank risk-taking in Indonesia. We employed a GMM system approach to analyze bank and macro level data from 2004 to 2019. Our result confirms that appropriate capital regulations for reducing bank risk-taking are heterogeneous. Traditional capital ratios decrease bank risk-taking. However, the risk-based capital ratio shows an unexpected affirmative effect. Implementing macroprudential policy instruments of capital buffer effectively manages bank risk, and so does the regulatory capital pressure variable. The results are intimate for guiding commercial banks' risk management and capital effectiveness.
The European Central Bank and the prudential regulation of the financial system
International Journal of Finance & Economics, 1998
This paper focuses on a specific aspect of prudential regulation: namely the impact on the stability of the financial system of a deterioration in public finances. This is a separate issue to the need for consumer protection that should be provided by rules for the conduct of business by financial institutions.
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Journal of Banking & Finance, 2006
We study whether foreign and domestic banks in Central and Eastern Europe have reacted differently to business cycle conditions and host country banking crises. Our unique panel dataset comprises data of more than 300 banks for the period 1993-2000, with detailed information on bank ownership. Our analysis shows that during crisis periods domestic banks contracted their credit and deposit bases, whereas foreign banks did not. Also, home country conditions matter for foreign bank growth, as there is a significant and negative relationship between home country economic growth and host country credit by foreign banks.