Browsing by Author "James, Gregory A."

Now showing 1 - 7 of 7
  • No Thumbnail Available
    ItemMetadata only
    Analyzing monetary policies and bank credit in Indonesia’s provincial clusters amidst COVID-19 pandemic
    (Taylor and Francis, 2024-06-04) Safuan, Sugiharso; Sugandi, Eric Alexander; Habibullah, Muzafar Shah; James, Gregory A.
    This research investigates the impact of monetary policy instruments employed by the Bank of Indonesia (BI), including reserve requirement (GWM), policy rate, and loan-to-value (LTV) ratio, on bank credit by sector in Indonesia. We utilize FMOLS and DOLS techniques to estimate the effects of policy instruments and COVID-19 variables on bank credit across six clusters of provinces. Our findings indicate that the GWM exhibits a negative impact, while the policy rate positively influences bank credit in all non-household sectors in Indonesia. The LTV instrument significantly affects bank credit in household sectors. Furthermore, The Covid-19 pandemic’s influence on the relationship between each policy instrument and bank credit varies across economic sectors and provincial clusters. We recommend BI to utilize the GWM and LTV instruments more frequently and exercise caution in reducing the policy rate to very low levels, as excessively low interest rates may not incentivize banks to increase lending.
  • Thumbnail Image
    ItemOpen Access
    Bank business models, failure risk and earnings opacity: A short- versus long-term perspective
    (Elsevier, 2022-01-12) Lartey, Theophilus; James, Gregory A.; Danso, Albert; Boateng, Agyenim
    Despite the ongoing bank regulatory reforms, relatively little research attention has been given to the effects of bank business models and opacity of bank balance sheet structure which may hinder regulation and market discipline. In this study, we explore the effects of business model strategies on banks’ earnings opacity in the UK banking sector. Distinguishing between the short-term (within) and long-term (between) effects, our findings suggest that retail-oriented business models reduce the likelihood of earnings management practices in the short term but not over the long term. In contrast, wholesale-oriented business models increase the probability of earnings manipulation both in the short and long term. While bank business models characterised by a greater degree of functional diversification tend to lower earnings manipulation in the short term, the long-term incentives cannot be mitigated. Our findings also demonstrate that low failure risk (or greater solvency) represents an important channel in mitigating the effects of business models on earnings management practices both in the short and long term. Our results are robust to alternative
  • Thumbnail Image
    ItemOpen Access
    Domestic lead arranger certification and the pricing of project finance loans
    (Wiley, 2018-10-21) Ahiabor, Frederick; James, Gregory A.
    Using a sample of 1,270 project finance syndicated loan tranches arranged from 1998 to 2011 and worth over $300 billion, we estimate the causal impact of certification by domestic lead arrangers on the pricing of project finance loans in emerging markets. We hypothesize that, on average, domestic arrangers are better able to structure and screen project finance deals, credibly communicate the true value of a project and its underlying network of contracts, and monitor the loan contract compared to foreign arrangers. If so, all things being equal, domestic arranger certification should result in lower loan spreads compared to foreign arranger certification. Our results support this hypothesis. After controlling for project and loan characteristics and the potential endogeneity of the lead arranger's selection, we find that certification by domestic arrangers causes a significant reduction in loan spreads across different industrial categories and geographic locations of projects. This finding demonstrates the economic value of domestic arranger certification in project finance lending. Our results suggest that, in the presence of information asymmetry between project sponsors and participant lenders in the syndicate, certification by domestic arrangers offers a superior mechanism to minimize search, information and monitoring costs.
  • Thumbnail Image
    ItemOpen Access
    The effects of ownership change on bank performance and risk exposure: Evidence from Indonesia
    (Elsevier, 2017-02-16) James, Gregory A.; Shaban, M.
    This study investigates the effects of ownership change on the performance and exposure to risk of 60 Indonesian commercial banks over the period 2005–2012. We find that state-owned banks tend to be less profitable and more exposed to risk than private and foreign banks. Domestic investors tend to select the best performers for acquisition. Domestic acquisition is generally associated with a decrease in the efficiency of the acquired banks. Non-regional foreign acquisition is associated with a reduction in risk exposure. Acquisition by regional foreign investors is associated with performance gains.
  • Thumbnail Image
    ItemOpen Access
    Interbank funding, bank risk exposure and performance in the UK: a three-stage network DEA approach
    (Elsevier, 2021-03-30) Lartey, Theophilus; James, Gregory A.; Danso, Albert
    Operating on unsecured interbank markets exposes banks to various risks which trigger changes in bank strategic outcomes such as risk management and performance. This paper proposes a novel three-stage network data envelopment approach with feedback and alliance to examine the importance of bank risk exposures through interbank funding on bank efficiency levels. Our results show that overall bank performance management is achieved via a complement of good alliance between risk and funding, and financial performance. In addition, high financial or overall performance may not imply better risk management or allied process performance. Rather, banks are inherently performance-driven institutions whose performance objectives are independently optimal but aggregately suboptimal. Further analyses show that, for international banks, high financial or overall performance may not necessarily limit high allied process and risk management. Moreover, risk governance in large banks has not improved despite the increased regulatory pressure induced after the 2007-2008 credit crisis. Our results remain robust regardless of whether the alliance or financial performance stage is given priority in the overall efficiency decomposition, and when the novel resource imbalance index is used to assess and enhance the discriminatory power of performance.
  • Thumbnail Image
    ItemOpen Access
    Interbank market structure, bank conduct, and performance: evidence from the UK
    (Elsevier, 2023-04-13) Lartey, Theophilus; James, Gregory A.; Danso, Albert; Boateng, Agyenim
    We examine whether a concentrated interbank market stimulates bank collusion or monopolistic pricing towards enhancing performance. We explore this nexus by incorporating the role of bank conduct into the structure–performance paradigm. The results show that the interbank market structure provides a channel for banks to collude and engage in monopolistic pricing in the market for bank and business loans to consequently increase bank performance. Further, while the interbank market structure is both profit and cost efficient for non-conglomerate banks, it is cost efficient for foreign banks. Hence, collusion and other anti-competitive behaviours in the interbank market may exacerbate incentives for foreign and non-conglomerate bank entry. We also explored the theoretical and policy implications of these findings. Our results are robust to alternative measures of market structure, bank conduct and performance, and the use of a wide range of specifications and econometric models.
  • Thumbnail Image
    ItemOpen Access
    Shareholder protection, stock markets and cross-border mergers
    (Elsevier, 2018-07-10) Ahiabor, Frederick; James, Gregory A.; Kwabi, Frank; Siems, Mathias
    This paper is the first one that uses a panel data of different types of shareholder protection in order to examine (i) the effect of such laws on stock market development and (ii) the convergence of shareholder protection laws through cross-border mergers and acquisitions. We find significant results for enabling laws but less so for paternalistic ones.