Abstract: Most empirical studies have analyzed how liquidity risks faced by individual institutions turn into systemic risk. Recent banking crisis has highlighted the importance of grasping and controlling the systemic risk, and the acceptance by Central Banks to ease their monetary policies for saving default or illiquid banks. This last point shows that banks would pay less attention to liquidity risk which, in turn, can become a new important channel of loss. The financial regulation focuses on the most important and “systemic” banks in the global network. However, to quantify the expected loss associated with liquidity risk, it is worth to analyze sensitivity to this channel for the various elements of the global bank network. A small bank is not considered as potentially systemic; however the interaction of small banks all together can become a systemic element. This paper analyzes the impact of medium and small banks interaction on a set of banks which is considered as the core of the network. The proposed method uses the structure of agent-based model in a two-class environment. In first class, the data from actual balance sheets of 22 large and systemic banks (such as BNP Paribas or Barclays) are collected. In second one, to model a network as closely as possible to actual interbank market, 578 fictitious banks smaller than the ones belonging to first class have been split into two groups of small and medium ones. All banks are active on the European interbank network and have deposit and market activity. A simulation of 12 three month periods representing a midterm time interval three years is projected. In each period, there is a set of behavioral descriptions: repayment of matured loans, liquidation of deposits, income from securities, collection of new deposits, new demands of credit, and securities sale. The last two actions are part of refunding process developed in this paper. To strengthen reliability of proposed model, random parameters dynamics are managed with stochastic equations as rates the variations of which are generated by Vasicek model. The Central Bank is considered as the lender of last resort which allows banks to borrow at REPO rate and some ejection conditions of banks from the system are introduced.
Liquidity crunch due to exogenous crisis is simulated in the first class and the loss impact on other bank classes is analyzed though aggregate values representing the aggregate of loans and/or the aggregate of borrowing between classes. It is mainly shown that the three groups of European interbank network do not have the same response, and that intermediate banks are the most sensitive to liquidity risk.
Abstract: One of the most significant threats to the economy of a nation is the bankruptcy of its banks. This study evaluates the susceptibility of Nigerian banks to failure with a view to identifying ratios and financial data that are sensitive to solvency of the bank. Further, a predictive model is generated to guide all stakeholders in the industry. Thirty quoted banks that had published Annual Reports for the year preceding the consolidation i.e. year 2004 were selected. They were examined for distress using the Multilayer Perceptron Neural Network Analysis. The model was used to analyze further reforms by the Central Bank of Nigeria using published Annual Reports of twenty quoted banks for the year 2008 and 2011. The model can thus be used for future prediction of failure in the Nigerian banking system.
Abstract: The aim of this article was to analyze the relationship between the loyalty of banks´ employees and the acceptance of clients’ needs and to analyze the relationship between the loyalty of banks’ employees and the lack of their productivity in the Czech and Slovak banking sector. Our research has been realized through a questionnaire survey.
The loyalty of banks’ employees was higher in the Czech Republic than in Slovak Republic which has been transformed into a higher acceptance rate of customers’ needs and lower lack of employees’ productivity. Within both countries, it has been found that the approach of loyal employees to the acceptance of clients’ needs is not statistically significantly different from the approach of other employees. It has been also discovered that loyal employees did not work more intensively and did not feel statistically significant lower lack of their own productivity.
Abstract: The banking sector poses a lot of problems in Nigeria in general and the non-oil export sector in particular. The banks' lack effectiveness in handling small, medium or long-term credit risk (lack of training of loan officers, lack of information on borrowers and absence of a reliable credit registry) results in non-oil exporters being burdened with high requirements, such as up to three years of financial statements, enough collateral to cover both the loan principal and interest (including a cash deposit that may be up to 30% of the loans' net present value), and to provide every detail of the international trade transaction in question. The stated problems triggered this research. Consequently, information on bank financing of non-oil exports was collected from 100 respondents from the 20 Deposit Money Banks (DMBs) in Nigeria. The data was analysed by the use of descriptive statistics correlation and regression. It is found that, Nigerian banks are participants in the financing of non-oil exports. Despite their participation, the rate of interest for credit extended to non-oil export is usually high, ranging between 15-20%. Small and medium sized non-oil export businesses lack the credit history for banks to judge them as reputable. Banks also consider the non-oil export sector very risky for investment. The banks actually do grant less credit than the exporters may require and therefore are not properly funded by banks. Banks grant very low volume of foreign currency loan in addition to, unfavorable exchange rate at which Naira is exchanged to the Dollar and other currencies in the country. This makes importation of inputs costly and negatively impacted on the non-oil export performance in Nigeria.
Abstract: The purpose of this paper is to examine co-creation of non-economic values in Islamic banking services and their significance for service science by comparing Islamic and conventional banking services. Although many scholars have discussed co-creation of values in services, most of them have focused on only economic values.
Following Sharia (Islamic principles that are based on Qur’an and Sunnah) traditions, Islamic banking is more concerned with such non-economic values as well-being, partnership, fairness, trust, and justice, than such economic values as money in terms of interest. Therefore, it may be more sustainable and suitable for today’s unpredictable socio-economic environments.
We also argue that Islamic banking is essentially a value co-creation business model that fits better with the so-called Service-Dominant Logic (SDL) than conventional banking. This paper explores a new frontier of value co-creation in services, thereby contributing to further development of service science.
Abstract: Electronic banking must be secure and easy to use and
many banks heavily advertise an apparent of 100% secure system
which is contestable in many points. In this work, an alternative
approach to the design of e-banking system, through a new solution
for user authentication and security with digital certificate called
LumaCert is introduced. The certificate applies new algorithm for
asymmetric encryption by utilizing two mathematical operators
called Pentors and UltraPentors. The public and private key in this
algorithm represent a quadruple of parameters which are directly
dependent from the above mentioned operators. The strength of the
algorithm resides in the inability to find the respective Pentor and
UltraPentor operator from the mentioned parameters.
Abstract: Aim of this paper is to explore the prospect of a new approach of mobile phone banking in Libya. This study evaluates customer knowledge on commercial mobile banking in Libya. To examine the relationship between age, occupation and intention for using mobile banking for commercial purpose, a survey was conducted to gather information from one hundred Libyan bank clients. The results indicate that Libyan customers have accepted the new technology and they are ready to use it. There is no significant joint relationship between age and occupation found in intention to use mobile banking in Libya. On the other hand, the customers’ knowledge about mobile banking has a greater relationship with the intention. This study has implications for demographic researches and consumer behaviour disciplines. It also has profitable implications for banks and managers in Libya, as it will assist in better understanding of the Libyan consumers and their activities, when they develop their market strategies and new service.
Abstract: In this paper we present a Adaptive Neuro-Fuzzy
System (ANFIS) with inputs the lagged dependent variable for the
prediction of Gross domestic Product growth rate in six countries.
We compare the results with those of Autoregressive (AR) model.
We conclude that the forecasting performance of neuro-fuzzy-system
in the out-of-sample period is much more superior and can be a very
useful alternative tool used by the national statistical services and the
banking and finance industry.
Abstract: The history of technology and banking is examined as
it relates to risk and technological determinism. It is proposed that
the services that banks offer are determined by technology and that
banks must adopt new technologies to be competitive. The adoption
of technologies paradoxically forces the adoption of other new
technologies to protect the bank from the increased risk of
technology. This cycle will lead to bank examiners and regulators to
focus on human behavior, not on the ever changing technology.
Abstract: Under the difficult access to finance of SMEs, they expect that its relationship with the banks shall constitute a real help to access appropriate financing, at reasonable costs and requirements, given the possibility of mutually beneficial and long lasting relation. The literature, but also the research we have carried on, is centered on such determinants as concentration and the length of the relationship, but at the same time, there is little certainty that banks are responding positively to them. Furthermore, although the trust is considered as being a fundamental element of bank relationship – see the case house bank – SMEs find that the banks finance them looking rather on collaterals and covenants than to trust. Moreover, a positive behavior, such as prompt or advance repayments of loans, doesn-t generate any positive feedback from the banks side. All these show a deep un-satisfaction of the SMEs concerning their relationship banking.
Abstract: Simulations are developed in this paper with usual DSGE model equations. The model is based on simplified version of Smets-Wouters equations in use at European Central Bank which implies 10 macro-economic variables: consumption, investment, wages, inflation, capital stock, interest rates, production, capital accumulation, labour and credit rate, and allows take into consideration the banking system. Throughout the simulations, this model will be used to evaluate the impact of rate shocks recounting the actions of the European Central Bank during 2008.
Abstract: The efficient knowledge management system (KMS)
is one of the important strategies to help firms to achieve sustainable
competitive advantages, but little research has been conducted to
understand what contributes to the KMS success. This study thus set
to investigate the determinants of KMS success in the context of Thai
banking industry. A questionnaire survey was conducted in four
major Thai Banks to test the proposed KMS Success model.
The result of this study shows that KMS use and user satisfaction
relate significantly to the success of KMS, and knowledge quality,
service quality and trust lead to system use, and knowledge quality,
system quality and trust lead to user satisfaction. However, this
research focuses only on system and user-related factors. Future
research thus can extend to study factors such as management support
and organization readiness.
Abstract: Company mergers and acquisitions reached their peak
in the twenty-first century. Mergers and acquisitions have become one
of the competitive strategies for external growth. In general, it is
believed that mergers and acquisitions can create synergies. However,
they require complete information technology system and service
integration, especially in the banking industry. Much of the research
has focused on performance evaluation, shareholder equity allocation,
or even the increase of company market value after the merger and
acquisition, whereas few scholars have focused on information system
integration post merger and acquisition. This study indicates the role
of information systems after a merger and acquisition, explaining the
benefits of information system integration using a merger and
acquisition case in the banking industry as an example. In addition, we
discuss factors that affect the performance of information system
integration, and utilize system dynamics to interpret the relationship
among factors that affect information system integration performance
in the banking industry after a merger and acquisition.
Abstract: This paper focuses on operational risk measurement
techniques and on economic capital estimation methods. A data
sample of operational losses provided by an anonymous Central
European bank is analyzed using several approaches. Loss
Distribution Approach and scenario analysis method are considered.
Custom plausible loss events defined in a particular scenario are
merged with the original data sample and their impact on capital
estimates and on the financial institution is evaluated. Two main
questions are assessed – What is the most appropriate statistical
method to measure and model operational loss data distribution? and
What is the impact of hypothetical plausible events on the financial
institution? The g&h distribution was evaluated to be the most
suitable one for operational risk modeling. The method based on the
combination of historical loss events modeling and scenario analysis
provides reasonable capital estimates and allows for the measurement
of the impact of extreme events on banking operations.
Abstract: This study1 holds for the formation of international financial crisis and political factors for economic crisis in Turkey, are evaluated in chronological order. The international arena and relevant studies conducted in Turkey work in the literature are assessed. The main purpose of the study is to hold the linkage between the crises and political stability in Turkey in details, and to examine the position of Turkey in this regard. The introduction part follows the literature survey on the models explaining causes and results of the crises, the second part of the study. In the third part, the formations of the world financial crises are studied. The fourth part, financial crisis in Turkey in 1994, 2000, 2001 and 2008 are reviewed and their political reasons are analyzed. In the last part of the study the results and recommendations are held. Political administrations have laid the grounds for an economic crisis in Turkey. In this study, the emergence of an economic crisis in Turkey and the developments after the crisis are chronologically examined and an explanation is offered as to the cause and effect relationship between the political administration and economic equilibrium in the country. Economic crises can be characterized as follows: high prices of consumables, high interest rates, current account deficits, budget deficits, structural defects in government finance, rising inflation and fixed currency applications, rising government debt, declining savings rates and increased dependency on foreign capital stock. Entering into the conditions of crisis during a time when the exchange value of the country-s national currency was rising, speculative finance movements and shrinking of foreign currency reserves happened due to expectations for devaluation and because of foreign investors- resistance to financing national debt, and a financial risk occurs. During the February 2001 crisis and immediately following, devaluation and reduction of value occurred in Turkey-s stock market. While changing over to the system of floating exchange rates in the midst of this crisis, the effects of the crisis on the real economy are discussed in this study. Administered politics include financial reforms, such as the rearrangement of banking systems. These reforms followed with the provision of foreign financial support. There have been winners and losers in the imbalance of income distribution, which has recently become more evident in Turkey-s fragile economy.
Abstract: The recent trend has been using hybrid approach rather than using a single intelligent technique to solve the problems. In this paper, we describe and discuss a framework to develop enterprise solutions that are backed by intelligent techniques. The framework not only uses intelligent techniques themselves but it is a complete environment that includes various interfaces and components to develop the intelligent solutions. The framework is completely Web-based and uses XML extensively. It can work like shared plat-form to be accessed by multiple developers, users and decision makers.
Abstract: In this article we propose to model Net-banking
system by game theory. We adopt extensive game to model our web
application. We present the model in term of players and strategy.
We present UML diagram related the protocol game.
Abstract: Data mining, which is the exploration of
knowledge from the large set of data, generated as a result of
the various data processing activities. Frequent Pattern Mining
is a very important task in data mining. The previous
approaches applied to generate frequent set generally adopt
candidate generation and pruning techniques for the
satisfaction of the desired objective. This paper shows how
the different approaches achieve the objective of frequent
mining along with the complexities required to perform the
job. This paper will also look for hardware approach of cache
coherence to improve efficiency of the above process. The
process of data mining is helpful in generation of support
systems that can help in Management, Bioinformatics,
Biotechnology, Medical Science, Statistics, Mathematics,
Banking, Networking and other Computer related
applications. This paper proposes the use of both upward and
downward closure property for the extraction of frequent item
sets which reduces the total number of scans required for the
generation of Candidate Sets.
Abstract: Al-Murabahah is an Islamic financing facility used in
asset financing, the profit rate of the contract is determined by
components which are also being used in the conventional banking.
Such are cost of fund, overhead cost, risk premium cost and bank-s
profit margin. At the same time, the profit rate determined by Islamic
banking system also refers to Inter-Bank Offered Rate (LIBOR) in
London as a benchmark. This practice has risen arguments among
Muslim scholars in term of its validity of the contract; whether the
contract maintains the Shariah compliance or not. This paper aims to
explore the view of Shariah towards the above components practiced
by Islamic Banking in determining the profit rate of al-murabahah
asset financing in Malaysia. This is a comparative research which
applied the views of Muslim scholars from all major mazahibs in
Islamic jurisprudence and examined the practices by Islamic banks in
Malaysia for the above components. The study found that the shariah
accepts all the components with conditions. The cost of fund is
accepted as a portion of al-mudarabah-s profit, the overhead cost is
accepted as a cost of product, risk premium cost consist of business
risk and mitigation risk are accepted through the concept of alta-awun
and bank-s profit margin is accepted as a right of bank after
venturing in risky investment.
Abstract: Nowadays, computer worms, viruses and Trojan horse
become popular, and they are collectively called malware. Those
malware just spoiled computers by deleting or rewriting important
files a decade ago. However, recent malware seems to be born to earn
money. Some of malware work for collecting personal information so
that malicious people can find secret information such as password for
online banking, evidence for a scandal or contact address which relates
with the target. Moreover, relation between money and malware
becomes more complex. Many kinds of malware bear bots to get
springboards. Meanwhile, for ordinary internet users,
countermeasures against malware come up against a blank wall.
Pattern matching becomes too much waste of computer resources,
since matching tools have to deal with a lot of patterns derived from
subspecies. Virus making tools can automatically bear subspecies of
malware. Moreover, metamorphic and polymorphic malware are no
longer special. Recently there appears malware checking sites that
check contents in place of users' PC. However, there appears a new
type of malicious sites that avoids check by malware checking sites. In
this paper, existing protocols and methods related with the web are
reconsidered in terms of protection from current attacks, and new
protocol and method are indicated for the purpose of security of the
web.