Bank Market Power, Economic Growth and Financial Stability: Evidence from Asian Banks
By Wahyoe Soedarmono, F. Machrouh, Amine Tarazi. 2011
182 citations recorded by the source corpus.
This paper examines whether Asian banks are still prone to moral hazard in the aftermath of the 1997 Asian crisis. Using a sample of commercial banks from 12 Asian countries during the 2001–2007 period, our empirical findings highlight that greater market power in the banking market results in higher instability. Although banks are better capitalized in less competitive markets their default risk remains higher. A deeper investigation however shows that such behaviour is dependent on the economic environment. Higher economic growth contributes to neutralize greater risk taking and higher instability in less competitive markets.
Subfields: Accounting, Finance
View Paper: https://www.semanticscholar.org/paper/e1b3700a11d0018fb3030d70c7f8c33a5ba74255
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Citations in the corpus
- Determinants of non-performing loans in the banking sector in developing state (2020, background): “Earlier in 1997, the developing countries in East Asia have suffered the financial crises in the form of a significant outflow of foreign investment (Soedarmono et al., 2011).”
- Bank competition, crisis and risk taking: Evidence from emerging markets in Asia (2013, unknown): “Following Agusman et al. (2006), Laeven (1999) and Soedarmono et al. (2011) who study Asian banks, we focus only on commercial banks, since commercial banks tend to have more freedom to choose their business mix and face similar restrictions across countries.”