Pub Date : 2022-06-28DOI: 10.1108/jfrc-09-2021-0073
Daniel Ofori‐Sasu, E. Agbloyor, Saint Kuttu, J. Abor
Purpose This study aims to investigate the coordinated impact of regulations on the predicted probability of a banking crisis in Africa. Design/methodology/approach The study used the dynamic panel instrumental variable probit regression model of 52 African economies over the period 2006 to 2018. Findings The authors observe that banking crisis is persistent for few years but dissipates in the long run. The results show that board mechanism and ownership control are important in reducing the likelihood of banking crisis. The authors found a negative impact of regulatory capital and monetary policy on the predicted probability of a banking crisis while regulatory quality was not strong in reducing the likelihood of banking crisis. There was also evidence to support that regulatory capital and monetary policy augment the negative impact of board mechanism and ownership control on the predicted probability of a banking crisis. Research limitations/implications The limitation of the study is that it did not explore all measures of regulatory framework and how they impact banking crisis. However, it has an advantage of using alternative measures of regulations in a banking crisis probability model. Therefore, future studies should include other macro-prudential regulations, regulatory environments and supervision and observe how they are coordinated to reduce possible crisis in a robust methodological framework. Practical implications The research has policy implications for monetary authorities and policymakers to set coordinated regulations through internal banking mechanisms that are relevant in sustaining banking system stability goals. Countries in Africa should strengthen their quality of regulation in such a way that it can play a strong and complementary role to a robust internal control mechanisms, so as to maintain stability in the banking system. In general, regulators and policymakers should design greater coordination of external and internal regulations through a single regulatory framework and a common resolution mechanism that make the banking system more robust in curbing possible crisis. Social implications The policy implication of the study is to build banking confidence in the society. Originality/value This study analyses the interactions of different components of internal and external regulatory framework in helping to reduce the probability of a banking crisis in Africa.
{"title":"Regulations and banking crisis: lessons from the African context","authors":"Daniel Ofori‐Sasu, E. Agbloyor, Saint Kuttu, J. Abor","doi":"10.1108/jfrc-09-2021-0073","DOIUrl":"https://doi.org/10.1108/jfrc-09-2021-0073","url":null,"abstract":"\u0000Purpose\u0000This study aims to investigate the coordinated impact of regulations on the predicted probability of a banking crisis in Africa.\u0000\u0000\u0000Design/methodology/approach\u0000The study used the dynamic panel instrumental variable probit regression model of 52 African economies over the period 2006 to 2018.\u0000\u0000\u0000Findings\u0000The authors observe that banking crisis is persistent for few years but dissipates in the long run. The results show that board mechanism and ownership control are important in reducing the likelihood of banking crisis. The authors found a negative impact of regulatory capital and monetary policy on the predicted probability of a banking crisis while regulatory quality was not strong in reducing the likelihood of banking crisis. There was also evidence to support that regulatory capital and monetary policy augment the negative impact of board mechanism and ownership control on the predicted probability of a banking crisis.\u0000\u0000\u0000Research limitations/implications\u0000The limitation of the study is that it did not explore all measures of regulatory framework and how they impact banking crisis. However, it has an advantage of using alternative measures of regulations in a banking crisis probability model. Therefore, future studies should include other macro-prudential regulations, regulatory environments and supervision and observe how they are coordinated to reduce possible crisis in a robust methodological framework.\u0000\u0000\u0000Practical implications\u0000The research has policy implications for monetary authorities and policymakers to set coordinated regulations through internal banking mechanisms that are relevant in sustaining banking system stability goals. Countries in Africa should strengthen their quality of regulation in such a way that it can play a strong and complementary role to a robust internal control mechanisms, so as to maintain stability in the banking system. In general, regulators and policymakers should design greater coordination of external and internal regulations through a single regulatory framework and a common resolution mechanism that make the banking system more robust in curbing possible crisis.\u0000\u0000\u0000Social implications\u0000The policy implication of the study is to build banking confidence in the society.\u0000\u0000\u0000Originality/value\u0000This study analyses the interactions of different components of internal and external regulatory framework in helping to reduce the probability of a banking crisis in Africa.\u0000","PeriodicalId":44814,"journal":{"name":"Journal of Financial Regulation and Compliance","volume":" ","pages":""},"PeriodicalIF":0.9,"publicationDate":"2022-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48016512","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-06-20DOI: 10.1108/jfrc-12-2021-0104
Sopani Gondwe, T. Gwatidzo, N. Mahonye
Purpose In a bid to enhance the stability of banks, supervisory authorities in sub-Sahara Africa (SSA) have also adopted international bank regulatory standards based on the Basel core principles. This paper aims to investigate the effectiveness of these regulations in mitigating Bank risk (instability) in SSA. The focus of empirical analysis is on examining the implications of four regulations (capital, activity restrictions, supervisory power and market discipline) on risk-taking behaviour of banks. Design/methodology/approach This paper uses two dimensions of financial stability in relation to two different sources of bank risk: solvency risk and liquidity risk. This paper uses information from the World Bank Regulatory Survey database to construct regulation indices on activity restrictions and the three regulations pertaining to the three pillars of Basel II, i.e. capital, supervisory power and market discipline. The paper then uses a two-step system generalised method of moments estimator to estimate the impact of each regulation on solvency and liquidity risk. Findings The overall results show that: regulations pertaining to capital (Pillar 1) and market discipline (Pillar 3) are effective in reducing solvency risk; and regulations pertaining to supervisory power (Pillar 2) and activity restrictions increase liquidity risk (i.e. reduce bank stability). Research limitations/implications Given some evidence from other studies which show that market power (competition) tends to condition the effect of regulations on bank stability, it would have been more informative to examine whether this is really the case in SSA, given the low levels of competition in some countries. This study is limited in this regard. Practical implications The key policy implications from the study findings are three-fold: bank supervisory agencies in SSA should prioritise the adoption of Pillars 1 and 3 of the Basel II framework as an effective policy response to enhance the stability of the banking system; a universal banking model is more stability enhancing; and there is a trade-off between stronger supervisory power and liquidity stability that needs to be properly managed every time regulatory agencies increase their supervisory mandate. Originality/value This paper provides new evidence on which Pillars of the Basel II regulatory framework are more effective in reducing bank risk in SSA. This paper also shows that the way regulations affect solvency risk is different from that of liquidity risk – an approach that allows for case specific policy interventions based on the type of bank risk under consideration. Ignoring this dual dimension of bank stability can thus lead to erroneous policy inferences.
{"title":"Bank regulation and risk-taking in sub-Sahara Africa","authors":"Sopani Gondwe, T. Gwatidzo, N. Mahonye","doi":"10.1108/jfrc-12-2021-0104","DOIUrl":"https://doi.org/10.1108/jfrc-12-2021-0104","url":null,"abstract":"\u0000Purpose\u0000In a bid to enhance the stability of banks, supervisory authorities in sub-Sahara Africa (SSA) have also adopted international bank regulatory standards based on the Basel core principles. This paper aims to investigate the effectiveness of these regulations in mitigating Bank risk (instability) in SSA. The focus of empirical analysis is on examining the implications of four regulations (capital, activity restrictions, supervisory power and market discipline) on risk-taking behaviour of banks.\u0000\u0000\u0000Design/methodology/approach\u0000This paper uses two dimensions of financial stability in relation to two different sources of bank risk: solvency risk and liquidity risk. This paper uses information from the World Bank Regulatory Survey database to construct regulation indices on activity restrictions and the three regulations pertaining to the three pillars of Basel II, i.e. capital, supervisory power and market discipline. The paper then uses a two-step system generalised method of moments estimator to estimate the impact of each regulation on solvency and liquidity risk.\u0000\u0000\u0000Findings\u0000The overall results show that: regulations pertaining to capital (Pillar 1) and market discipline (Pillar 3) are effective in reducing solvency risk; and regulations pertaining to supervisory power (Pillar 2) and activity restrictions increase liquidity risk (i.e. reduce bank stability).\u0000\u0000\u0000Research limitations/implications\u0000Given some evidence from other studies which show that market power (competition) tends to condition the effect of regulations on bank stability, it would have been more informative to examine whether this is really the case in SSA, given the low levels of competition in some countries. This study is limited in this regard.\u0000\u0000\u0000Practical implications\u0000The key policy implications from the study findings are three-fold: bank supervisory agencies in SSA should prioritise the adoption of Pillars 1 and 3 of the Basel II framework as an effective policy response to enhance the stability of the banking system; a universal banking model is more stability enhancing; and there is a trade-off between stronger supervisory power and liquidity stability that needs to be properly managed every time regulatory agencies increase their supervisory mandate.\u0000\u0000\u0000Originality/value\u0000This paper provides new evidence on which Pillars of the Basel II regulatory framework are more effective in reducing bank risk in SSA. This paper also shows that the way regulations affect solvency risk is different from that of liquidity risk – an approach that allows for case specific policy interventions based on the type of bank risk under consideration. Ignoring this dual dimension of bank stability can thus lead to erroneous policy inferences.\u0000","PeriodicalId":44814,"journal":{"name":"Journal of Financial Regulation and Compliance","volume":"365 5","pages":""},"PeriodicalIF":0.9,"publicationDate":"2022-06-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41286583","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-06-14DOI: 10.1108/jfrc-09-2021-0076
Nicholas Addai Boamah, E. Opoku, Augustine Boakye-Dankwa
Purpose This study aims to examine the descriptive capabilities of efficiency, liquidity risk and capital risk for the cross-sectional and time-series variations in banks’ performance across emerging economies (EEs). It also examines the impact of the 2008 global financial crisis (GFC) on the effects of capital, liquidity and efficiency on banks’ performance. Design/methodology/approach The paper adopts a spatial panel model and collects data across 90 EEs. Findings The study shows that a surge in efficiency and liquidity improves bank performance. In addition, banks that finance credit creation primarily with core deposits perform better. Also, banks in EEs responded to the GFC. The findings show that banks in EEs respond to global events emanating from the developed economies. This indicates that EEs banks are relatively integrated with banks in developed markets. Originality/value Improvement in profit efficiency and effective liquidity and capital risk management enhance the performance of EEs banks.
{"title":"Capital regulation, liquidity risk, efficiency and banks performance in emerging economies","authors":"Nicholas Addai Boamah, E. Opoku, Augustine Boakye-Dankwa","doi":"10.1108/jfrc-09-2021-0076","DOIUrl":"https://doi.org/10.1108/jfrc-09-2021-0076","url":null,"abstract":"\u0000Purpose\u0000This study aims to examine the descriptive capabilities of efficiency, liquidity risk and capital risk for the cross-sectional and time-series variations in banks’ performance across emerging economies (EEs). It also examines the impact of the 2008 global financial crisis (GFC) on the effects of capital, liquidity and efficiency on banks’ performance.\u0000\u0000\u0000Design/methodology/approach\u0000The paper adopts a spatial panel model and collects data across 90 EEs.\u0000\u0000\u0000Findings\u0000The study shows that a surge in efficiency and liquidity improves bank performance. In addition, banks that finance credit creation primarily with core deposits perform better. Also, banks in EEs responded to the GFC. The findings show that banks in EEs respond to global events emanating from the developed economies. This indicates that EEs banks are relatively integrated with banks in developed markets.\u0000\u0000\u0000Originality/value\u0000Improvement in profit efficiency and effective liquidity and capital risk management enhance the performance of EEs banks.\u0000","PeriodicalId":44814,"journal":{"name":"Journal of Financial Regulation and Compliance","volume":" ","pages":""},"PeriodicalIF":0.9,"publicationDate":"2022-06-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45124529","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-06-07DOI: 10.1108/jfrc-02-2022-0015
Baljinder Kaur, K. Sood, S. Grima
Purpose This paper aims to determine how forensic accounting contributes to fraud detection and prevention and answer the following research questions: What are the standard techniques for fraud detection and prevention; and What are the significant challenges that hinder the application of forensic accounting in fraud prevention and detection? Design/methodology/approach The authors use the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) method to carry out a systematic literature review (SLR) to identify and assess the existing literature on forensic accounting. Findings There exists a positive correlation between forensic accounting and fraud detection and prevention. Moreover, in both the empirical and non-empirical findings, the authors note that fraud is complex, and in carrying out fraud investigations, one must be aware of its complexity. Practical implications Although drug counterfeiting is a sector where forensic accountants have paid less attention, it is a rapidly expanding fraud area. This paper finds that to detect fraud at an early stage, one must increase consumer understanding of basic forensic accounting techniques by implementing accurate supply chain monitoring systems and inventory management controls and conducting adequate and effective regulatory, honest and legitimate customs inspections. Social implications The major factors that restrict forensic accounting are a lack of awareness and education. Hence, it is essential to incorporate forensic accounting in undergraduate and post-graduate courses. Originality/value From the existing literature, it has been observed that very few studies have been conducted in this field using the PRISMA and SLR techniques. Also, the authors carried out a holistic study that focuses on three different areas – fraud detection, fraud prevention and the challenges in forensic accounting.
{"title":"A systematic review on forensic accounting and its contribution towards fraud detection and prevention","authors":"Baljinder Kaur, K. Sood, S. Grima","doi":"10.1108/jfrc-02-2022-0015","DOIUrl":"https://doi.org/10.1108/jfrc-02-2022-0015","url":null,"abstract":"\u0000Purpose\u0000This paper aims to determine how forensic accounting contributes to fraud detection and prevention and answer the following research questions: What are the standard techniques for fraud detection and prevention; and What are the significant challenges that hinder the application of forensic accounting in fraud prevention and detection?\u0000\u0000\u0000Design/methodology/approach\u0000The authors use the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) method to carry out a systematic literature review (SLR) to identify and assess the existing literature on forensic accounting.\u0000\u0000\u0000Findings\u0000There exists a positive correlation between forensic accounting and fraud detection and prevention. Moreover, in both the empirical and non-empirical findings, the authors note that fraud is complex, and in carrying out fraud investigations, one must be aware of its complexity.\u0000\u0000\u0000Practical implications\u0000Although drug counterfeiting is a sector where forensic accountants have paid less attention, it is a rapidly expanding fraud area. This paper finds that to detect fraud at an early stage, one must increase consumer understanding of basic forensic accounting techniques by implementing accurate supply chain monitoring systems and inventory management controls and conducting adequate and effective regulatory, honest and legitimate customs inspections.\u0000\u0000\u0000Social implications\u0000The major factors that restrict forensic accounting are a lack of awareness and education. Hence, it is essential to incorporate forensic accounting in undergraduate and post-graduate courses.\u0000\u0000\u0000Originality/value\u0000From the existing literature, it has been observed that very few studies have been conducted in this field using the PRISMA and SLR techniques. Also, the authors carried out a holistic study that focuses on three different areas – fraud detection, fraud prevention and the challenges in forensic accounting.\u0000","PeriodicalId":44814,"journal":{"name":"Journal of Financial Regulation and Compliance","volume":" ","pages":""},"PeriodicalIF":0.9,"publicationDate":"2022-06-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45826578","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-06-02DOI: 10.1108/jfrc-01-2022-0007
Ming Torng Ang, Y. Chow
Purpose The purpose of this study is to examine the influence of virtual currency (VC) development on financial stocks’ value in selected Asian equity markets and the moderating role of investor attention on this relationship. Design/methodology/approach The pooled ordinary least squares regression is used on a sample of 138 listed financial firms from four emerging Asian countries for the period 2016–2020. Findings This study finds that changes in VC values have greater spillover effects on the values of financial stocks in countries which do not recognize the legitimacy of VCs than in countries which do, due to the lack of breadth and depth of the former markets. Moreover, this paper also reports evidence of the greater moderating role of investor attention on this relationship in countries which do not recognize the legitimacy of VCs than in countries which do. Originality/value Although numerous studies have been conducted on the influence of VCs on stock performance, majority of these studies did not distinguish whether the sample countries being studied actually recognize the legitimacy of VC transactions or not. Moreover, extant literature has not considered the moderating role of investor attention on this relationship. It is the aim of this study to address these research voids by using a refined three-factor theory model of capital asset pricing model incorporating VCs to better represent stock performance in the digital economy era.
{"title":"Influence of virtual currency development and investor attention on financial stocks’ value: evidence from selected Asian equity markets","authors":"Ming Torng Ang, Y. Chow","doi":"10.1108/jfrc-01-2022-0007","DOIUrl":"https://doi.org/10.1108/jfrc-01-2022-0007","url":null,"abstract":"\u0000Purpose\u0000The purpose of this study is to examine the influence of virtual currency (VC) development on financial stocks’ value in selected Asian equity markets and the moderating role of investor attention on this relationship.\u0000\u0000\u0000Design/methodology/approach\u0000The pooled ordinary least squares regression is used on a sample of 138 listed financial firms from four emerging Asian countries for the period 2016–2020.\u0000\u0000\u0000Findings\u0000This study finds that changes in VC values have greater spillover effects on the values of financial stocks in countries which do not recognize the legitimacy of VCs than in countries which do, due to the lack of breadth and depth of the former markets. Moreover, this paper also reports evidence of the greater moderating role of investor attention on this relationship in countries which do not recognize the legitimacy of VCs than in countries which do.\u0000\u0000\u0000Originality/value\u0000Although numerous studies have been conducted on the influence of VCs on stock performance, majority of these studies did not distinguish whether the sample countries being studied actually recognize the legitimacy of VC transactions or not. Moreover, extant literature has not considered the moderating role of investor attention on this relationship. It is the aim of this study to address these research voids by using a refined three-factor theory model of capital asset pricing model incorporating VCs to better represent stock performance in the digital economy era.\u0000","PeriodicalId":44814,"journal":{"name":"Journal of Financial Regulation and Compliance","volume":" ","pages":""},"PeriodicalIF":0.9,"publicationDate":"2022-06-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46591462","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-05-23DOI: 10.1108/jfrc-08-2021-0068
Egidio Palmieri, E. Geretto, Maurizio Polato
Purpose This paper aims to verify the presence of a management model that confirms or not the one size fits all hypothesis expressed in terms of risk-return. This study will test the existence of stickiness phenomena and discuss the relevance of business model analysis integration with the risk assessment process. Design/methodology/approach The sample consists of 60 credit institutions operating in Europe for 20 years of observations. This study proposes a classification of banks’ business models (BMs) based on an agglomerative hierarchical clustering algorithm analyzing their performance according to risk and return dimensions. To confirm BM stickiness, the authors verify the tendency and frequency with which a bank migrates to other BMs after exogenous events. Findings The results show that it is impossible to define a single model that responds to the one size fits all logic, and there is a tendency to adapt the BM to exogenous factors. In this context, there is a propensity for smaller- and medium-sized institutions to change their BM more frequently than larger institutions. Practical implications Quantitative metrics seem to be only able to represent partially the intrinsic dynamics of BMs, and to include these metrics, it is necessary to resort to a holistic view of the BM. Originality/value This paper provides evidence that BMs’ stickiness indicated in the literature seems to weaken in conjunction with extraordinary events that can undermine institutions’ margins.
{"title":"European banks’ business models as a driver of strategic planning: one size fits all","authors":"Egidio Palmieri, E. Geretto, Maurizio Polato","doi":"10.1108/jfrc-08-2021-0068","DOIUrl":"https://doi.org/10.1108/jfrc-08-2021-0068","url":null,"abstract":"\u0000Purpose\u0000This paper aims to verify the presence of a management model that confirms or not the one size fits all hypothesis expressed in terms of risk-return. This study will test the existence of stickiness phenomena and discuss the relevance of business model analysis integration with the risk assessment process.\u0000\u0000\u0000Design/methodology/approach\u0000The sample consists of 60 credit institutions operating in Europe for 20 years of observations. This study proposes a classification of banks’ business models (BMs) based on an agglomerative hierarchical clustering algorithm analyzing their performance according to risk and return dimensions. To confirm BM stickiness, the authors verify the tendency and frequency with which a bank migrates to other BMs after exogenous events.\u0000\u0000\u0000Findings\u0000The results show that it is impossible to define a single model that responds to the one size fits all logic, and there is a tendency to adapt the BM to exogenous factors. In this context, there is a propensity for smaller- and medium-sized institutions to change their BM more frequently than larger institutions.\u0000\u0000\u0000Practical implications\u0000Quantitative metrics seem to be only able to represent partially the intrinsic dynamics of BMs, and to include these metrics, it is necessary to resort to a holistic view of the BM.\u0000\u0000\u0000Originality/value\u0000This paper provides evidence that BMs’ stickiness indicated in the literature seems to weaken in conjunction with extraordinary events that can undermine institutions’ margins.\u0000","PeriodicalId":44814,"journal":{"name":"Journal of Financial Regulation and Compliance","volume":" ","pages":""},"PeriodicalIF":0.9,"publicationDate":"2022-05-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43257252","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-05-19DOI: 10.1108/jfrc-02-2022-0011
Salvatore Polizzi, Enzo Scannella
Purpose This paper aims to analyse the implementation challenges faced by internal audit departments of public sector organisations and central banks when implementing continuous auditing (CA) systems. CA aims to monitor internal control systems and risk levels on a continuous basis to support the audit process. This study identifies the implementation challenges of CA systems and proposes adequate countermeasures. Design/methodology/approach This study employs the design science information system research and the design science research process methodologies to ensure the rigor of this analysis. These research methodologies are adopted to tackle identified organisational problems and propose solutions. This methodological approach consists in the following phases: identification of the problems and motivation; definition of the objectives of the solution; research design and development; evaluation; communication. Findings This study detects several implementation challenges for public sector organisations and central banks and proposes adequate solutions. This study finds that these challenges are related to organisations’ complexity, institutional rigidity, potential threats to internal auditors’ independence and the issue of considering CA system as a “real time error correction” mechanism. The solutions involve the development of a business process focussed audit approach to enable internal auditors to analyse CA indicators, and the use of CA systems to support each phase of the audit process. Originality/value This study contributes to the scant strand of literature on internal auditing in central banks. Given the exceptional demand for guidance concerning internal auditing in the public sector and in central banks, this paper provides guidelines for these organisations to implement CA systems and to tackle implementation challenges. The analysis allows internal audit departments within central banks to better support their organisations in the achievement of their important regulatory and policy objectives.
{"title":"Continuous auditing in public sector and central banks: a framework to tackle implementation challenges","authors":"Salvatore Polizzi, Enzo Scannella","doi":"10.1108/jfrc-02-2022-0011","DOIUrl":"https://doi.org/10.1108/jfrc-02-2022-0011","url":null,"abstract":"\u0000Purpose\u0000This paper aims to analyse the implementation challenges faced by internal audit departments of public sector organisations and central banks when implementing continuous auditing (CA) systems. CA aims to monitor internal control systems and risk levels on a continuous basis to support the audit process. This study identifies the implementation challenges of CA systems and proposes adequate countermeasures.\u0000\u0000\u0000Design/methodology/approach\u0000This study employs the design science information system research and the design science research process methodologies to ensure the rigor of this analysis. These research methodologies are adopted to tackle identified organisational problems and propose solutions. This methodological approach consists in the following phases: identification of the problems and motivation; definition of the objectives of the solution; research design and development; evaluation; communication.\u0000\u0000\u0000Findings\u0000This study detects several implementation challenges for public sector organisations and central banks and proposes adequate solutions. This study finds that these challenges are related to organisations’ complexity, institutional rigidity, potential threats to internal auditors’ independence and the issue of considering CA system as a “real time error correction” mechanism. The solutions involve the development of a business process focussed audit approach to enable internal auditors to analyse CA indicators, and the use of CA systems to support each phase of the audit process.\u0000\u0000\u0000Originality/value\u0000This study contributes to the scant strand of literature on internal auditing in central banks. Given the exceptional demand for guidance concerning internal auditing in the public sector and in central banks, this paper provides guidelines for these organisations to implement CA systems and to tackle implementation challenges. The analysis allows internal audit departments within central banks to better support their organisations in the achievement of their important regulatory and policy objectives.\u0000","PeriodicalId":44814,"journal":{"name":"Journal of Financial Regulation and Compliance","volume":" ","pages":""},"PeriodicalIF":0.9,"publicationDate":"2022-05-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44131517","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"TAVI at 20: how a crazy idea led to a clinical revolution.","authors":"Hélène Eltchaninoff, Martine Gilard, Alain Cribier","doi":"10.4244/EIJ-E-22-00007","DOIUrl":"10.4244/EIJ-E-22-00007","url":null,"abstract":"","PeriodicalId":44814,"journal":{"name":"Journal of Financial Regulation and Compliance","volume":"16 1","pages":"15-18"},"PeriodicalIF":6.2,"publicationDate":"2022-05-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.ncbi.nlm.nih.gov/pmc/articles/PMC11075970/pdf/","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84543392","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-05-10DOI: 10.1108/jfrc-04-2021-0029
Zhanhai Wang
Purpose This paper aims to study the effects of interest on reserves (IOR) on banks’ behavior in a theoretical framework. Design/methodology/approach This paper introduces IOR into both Cooper and Ross (1998) and Cooper and Ross (2002) and conducts quantitative analysis. It thoroughly examines the effects of IOR on banks’ resource allocation decisions under different assumptions. Findings In the model without deposit insurance, the results of this paper show that paying IOR facilitates the bank to use the run-proof contract. When the run-admitting contract is adopted, there is a set of conditions under which the bank is indifferent between holding illiquid asset and excess liquid reserves. In the model with deposit insurance, the results show that if the riskless illiquid investment is profitable and available, then paying IOR can hardly influence the bank's resource allocation. If the riskless illiquid investment is limited, then a certain level of IOR could fulfill some monetary targets. Originality/value Little research has combined IOR and model of bank runs. It helps to extend the theoretical analysis in this perspective.
目的在理论框架下研究准备金利率对银行行为的影响。本文将IOR引入Cooper and Ross(1998)和Cooper and Ross(2002)，并进行定量分析。在不同的假设条件下，研究了IOR对银行资源配置决策的影响。在没有存款保险的模型中，本文的研究结果表明，支付IOR有利于银行使用防挤兑合同。当采用挤兑接纳合同时，在一定条件下，银行对持有非流动性资产和持有超额流动性准备金是无所谓的。在有存款保险的模型中，结果表明，如果无风险的非流动性投资是有利可图的，那么支付IOR几乎不会影响银行的资源配置。如果无风险的非流动性投资是有限的，那么一定水平的IOR可以实现一些货币目标。独创性/价值很少有研究将IOR与银行挤兑模型结合起来。这有助于拓展这一视角下的理论分析。
{"title":"Interest on reserves, bank runs and investment decisions","authors":"Zhanhai Wang","doi":"10.1108/jfrc-04-2021-0029","DOIUrl":"https://doi.org/10.1108/jfrc-04-2021-0029","url":null,"abstract":"\u0000Purpose\u0000This paper aims to study the effects of interest on reserves (IOR) on banks’ behavior in a theoretical framework.\u0000\u0000\u0000Design/methodology/approach\u0000This paper introduces IOR into both Cooper and Ross (1998) and Cooper and Ross (2002) and conducts quantitative analysis. It thoroughly examines the effects of IOR on banks’ resource allocation decisions under different assumptions.\u0000\u0000\u0000Findings\u0000In the model without deposit insurance, the results of this paper show that paying IOR facilitates the bank to use the run-proof contract. When the run-admitting contract is adopted, there is a set of conditions under which the bank is indifferent between holding illiquid asset and excess liquid reserves. In the model with deposit insurance, the results show that if the riskless illiquid investment is profitable and available, then paying IOR can hardly influence the bank's resource allocation. If the riskless illiquid investment is limited, then a certain level of IOR could fulfill some monetary targets.\u0000\u0000\u0000Originality/value\u0000Little research has combined IOR and model of bank runs. It helps to extend the theoretical analysis in this perspective.\u0000","PeriodicalId":44814,"journal":{"name":"Journal of Financial Regulation and Compliance","volume":" ","pages":""},"PeriodicalIF":0.9,"publicationDate":"2022-05-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48557419","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-05-09DOI: 10.1108/jfrc-12-2021-0106
Isaac Ofoeda
Purpose This study aims to examine the impact of anti-money laundering (AML) regulations on financial inclusion using a comprehensive measure of AML regulations developed by the Basel Institute on Governance. Again, this study investigates the existence of threshold effects in the AML regulations–financial inclusion nexus. Design/methodology/approach This study uses panel data across 212 economies (developed, developing and Africa) of the globe-spanning from 2012 to 2019. This study uses the dynamic panel threshold estimation technique proposed by Seo et al. (2019). Findings In general, the results indicate that AML regulations promote financial inclusion across the globe. However, AML regulations spur financial inclusion below the threshold of AML regulations, whereas, above the thresholds, AML regulations have damaging effects on financial inclusion. Further, the author finds that AML regulations have a detrimental impact on financial inclusion for developed economies. In contrast, AML regulations promote financial inclusion at all levels of AML regulations for African countries. Practical implications The findings of this study imply that countries must make conscious efforts in combating the incidence of money laundering by establishing sound AML regulatory regimes as a means of promoting financial inclusiveness. However, there is a need for regulators to ensure cost-effective and efficient implementation of AML regulations. Originality/value The value of this paper is its contribution to literature as it is a major attempt in empirically assessing the impact of AML regulations on financial inclusion. Again, to the best of the author’s knowledge, this is the first study to examine the non-linear relationship between AML regulations and financial inclusion.
{"title":"Anti-money laundering regulations and financial inclusion: empirical evidence across the globe","authors":"Isaac Ofoeda","doi":"10.1108/jfrc-12-2021-0106","DOIUrl":"https://doi.org/10.1108/jfrc-12-2021-0106","url":null,"abstract":"\u0000Purpose\u0000This study aims to examine the impact of anti-money laundering (AML) regulations on financial inclusion using a comprehensive measure of AML regulations developed by the Basel Institute on Governance. Again, this study investigates the existence of threshold effects in the AML regulations–financial inclusion nexus.\u0000\u0000\u0000Design/methodology/approach\u0000This study uses panel data across 212 economies (developed, developing and Africa) of the globe-spanning from 2012 to 2019. This study uses the dynamic panel threshold estimation technique proposed by Seo et al. (2019).\u0000\u0000\u0000Findings\u0000In general, the results indicate that AML regulations promote financial inclusion across the globe. However, AML regulations spur financial inclusion below the threshold of AML regulations, whereas, above the thresholds, AML regulations have damaging effects on financial inclusion. Further, the author finds that AML regulations have a detrimental impact on financial inclusion for developed economies. In contrast, AML regulations promote financial inclusion at all levels of AML regulations for African countries.\u0000\u0000\u0000Practical implications\u0000The findings of this study imply that countries must make conscious efforts in combating the incidence of money laundering by establishing sound AML regulatory regimes as a means of promoting financial inclusiveness. However, there is a need for regulators to ensure cost-effective and efficient implementation of AML regulations.\u0000\u0000\u0000Originality/value\u0000The value of this paper is its contribution to literature as it is a major attempt in empirically assessing the impact of AML regulations on financial inclusion. Again, to the best of the author’s knowledge, this is the first study to examine the non-linear relationship between AML regulations and financial inclusion.\u0000","PeriodicalId":44814,"journal":{"name":"Journal of Financial Regulation and Compliance","volume":" ","pages":""},"PeriodicalIF":0.9,"publicationDate":"2022-05-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49383293","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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