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Using firm‐level data from 16 euro‐area countries over 2008–2014, we investigate how the performance of bank‐affiliated private equity‐backed companies evolves after the European Banking Authority increased capital requirements for their parent banks. We find that portfolio companies connected to exposed banks reduce their level of investment and experience weaker asset growth, employment growth and profitability following the capital exercise. We further show that the effect is stronger for companies likely to face financial constraints. Finally, the findings indicate that the negative effect of the capital exercise is muted when the private equity sponsor is more experienced. [ABSTRACT FROM AUTHOR]

Regulators frequently relax accounting rules during a financial crisis as a means of regulatory forbearance. The new accounting options provide banks with an opportunity for an accrual-based increase in their regulatory capital. The use of such an accounting option helps reduce the costs of government interventions such as bailouts and avoid the dilution of existing shareholders' ownership rights. We examine the introduction of the reclassification option for financial assets during the 2008 financial crisis and study the position of accrual-based options in the pecking order of banks' recapitalization measures. The findings suggest that the accrual-based increase in regulatory capital is temporary and does not provide permanent relief. Consistent with the long-term costs of accrual-based measures, investors perceive the accounting choice as a negative signal. If banks do not complement their use of the accounting option by other corrective actions that result in a real capital increase and a liquidity injection, they continue to suffer from low capitalization and financial difficulties in the following years. Ultimately, government interventions in accounting regulation are unlikely to offer a sustainable solution to capital shortfalls in the banking sector if they are not supported by the concurrent enforcement of real corrective actions. This paper was accepted by Brian Bushee, accounting. Funding: The authors acknowledge financial support from Deutsche Forschungsgemeinschaft (Project-ID 403041268-TRR 266) as well as from IAAER and KPMG under the "Research Informing the IASB Standard Setting" grant. Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2022.4364. [ABSTRACT FROM AUTHOR]

The banking system's role as an intermediary between depositors and borrowers makes its stability a crucial element of the economy. Individual bank stability impacts the stability of the financial sector and, consequently, the real sector and economic growth. This study is a detailed investigation of bank stability scores for the Turkish banking sector. Turkey experienced a major banking crisis from 2000 to 2001. However, with an improved regulatory environment and structural reforms, its resilience to shocks increased significantly in subsequent years. The present study contributes to the literature in three areas. First, it applies eight variations of the Z-score to the Turkish banking sector to test the importance of time and risk variation. Second, it investigates the impact on stability scores of several factors-the implementation of new capital regulations and Basel III liquidity rules, the Turkish lira crisis and the effects of COVID-19). Finally, it measures the contribution to systemic risk of each Turkish bank using the leave-one-out (LOO) Z-score method; this is the first study to use this method to analyse the contribution of different bank types to the overall stability of the sector. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to present a corporate social responsibility (CSR) model that would apply to Islamic banks, considering the international aspect of social responsibility because CSR is not applicable in the same way in all types of societies. Design/methodology/approach: Based on the extensive review of the existing literature, the authors aim to present an Islamic CSR model applicable to Islamic banks. This study is based on the international approach to CSR developed by Masoud (2017). Each responsibility has an equal share but with specific changes regarding the order of priorities between them and the type of responsibility. Findings: The findings show that the existing literature provides several Islamic CSR models. Most of these models are general and offer guidelines to Islamic financial institutions, but no model applies exclusively to Islamic banks. Using these models for Islamic banks is challenging because of their specific business activities, especially in non-Muslim countries. This study proposes a model that could act as the main guideline for Islamic banks with enough flexibility to meet different market and stakeholders' requirements. Practical implications: The model was not tested on a sample, and not all Islamic principles were considered. However, it is applicable for Islamic banks, especially considering internationalization in their businesses and the further development of Islamic banking. At the same time, this model puts ethical norms in the spotlight. This is particularly emphasized in the case of non-Muslim countries or in societies where a particular law does not regulate Islamic bank activities. Originality/value: Although there is a growing literature on this topic, existing studies primarily discuss the Islamic approach to CSR from the overall perspective, not in a specific industry. While some authors developed their own Islamic CSR models relying on the primary Shariah sources, others base their proposals on other classical CSR ideas. To the best of the authors' knowledge, this is the first study based on the CSR model developed by Masoud (2017), considering the relationship between economics and religion and the implications of the Islamic moral economy. [ABSTRACT FROM AUTHOR]

We develop a model in which accounting information and prudential regulation interact to affect banks' incentives to originate loans. Prudential regulators impose capital requirements to prevent banks from taking excessive risk. However, regulators cannot commit to ex ante efficient intervention and, instead, respond to ex post accounting information. We show that capital requirements and accounting measurement are substitutes when considered separately. By contrast, when considered jointly, accounting measurement and capital requirements are complementary tools that affect the level and efficiency of credit decisions. Comparative statics link capital requirements, quality of accounting information, and regulatory intervention to credit market conditions. An upshot of our analysis is that by appropriately optimizing the information from expected loss models, prudential regulators may design looser capital requirements to spur more bank lending. JEL Classifications: G21; G28; M41; M48. [ABSTRACT FROM AUTHOR]

We analyse the impact of bank regulation on the risks of Islamic banks (IBs) and conventional banks (CBs) between 2004 and 2015 by employing 455 CBs and 95 IBs from 22 countries where IBs and CBs coexist. Since the objective of Basel regulations is to achieve a stable banking sector by mitigating risks, we examine the impact of bank regulations on various risks of IBs and CBs by using a regression framework. We examine solvency risk, credit risk, idiosyncratic risk and systemic risk by using capital oversight, restriction on activities, private monitoring and supervisory power bank regulation data provided by the World Bank. The findings show that though the Basel regulations were originally developed for CBs, our results imply that they are effective for IBs as well as CBs. However, our study also shows that regulations affect IBs and CBs differently as their business models are different. More targeted regulations towards IBs would be necessary to support IBs. Additionally, in regions with higher economic freedom indexes, banking regulations can mitigate the risk of IBs and CBs to a greater extent. Our results imply that the combination of free economic policies and banking supervision addresses risks in banking effectively. Finally, the bank regulations did not appear to be able to control the risk of the sample banks during the 2007–2009 crisis. Hence, the Basel committee needs to rethink about regulations during crisis times. [ABSTRACT FROM AUTHOR]

The recent global financial crisis has clearly highlighted the importance of the timely identification of weak banks. This paper introduces and analyses a new sample of European Union (EU) banks, which faced distress during 2008–2015 and provides evidence regarding the relationship between distress and bank‐specific, macroeconomic, banking sector and stock market distress determinants, paying particular attention to issues that have been central following the crisis, such as capital, size and revenue diversification. Our findings regarding these variables seem to "connect" well with current supervisory actions. The paper also focuses on banks in EU countries that faced economic problems and documents that the probability of distress in these countries has been influenced by different factors, in comparison to the rest of the EU. [ABSTRACT FROM AUTHOR]

There is a puzzle in the literature which seems to indicate that high capital levels introduced by Basel III increase bank risk. This paper attempts to solve this puzzle by investigating whether the risk of the eight U.S. global systemically important banks (GSIBs) increased in the Basel III period from previous periods. This paper uses case studies of the eight U.S. GSIBs to evaluate whether Basel III has changed their risk perceived by the market. Basel III has reduced the systematic risk of equity of U.S. GSIBs perceived by the stock market, and it does not explain the decline in return on equity (ROE) which may indicate some increase in large bank financial risk. The paper breaks down stock market measures into drivers which capture systematic risk of equity and other drivers which capture financial risk, and it finds new evidence which solves the puzzle in the literature on large bank risk. The findings of the paper help investors, creditors and regulators to have a clear understanding of the market perception of large bank risk. The paper provides new methods and evidence which could help regulators to assess the impact of Basel III on bank risk perceived by the market. [ABSTRACT FROM AUTHOR]

Copyright of Trace: Travaux et Recherches dans les Amériques du Centre is the property of Centro de Estudios Mexicanos & Centroamericanos and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Revista Direito GV is the property of Fundacao Getulio Vargas and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This research paper purposes to discover the reasons that impact the working capital management (WCM) of Indian-listed manufacturing firms. The study uses a panel data set of 291 firms covering years from 2011 to 2020. The authors use working capital requirement (WCR) and cash conversion cycle (CCC) as proxies for working capital management and assess the effect of operating cash flow (OCF), performance as return on assets (ROA), valuation as Tobin's Q (TQs), size, age, growth opportunities, leverage, and economic condition as the gross domestic product (GDP) over them. We use OLS and GMM estimators for the analysis of the study. Indian listed manufacturing firms' cash conversion cycle (CCC) has been found to be positively correlated to their firm value, performance, and leverage. At the macro level, CCC is positively correlated to GDP. Further, CCC has been found to be negatively correlated with growth opportunities, operating cash flow, firm size, and age. The working capital requirement (WCR) of the firms, on the other hand, is positively associated with performance, firm age, and value, while it is negatively related to OCF, growth opportunities, leverage, size, and GDP. Our study adds uniqueness to the existing works on working capital in many ways. First, to our knowledge, very few studies exist to measure working capital management in the Indian context using two proxies WCR and CCC of working capital as dependent variables. Second, we used both OLS and GMM estimators to measure the explanatory variable's effect over WCR and CCC which provided a more valid result. Third, we used eight factors as explanatory variables that provide a wider scope to explain the working capital management of Indian listed firms. [ABSTRACT FROM AUTHOR]

Copyright of FinanzRundschau is the property of De Gruyter and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Prudential regulation has become increasingly important over time. In such a context, strict suitability requirements for members of the management body and key function holders are considered an adequate tool to safeguard the sound and prudent management of banks. In the years following the Great Financial Crisis in 2008–2009 and the Eurozone sovereign debt crisis in 2010–2012, the regulatory and supervisory approach to banks' corporate governance has seen a significant evolution. The centralisation of banking supervision at the Eurozone level was complemented by the application of a single rulebook throughout the European Union which stated, in compliance with the Capital Requirements Directive, higher suitability requirements for being appointed as a member of a management body or as a key function holder at a bank. Furthermore, the choice to identify fit and proper requirements through standards attributes significant power to the decision maker, thus allowing greater public control over private choices, and is justified by the need to prevent negative externalities. This approach is open to debate. Against the background of the pursuit of public interest, the lawmaker confers discretionary power on the supervisory authorities (the European Central Bank and the national competent authorities), and sets restrictions on the job market for board member candidates. This paper is a contribution enriching the ongoing discussion about the existing regulatory and policy regime, with a special focus on the specific functions performed by the management body members and particularly by the chairs of the management body's special committees. [ABSTRACT FROM AUTHOR]

The Basel III regulation explicitly prescribes the use of Hodrick–Prescott filters to estimate credit cycles and calibrate countercyclical capital buffers. However, the filter has been found to suffer from large ex-post revisions, raising concerns on its fitness for policy use. To investigate this problem, we study credit cycles in a panel of 26 countries between 1971 and 2018. We reach two conclusions. The bad news is that the limitations of the one-side HP filter are serious and pervasive. The good news is that they can be easily mitigated. The filtering errors are persistent and hence predictable. This can be exploited to construct real-time estimates of the cycle that are less subject to ex-post revisions, forecast financial crises more reliably, and stimulate the build-up of bank capital before a crisis. [ABSTRACT FROM AUTHOR]

In the aftermath of the Global Financial Crisis, financial regulation uses micro and macroprudential rules, most of the time motivated by empirical studies. This article suggests a theoretical explanation for countercyclical and progressive capital requirements that incorporate micro- and macro-prudential stabilization objectives. The Capital Adequacy Ratio (CAR) imposed to individual banks by a Prudential Authority (PA) would thus represent an optimal regulation whose aim is to avoid individual and systemic risk accumulation by imposing minimal constraints to financial institutions. This corresponds to the implementation of optimal time-varying prudential capital requirements to banks, with non-linear structure, that allows PA to take progressive countercyclical actions in order to ensure financial stability. We also test the mechanism in a DSGE model and show that it would be more suitable for the financial and real stability compared to the existing fixed prudential ratios. [ABSTRACT FROM AUTHOR]

Most of prudential regulations apply to national institutions while, in practice, banks operate at the global level, generating international banking flows which are not comprehensively captured by policies with a domestic remit. This may give rise to spillovers, i.e., effects not considered ex ante in the objectives and/or constraints of authorities in charge of prudential policy, the effectiveness of which may be harmed. Using BIS data on foreign bank lending over a large sample of countries, we investigate international spillovers from French prudential policies. Overall, we show that French prudential policies entail a reduction in foreign banks' lending to French residents. Yet some measures may lead to undesired leakages that potentially undermine authorities' goals: foreign bank affiliates' exposure to France rose by 1.1% (1.9 Bn USD) on average over 2011–17 owing to the implementation of Basel capital requirements. [ABSTRACT FROM AUTHOR]

We assess if capital ratios reduced the occurrence of banking crises in the European Union from 1998 to 2017. We use a Probit model and estimate the effect of two measures: the bank capital to total assets ratio and the bank regulatory capital to Risk Weighted Assets (RWA). We found that both measures affect negatively the probability of crisis. This result is robust to the exclusion of outliers, to the inclusion of various control variables for banking, financial and macroeconomic risks. Finally, we show that while the bank regulatory capital to RWA has always a negative effect on the probability of crisis, the bank capital to total assets ratio is only significant above a threshold, estimated between 10 ​% and 12 ​%. [ABSTRACT FROM AUTHOR]

Both equity and regulation play key roles in determining the ability of banks to create credit. Equity varies endogenously, while regulations are exogenously imposed. This study proposes a banking model to investigate how changes in bank equity due to interest receipts and expenditures affect credit and money creation under Basel III regulations. Four Basel III regulations—the capital adequacy ratio, the leverage ratio, the liquidity coverage ratio, and the net stable funding ratio—are discussed. Their effect on credit creation are demonstrated by the changes that occur in the credit supply in response to the changes in equity arising from interest payments. This study identifies seven regulatory scenarios under these four regulations. In each scenario, there exists a multiplier that relates the change in equity to the resultant change in the credit supply. Correspondingly, there is a multiplier effect on the money supply. This study sheds new light on how bank equity and Basel III regulations affect credit and money creation. • Banks respond to changes in their equity by creating credit and money. • Consequently, there exist multiplier effects on their credit and money supply. • This study shows seven regulatory scenarios under Basel III regulations. • The multipliers depend on the specific scenario. • Under liquidity coverage ratios, increasing equity may reduce the credit supply. [ABSTRACT FROM AUTHOR]

We investigate whether and how strongly Basel 3 chief innovations jointly affected in different ways individual Eurozone banks' stability (z-score) across six business models (BMs). We study this issue in the initial years when adaptation was most intense (2011–2014) and the Eurozone underwent a phase with sovereign crises abated by ECB policies easing financial conditions. In parallel, we run this exercise over 2000–2010 data, a time frame over which Basel 3 did not apply yet to see through the eyes of the regulator. Irrespective of BMs, we identify the leverage ratio as the most effective driver of banks' stability. However, the impact on z-score of Basel 3 chief drivers does not seem to differ significantly on 2011–2014 vs. 2000–2010. Next, interactions with banks' BMs suggest that Basel 3 innovations improve z-scores the most at traditionally focused banks (cooperative and savings banks), vis-à-vis diversified banks. Our results suggest Basel regulatory decisions were questionable. First, the front loading of the increased minimum capital requirements vs. the backloading of the leverage ratio phasing in may have lured banks from credit to financial assets. Second, our findings support the desirability of revising the current "one-size-fits-all" European prudential framework, which disregards BMs. [ABSTRACT FROM AUTHOR]

We model dynamic bank capital structure under three optimally‐designed regulatory regimes for dealing with potential default—bailout, in which the government provides capital; bail‐in, which the private‐sector provides needed funds; and no regulatory intervention, allowing the institutions to fail. Only under the optimally‐designed bail‐in regime do banks recapitalize during times of distress. Their pre‐commitment to recapitalize reduces debt costs and increases debt capacity. No regulatory intervention is suboptimal for all agents. Optimal bailouts and bail‐ins both generate no asset substitution‐moral hazard behavior under optimal policies in which regulators intervene at early stages of distress. Empirical tests of changes in capital behavior from the pre‐Global Financial Crisis bailout period to the post‐crisis bail‐in period corroborate the model's predictions. [ABSTRACT FROM AUTHOR]

Inspired by the concept of erotic capital, we claim that candidates' and employees' erotic capital is one of the factors that may influence on the decisions related to human resources management. Hakim's concept is however criticized for being too extensive, too incoherent and lacking empirical studies to support it. Therefore, we have conducted empirical studies. They aimed at validating the construct of erotic capital in the context of its role in the assessment of another person, assessment that is intrinsic to HR decision-making. An additional goal was to develop a tool (questionnaire) for estimating the impact of the candidate's/employee's erotic capital on decisions being made concerning recruitment and appraisal in the organization. Research was split into 3 stages. Stage one consisted of studying the literature. At the second stage, we proceeded with the assessment of content and face validity of the research tool. Within the third stage of the research, the construct was subject to theoretical validity check. Validation proved that the obtained model of erotic capital fulfilled the requirements of: reliability, validity (divergent and predictive) and unidimensionality. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Economics & Administrative Sciences / Afyon Kocatepe Üniversitesi Iktisadi ve Idari Bilimler Fakültesi Dergisi is the property of Afyon Kocatepe University, Faculty of Business Administration and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

We investigate the benefits of risk pooling for the policyholders of stock insurance companies under different solvency standards. Using second‐degree stochastic dominance, we document that the utility of risk‐averse policyholders is increasing in the pool size if the equity capital is proportional to the premiums written. To the contrary, an increase in the pool size can reduce the policyholders' utility if the equity capital is determined using the Value‐at‐Risk (VaR). We show that pooling with a larger number of risks is also beneficial for all risk‐averse policyholders under a VaR‐based regulation if the pool satisfies an excess tail risk restriction. Our analysis provides new insights for the design of solvency standards and reveals a potential disadvantage of risk‐based capital requirements for policyholders. [ABSTRACT FROM AUTHOR]

The study examines the nexus between Basel capital requirements, banking sector risk-taking, and profitability in Asian emerging markets by using dynamic panel GMM methodology. The findings of the study suggest that regulatory capital positively affects risk-taking which validates the "regulatory hypothesis." The findings also reveal that regulatory capital positively while risk negatively affects the profitability in the banking sector. The current study finds the bidirectional causality between the regulatory capital and risk-taking, implying that banks with higher capital ratios are expected to increase in risk-taking and vice versa. The findings also suggest that managerial ownership positively affects while foreign ownership negatively impacts risk-taking consistent with the agency theory of corporate governance. The study proposes that ownership structure has a significant influence on bank risk and profitability, however, the combined impact of regulatory capital through its interaction with the ownership structure is not proved to be significant. [ABSTRACT FROM AUTHOR]

We use the world's largest publicly available dataset of operational risk to model cyber losses and show that the Tweedie model best fits the cyber loss severity in the financial industry. Three key determinants of loss severity are firm size, contagion risk and legal liability. We also measure the size of risk based on the estimation results and show a large degree of heterogeneity across financial firms. The results are particularly relevant with respect to the recent discussion on simplifying operational risk capital requirements and reiterate the importance of considering individual firm characteristics when modelling operational losses. [ABSTRACT FROM AUTHOR]

Catastrophe (CAT) bonds are a means to share economic losses resulting from natural disasters including hurricanes, earthquakes, and—more recently, as used by the World Bank—pandemics. Because these pandemic CAT (PCAT) bonds were subsidized by government donations and, absent the occurrence of covered pandemics, were full recourse to the World Bank, this precedent was not market‐tested for the commercial viability of such instruments. This paper examines PCAT bonds as a means of securitization for pandemic risk through the lenses of reinsurers′ unmet capital needs and the requirements for the potential viability of a PCAT‐bond market. Where the reinsurance market has limited capacity to either absorb or spread the risks of global‐level CATs, risk securitization may be effective for layered risk sharing. The authors explore whether pandemic risk may be insurable by increasing reinsurance capacity to handle losses from business interruptions that are due to unintentional pandemics. Are PCAT bonds a potential means to achieving this protection? Historically, insurers were reluctant to enter this market because the required spreads and associated bond‐issuance expenses were considered prohibitively high. The situation has improved, although there remains much room and need for growth in this market. [ABSTRACT FROM AUTHOR]

Little is known about the trade-off mechanism underlying raising bank capital and enhancing bank liquidity creation, as empirical evidence is sparse. Pursuing Basel II target capital seems challenging and costly because it could generate unintended consequences, such as reducing liquidity creation. Thus, the aim of this study is to point out that the pursuit of raising capital to meet Basel II standards in recent years has limited the liquidity creation function of banks. This finding is reliable and consistent across different research methods, i.e. least absolute shrinkage and selection operator (LASSO regression) and the simultaneous equations model (SEM). We chose Vietnam's banking system for this study because applying Basel II in Vietnam has been topical in recent years and also more challenging than in the rest of the world. Our finding strengthens academically the financial fragilitycrowding out hypothesis developed by Diamond & Rajan (2000). [ABSTRACT FROM AUTHOR]

This paper aims to examine the determinants of financial stability in Jordanian commercial banks based on annual data for the period from 2011 to 2018. Based on the pooled effect model, this study shows that SME loans and capital adequacy positively and statistically affect the stability of Jordanian commercial banks, while financial inclusion, liquidity risk and credit risk negatively and statistically affect the stability of Jordanian commercial banks. The study recommends increasing the directing of bank loans towards small and medium enterprises, and the necessity for bank managers to commit to capital adequacy requirements because of their positive impact on banks' stability. This study recommends that banks experiencing financial stability accelerate the increase in the rate of financial inclusion because financial inclusion ratios are very low in most of these stable banks. On the other hand, Jordanian commercial banks that have relatively high rates of financial inclusion should reduce the operating expenses resulting from financial inclusion. Bank managers also have to maintain sufficient liquidity in their banks and enhance credit standards by increasing collateral requirement from customers. [ABSTRACT FROM AUTHOR]

Over the past decade, a consensus has emerged among academics and policy makers that climate change could threaten the stability of banks, insurers, and the broader financial system. In response, regulators from around the world have begun implementing policies to mitigate emerging climate risks in the financial sector. The United States, however, lags significantly behind other countries in addressing such risks. This article argues that the United States' sluggishness in responding to climate‐related financial risk is problematic because the U.S. banking system is uniquely susceptible to climate change. The United States' vulnerability stems, in part, from a little‐known statutory provision that prohibits U.S. regulators from relying on external credit ratings in bank capital requirements. Because of this deviation from internationally accepted capital standards, when a credit rating agency downgrades a "dirty" company, U.S. banks that lend to that company need not compensate by maintaining a bigger capital cushion. Over time, this dynamic will likely incentivize "dirty" companies to borrow more from U.S. banks, intensifying the U.S. banking system's exposure to climate risks. This article contends that the United States must overcome this unusual weakness by taking bold steps to safeguard the domestic financial system from the climate crisis. [ABSTRACT FROM AUTHOR]

In recent years, US share buyback costs have hit record highs, in part due to the 2017 Tax Reform, shareholder activities and record low borrowing costs. The purpose of the present study is to explore the reasons for choosing a policy of payments to investors in American companies and the impact of share buybacks on the results of companies and the economic system. The study reviews traditional theories that explain the choice of investor payout policy. The authors have highlighted the main motives of companies when making decisions on the payment mechanism. After examining the existing theoretical aspects of the choice of payment policy and the trend of US buybacks, a panel data regression analysis of is carried out to comprehensively investigate the causes and consequences of the choice of payment policy. The study identifies managements’ motives for the share buyback and demonstrates the positive impact of share buybacks on the company’s development.

The subject of this paper is the analysis of the concentration of capital on the insurance market in the Republic of Serbia and the identification of critical points in the analysis of insolvency of insurers. The necessity of economic and social protection of the interests of insured persons in conditions when the business of insurance companies is objectively exposed to a large number of risks can be achieved only if insurance companies meet extremely strict solvency requirements. In addition to the requirements for the adequacy of recognized liabilities and capital adequacy requirements, insurance companies are additionally faced with a number of special requirements, including requirements relating to the matching of assets, capital and liabilities. Although capital adequacy is the strongest type of guarantee, ie the ability of the insurance company to settle its future obligations based on claims, payments of insured amounts and other obligations, in essence compliance means that the insurer has additionally met the requirements regarding the amount and relative relations between assets, capital and liabilities, within assets or liabilities, as well as the relative relationship between certain categories of assets and capital and liabilities. The aim of this paper is to point out that for the insurer, in addition to capital adequacy and adequacy of technical reserves, the existence of financial balance is essential, ie the establishment of structural and maturity matching of assets, capital and liabilities. The structure of the paper provides insight into the analysis of capital concentration and fulfllment of capital requirements of insurers operating in the insurance market in Serbia, but also consideration of solvency assumptions and insight into the methodological apparatus used in the process of insolvency and security analysis of insurers.

Purpose: Human capital is considered by many to be a firm's most important asset. However, because no international human capital reporting framework exists, firms can decide to include/exclude human capital details on annual reports. Based on legitimacy theory, firms that disclose high levels of human capital information can be considered congruent with the expectations of society. However, firms can also choose to include human capital information on annual reports for symbolic purposes as an image management strategy. Design/methodology/approach: Using 2018 as a sample period, content analysis is used to evaluate the annual reports of the 25 largest British and 25 largest Korean firms to demonstrate the propensity of British/Korean firms to disclose human capital information as numerical and textual data. Findings: The authors report that South Korean firms provide high levels of human capital information using narrative and numerical data, including value added human capital elements included on integrated reports. British firms on the other hand tend to use primarily positive narrative and limited numerical human capital data to present human capital information. Originality/value: The results imply South Korean firms provide robust human capital information on annual reports as a legitimacy strategy. On the other hand, the UK's human capital reporting requirement can be considered as a form of image management. The results therefore have important policy implications for legislators, labour unions and firm stakeholders with incentives to enhance human capital information transparency. [ABSTRACT FROM AUTHOR]

In this article, we discuss how the too‐big‐to‐fail dilemma for large financial institution is addressed in the regulatory framework and how (differently) regulators in the EU apply it. The European Banking Authority (EBA) has devised a buffer guideline for identifying other systemically important institutions (OSIIs) to address this issue. This guideline defines how to identify OSIIs by a scoring process but does not specify how to map these scores into additional capital buffers. In this study, we empirically show that the OSII buffer assignment is very heterogeneous in Europe. First, based on all EU banks that were classified as OSIIs, we show that the OSII score has less impact on the OSII buffer than the headquarter country dummy. Second, if all countries applied the German OSII buffer assignment, the additional capital requirements in the euro area would increase by 90 bn EUR. Third, we analyze whether our results could be explained by regulatory capture which is measured by supervisory quality, supervisory funding, importance/concentration of the banking system, and political orientation of the government. We find among others that supervisory quality and supervisory funding without banks' participation increase OSII buffers significantly. [ABSTRACT FROM AUTHOR]

This paper provides a stochastic model, consistent with Solvency II and the Delegated Regulation, to quantify the capital requirement for demographic risk. In particular, we present a framework that models idiosyncratic and trend risks exploiting a risk theory approach in which results are obtained analytically. We apply the model to non-participating policies and quantify the Solvency Capital Requirement for the aforementioned risks in different time horizons. [ABSTRACT FROM AUTHOR]

Choke points in transport and logistics have been identified as devices of the power of workers in these sectors. The 11 day long strike of around 400,000 Brazilian truck drivers at more than 750 blockades in May 2018 exercised an effective blockade of the national economy but only led to meagre results. The article asks how this mismatch between the power to block the flow of goods and the lack of power to achieve significant improvements of the truckers' situation can be explained. It demonstrates that analyses with a focus on the power resources of workers fail to understand the larger dynamics at play. The article proposes a political economy of labour as an analytical device that incorporates global economic relations, the characteristics of social formations and political-ideological relations into its ambit. It claims that in order to understand the economic and political leverage of workers in transport and logistics, one has to look at capital as a broader social relation which includes long term development strategies and material constraints like energy systems and infrastructure. [ABSTRACT FROM AUTHOR]

After the 2008 global financial crisis, authorities across the globe stressed the importance of equity capital to absorb losses. While many countries have raised bank capital adequacy requirements (CARs), the comprehensive impact assessment of this policy for emerging economies remains largely unexplored. We use a financial computable general equilibrium (FCGE) model of Indonesia called AMELIA-F to investigate the economy-wide impact of a 100 basis points increase in the CAR of Indonesian banks. Bank balance sheets contract as they move away from holding riskier assets, aiding macroeconomic stability. However, both non-housing and housing investment contract as banks pass on higher funding costs, driving long-run real GDP below baseline. As we discuss, debt-to-equity ratios for these sectors, and the economy-wide private debt to income ratio all fall, thus aiding long-run macroeconomic stability. [ABSTRACT FROM AUTHOR]

Capital requirements increase as aquaculture becomes more industrialized, with firms increasing their scale of production and capital intensity. Public listing at stock exchanges can provide improved access and cheaper financing for firms. Since the public listing is a fairly recent phenomenon and relatively few aquaculture firms have entered stock markets, it is useful to investigate the differences in profitability among listed and private aquaculture firms. Our econometric estimates based on a unique panel dataset of Norwegian salmon companies indicate that the sources of profitability, as measured by return on assets (ROA), are different among the two groups of companies. Listed companies are able to increase profitability through working capital optimization; however, they are more negatively affected by operating leverage and liquidity. This indicates that using liquidity as a risk reduction measure is costly in the industry. Although private firms have historically performed better on average in terms of ROA, the difference is not statistically different. [ABSTRACT FROM AUTHOR]

We analyse the trend among 79 banks from 20 European countries towards scrip dividends. Whereas banks do not seem to smooth cash dividends, they do smooth total dividends, which include both cash and scrip dividends. We also find that the new legal requirements (resulting from the Basel III Accord and other country‐level laws) have different implications on cash and scrip dividends. Whereas the need for better and more capital imposed by these rules has led banks to cut cash dividends, there is a positive relationship between the legal requirements on capital adequacy and scrip dividends. [ABSTRACT FROM AUTHOR]

The aim of the research is to identify the suitability of a patrol model in evaluating the financial performance of Iraqi banks. The financial reports of five Iraqi commercial banks were approved as a sample for research for the period from 2015 to 2020. The most common financial ratios were adopted for the purpose of measuring the five elements of the model, which are capital adequacy, profitability, credit risk, bankal efficiency and liquidity. The results showed the possibility of using the PATROL model in evaluating the performance of Iraqi banks, as it gave a realistic image of the reality of Iraqi banks in terms of high capital adequacy index and high liquidity, as well as fluctuation in profitability index, not to mention the problems of non-performing loans. The research recommends the adoption of a patrol model by the Central Bank of Iraq instead of the camels model that is currently adopted in evaluating the performance of Iraqi banks, due to the lack of full application of the camels model as shown by the guide to classify Iraqi banks, as the market sensitivity index is not being calculated because the Iraqi economy is an unstable economy and has been exposed to many Changes and shocks are what cause the difficulty of measuring this indicator in light of fluctuating market prices, so the patrol model is more suitable for the Iraqi environment because it is free from the indicator of the sensitivity of change to market prices. [ABSTRACT FROM AUTHOR]

Summary: Motivation: Small‐scale cross‐border trade is critically important to livelihoods and food security in East Africa, but bribes, harassment, and violence remain serious problems. Based on current research, we ask which anti‐corruption interventions tend to work to improve the conditions of these traders? Purpose: This article critically and systematically reviews a growing literature on small‐scale cross‐border trade, corruption, and gender. The aim is to synthesize and assess the current state of knowledge, highlight progress, and gaps, and assess the potential of anti‐corruption programmes to address the needs of traders. Methods and approach: A systematic literature review with supplementary interviews with traders and policy actors. Findings We found research is increasingly drawing on diversifying interdisciplinary methods and focusing on individual trader behaviours, networks, interactions with state actors, and, increasingly, on gendered dynamics; more work might focus on state actors, especially the police, and what determines how bribes function and their levels. Associations, civil society, and the platforms, both informal and formal, by which traders voice concern and confront government officials, as well as how traders choose between formal and informal pathways, and how these pathways interact, require more attention. Policy implications: Government reforms like the One Stop Border Post, need to be better tailored to the specific, gendered needs of small‐scale cross‐border traders. Simplifying and reducing formal border procedures, reducing tariffs, improving information desks and complaints mechanisms are all needed to enhance access and accountability. Programmes that support access to capital, business support, networking, and knowledge around border procedures have positive impacts, as do those that promote strong associations to put to the government the specific needs of small‐scale traders. Police reform tailored to border areas is also required. [ABSTRACT FROM AUTHOR]