Bank Competition, Efficiency and Liquidity Creation in Asia Pacific

"Banking market integration in the Asia Pacific has greatly accelerated in recent years, in an environment of many other rapid advances in banking and finance. This has increased competition between domestic and foreign banks, and made the measurement of bank efficiency, competition, and liquidity creation a critical issue for both policy makers and bank managers. This book investigates important policy-related issues in Asia Pacific banking. It analyses the link between competition and stability, examining the cases of fourteen Asia Pacific countries between 2003 and 2010, and goes on to discuss whether bank shareholder value is influenced by cost and profit efficiency changes over time. The authors explore the different ways in which banks in Asia-Pacific create liquidity, and whether this is linked to capital generation. This book provides valuable insight for researchers, policy makers and bank managers with an interest in financial rationalization, restructuring and consolidation"-- Provided by publisher Cover 1 Title 4 Copyright 5 Contents 6 List of Illustrations 8 Preface and Acknowledgments 11 1 Introduction 13 2 Development of the Asia Pacific Banking System 17 2.1 The period before 1997 17 2.2 The period between 1997 and 1999 21 2.3 Implemented reforms in the aftermath of the Asian financial crisis 23 2.4 The period between 2000 and 2006 31 2.5 The period between 2007 and 2010 39 2.6 Implemented changes in the aftermath of the global financial crisis 54 3 Bank Competition and Financial Stability in Asia Pacific 61 3.1 Introduction 61 3.2 Literature review 63 3.3 Methodology 67 3.3.1 Bank risk 67 3.3.2 Concentration and competition 71 3.3.3 Control variables 72 3.4 Data 74 3.5 Empirical results 78 3.6 Conclusions 82 4 Bank Efficiency and Shareholder Value in Asia Pacific 84 4.1 Introduction 84 4.2 Literature review 87 4.3 Methodology 90 4.3.1 Shareholder value 90 4.3.2 Efficiency change 91 4.3.3 Control variables 93 4.4 Data 94 4.5 Empirical results 101 4.6 Conclusions 106 5 Bank Liquidity Creation and Regulatory Capital in Asia Pacific 108 5.1 Introduction 108 5.2 Literature review 111 5.3 Methodology 113 5.3.1 Liquidity creation 113 5.3.2 Regulatory capital ratio 116 5.3.3 Control variables affecting liquidity creation 116 5.3.4 Control variables affecting regulatory capital 118 5.4 Data 119 5.5 Empirical results 124 5.5.1 Main results 124 5.5.2 The relationship between liquidity creation and regulatory capital for large and small banks 127 5.5.3 The relationship between liquidity creation and regulatory capital by region 130 5.5.4 Robustness checks 134 5.6 Conclusions 135 6 Conclusions 137 References 140 Index 148 Front Matter....Pages i-xi Introduction....Pages 1-4 Development of the Asia Pacific Banking System....Pages 5-48 Bank Competition and Financial Stability in Asia Pacific....Pages 49-71 Bank Efficiency and Shareholder Value in Asia Pacific....Pages 72-95 Bank Liquidity Creation and Regulatory Capital in Asia Pacific....Pages 96-124 Conclusions....Pages 125-127 Back Matter....Pages 128-141