Abstracts » Business

Factors affecting the performance of foreign-owned banks in Australia: a cross-sectional study

Article Abstract:

The profitability of foreign banks in Australia was found to be dependent on firm-specific characteristics such as the possession of bank license and size of parent firm, as well as of net interest margins and scaled fees. Timing of entry in a deregulated banking environment was found to be an insignificant factor in the profitability of foreign banks in their host countries, and is more governed by the defensive expansion effect rather than the gold rush effect.

Regulation, Licensing, and Inspection of Miscellaneous Commercial Sectors, Banking Regulation, Research, Australia, International business enterprises, Multinational corporations, Economic policy, Deregulation, Banking law

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State-contingent regulatory mechanisms and fairly-priced deposit insurance

Article Abstract:

An incentive compatible model for bank regulation in the presence of moral hazard and adverse selection is presented. The model shows that an informationally efficient mechanism is feasible if regulators decompose bank asset risk and implement ex post ricing contingent on the state of the market. The resulting mechanisms are generally sufficient to induce banks to reveal their truer risk profile and to choose the first best asset quality.

Analysis, Laws, regulations and rules, Bank reserves, Deposit insurance

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