Article (Scientific journals)
Empirical evidence on bank market power, business models, stability and performance in the emerging economies
Yudha Sudrajad, Oktofa; Hübner, Georges
2019In Eurasian Business Review, 9, p. 213-145
Peer reviewed
 

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Keywords :
Lerner Index; bank business model; bank stability
Abstract :
[en] This paper studies the nexus between banks’ market power and business model represented by non-interest income and non-deposit short-term funding share. We also examine the impact of bank business model on banking stability and performance. We use a sample made up with six ASEAN country banking sectors from 2002 to 2015. We find that banks with a strong capital base but lower net interest margin perform better in translating their market power to generate non-traditional income as alternative soruce of revenues. Our findings also show that the implementation of Basel 2 Accord encourages banks to create non-interest income from trading & derivatives activities. We also document that banks with higher market power tend to increase non-deposit short-term funding in their banking scheme. In the evaluation of the banking stability, our results suggest that banks with greater non-traditional income are associated with less banking overall risk. Moreover, non-traditional incomes also contribute to better bank performance.
Disciplines :
Finance
Author, co-author :
Yudha Sudrajad, Oktofa;  Université de Liège - ULiège > HEC Liège
Hübner, Georges  ;  Université de Liège - ULiège > HEC Liège : UER > Gestion financière
Language :
English
Title :
Empirical evidence on bank market power, business models, stability and performance in the emerging economies
Publication date :
2019
Journal title :
Eurasian Business Review
ISSN :
1309-4297
Publisher :
Springer
Volume :
9
Pages :
213-145
Peer reviewed :
Peer reviewed
Available on ORBi :
since 18 August 2018

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