Figure 7 - uploaded by Victor Murinde
Content may be subject to copyright.
Source publication
This paper invokes a flow-of-funds framework to scope the implications of the global financial crisis for Africa"s financial system. The paper argues that because the financial crisis is characterised globally by bank fragility, the contagion effects may impair (through exchange rate and stock price propagation mechanisms) the financial intermediat...
Context in source publication
Context 1
... therefore, as shown in Table 3 and Figures 7 and 7, positive gains have been recorded between 2000 and 2007 in terms of improvements in the key performance indicators, which may be attributed to the reforms, including adoption of advanced trading technology aimed to reduce transaction costs and settlement periods, strengthening of the regulatory system to reduce information asymmetry problem and protect the rights of investors, and relaxation of restrictions on foreign investors" participation in the market. ...
Similar publications
The entry and consolidation of foreign banks in Central and Eastern European (CEE) economies is remarkable, as they, in less than two decades, in different forms, motivations and rhythms, managed to attain dominant positions in the banking systems of these countries. Understanding the implications of this impressive presence is even more important,...
Most regulators around the world reacted to the 2007–09 crisis by imposing bans on short selling. Using
data from seven equity markets, this study empirically examines the impact of the 2008 short-selling bans
on financial stocks.
Using panel and matching techniques, evidence indicates that bans on short-selling (i) on the whole widen
volatility bo...
This paper studies stock price reaction to share repurchases announced by U.S. banks between January 2002 and December 2008. Using the standard event study method, we find that the average abnormal return around share repurchase announcements is positive in both normal and crisis times. We also find that the average abnormal return is significantly...
This paper studies the relation between CEOs’ monetary incentives, financial regulation, and risk in banks. We develop a model where banks lend to opaque entrepreneurial projects that need to be monitored by bank managers. Bank managers are remunerated according to a pay-for-performance scheme and their effort is not observable to depositors and ba...
Citations
... Literature dealing with the global financial crisis mostly focuses on the causes of the crisis (Bhattacharya, 2009), the impact and implications of the crisis on different countries and continents (Goldstein and Xie, 2009;Murinde, 2009), financial institutional structures and architecture (Crockett, 2009;Metzger and Taube, 2010;Zhang et al., 2009), the regulatory environment (Bellofiore et al., 2010;Calomiris 2009;Metzger and Taube, 2010;Kamhunga, 2011), lessons learnt from the financial crisis (Demirguc-Kunt et al., 2010;Krueger, 2009), and recommendations for the post-crisis period (Baily and Elliott, 2009;Murinde, 2009). Most of these studies furthermore examined collective reactions by an industry, country or continent. ...
... Literature dealing with the global financial crisis mostly focuses on the causes of the crisis (Bhattacharya, 2009), the impact and implications of the crisis on different countries and continents (Goldstein and Xie, 2009;Murinde, 2009), financial institutional structures and architecture (Crockett, 2009;Metzger and Taube, 2010;Zhang et al., 2009), the regulatory environment (Bellofiore et al., 2010;Calomiris 2009;Metzger and Taube, 2010;Kamhunga, 2011), lessons learnt from the financial crisis (Demirguc-Kunt et al., 2010;Krueger, 2009), and recommendations for the post-crisis period (Baily and Elliott, 2009;Murinde, 2009). Most of these studies furthermore examined collective reactions by an industry, country or continent. ...
... Without sound banking and other financial regulations, the domestic financial markets would have been more severely and directly impacted by the global financial market turmoil (SARB, 2011). In general, authors agree that the South African competitive banking landscape remained strong despite the crisis (IMF, 2010;Metzger and Taube, 2010;Murinde, 2009). Certain financial institutions even took the opportunity to increase their market share (SARB, 2011). ...
The South African financial sector largely proved resilient to the consequences of the global financial crisis and did not experience the financial upheaval seen in advanced economies. This paper investigated and compared the strategic stance and actions employed by eight South African banks listed on the Johannesburg Securities Exchange in response to the global crisis. The research was conducted through content analysis of the annual reports of these banks for the periods 2006 through 2011. Findings illustrated that, although structural and industry drivers played a key role in ensuring the relatively unscathed survival of SA banks, banks generally had a clear corporate strategic direction that remained relatively stable during the financial crisis. It was found that the industry was balanced in terms of the strategic positioning of banks. Of the eight banks, four were classified as strong niche players that were categorised as “defenders”. The big four banks were classified into two groups. ABSA and Nedbank were categorised as “analysers”, since they are generally cautious and conservative in their growth and expansion strategies. FirstRand and Standard Bank were classified as prospectors, since they tend to be more open to new opportunities.
... The socio-political changes led to structural changes in the banking sector as well as the delivery of financial services. The political transformation, relaxation of exchange controls and liberalisation of the economy resulted in South Africa increasingly becoming an important financial centre (Mboweni, 2004;Murinde, 2009). Such financial liberalisation did not only bring greater competition for traditional domestic banks but also improved the quality and availability of financial services in South Africa. ...
... The South African banking industry is also characterised by international links through correspondent banking relations with off-shore banks and international institutional investments in domestic banks . Therefore, regulation and supervision of banking is still an issue, especially with respect to financial innovations such as derivative instruments and in light of the 2007-2009 global financial crisis (Murinde, 2009). The 1990 Banks Act was amended in 2008, to align the South African banking legislative framework with the principles of Basel II . ...
This paper investigates the performance of South Africa’s commercial banking sector for the
period 2005-2009. Financial ratios are employed to measure the profitability, liquidity and
credit quality performance of five large South African based commercial banks. The study found
that overall bank performance increased considerably in the first two years of the analysis. A
significant change in trend is noticed at the onset of the global financial crisis in 2007, reaching
its peak during 2008-2009. This resulted in falling profitability, low liquidity and deteriorating
credit quality in the South African Banking sector.
... The socio-political changes led to structural changes in the banking sector as well as the delivery of financial services. The political transformation, relaxation of exchange controls and liberalisation of the economy resulted in South Africa increasingly becoming an important financial centre (Mboweni, 2004;Murinde, 2009). Such financial liberalisation did not only bring greater competition for traditional domestic banks but also improved the quality and availability of financial services in South Africa. ...
... The South African banking industry is also characterised by international links through correspondent banking relations with off-shore banks and international institutional investments in domestic banks . Therefore, regulation and supervision of banking is still an issue, especially with respect to financial innovations such as derivative instruments and in light of the 2007-2009 global financial crisis (Murinde, 2009). The 1990 Banks Act was amended in 2008, to align the South African banking legislative framework with the principles of Basel II . ...
This paper investigates the performance of South Africa's commercial banking sector for the period 2005-2009. Financial ratios are employed to measure the profitability, liquidity and credit quality performance of five large South African based commercial banks. The study found that overall bank performance increased considerably in the first two years of the analysis. A significant change in trend is noticed at the onset of the global financial crisis in 2007, reaching its peak during 2008-2009. This resulted in falling profitability, low liquidity and deteriorating credit quality in the South African Banking sector.
... A more flexible exchange rate would curb Chinese inflation and promote low-income growth (particularly in Africa) and may address global imbalances. Murinde (2009) suggests a flow-of-funds framework to scope the implications of the global financial crisis for Africa"s financial system. The paper also examines the nature of the current crisis, in view of other recent financial crises, and highlights the implications for key players in a flow of funds sense, namely banks, companies, investors (households) and the government. ...
There have been the growing concerns and controversies on the role of the Stock markets on economic growth and development. There have been mixed results; while some are in support of a positive link, some negative link and others do not find any empirical evidence to support such conclusion. In this study. To explored the roles or effectiveness of capital market instruments on Nigerian economic growth. Two models were formulated and data for the period 2004-2014 were collated while the Error Correction and co-integration model were employed for analysis with result of long run equilibrium. This study examines the role of the Nigerian capital market operations on the development of the Nigeria local investment in the manufacturing sector, recommendations were made for active stock market to be developed in the country.
The banking sector in Africa dominates the financial system which makes bank credit an important source of external finance for firms within the economy. For this reason, financial policy makers and regulators implement development measures in the banking sector to ease a firm’s access to bank credit. This paper investigates the effect of banking sector development on capital structure decisions of publicly listed firms in South Africa with the use of a dynamic panel data estimator. We use the two-step system generalised method of moments (GMM) in the investigation and find that as the banking sector develops, publicly listed firms in South Africa use less debt in their capital structure. This is consistent with the notion that as the banking sector develops in emerging markets; the resultant risk management process which tightens lending process gives a better pricing for risk and makes the cost of bank credit higher. The policy implication for financial policy makers and regulatory bodies is that they should implement policies that will put in place an efficient risk management process which at the same time, reduces cost of bank credit.
