The Relationship between Regulation and Solvency Risk for the Top Five South African Banks
Keywords:
z-score; Auto-Regressive Distributed Lag model; logistic regressionAbstract
Objectives: the objectives of this paper were to analyse different types of risks that banks face, conduct in-depth analysis of the various types of bank regulatory measures, and determine whether there is a long run or short-run relationship between bank solvency and the implementation of bank regulation Prior Work this research builds up on studies about bank risk and regulation but include an African aspect Approach Secondary data from banks’ financial statements was used to calculate solvency risk using a z-score model. The results of the z-score model represented solvency risk and performed as the dependent variable in the study. Results Logit Regression showed that the z-score for South African banks cannot be used to predict whether new regulation will be implemented in the future. However, an ARDL model indicated that there is a long-run relationship between the z-score for the top five South African banks and new regulation being implemented. Implications This study can be used by academic researchers as a comparison to their own academic work Value Based on the varying results from the different methodologies implemented in this study, it can be recommended that more regulation needs to be implemented that specifically looks into increasing the solvency levels of South African banks.
References
ABSA. (2019). Barclays Africa Group Relaunches as Absa Group with a Fresh New Look. Retrieved from https://www.absa.co.za Date 06.04.2019.
Admati, A. & Hellwig, M. (2014). The Bankers' New Clothes: What's Wrong with Banking and What to Do about It-Updated Edition. New Jersey: Princeton University Press.
Altman, E.I. (1968). Financial Ratios, Discriminant Analysis and the Prediction of Corporate Bankruptcy. Journal of Finance, 23., 4., 589–609.
Altman, E. I., Iwanicz‐Drozdowska, M., Laitinen, E. K. & Suvas, A. (2017). Financial distress prediction in an international context: A review and empirical analysis of Altman's Z‐score model. Journal of International Financial Management & Accounting, 28., 2., 131-171.
Angkinand, A. P. (2009). Banking regulation and the output cost of banking crises. Journal of International Financial Markets, Institutions and Money, 19., 2., 240-257.
Appiah, K. O. (2011). Predicting Corporate Failure and Global Financial Crisis: Theory and Implications. Journal of Modern Accounting and Auditing, 7., 1., 38-47.
BankSeta. (2017). Banking Sector Skills Plan 2017/18. Retrieved from https://www.bankseta.org.za Date 06.14.2019.
Bany-Ariffin, A.N., Matemilola, B.T. & Muhtar, F.E. (2015). The impact of monetary policy on bank lending rate in South Africa. Borsa Istanbul Review, 15., 1., 53-59.
Bara, A. & Le Roux, P. (2017). South Africa’s Financial Spillover Effects on Growth and Financial Development in the Southern African Development Community. International Journal of Economics and Financial Issues, 7., 5., 400-412.
Barth, J. R., Caprio, G. & Levine, R. (2004). Bank regulation and supervision: what works best? Journal of Financial Intermediation, 13., 2., 205-248
Barth, J.R., Caprio, G. & Levine, R. 2006. Rethinking Bank Regulation: Till Angels Govern. Cambridge. Cambridge: Cambridge University Press.
Barth, J.R., Caprio, G. & Levine, R. (2008). Bank regulations are changing: for better or worse? Comparative Economic Studies, 50., 537-563
Barth, J. R., Lin, C., Ma, Y., Seade, J. & Song, F. M. (2013). Do bank regulation, supervision and monitoring enhance or impede bank efficiency?. Journal of Banking & Finance, 37., 8., 2879-2892.
Beaver, W. H. (1966). Financial ratios as predictors of failure, empirical research in accounting. Supplement to Journal of Accounting Research, 71-111.
Beck, T., Levine, R. & Levkov, A. (2010). Big bad banks? The winners and losers from bank deregulation in the United States. The Journal of Finance, 65., 5., 1637-1667.
Becker, E. (2016). Knowledge Capture in Financial Regulation: Data-, Information-and Knowledge-asymmetries in the US Financial Crisis. New York: Springer.
Bessis, J. (2015). Risk Management in Banking. Hoboken, NJ: John Wiley & Sons.
Bhatt, R. K. (2011). Recent global recession and Indian economy: an analysis. International Journal of Trade, Economics and Finance, 2., 3., 212-217.
Cai, C. X., Keasey, K., Vallascas, F. & Zhang, Q. (2015). Are Market-Based Measures of Global Systemic Importance of Financial Institutions Useful to Regulators and Supervisors. Journal of Money, Credit and Banking, 47., 7., 1404-1442.
Canuto, O. & Ghosh, S. (Eds.). (2013). Dealing with the challenges of macro financial linkages in emerging markets. The World Bank.
Capitec Bank. (2019). About us. https://www.capitecbank.co.za/about-us Date 07.04.2019.
Chava, S., Oettl, A., Subramanian, A., & Subramanian, K. V. (2013). Banking deregulation and innovation. Journal of Financial Economics, 109., 3., 759-774.
Chiaramonte, L., Croci, E. & Poli, F. (2015). Should we trust the Z-score? Evidence from the European Banking Industry. Global Finance Journal, 25., 99., 111 – 131.
Chipatiso, T., & Kawadza, H. (2018). Business rescue as a mechanism for addressing bank failures: possible lessons from the American approach. Journal of Corporate and Commercial Law and Practice, 4., 2., 37-50.
Chironga, M., Cunha, L. & De Grandis, H. (2018). Roaring to life: Growth and innovation in African retail banking. McKinsey & Company. https://www.mckinsey.com/za Date of Access: 06.18.2018.
Chortareas, G. E., Girardone, C. & Ventouri, A. (2012). Bank supervision, regulation, and efficiency: Evidence from the European Union. Journal of Financial Stability, 8., 4., 292-302.
Chitamba, A. (2018). Customers perceptions on competitiveness of ABSA Bank in South Africa. Durban- Durban University of Technology (PhD - dissertation).
Claessens, S. & Kodres, M. L. E. (2014). The regulatory responses to the global financial crisis: Some uncomfortable questions (No. 14-46). International Monetary Fund.
Costello, A. M., Granja, J. & Weber, J. (2019). Do Strict Regulators Increase the Transparency of Banks?. Journal of Accounting Research, 57., 3., 603-637.
Dawid, H. & van der Hoog, S. (2017). Bubbles, crashes, and the financial cycle: The impact of banking regulation on deep recessions. Macroeconomic Dynamics, 1205-1246.
de Haan, J., de Vries, F. & Kellermann, A. J. (2013). Financial supervision in the 21st century. Berlin: Springer.
de Haan, J. &. Klomp, J. (2014). Bank regulation, the quality of institutions, and banking risk in emerging and developing countries: an empirical analysis. Emerging Markets Finance and Trade, 50., 6., 19-40.
de Haan, J. & Klomp, J. (2015). Bank regulation and financial fragility in developing countries: Does bank structure matter? Review of Development Finance, 5., 2., 82-90.
de Nicolo, G. (2000). Size, charter value and risk in banking: an international perspective. International Finance Discussion Papers No. 689, Washington, DC: Board of Governors of the Federal Reserve System. Retrieved from http://www.federalreserve.gov Date 04.28.2019.
Delis, M. D., Molyneux, P. & Pasiouras, F. (2011). Regulations and productivity growth in banking: Evidence from transition economies. Journal of Money, Credit and Banking, 43., 4., 735-764.
Dermirguc-Kunt, A., Detragiache, E. & Tressel, T. (2008). Banking on the Principles: Compliance with Basel Core Principles and Bank Soundness. Journal of Financial Intermediation, 17., 511: 542.
Demirgüc¸-Kunt, A. & Detragiache, E., (2011). Basel core principles and bank soundness: does compliance matter?. Journal of Financial Stability, 7., 179–190.
DeYoung, R. (2010). Banking in the United States. The Oxford handbook of banking, 1-47.
du Jardin, P., Veganzones, D. & Séverin, E. (2017). Forecasting corporate bankruptcy using accrual-based models. Computational Economics, 1-37.
Ernst & Young. (2018). Global Bank Outlook. https://www.ey.com/za Date of Access: 06.15.2019.
European Investment Bank. (2018). Banking in Africa: Delivering on Financial Inclusion, Supporting Financial Stability. Retrieved from https://www.eib.org Date 06.13.2019
Foggitt, G.M., Heymans, A., Van Vuuren, G.W. & Pretorius, A. (2017). Measuring the systemic risk in the South African banking sector. South African Journal of Economic and Management Sciences., 20., 1., 1-9.
Fu, X. M., Lin, Y.M. & Molyneux, P. (2014). Bank competition and financial stability in Asia Pacific. Journal of Banking & Finance, 38., 64-77.
Gepp, A. & Kumar, K. (2015). Predicting financial distress: A comparison of survival analysis and decision tree techniques. Procedia Computer Science, 54., 396-404.
Jiang, C. & Yao, S. (2017). Chinese Banking Reform: From the Pre-WTO Period to the Financial Crisis and Beyond. New York: Springer.
Ifeacho, C. & Ngalawa, H. (2014). Performance of the South African banking sector since 1994. Journal of Applied Business Research, 30., 4., 1183-1196.
Ikhide, S. & Maredza, A. (2013). Measuring the impact of the global financial crisis on efficiency and productivity of the banking system in South Africa. Mediterranean Journal of Social Sciences, 4., 6., 553-568.
IMF. (2014). Country Report: South Africa. IMF Financial Sector Assessment Program. Retrieved from https://www.imf.org/external/pubs/ft/scr/2014/cr14340.pdf Date 06.13.2019.
IMF. (2014b). South Africa Financial System Stability Assessment. Retrieved from https://www.imf.org Date 06.14.2019.
Iyer, R., Puri, M. & Ryan, N. (2016). A tale of two runs: Depositor responses to bank solvency risk. The Journal of Finance, 71., 6., 2687-2726.
Jacobs, J. & Van Vuuren, G. (2014). Is regulatory capital a legitimate, comparable and objective global standard? Evidence from 51 institutions across 17 countries. South African Journal of Economic and Management Sciences, 17., 3., 266-283.
Jayasekera, R. (2018). Prediction of company failure: Past, present and promising directions for the future. International Review of Financial Analysis, 55., 196-208.
Johnstone, D., Jones, S. & Wilson, R. (2017). Predicting Corporate Bankruptcy: An Evaluation of Alternative Statistical Frameworks. Journal of Business & Accounting, 44., 1., 3-34.
Kamarudin, F. & Sufian, F. (2016). The impact of globalization on the performance of Banks in South Africa. Review of International Business and Strategy, 26., 4., 517-542.
Kim, T. & Mangla, V. (2019). Capital Regulation with Two Banking Sectors: Cyclicality and Implementation. Journal of Money, Credit and Banking, 51., 485-537.
Kumbirai, M., & Webb, R. (2010). A financial ratio analysis of commercial bank performance in South Africa. African Review of Economics and Finance, 2., 1., 30-53.
Laeven, L. & Levine, R. (2009). Bank governance, regulation and risk taking. Journal of Financial Economics. 93., 259–275.
Lepetit, L. & Strobel, F. (2013). Bank insolvency risk and time-varying Z-score measures. Journal of International Financial Markets, Institutions and Money, 25., 73-87.
Levine, R., Levkov, A. & Rubinstein, Y. (2014). Bank deregulation and racial inequality in America. Critical Finance Review, 3., 1., 1-48.
Li, X., Malone, C. B. & Tripe, D. W. (2017). Measuring bank risk: An exploration of z-score. Retrieved from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2823946 Date 06.06.2019.
López-Espinosa, G., Moreno, A., Rubia, A., & Valderrama, L. (2012). Short-term wholesale funding and systemic risk: A global CoVaR approach. Journal of Banking & Finance, 36., 12., 3150-3162.
Mare, D. S., Moreira, F. & Rossi, R. (2017). Nonstationary Z-score measures. European Journal of Operational Research, 260., 1., 348-358.
Mishra, A. K. & Singh, B. P. (2016). Re-estimation and comparisons of alternative accounting based bankruptcy prediction models for Indian companies. Financial Innovation, 2., 1., 1-28.
Mlambo, K. & Ncube, M. (2011). Competition and Efficiency in the Banking Sector in South Africa. African Development Review, 23., 1., 4-15.
Mohamed, S. (2015). The South African Financial System. FESSUD: Studies in Financial Systems No 15.
Moyo, B. (2018). An analysis of competition, efficiency and soundness in the South African banking sector. South African Journal of Economic and Management Sciences, 21., 1., 1-14.
National Treasury. (2011). A safer financial sector to serve South Africa better. http://www.treasury.gov.za Date 05.21.2019.
National Treasury. (2018). 2017/18 National Treasury Annual Report. Retrieved from http://www.treasury.gov.za Date 05.27.2019.
Novis, S. (2010). An Analysis of the Performance of the Barclays/ABSA Cross-Border Acquisition. Cape Town: UCT (Dissertation - PhD).
Pasiouras, F., Tanna, S. & Zopounidis, C. (2009). The impact of banking regulations on banks' cost and profit efficiency: Cross-country evidence. International Review of Financial Analysis, 18., 5., 294-302.
PwC. (2018). Resilient despite headwinds: South Africa – Major bank analysis. Retrieved from www.pwc.co.za/banking-analysis Date 06.06.2019.
PwC. (2019). Regulated industries. Retrieved from https://www.pwc.de/en/branchenregulierung.html Date 07.02.2019.
Simatele, M. (2015). Market Structure and Competition in the South African banking sector. Procedia Economics and Finance, 30., 825-835.
Smit, A. M. & Swanepoel, E. (2016). The impact of executive remuneration on risk-taking in the banking industry. Investment Management and Financial Innovations, 13., 3., 110-117.
South African Reserve Bank. (2017). Group Annual Financial Statements 2016/17. Retrieved from https://www.resbank.co.za Date 06.06.2019.
South African Reserve Bank (SARB). (2018). Financial Stability Review 2018. Retrieved from https://www.resbank.co.za Date 05.27.2019.
South African Reserve Bank. (2018b). Financial Stability Review 2018 2nd Edition. Retrieved from https://www.resbank.co.za Date 06.04.2019.
South African Reserve Bank. (2018c). Group Annual Financial Statements 2017/18. Retrieved from https://www.resbank.co.za Date 06.06.2019.
Sperandei, S. (2014). Understanding logistic regression analysis. Biochemia medica, 24., 12-18.
Tchana, F. T. (2008). Regulation and banking stability: A survey of empirical studies. Retrieved from https://ssrn.com/abstract=1150823 Date 21 April 2019.
The Banking Association South Africa. (2019). Financial service charter code. Retrieved from https://www.banking.org.za Date 05.16.2019.
Tinoco, M. H., & Wilson, N. (2013). Financial distress and bankruptcy prediction among listed companies using accounting, market and macroeconomic variables. International Review of Financial Analysis, 30., 394-419.
Treasury. 2017. (2017). Budget Review. Retrieved from http://www.treasury.gov.za Date 05.16.2019.
Wilf, M. (2016). Credibility and Distributional effects of International Banking regulations: evidence from us Bank stock returns. International Organization, 70., 4., 763-796.
World Economic Forum. (2018). Global Competitiveness Index 4.02018 edition. Retrieved from http://reports.weforum.org Date 05.27.2019.
Zeidan, M. J. (2012). The effects of violating banking regulations on the financial performance of the US banking industry. Journal of Financial Regulation and Compliance, 20., 1., 56-71.
Admati, A. & Hellwig, M. (2014). The Bankers' New Clothes: What's Wrong with Banking and What to Do about It-Updated Edition. New Jersey: Princeton University Press.
Altman, E.I. (1968). Financial Ratios, Discriminant Analysis and the Prediction of Corporate Bankruptcy. Journal of Finance, 23., 4., 589–609.
Altman, E. I., Iwanicz‐Drozdowska, M., Laitinen, E. K. & Suvas, A. (2017). Financial distress prediction in an international context: A review and empirical analysis of Altman's Z‐score model. Journal of International Financial Management & Accounting, 28., 2., 131-171.
Angkinand, A. P. (2009). Banking regulation and the output cost of banking crises. Journal of International Financial Markets, Institutions and Money, 19., 2., 240-257.
Appiah, K. O. (2011). Predicting Corporate Failure and Global Financial Crisis: Theory and Implications. Journal of Modern Accounting and Auditing, 7., 1., 38-47.
BankSeta. (2017). Banking Sector Skills Plan 2017/18. Retrieved from https://www.bankseta.org.za Date 06.14.2019.
Bany-Ariffin, A.N., Matemilola, B.T. & Muhtar, F.E. (2015). The impact of monetary policy on bank lending rate in South Africa. Borsa Istanbul Review, 15., 1., 53-59.
Bara, A. & Le Roux, P. (2017). South Africa’s Financial Spillover Effects on Growth and Financial Development in the Southern African Development Community. International Journal of Economics and Financial Issues, 7., 5., 400-412.
Barth, J. R., Caprio, G. & Levine, R. (2004). Bank regulation and supervision: what works best? Journal of Financial Intermediation, 13., 2., 205-248
Barth, J.R., Caprio, G. & Levine, R. 2006. Rethinking Bank Regulation: Till Angels Govern. Cambridge. Cambridge: Cambridge University Press.
Barth, J.R., Caprio, G. & Levine, R. (2008). Bank regulations are changing: for better or worse? Comparative Economic Studies, 50., 537-563
Barth, J. R., Lin, C., Ma, Y., Seade, J. & Song, F. M. (2013). Do bank regulation, supervision and monitoring enhance or impede bank efficiency?. Journal of Banking & Finance, 37., 8., 2879-2892.
Beaver, W. H. (1966). Financial ratios as predictors of failure, empirical research in accounting. Supplement to Journal of Accounting Research, 71-111.
Beck, T., Levine, R. & Levkov, A. (2010). Big bad banks? The winners and losers from bank deregulation in the United States. The Journal of Finance, 65., 5., 1637-1667.
Becker, E. (2016). Knowledge Capture in Financial Regulation: Data-, Information-and Knowledge-asymmetries in the US Financial Crisis. New York: Springer.
Bessis, J. (2015). Risk Management in Banking. Hoboken, NJ: John Wiley & Sons.
Bhatt, R. K. (2011). Recent global recession and Indian economy: an analysis. International Journal of Trade, Economics and Finance, 2., 3., 212-217.
Cai, C. X., Keasey, K., Vallascas, F. & Zhang, Q. (2015). Are Market-Based Measures of Global Systemic Importance of Financial Institutions Useful to Regulators and Supervisors. Journal of Money, Credit and Banking, 47., 7., 1404-1442.
Canuto, O. & Ghosh, S. (Eds.). (2013). Dealing with the challenges of macro financial linkages in emerging markets. The World Bank.
Capitec Bank. (2019). About us. https://www.capitecbank.co.za/about-us Date 07.04.2019.
Chava, S., Oettl, A., Subramanian, A., & Subramanian, K. V. (2013). Banking deregulation and innovation. Journal of Financial Economics, 109., 3., 759-774.
Chiaramonte, L., Croci, E. & Poli, F. (2015). Should we trust the Z-score? Evidence from the European Banking Industry. Global Finance Journal, 25., 99., 111 – 131.
Chipatiso, T., & Kawadza, H. (2018). Business rescue as a mechanism for addressing bank failures: possible lessons from the American approach. Journal of Corporate and Commercial Law and Practice, 4., 2., 37-50.
Chironga, M., Cunha, L. & De Grandis, H. (2018). Roaring to life: Growth and innovation in African retail banking. McKinsey & Company. https://www.mckinsey.com/za Date of Access: 06.18.2018.
Chortareas, G. E., Girardone, C. & Ventouri, A. (2012). Bank supervision, regulation, and efficiency: Evidence from the European Union. Journal of Financial Stability, 8., 4., 292-302.
Chitamba, A. (2018). Customers perceptions on competitiveness of ABSA Bank in South Africa. Durban- Durban University of Technology (PhD - dissertation).
Claessens, S. & Kodres, M. L. E. (2014). The regulatory responses to the global financial crisis: Some uncomfortable questions (No. 14-46). International Monetary Fund.
Costello, A. M., Granja, J. & Weber, J. (2019). Do Strict Regulators Increase the Transparency of Banks?. Journal of Accounting Research, 57., 3., 603-637.
Dawid, H. & van der Hoog, S. (2017). Bubbles, crashes, and the financial cycle: The impact of banking regulation on deep recessions. Macroeconomic Dynamics, 1205-1246.
de Haan, J., de Vries, F. & Kellermann, A. J. (2013). Financial supervision in the 21st century. Berlin: Springer.
de Haan, J. &. Klomp, J. (2014). Bank regulation, the quality of institutions, and banking risk in emerging and developing countries: an empirical analysis. Emerging Markets Finance and Trade, 50., 6., 19-40.
de Haan, J. & Klomp, J. (2015). Bank regulation and financial fragility in developing countries: Does bank structure matter? Review of Development Finance, 5., 2., 82-90.
de Nicolo, G. (2000). Size, charter value and risk in banking: an international perspective. International Finance Discussion Papers No. 689, Washington, DC: Board of Governors of the Federal Reserve System. Retrieved from http://www.federalreserve.gov Date 04.28.2019.
Delis, M. D., Molyneux, P. & Pasiouras, F. (2011). Regulations and productivity growth in banking: Evidence from transition economies. Journal of Money, Credit and Banking, 43., 4., 735-764.
Dermirguc-Kunt, A., Detragiache, E. & Tressel, T. (2008). Banking on the Principles: Compliance with Basel Core Principles and Bank Soundness. Journal of Financial Intermediation, 17., 511: 542.
Demirgüc¸-Kunt, A. & Detragiache, E., (2011). Basel core principles and bank soundness: does compliance matter?. Journal of Financial Stability, 7., 179–190.
DeYoung, R. (2010). Banking in the United States. The Oxford handbook of banking, 1-47.
du Jardin, P., Veganzones, D. & Séverin, E. (2017). Forecasting corporate bankruptcy using accrual-based models. Computational Economics, 1-37.
Ernst & Young. (2018). Global Bank Outlook. https://www.ey.com/za Date of Access: 06.15.2019.
European Investment Bank. (2018). Banking in Africa: Delivering on Financial Inclusion, Supporting Financial Stability. Retrieved from https://www.eib.org Date 06.13.2019
Foggitt, G.M., Heymans, A., Van Vuuren, G.W. & Pretorius, A. (2017). Measuring the systemic risk in the South African banking sector. South African Journal of Economic and Management Sciences., 20., 1., 1-9.
Fu, X. M., Lin, Y.M. & Molyneux, P. (2014). Bank competition and financial stability in Asia Pacific. Journal of Banking & Finance, 38., 64-77.
Gepp, A. & Kumar, K. (2015). Predicting financial distress: A comparison of survival analysis and decision tree techniques. Procedia Computer Science, 54., 396-404.
Jiang, C. & Yao, S. (2017). Chinese Banking Reform: From the Pre-WTO Period to the Financial Crisis and Beyond. New York: Springer.
Ifeacho, C. & Ngalawa, H. (2014). Performance of the South African banking sector since 1994. Journal of Applied Business Research, 30., 4., 1183-1196.
Ikhide, S. & Maredza, A. (2013). Measuring the impact of the global financial crisis on efficiency and productivity of the banking system in South Africa. Mediterranean Journal of Social Sciences, 4., 6., 553-568.
IMF. (2014). Country Report: South Africa. IMF Financial Sector Assessment Program. Retrieved from https://www.imf.org/external/pubs/ft/scr/2014/cr14340.pdf Date 06.13.2019.
IMF. (2014b). South Africa Financial System Stability Assessment. Retrieved from https://www.imf.org Date 06.14.2019.
Iyer, R., Puri, M. & Ryan, N. (2016). A tale of two runs: Depositor responses to bank solvency risk. The Journal of Finance, 71., 6., 2687-2726.
Jacobs, J. & Van Vuuren, G. (2014). Is regulatory capital a legitimate, comparable and objective global standard? Evidence from 51 institutions across 17 countries. South African Journal of Economic and Management Sciences, 17., 3., 266-283.
Jayasekera, R. (2018). Prediction of company failure: Past, present and promising directions for the future. International Review of Financial Analysis, 55., 196-208.
Johnstone, D., Jones, S. & Wilson, R. (2017). Predicting Corporate Bankruptcy: An Evaluation of Alternative Statistical Frameworks. Journal of Business & Accounting, 44., 1., 3-34.
Kamarudin, F. & Sufian, F. (2016). The impact of globalization on the performance of Banks in South Africa. Review of International Business and Strategy, 26., 4., 517-542.
Kim, T. & Mangla, V. (2019). Capital Regulation with Two Banking Sectors: Cyclicality and Implementation. Journal of Money, Credit and Banking, 51., 485-537.
Kumbirai, M., & Webb, R. (2010). A financial ratio analysis of commercial bank performance in South Africa. African Review of Economics and Finance, 2., 1., 30-53.
Laeven, L. & Levine, R. (2009). Bank governance, regulation and risk taking. Journal of Financial Economics. 93., 259–275.
Lepetit, L. & Strobel, F. (2013). Bank insolvency risk and time-varying Z-score measures. Journal of International Financial Markets, Institutions and Money, 25., 73-87.
Levine, R., Levkov, A. & Rubinstein, Y. (2014). Bank deregulation and racial inequality in America. Critical Finance Review, 3., 1., 1-48.
Li, X., Malone, C. B. & Tripe, D. W. (2017). Measuring bank risk: An exploration of z-score. Retrieved from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2823946 Date 06.06.2019.
López-Espinosa, G., Moreno, A., Rubia, A., & Valderrama, L. (2012). Short-term wholesale funding and systemic risk: A global CoVaR approach. Journal of Banking & Finance, 36., 12., 3150-3162.
Mare, D. S., Moreira, F. & Rossi, R. (2017). Nonstationary Z-score measures. European Journal of Operational Research, 260., 1., 348-358.
Mishra, A. K. & Singh, B. P. (2016). Re-estimation and comparisons of alternative accounting based bankruptcy prediction models for Indian companies. Financial Innovation, 2., 1., 1-28.
Mlambo, K. & Ncube, M. (2011). Competition and Efficiency in the Banking Sector in South Africa. African Development Review, 23., 1., 4-15.
Mohamed, S. (2015). The South African Financial System. FESSUD: Studies in Financial Systems No 15.
Moyo, B. (2018). An analysis of competition, efficiency and soundness in the South African banking sector. South African Journal of Economic and Management Sciences, 21., 1., 1-14.
National Treasury. (2011). A safer financial sector to serve South Africa better. http://www.treasury.gov.za Date 05.21.2019.
National Treasury. (2018). 2017/18 National Treasury Annual Report. Retrieved from http://www.treasury.gov.za Date 05.27.2019.
Novis, S. (2010). An Analysis of the Performance of the Barclays/ABSA Cross-Border Acquisition. Cape Town: UCT (Dissertation - PhD).
Pasiouras, F., Tanna, S. & Zopounidis, C. (2009). The impact of banking regulations on banks' cost and profit efficiency: Cross-country evidence. International Review of Financial Analysis, 18., 5., 294-302.
PwC. (2018). Resilient despite headwinds: South Africa – Major bank analysis. Retrieved from www.pwc.co.za/banking-analysis Date 06.06.2019.
PwC. (2019). Regulated industries. Retrieved from https://www.pwc.de/en/branchenregulierung.html Date 07.02.2019.
Simatele, M. (2015). Market Structure and Competition in the South African banking sector. Procedia Economics and Finance, 30., 825-835.
Smit, A. M. & Swanepoel, E. (2016). The impact of executive remuneration on risk-taking in the banking industry. Investment Management and Financial Innovations, 13., 3., 110-117.
South African Reserve Bank. (2017). Group Annual Financial Statements 2016/17. Retrieved from https://www.resbank.co.za Date 06.06.2019.
South African Reserve Bank (SARB). (2018). Financial Stability Review 2018. Retrieved from https://www.resbank.co.za Date 05.27.2019.
South African Reserve Bank. (2018b). Financial Stability Review 2018 2nd Edition. Retrieved from https://www.resbank.co.za Date 06.04.2019.
South African Reserve Bank. (2018c). Group Annual Financial Statements 2017/18. Retrieved from https://www.resbank.co.za Date 06.06.2019.
Sperandei, S. (2014). Understanding logistic regression analysis. Biochemia medica, 24., 12-18.
Tchana, F. T. (2008). Regulation and banking stability: A survey of empirical studies. Retrieved from https://ssrn.com/abstract=1150823 Date 21 April 2019.
The Banking Association South Africa. (2019). Financial service charter code. Retrieved from https://www.banking.org.za Date 05.16.2019.
Tinoco, M. H., & Wilson, N. (2013). Financial distress and bankruptcy prediction among listed companies using accounting, market and macroeconomic variables. International Review of Financial Analysis, 30., 394-419.
Treasury. 2017. (2017). Budget Review. Retrieved from http://www.treasury.gov.za Date 05.16.2019.
Wilf, M. (2016). Credibility and Distributional effects of International Banking regulations: evidence from us Bank stock returns. International Organization, 70., 4., 763-796.
World Economic Forum. (2018). Global Competitiveness Index 4.02018 edition. Retrieved from http://reports.weforum.org Date 05.27.2019.
Zeidan, M. J. (2012). The effects of violating banking regulations on the financial performance of the US banking industry. Journal of Financial Regulation and Compliance, 20., 1., 56-71.
Published
2020-09-09
How to Cite
Tafara, . S. N., Mokatsanyane, D. ., & Dickason-Koekemoer, Z. (2020). The Relationship between Regulation and Solvency Risk for the Top Five South African Banks: Array. Acta Universitatis Danubius. Œconomica, 16(6). Retrieved from https://dj.univ-danubius.ro/index.php/AUDOE/article/view/410
Issue
Section
Financial Economics
License
The author fully assumes the content originality and the holograph signature makes him responsible in case of trial.
