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Critical Review(2)

Critical Review(2)

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Published by Nikunj Patel
how to evaluate critical review with new banking regulation in global market.
how to evaluate critical review with new banking regulation in global market.

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Published by: Nikunj Patel on Oct 07, 2010
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10/07/2010

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London school of commerce
(Business School)
INVESTMENT MANAGEMENT ANDCAPITAL MARKETS
(
RESEARCH METHODS
)
CRITICAL REVIEWTHERELATION BETWEEN BANK REGULATIONS&ECONOMIC PERFORMANCE:A CROSS-COUNTRY ANALYSISModule Leader: VIJAY SHENAI AND MAKAILLA McConnellID No: 0661SWSW1109
1
 
The papers under review discuss the relation between national wealth andbank regulatory policy, and all the data measured by three pillars of the newBasel capital accord. In this article, using the database of 153 countriesreflects that the countries with great monitoring, accounting practice, financialtransparency, and credit rating efficiency are associated with greater wealthand less risk. The title of topic is The Relation between Bank regulation andEconomic performance: A cross- country analysis. This article has beenwritten byMark Bertus,John S Jahera Jr ,and Keven Yost
.
and publishedbanks and bank system in 2007 volume 2 issues 3.
Purpose & understanding of the paper & Placementof article within wider subject context
Barth, Caprio and Levine BCL (2006) prepared a questionnaire with 262questions and distributed to central banking authorities of 153 countries. Thisinformation represents the official government position, annual GDP, GDPgrowth rate, inflation rate for 2000- 204. All this data collected from the WorldBank. They also gather the information related corruption and democracyfrom La portal, Lopez-de-Silages, Shelter and Vishnu (1999). BCL evaluatedthe relationship of these factors with financial sectors of the country.It is an inclusive research paper which has been divided into 5 sections,Section 1 introductionSection 2 Review of selected literature on Basel II pillarsSection 3 Data, Methodology, and Descriptive StatisticsSection 4 discusses the empirical results,Section 5 concludes
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According toBertus,Jahera and Yost , Global financial markets are a fundamental ingredient in the production and maintenance of the world'seconomic activity. Overall financial condition improve the economicperformance applying five
broad functions (see Levine, 2005, p. 4)
1 The production of ex ante information about investments.
2
The monitoring of investments for which they provide financing.
3 The facilitation of risk management and diversification.
4 Mobilizations and pooling of resources.
5 The facilitation of trading goods and services.
Bertus,Jahera and Yost argue that banking system is the most important factors of financial market. And it is widely acknowledged that a wellstructured banking system, defined by its supervisory practices, risk taking,and governance, promotes greater financial performance and economicstability. Further they say that
Differences with respect to corruption, democracy,and legal origin, for example,
create heterogeneous regulatory environmentsthat impede the implementation of universally effective policies. The intent of this study is to empirically evaluate the association between a country'sbanking system characteristics and its overall level of income and incomegrowth.Paper show identify that over the past two decades most of all financialmarket facing financial crisis and which leaves the negative effects on
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