Skip to main content
Book cover

Implementation of Basel Accords in Bangladesh pp 35–71Cite as

Palgrave Macmillan

Theoretical Discussion on Banking Business Model and Banking Regulations

  • 59 Accesses

Abstract

In the introductory chapter, we have initiated the discussion on the banking industry’s systemic risk and the objective of the Basel framework. As the Basel Accords are considered as a prudential banking regulation by the central banks globally, we need to understand three issues, namely: (i) the theoretical foundation of banking business and the limitations of banking business model, (ii) what are the economic rationale to regulate the financial institutions and (iii) contemporary debate on Basel framework. In this chapter, we briefly discuss those three issues. The structure of the chapter is as follows. Section 3.2 discusses the economic theories on banking and the limits of banking business model. Section 3.3 offers a comprehensive discussion on theories on banking regulation and detailed discussion on capital regulation. Section 3.4 presents the existing academic debate on CRAs’ roles in the financial industry and the position of this study. Section 3.5 presents the existing academic debate on sub-debt's role in the Basel Accord and the position of the study as well. Section 3.6 contains concluding remarks.

This is a preview of subscription content, access via your institution.

Chapter
USD   29.95
Price excludes VAT (USA)
  • DOI: 10.1007/978-981-16-3472-7_3
  • Chapter length: 37 pages
  • Instant PDF download
  • Readable on all devices
  • Own it forever
  • Exclusive offer for individuals only
  • Tax calculation will be finalised during checkout
eBook
USD   109.00
Price excludes VAT (USA)
  • ISBN: 978-981-16-3472-7
  • Instant PDF download
  • Readable on all devices
  • Own it forever
  • Exclusive offer for individuals only
  • Tax calculation will be finalised during checkout
Softcover Book
USD   149.99
Price excludes VAT (USA)
Hardcover Book
USD   149.99
Price excludes VAT (USA)
Learn about institutional subscriptions

Notes

  1. 1.

    In Bangladesh, the maximum insured deposit is BDT 200,000 (equivalent to USD 2,300) in the case of bankruptcies, under Deposit Insurance System & proposed Deposit Protection Act 2020 (Amanat Surokka Aain 2020) of Ministry of Finance.

  2. 2.

    It is noted that as on March 27, 2020, the implementation date of the Basel III standards that finalized in December 2017 has been deferred by one year to January 1, 2023, and transitional arrangements for output floor has also been deferred by one year to January 1, 2028, by BCBS to respond to COVID-19 global pandemic. See details at https://www.bis.org/press/p200327.htm.

References

  • Abdelal, R. (2007). Capital rules: The construction of global finance. Harvard University Press.

    Google Scholar 

  • Acharya, V. V. (2009). A theory of systemic risk and design of prudential bank regulation. Journal of Financial Stability, 5, 224–225.

    CrossRef  Google Scholar 

  • Acharya, V. V., & Yorulmazer, T. (2007). Too many to fail- An analysis of time-consistency in bank closure policies. Journal of Financial Intermediation, 16, 1–31.

    CrossRef  Google Scholar 

  • Ahmed, M. K. (2009). The role of an explicit subordinated debt policy in the smooth transition to Basel II: Developing economy perspective. Journal of Banking Regulation, 10(3), 221–233.

    CrossRef  Google Scholar 

  • Ahmed, M. N., Pandit, A. C., Hossain, M. Z., Banu, R., & Siddiqui, M. S. (2017). Research report on impact of adopting Basel accords in the banking sector of Bangladesh. Bangladesh Institute of bank Management.

    Google Scholar 

  • Bagehot. (1873). Lombard street: A description of the money market. Charles Scribner’s Sons.

    Google Scholar 

  • Baltensperger, A. (1980). Alternative approaches to the theory of banking firm. Journal of Monetary Economics, 6, 1–37.

    CrossRef  Google Scholar 

  • Bangladesh Securities and Exchange Commission (BSEC). (1996). Credit rating companies rules 1996. BSEC. https://www.sec.gov.bd/home/lbook.

  • Bank for International Settlements (BIS). (1988). International convergence of capital measurement and capital standards. BCBS, Bank for International Settlements.

    Google Scholar 

  • Basel Committee on Banking Supervision (BCBS). (2003). Markets for bank subordinated debt and equity in basel committee member countries. Bank for International Settlements.

    Google Scholar 

  • Benston, G. J. (1964). Interest payments on demand deposits and bank investment behavior. Journal of Political Economy, 72(5), 431–449.

    CrossRef  Google Scholar 

  • Bernard, B., Capponi, A., & Stiglitz, J. E. (2018). Bail-ins and bails-outs: Incentives, connectivity, and systemic stability (NBER Working Paper 23747). National Bureau of Economic Research.

    Google Scholar 

  • Besanko, D., & Kanatas, G. (1996). The regulation of bank capital: Do capital standards promote bank safety? Journal of Financial Intermediation, 5, 160–183.

    CrossRef  Google Scholar 

  • Bhattacharya, S., & Gale, D. (1987). Preference shocks, liquidity, and central bank policy. In W. A. Barnett & K. J. Singleton (Eds.), New approaches to monetary economics (pp. 69–88). Cambridge University Press.

    Google Scholar 

  • Birchler, U. W., & Hancock, D. (2003). What does the yield on subordinated bank debt measure? Review of Financial Studies, 13(3), 813–840.

    CrossRef  Google Scholar 

  • Bony, S. Z., & Moniruzzaman, M. (2017). A comparative analysis between commercial banks and insurance companies in Bangladesh on the basis of capital structure. International Journal of Business and Social Research, 7(8).

    Google Scholar 

  • Boot, A. W. A., Milbourn, T. T., & Schmeits, A. (2006). Credit ratings as coordination mechanisms. Review of Financial Studies, 19(1), 81–118.

    CrossRef  Google Scholar 

  • Brown, M., Evangelou, I., & Stix, H. (2017). Banking crises, bail-ins and money holdings (Working Paper No. 2017-2). Central Bank of Cyprus. https://www.centralbank.cy/en/publications/working-papers.

  • Bryan, L. L. (1988). Breaking up the bank: Rethinking on industry under Siege. Dow Jones-Irwin.

    Google Scholar 

  • Bryant, J. (1980). A model of reserves, bank runs, and deposit insurance. Journal of Banking and Finance, 4, 335–344.

    CrossRef  Google Scholar 

  • Buser, S., Chen, A., & Kane, E. (1981). Federal deposit insurance, regulatory policy and optimal bank capital. Journal of Finance, 26(1), 51–60.

    Google Scholar 

  • Calomiris, C. W., & Gorton, G. (1991). The origins of banking panics: Models, facts, and bank regulation. In R. G. Hubbard (Ed.), Financial markets and financial crises (pp. 109–174). University of Chicago Press.

    Google Scholar 

  • Campbell, T. S., Chan, Y., & Marino, A. M. (1992). An incentive-based theory of bank regulation. Journal of Financial Intermediation, 2(3), 255–276.

    CrossRef  Google Scholar 

  • Carapeto, M., Moeller, S., Faelten, A., Vitkova, V., & Bortolotto, L. (2010). Distress classification measures in the banking sector. City University of London.

    Google Scholar 

  • Chen, Y., & Hasan, I. (2011). Subordinated debt, market discipline, and bank risk. Journal of Money, Credit and Banking, 43(6), 1043–1072.

    CrossRef  Google Scholar 

  • Choi, H., & Choi, S. (2015). What drives credit rating changes? A return decomposition approach. Asia-Pacific Journal of Financial Studies, 44, 899–931. https://doi.org/10.1111/ajfs.12118.

    CrossRef  Google Scholar 

  • Choi, S. J. (2004). A framework for the regulation of securities market intermediaries. Berkeley Business Law Journal, 1(1), 48–81.

    Google Scholar 

  • Coffee, J. C. (2006). Gatekeepers: The professions and corporate governance. Oxford University Press.

    Google Scholar 

  • Coffee, J. C. (2011). Rating reforms: The good, the bad and the ugly. Harvard Business Law Review, 1, 231–278.

    Google Scholar 

  • Cooper, R., & Ross, T. W. (2002). Bank runs: Deposit insurance and capital requirements. International Economic Review, 43(1), 55–72. https://doi.org/10.1111/1468-2354.t01-1-00003.

    CrossRef  Google Scholar 

  • Darbellay, A. (2013). Regulating credit rating agencies. Edward Elgar.

    Google Scholar 

  • Davis, E. P. (1995). Debt financial fragility and systemic risk. Oxford University Press.

    Google Scholar 

  • Dewatripont, M., & Tirole, J. (1994). The prudential regulations of banks. MIT Press.

    Google Scholar 

  • Dey, B. K. (2019). Managing nonperforming loans in Bangladesh: ADB Briefs, no 116, November, 2019. Asian Development Bank. https://www.adb.org/publications/papers. https://doi.org/10.22617/BRF190507-2.

  • DeYoung, R. (1988). The efficiency of financial institutions: How does regulation matter? Journal of Economics and Business, 50, 79–234.

    Google Scholar 

  • Diamond, D. W. (1984). Financial intermediation and delegated monitoring. The Review of Economic Studies, 51(3), 393–414.

    Google Scholar 

  • Diamond, D. W. (1996). Financial intermediation as delegated monitoring: A simple example. Federal Reserve Bank of Richmond Economic Quarterly, 82(3), 51–66.

    Google Scholar 

  • Diamond, D. W., & Dybvig, P. H. (1983). Bank runs, deposit insurance, and liquidity. The Journal of Political Economy, 91(3), 401–419.

    Google Scholar 

  • Diamond, D. W., & Dybvig, P. H. (1986). Banking theory, deposit insurance, and bank regulation. The Journal of Business, 59(1), 55–68.

    CrossRef  Google Scholar 

  • Diamond, D. W., & Rajan, R. G. (2000). A theory of bank capital. Journal of Finance, LV(6), 2431–2465.

    Google Scholar 

  • Dothan, U., & Williams, J. (1980). Banks, bankruptcy, and public regulation. Journal of Banking and Finance, 4, 65–88.

    CrossRef  Google Scholar 

  • Eichberger, J., & Harper, I. R. (1997). Financial economics. Oxford University Press.

    Google Scholar 

  • Elyasiani, E. (1983). The two-product banking firm under uncertainty. Southern Economic Journal, 1002–1017.

    Google Scholar 

  • European Commission (EC). (2009). Regulation (EC) No 1060/2009 Of the European parliament and of the council of 16 September 2009 on credit rating agencies. European Commission. https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:02009R1060-20150621&from=EN.

  • Evanoff, D. D. (1994). Capital requirements and bank regulatory reforms. In C. A. Stone & A. Zissu (Eds.), Global risk based capital regulation Volume 1: Capital adequacy. Irwin Professional Publishing.

    Google Scholar 

  • Evanoff, D. D., & Wall, L. D. (2000). Subordinated debt as bank capital: A proposal for regulatory reform (WP 2000-07). Federal Reserve Bank of Chicago.

    Google Scholar 

  • Evanoff, D. D., & Wall, L. D. (2001). Sub-debt yields spreads as bank risk measures. Subordinated debt as bank capital: A proposal for regulatory reform. Journal of Financial Services Research, 20(2/3), 121–145.

    Google Scholar 

  • Evanoff, D. D., Jagtiani, J. A., & Nakata, T. (2011). Enhancing market discipline in banking: The role of subordinated debt in financial regulatory reform. Journal of Economics and Business, 63, 1–22.

    CrossRef  Google Scholar 

  • Evanoff, D. D., & Wall, L. D. (2002). Measures of the riskiness of banking organizations: Subordinated debt yields, risk-based capital, and examination ratings. Journal of Banking & Finance, 26, 989–1009.

    Google Scholar 

  • Farhi, E. & Tirole, J. (2009). Collective moral hazard, maturity mismatch and systemic bailouts (NBER Working Paper No. 15138). National Bureau of Economic Research.

    Google Scholar 

  • Federal Deposit Insurance Corporation (FDIC). (2020). 2019 Annual Report. FDIC.

    Google Scholar 

  • Ferguson, R. W. (1999). Evolution of financial institutions and markets: implications for public and private policies and practices. Speech delivered at the Money Marketers of New York University, New York. Board of Governors of the Federal Reserve System. https://www.federalreserve.gov/boarddocs/speeches/1999/199902252.htm.

  • Financial Instrument and Exchange (FIE) Act. (2006). The Act for the Amendment of the Securities and Exchange Act, etc. (Act No. 65 of 2006) and the Act for the Development, etc. of Relevant Acts for Enforcement of the Act for the Amendment of the Securities and Exchange Act, etc. (2006 Act No. 66). Financial Services Agency. https://www.fsa.go.jp/common/law/fie01.pdf.

  • Flannery, M. J. (1996). Financial crises, payment systems problems, and discount window lending. Journal of Money Credit and Banking, 28(4), 804–824.

    CrossRef  Google Scholar 

  • Flannery, M., & Sorescu, S. M. (1996). Evidence of bank market discipline in subordinated debenture yields: 1983–1991. Journal of Finance, 51(4), 1347–1377.

    Google Scholar 

  • Flori, A., Giansante, S., Girardone, C., & Pammolli, F. (2019). Banks’ business strategies on the edge of distress. Annals of Operations Research. https://doi.org/10.1007/s10479-019-03383-z.

    CrossRef  Google Scholar 

  • Freixas, X., & Rochet, J.-C. (1997). Microeconomics of banking. The MIT Press.

    Google Scholar 

  • Freixas, X., & Rochet, J.-C. (2008). Microeconomics of Banking (2nd ed.). The MIT Press.

    Google Scholar 

  • Freixas, X., Leven, L., & Peydro, J. (2015). Systemic risk, crises, and macroprudential regulation. The MIT Press.

    Google Scholar 

  • Furlong, F. T., & Keeley, M. C. (1989). Capital regulation and bank risk-taking: A note. Journal of Banking and Finance, 13, 883–891.

    CrossRef  Google Scholar 

  • Garten, H. A. (1986). Banking on the market: Relying on depositors to control bank Risks. Yale Journal on Regulation, 4(1), 129–172.

    Google Scholar 

  • Geneva Report. (2009). The fundamental principles of financial regulation: Geneva reports on the world economy 11. Centre for Economic Policy Research (CEPR).

    Google Scholar 

  • Goodhart, C. (1989). Money, information and uncertainty (2nd ed.). Macmillan.

    Google Scholar 

  • Goodhart, C. (1995). The central bank and the financial system. Palgrave Macmillan.

    Google Scholar 

  • Goodhart, C. (2009). The regulatory response to the financial crisis. Edward Elgar.

    Google Scholar 

  • Goodhart, C. (2011). The Basel Committee on banking Supervision: A history of the early years 1974–1997. Central Bank and the Financial System. Cambridge University Press.

    Google Scholar 

  • Gorton, G., & Pennacchi, G. (1990). Financial intermediaries and liquidity creation. The Journal of Finance, 45(1), 49–71.

    CrossRef  Google Scholar 

  • Gorton, G., & Winton, A. (1995). Bank capital regulation in general equilibrium. (NBER Working Paper No. 5244). National Bureau of Economic Research.

    Google Scholar 

  • Götz, M. R., & Tröger, T. H. (2016). Should the marketing of subordinated debt be restricted/different in one way or the other? What to do in the case of mis-selling? Economic and Monetary Affairs Committee, European Union.

    Google Scholar 

  • Greenspan, A. (2000). Banking evolution. In Proceedings of a Conference on Bank Structure and Competition. Federal Reserve Bank of Chicago.

    Google Scholar 

  • Hart, O. D., & Jafee, D. M. (1974). On the application of portfolio theory to depository finance intermediaries. Review of Economic Studies, 41, 129–147.

    CrossRef  Google Scholar 

  • Hemraj, M. (2015). Credit rating agencies self-regulation, statutory regulation and case law regulation in the United States and European Union. Springer International Publishing.

    Google Scholar 

  • International Organization of Securities commissions (IOSCO). (2015). Code of conduct fundamentals for credit rating agencies: Final report (FR05/2015). IOSCO. https://www.iosco.org/library/pubdocs/pdf/IOSCOPD482.pdf.

  • Jacklin, C., & Bhattacharya, S. (1988). Distinguishing panics and information based bank runs: Welfare and policy implications. Journal of Political Economy, 96, 568–592.

    CrossRef  Google Scholar 

  • Jagtiani, J., & Lemieux, C. M. (2001). Market discipline prior to bank failure. Journal of Economics and Business, 53(2–3), 313–324.

    Google Scholar 

  • Jagtiani, J., Kolari, J. W., Lemieux, C. M., & Shin, G. H. (2000). Predicting inadequate capitalization: Early warning system for bank supervision (S&R-2000-10R). Supervision and Regulation Department, Federal Reserve Bank of Chicago.

    Google Scholar 

  • Kahane, Y. (1977). Capital adequacy and the regulation of financial intermediaries. Journal of Banking and Finance, 1, 207–218.

    CrossRef  Google Scholar 

  • Kammoun, R., & Louizi, A. (2015). Credit rating agencies: Development and analysis of business models. Journal of Contemporary Management, 3(2), 53–66.

    Google Scholar 

  • Kareken, J. H. (1986). Federal bank regulatory policy: A description and some observations. Journal of Business, 59, 3–48.

    CrossRef  Google Scholar 

  • Kareken, J. H., & Wallace, N. (1978). Deposit insurance and bank regulation: A partial-equilibrium exposition. Journal of Business, 51, 413–438.

    CrossRef  Google Scholar 

  • Kashyap, A. K., Rajan, R. G., & Stein, J. C. (1999). Banks as liquidity providers: An explanation for the co-existence of lending and deposit-taking (NBER Working Paper 6962). National Bureau of Economic Research

    Google Scholar 

  • Keeley, M. C., & Furlong, F. T. (1990). A re-examination of the mean-variance analysis of bank capital regulation. Journal of Banking and Finance, 14, 69–84.

    CrossRef  Google Scholar 

  • Keynes, J. M. (1930). A treatise on money (Vol. 1). Macmillan.

    Google Scholar 

  • Kim, D., & Santomero, A. M. (1988). Risk in banking and capital regulation. The Journal of Finance, 43(5), 1219–1233.

    Google Scholar 

  • Koehn, M., & Santomero, A. M. (1980). Regulation of bank capital and portfolio risk. Journal of Finance, 43(5), 1235–1244.

    CrossRef  Google Scholar 

  • Langhor, H. M., & Langhor, P. T. (2008). The Rating agencies and their credit ratings What they are, how they work and why they are relevant. Wiley.

    Google Scholar 

  • Litan, R. E. (1987). What should banks do? Brookings Institution Press.

    Google Scholar 

  • Lucchetta, M., Moretto, M., & Parigi, B. M. (2018). Systemic risk, bank moral hazard, and bailouts (CESifo Working Paper Series 6878). CESifo Group.

    Google Scholar 

  • Marcus, A. J., & Shaked, I. (1984). The valuation of FDIC deposit insurance using option-pricing estimates. Journal of Money Credit and Banking, 16(4), 446–460.

    Google Scholar 

  • Markowitz, M. H. (1952). Portfolio selection efficient diversification of investment (Cowles Foundation Monograph, No. 16). Cowles Foundation.

    Google Scholar 

  • Matthews, K., & Thompson, J. (2014). The economics of banking. Wiley.

    Google Scholar 

  • Merton, R. C. (1977). An analytic derivation of the cost of deposit insurance and loan guarantees. Journal of Banking and Finance, 1, 512–520.

    CrossRef  Google Scholar 

  • Merton, R. C. (1978). On the cost of deposit insurance when there are surveillance costs. Journal of Business, 51, 439–452.

    CrossRef  Google Scholar 

  • Meyer, L. H. (1999). Market discipline as a complement to bank supervision and regulation. Speech before the Conference on Reforming Bank Capital Standards. Council on Foreign Relations. https://www.federalreserve.gov/boarddocs/speeches/1999/19990614.htm.

  • Miglionico, A. (2014). Recasting credit rating agencies’ responsibility: Suggestions for Reform (Doctoral Dissertation, University of London, London, UK). https://qmro.qmul.ac.uk/xmlui/bitstream/handle/123456789/12986/Miglionico_Andrea_PhD_Final_260216.pdf?sequence=1.

  • Miglionico, A. (2019). The governance of credit rating agencies regulatory regime and liability issues. Edward Elgar.

    Google Scholar 

  • Millers, S., Olson, E., & Yeager, T. J. (2015). The relative contributions of equity and subordinated debt signals as predictors of bank distress during the financial crisis. Journal of Financial Stability, 16, 118–137.

    Google Scholar 

  • Miyoda, M. (1994). Revival of US Banks-Merchant Bank, Investment Bank, Money-center Bank, Super-regional Bank. Nihon Keizai Shinbun Sha.

    Google Scholar 

  • Modigliani, F., & Miller, M. (MM). (1958). The cost of capital, corporation finance and the theory of investment. American Economic Review, 48(3), 261–297.

    Google Scholar 

  • Morgan, D. P., & Stiroh, K. J. (2000). Bond market discipline of banks: Is the market tough enough? (Federal Reserve Bank of New York Staff Report, No. 95). Federal Reserve Bank of New York. https://www.newyorkfed.org/research/economists/medialibrary/media/research/staff_reports/sr95.pdf#search='Bond+market+discipline+of+banks%3A+Is+the+market+tough+enough%3F.

  • Morgan, D. P., & Stiroh, K. J. (2001). Market discipline of banks: The asset test. Journal of Financial Services Research, 20, 195–208.

    CrossRef  Google Scholar 

  • Moskow, M. H. (1998). Regulatory efforts to prevent banking crises. In G. Caprio, W. C. Hunter, G. G. Kaufman, & D. M. Leipziger (Eds.), Preventing bank crises: Lessons from recent global bank failures (pp. 13–26). World Bank.

    Google Scholar 

  • North, D. C. (1990). Institutions, institutional change and economic performance. Cambridge University Press.

    Google Scholar 

  • North, D. C. (2005). Understanding the process of economic change. Princeton University Press.

    Google Scholar 

  • Partnoy, F. (1999). The Siskel and Ebert of financial markets? Two thumbs down for the credit rating agencies. Washington University Law Quarterly, 77(3), 619–713.

    Google Scholar 

  • Partnoy, F. (2006). How and why credit rating agencies are not like other gatekeepers (University of San Diego Legal Studies Research Paper Series No. 07-46). In Y. Fuchita & R. E. Litan (Eds.), Financial gatekeepers: Can they protect investors? Brookings Institution Press & the Nomura Institute of Capital Markets Research.

    Google Scholar 

  • Pennacchi, G. (1987). Alternative form of deposit insurance, pricing and bank incentive issues. Journal of Banking and Finance, 11(2), 291–312.

    CrossRef  Google Scholar 

  • Pierce, J. (1991). The future of banking. Yale University Press.

    Google Scholar 

  • Porter, R. C. (1961). A model of bank portfolio selection. Yale Economic Essays, 1(2), 323–359.

    Google Scholar 

  • Posner, E. A. (2015). How do bank regulators determine capital-adequacy requirements? University of Chicago Law Review, 82, 1853–1895.

    Google Scholar 

  • Rahim, M. M. (2010). Credit rating agencies’ roles have to be reassessed. Law and Financial Markets Review, 4(4), 433–438.

    CrossRef  Google Scholar 

  • Rajan, R. G. (1992). Insiders and outsiders: The Choice between informed and arm’s length debt. The Journal of Finance, 47(4), 1367–1400.

    CrossRef  Google Scholar 

  • Rixtel, A. V., González, L. R., & Yang, J. (2015). The determinants of long-term debt issuance by European banks: Evidence of two crises (BIS Working Papers No. 513). Bank for International Settlements.

    Google Scholar 

  • Rochet, J. C. (1992). Capital requirements and the behavior of commercial banks. European Economic Review, 36, 1137–1178.

    CrossRef  Google Scholar 

  • Rochet, J.-C., & Vives, X. (2004). Coordination failures and the lender of last resort: Was Baghehot right after all? Journal of the European Economic Association, 2(6), 1116–1147.

    CrossRef  Google Scholar 

  • Ronn, E. I., & Verma, A. (1986). Pricing risk-adjusted deposit insurance: An option-based model. Journal of Finance, 41(4), 871–895.

    Google Scholar 

  • Santomero, A. M. (1984). Modeling the banking firm: A survey. Journal of Money, Credit and Banking, 16(4), 576–602.

    CrossRef  Google Scholar 

  • Santomero, A. M. (2006). Forward. In H. Langhor & P. Langhor (Eds.), The rating agencies and their credit ratings what they are, how they work and why they are relevant (p. x). Wiley.

    Google Scholar 

  • Santos, J. A. C. (1999). Bank capital and equity investment regulations. Journal of Banking and Finance, 23, 1095–1120.

    CrossRef  Google Scholar 

  • Santos, J. A. C. (2001). Bank capital regulation in contemporary banking theory: A review of the literature. Financial Markets, Institutions & Instruments, 10(2), 41–84. https://doi.org/10.1111/1468-0416.00042.

  • Santos, J. A. C. (2006). Insuring banks against liquidity shocks: The role of deposit insurance and lending of last resort. Journal of Economic Surveys, 20(3), 459–482.

    CrossRef  Google Scholar 

  • Schooner, H. M., & Taylor, M. W. (2010). Global bank regulation principles and policies. Elsevier.

    Google Scholar 

  • Sharpe, W. F. (1978). Bank capital adequacy, deposit insurance and security values. Journal of Financial and Quantitative Analysis, 13, 701–718.

    Google Scholar 

  • Stigler, G. T. (1971). The theory of economic regulation. The Bell Journal of Economics and Management Science, 2(1), 3–21.

    CrossRef  Google Scholar 

  • Stiglitz, J. E. (2009). Report of the commission of experts of the president of the United Nations general assembly on reforms of the international monetary and financial system. United Nations.

    Google Scholar 

  • Stiglitz, J., & Greenwald, B. (2003). Towards a new paradigm in monetary economics. Cambridge University Press.

    Google Scholar 

  • Stiglitz, J. E., & Weiss, A. (1981). Credit rationing in markets with imperfect information. American Economic Review, 71(3), 393–410.

    Google Scholar 

  • Strier, F. (2008). Rating the raters: Conflicts of interest in the credit rating firms. Business and Society Review, 113(4), 533–553.

    Google Scholar 

  • Suzuki, Y. (2011). Japan’s Financial Slump: Collapse of the monitoring system under institutional and transitional failures. Palgrave Macmillan.

    Google Scholar 

  • Tobin, J. (1958). Liquidity preference as Behavior towards bank risk. Review of Economic Studies, 25, 65–67.

    CrossRef  Google Scholar 

  • Tobin, T. (1965). Money and economic growth. Econometrica, 33(4), 671–684.

    CrossRef  Google Scholar 

  • Tucker, P. (2013). Resolution and future of finance. Speech at the INSOL International World Congress, The Hague, Netherlands. https://www.bis.org/review/r130606a.pdf#search='Paul+Tucker%3A+Resolution+and+future+of+finance.

  • Tucker, P. (2014). Banking reform and macroprudential regulation: Implications for banks’ capital structure and credit conditions. In E. Jokivuolle & J. Vilmunen (Eds.), Banking after regulatory reforms-business as usual? (pp. 65–77). A Joint publication of SUERF—The European Money and Finance Forum & Bank of Finland. https://www.suerf.org/studies/4139/banking-after-regulatory-reforms-business-as-usual.

  • U.S. Securities and Exchange Commission (U.S. SEC). (2013). Report to congress credit rating agency independence study. U.S. Securities and Exchange Commission.

    Google Scholar 

  • White, L. J. (2010). The credit rating agencies. Journal of Economic Perspective, 24(2), 211–226.

    CrossRef  Google Scholar 

  • White, L. J. (2013). Credit rating agencies: An overview. Annual Review of Financial Economics, 5, 93–122. https://doi.org/10.1146/annurev-financial-110112-120942.

    CrossRef  Google Scholar 

  • Wymeersch, E. O., & Kruithof, M. (2006). Regulation and liability of credit rating agencies under Belgian law (Ghent University Financial Law Institute Working Paper No. 2006-05). Ghent University. http://www.law.ugent.be/fli/wps/archive.php#2006. https://doi.org/10.2139/ssrn.894820.

  • Yang, H., Ahn, H. K., Maria, H., & Ryu, D. (2017). Information asymmetry and investor trading behavior around bond rating change announcements. Emerging Markets Review, 32, 38–51.

    CrossRef  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Ritsumeikan Asia Pacific University, Beppu, Oita, Japan

    A K M Kamrul Hasan & Yasushi Suzuki

Authors
  1. A K M Kamrul Hasan
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Yasushi Suzuki
    View author publications

    You can also search for this author in PubMed Google Scholar

Rights and permissions

Reprints and Permissions

Copyright information

© 2021 The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd.

About this chapter

Verify currency and authenticity via CrossMark

Cite this chapter

Hasan, A.K.M.K., Suzuki, Y. (2021). Theoretical Discussion on Banking Business Model and Banking Regulations. In: Implementation of Basel Accords in Bangladesh. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-16-3472-7_3

Download citation

  • DOI: https://doi.org/10.1007/978-981-16-3472-7_3

  • Published:

  • Publisher Name: Palgrave Macmillan, Singapore

  • Print ISBN: 978-981-16-3471-0

  • Online ISBN: 978-981-16-3472-7

  • eBook Packages: Economics and FinanceEconomics and Finance (R0)