Mohammed Mizanur Rahman

This study examines the determinants of financial intermediation costs of banks in ten Emerging Economies (EEs) in the period 2000–2018 using panel data of 1335 banks. Empirically, this study applies the single-stage dealership model and its extensions by introducing new bank and country-level variables. We find robust evidence that investment in government securities and market openness positively affect bank intermediation costs while the trilemma index negatively affects them. During the world financial crisis, bank intermediation costs increased. Moreover, we observe that cost inefficiency, credit risk, and regulatory regime are the crucial drivers of bank intermediation costs. We draw important implications for scholars and policymakers.

Purpose: The purpose of this paper is to examine the impact of trade openness on the cost of financial intermediation and bank performance. Developed and developing countries are currently pursuing trade openness to achieve higher bank performance with less intermediation costs.Design/methodology/approach: In attaining the study's objectives, several regression methodologies were employed (i.e. system generalized method of moments (GMM), fixed effect, pooled ordinary least squares (OLS) and vector error correction model (VECM)). The authors tested the hypothesis on data of 885 banks from BRICS countries, which span 18 years (2000–2017).Findings: The results from this robust study showed that embedding higher trade openness reduces financial intermediation costs and improves banks' performance. The results remain robust following the use of different estimation methods and alternative variables as proxies. In addition, results were still valid upon considering bank level, industry level and country level as control variables. It was also observed that the relation pattern holds its rigidity during “good” and “bad” times (i.e. the global financial crisis).Originality/value: The results provide better references for bank regulators, academics and policymakers to take advantage of the low financial intermediation costs resulting from trade openness.

The Banking sector of Bangladesh had been struggling with poor performance before the COVID-19 situation. The reson behind as Non-performing loans, declining margins in a capped interest rate regime, deteriorations in various efficiency indicators, government-directed restructuring of loans. Now the COVID-19 pandemic has put this sector into further stress. This study examines the impact of COVID-19 on the bank's liquidity by using Pooled Ordinary Least Square (Pooled OLS) on a data-set of 20 Bangladeshi commercial banks covering the period from 8 March to 30 November 2020 and the daily COVID-19 affected and death cases. When finding the bank's liquidity response to COVID-19, we also elevate the interacting relationship between the government action variables and the Trend in COVID-19 affected and death cases. We find that social distancing and government economic support significantly affect the bank's liquidity. More interesting, remittance is the key drivers to take stable of the banking liquidity in Bangladesh. As there is frugality of literature regarding bank liquidity during the COVID-19 pandemic, this study will be a unique study on Bangladesh. The study results will be beneficial for other developing countries with the same economies.

Using Pooled Ordinary Least Square (Pooled OLS) on a daily panel dataset from the US and Canada from January 22 to September 22, 2020, this study examines the impact of macroeconomic indicators impact on the stock market indices during the COVID-19 pandemic. We improved the interaction relationship of government action variables with the trend in COVID-19 affected and death cases in finding the reaction of stock market returns. We find that the industrial production and money supply significantly influence the stock market return during this pandemic. As there is a paucity of literature together with unclear findings, we improved that social distancing and government economic support significantly affect the stock market returns. Further, this study implies that the interaction of social distancing with the trend in COVID-19 affected cases reduces the adverse reaction of stock market returns during this pandemic. But the interaction of social distancing with the trend in COVID-19 death cases enters negative and significant, suggesting that social distancing action with the trend in death cases of COVID-19 doesn’t weaken the inverse reaction of stock market returns. During this pandemic period, this study can be a policy dialog for the government, policymakers, researchers, and regulatory bodies.

In this paper, we examine the impact of trade openness on bank risk-taking behavior employing a panel dataset of 899 banks from the BRICS (i.e., Brazil, Russia, India, China, and South Africa) countries over the period 2000–2017. We find that higher trade openness lowers bank risk-taking. Our results are robust when we use alternative proxies of trade openness and bank risk-taking, estimate country-wise regressions, or use alternative estimation methods such as system Generalized Methods of Moments (GMM), fixed effects, pooled Ordinary Least Square (OLS), and Vector Error Correction Model (VECM) models. We also observe higher trade openness decreases bank risk-taking in both the short and long run. Moreover, banks in more open countries perform relatively better during the crisis period further signifying the diversification benefits of openness. Together, our findings imply the beneficial impact of trade openness for financial sector stability.