Ali Mirzaei

Using large-scale datasets, we examine the impact of the implementation of Basel III liquidity standards across 14 advanced countries on cross-border lending and bank loan growth in 110 emerging and developing countries. We find that the Basel III liquidity implementation in source countries is associated with lower growth in bilateral cross-border bank claims. However, the transmission mechanisms differ: LCR regulation is more consistent with a reallocation of lending across foreign destinations, whereas NSFR regulation operates more through a broad-based contraction in lending, suggesting distinct effects of each regulatory dimension. Evidence also reveals that the implementation of Basel III liquidity standards generates adverse spillovers to bank lending in destination countries by weakening the positive effect of cross-border inflows on bank-loan growth. Across all specifications, the impacts vary with some banking characteristics of both source and destination countries. Overall, the effects of liquidity regulation appear to extend beyond the jurisdictions in which it is implemented.

This paper examines whether fintech credit alleviates investment–cash flow sensitivity in financially constrained firms, particularly small firms in emerging economies. Using data from 45,770 firms over the period 2013–2020, we investigate whether the development of fintech lending markets reduces firms’ dependence on internally generated funds when financing investment expenditures. We find no significant effect of fintech financing on investment–cash flow sensitivity for the average firm. However, fintech financing significantly reduces investment–cash flow sensitivity among small firms, indicating that the benefits of fintech development are concentrated among firms facing greater financing constraints. Additional analyses show that the effect is stronger among young firms and firms operating in industries with greater external financing needs. Furthermore, our results reveal that the reduction in investment–cash flow sensitivity is primarily driven by peer-to-peer (P2P) lending and other alternative fintech lending channels, rather than by balance-sheet lending or crowdfunding. Overall, the findings suggest that fintech financing can improve capital allocation efficiency in emerging economies by alleviating financing constraints and expanding access to external finance for underserved firms.

This paper examines the relationship between national culture and the activation of macroprudential policies. Using data on the activation of prudential tools and three cultural dimension measures across 56 countries between 2000 and 2017, we show that national culture significantly influences the use of prudential policy tools. In particular, in countries characterized by stronger preferences for organized frameworks, higher power distance, and greater uncertainty avoidance tend to implement a larger number of macroprudential policies. In contrast, more individualistic societies are associated with lower levels of macroprudential policy activation, reflecting a greater emphasis on liberal values, risk appetite, and resistance to regulatory intervention. These findings are robust to a range of sensitivity analyses and carry policy implications. The results suggest that cultural values shape national policy preferences and should be considered in the design of prudential policies to enhance their effectiveness.

This paper examines the relationship between national culture and the activation of macroprudential policies. Using data on the activation of prudential tools and three cultural dimension measures across 56 countries between 2000 and 2017, we show that national culture significantly influences the use of prudential policy tools. In particular, in countries characterized by stronger preferences for organized frameworks, higher power distance, and greater uncertainty avoidance tend to implement a larger number of macroprudential policies. In contrast, more individualistic societies are associated with lower levels of macroprudential policy activation, reflecting a greater emphasis on liberal values, risk appetite, and resistance to regulatory intervention. These findings are robust to a range of sensitivity analyses and carry policy implications. The results suggest that cultural values shape national policy preferences and should be considered in the design of prudential policies to enhance their effectiveness.

This paper evaluates the stock performance of Islamic banks relative to their conventional counterparts during the initial phase of the COVID-19 crisis (from December 31, 2019, to March 31, 2020). Using 426 banks from 48 countries, we find that stock returns of Islamic banks were about 10–13% higher than those of conventional banks after controlling for a host of the bank- and country-level variables. This study explains the Islamic banks’ superior crisis stock performance by exploring the potential role of pre-crisis bank efficiency. In a univariate analysis, we document higher non-parametric Data Envelopment Analysis (DEA) efficiency levels for Islamic banks than conventional banks in the year preceding the COVID-19 crisis. Our multivariate regressions show that the risk-adjusted DEA efficiency scores can explain crisis stock returns for Islamic banks but not conventional banks. The evidence is robust to alternative measures of stock returns, efficiency models, and other empirical strategies. Finally, we present insight on the importance of key bank characteristics in determining the stock returns of conventional banks during the crisis period.

Macro‐prudential policies that are adopted to strengthen the resilience of the financial sector to systemic risk impose additional restrictions on bank lending and other activities, altering the structure of the banking sector. In this article, we empirically investigate the extent to which macro‐prudential instruments affect one of the bank characteristics, bank competition, for a sample of 58 countries. The robust finding is that macro‐prudential policies are adversely affecting bank competition, in particular, this is driven by liquidity‐ and capital‐related instruments. The negative effect can, however, be mitigated in countries with high institutional quality and high bank supervisory powers.