An open research seminar was held at the National Bank of Ukraine, during which a Senior Lecturer in Strategy and Economics at Bournemouth University (UK) Dr. Khurshid Djalilov presented the results of his own research “Does bank regulation improve bank efficiency? Evidence from transition countries”.
After the global financial crisis in 2008, Dr. Djalilov explained, economists faced two major challenges: how to stabilize banking sector and how to avoid financial instabilities in future. Researchers focused on examining the link between regulations and bank efficiency for both advanced and emerging economies. However, Dr. Djalilov claims, the results of these studies for advanced markets are not applicable to their transition counterparts, which have unique institutional conditions. In transition, financial and banking sectors are relatively young and possess underdeveloped market securities. Moreover, the transition economies have changed the regulations and reformed their banking sectors more frequently during the past few decades because of the numerous financial crises.
During the presentation, Dr. Djalilov described how restrictions on bank activity, prudent capital requirements, the presence of strong authority and market discipline affect efficiency of banking sector in transition economies. Overall, he used System GMM, Dynamic Panel Quantile Regression and Stochastic Frontier Analysis to explore regulations and efficiency of 319 commercial banks from 21 transition economies for the period of 2002-2014. He found that the only factor that influenced the efficiency of banking sector in transition economies was restrictions on bank activity.
Based on the results of his research, Dr. Djalilov concluded that state financial agencies should develop the regulations that fit best their county-specific environments. Moreover, banks are recommended to improve the quality of information they provide to the market.
Video of the seminar at link.
The materials of previous open research seminars are available via the link.
We invite potential speakers to attend the following seminars. The materials with the results of scientific research (article and / or presentation), the author's resume and the desired date for the seminar should be sent to the Research Division of the Monetary Policy and Economic Analysis Department at e-mail: [email protected].