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Inclusive Banking, Financial Regulation and Bank Performance: Cross-Country Evidence

November 9, 2018

DECRG Kuala Lumpur Seminar Series

  • The global financial crisis has emphasized the importance of identifying well-designed bank regulation that would work for promoting inclusive finance and bank performance. In this paper, we contribute to this ongoing policy debate by analyzing whether greater financial inclusion can help improve bank efficiency using an international sample of banks. We, first, document a strong positive association between financial inclusion and bank efficiency, and then show that this association is stronger in countries with limited restrictions on banking activities, less barriers on foreign bank entry, and more capital regulation stringency. Exploring plausible channels, we find that greater financial inclusion helps banks reduce the volatility of their deposit-funding share, implying inclusive banking providing more stable long-term funds while also mitigating the negative effects of return volatility. We also show that banks operating in less developed financial markets benefit more from inclusive financial development compared to banks in developed economies. The results are robust to an array of robustness tests, and have significant ramifications for contemporary regulatory reform debate.

    Download the paper

    Watch and join us via Live Chat: Seminar will be live-streamed, allowing for online audience participation (only available during the seminar)

  • Roman Matousek

    Roman Matousek is Professor of Finance and Director of the Centre for Risk, Banking and Financial Services (CRBFS) at Nottingham University Business School, University of Nottingham. Roman is also a member of the prestigious Chartered Association of Business Schools (ABS) International Committee. Roman served as Head of Research and Director of the Research Centre for EMEA Banking, Finance and Economics. Before joining Nottingham University Roman held an appointment as Professor of Banking and Finance and Deputy Head of Kent Business School, University of Kent. Roman has extensively collaborated with the leading Universities in China, Europe and North America. Based on his extensive academic activities in China and ASEAN region, Roman is an expert on higher education in China and other Southeast Asian countries. Roman is currently working on FinTech in banking along with his colleagues in Hong Kong and Mainland China. His research is predominantly focused on theoretical and empirical inquiry into issues of international banking, bank regulation, microeconomics of banking and monetary policy. Roman has extensively published in leading academic journals that include Journal of Banking and Finance, Environment and Planning A, European Journal of Operational Research, Journal of International Money and Finance, Decision Systems, OMEGA, Review of International Economics, Journal of International Financial Markets, Institutions and Money, Journal of Comparative Economics among others. He has organized a number of major conferences including most recently the conference on Economic Transition: Money, Banking and Finance. He is the author of several professional books on money and banking and has frequently been invited as a keynote speaker at the International conferences in Europe, USA and Asia. Roman was a Visiting Research Fellow at London Business School, Birmingham University. He received a prestigious Pew Fellowship from Walsh School of Foreign Service at Georgetown University, (USA). Roman was also a Visiting Professor at Tohoku University, Sendai, Japan. Roman has currently been appointed as the Visiting Research Economist at SEACEN Centre (https://www.seacen.org/) in Kuala Lumpur, Malaysia, where he leades a project on "Cross-border interbank contagion risk analysis". Roman currently serves on editorial boards of Journal of International Financial Markets, Institutions & Money (Elsevier). Before he was the Associate Editor of the Journal of Banking & Finance. Roman is also the Managing Editor of International Journal of Monetary Economics and Finance (Inderscience).

DETAILS

  • WHEN: Friday, November 9, 2018; 10:30-12:00PM
  • WHERE: World Bank Malaysia Office, Level 3, Sasana Kijang, No. 2, Jalan Dato’ Onn