Showing papers by "James R. Barth published in 1998"

The Role of Governments and Markets in International Banking Crises: The Case of East Asia

Abstract: Throughout the world there have been a large number of significant banking problems in recent years In East Asia since 1980 there have been varying degrees of banking problems in ten countries: China, Hong Kong, India, Indonesia, Korea, Malaysia, the Philippines, Singapore, Taiwan, and Thailand Our goal in this paper is to try to explain what caused the recent difficulties and to suggest ways to prevent future problems In doing so, we specifically focus on the banking crises in the region and attempt to explain what they have in common with other banking crises around the globe, including those in countries like the United States, with the most well-developed financial systems in the world An important element in understanding these issues is assessing the appropriate mix of government intervention and market forces in designing a national financial system in a global marketplace

Determinants of U.S. commercial bank performance: regulatory and econometric issues

Abstract: The purpose of this paper is to identify important determinants of the performance of commercial banks. Two profitability measures and one measure of loss are used as indicators of performance. Each of these measures is related to different types of bank assets and other variables. The choice of these measures and variables is justified by citing several previous studies in the area. Various arguments are also presented to show that these relationships are not linear, have unknown functional forms, and are not stable. To avoid the risk of misspecifying the functional form of the relationships, a wide class of functional forms is employed that may embody the true functional form as a special case even when the specific functional forms considered in previous studies are false. The empirical results obtained from the class approach are compared with those obtained by assuming linear and specific nonlinear relations to study the robustness of the results to departures from specific functional forms. The effects of excluded variables and of errors in measurement are also accounted for in the class approach.

A Multi-Country Analysis of Bank Capital and Earnings

Abstract: The purpose of this paper is to analyze the relationship between bank capital and earnings. However, because banks and other financial service firms are increasingly operating in a global marketplace, it is important to examine bank relationships beyond the borders of a single country. This paper, therefore, analyzes the relationship between bank capital and earnings employing a sample of 231 banks in ten Pacific basin countries and the United States. More specifically, following the lead of earlier research, the study examines the relationship between the capital-to-asset ratio and return-on-equity. The empirical results indicate that, contrary to the case of U.S. banks during the 1980s, a significant negative relationship exists between these two variables for the sample banks in the eleven countries in 1994. This relationship generally holds when various control variables, including both firm- and country-specific variables, are included.