The impact of Islamic banking on the cost efficiency and productivity change of Malaysian commercial banks

This study employs stochastic frontier analysis to analyze Malaysian commercial banks during 1996-2002, and particularly focuses on determining the impact of Islamic banking on performance. We derive both net and gross efficiency estimates, thereby demonstrating that differences in operating characteristics explain much of the difference in costs between Malaysian banks. We also decompose productivity change into efficiency, technical, and scale change using a generalised Malmquist productivity index. On average, Malaysian banks experience moderate scale economies and annual productivity change of 2.68 percent, with the latter driven primarily by technical change, which has declined over time. Our gross efficiency estimates suggest that Islamic banking is associated with higher input requirements. However, our productivity estimates indicate that full-fledged Islamic banks have overcome some of these cost disadvantages with rapid technical change, although this is not the case for conventional banks operating Islamic windows. Merged banks are found to have higher input usage and lower productivity change, suggesting that bank mergers have not contributed positively to bank performance. Finally, our results suggest that while the East Asian financial crisis had a short-term cost-reducing effect in 1998, the crisis triggered a more lasting negative impact by increasing the volume of non-performing loans.

High temperature gas cleaning for advanced syngas utilization:Paper # 95

Biofuels and chemicals from biomass mean the gasification of biogenic feedstocks and the synthesis via methanol, dimethylester (DME) or Fischer-Tropsch products. To prevent the sensitive synthesis catalysts from poisoning the syngas must be free of tar and particulates. The trace concentrations of S-, C1-, N-species, alkali and heavy metals must be of the order of a few ppb. Moreover maximum conversion efficiency will be achieved performing the gas cleaning above the synthesis conditions. The concept of an innovative dry HTHP syngas cleaning is presented. Based on the HT particle filtration and suitable sorption and catalysis processes for the relevant contaminants a total concept will be derived, which leads to a syngas quality required for synthesis catalysts in only 2 combined stages. The experimental setup for the HT gas cleaning behind the 60 kWtherm entrained flow gasifier REGA of the institute is described. Results from HT filter experiments in pilot scale are presented. The performance of 2 natural minerals for HC1 and H2S sorption is discussed with respect to the parameters temperature, surface and residence time. Results from lab scale investigations on low temperature tar catalysts' performance (commercial and proprietary development) are discussed finally.

Efficiency and total factor productivity changes of Malaysian commercial banks

This paper analyses the efficiency of Malaysian commercial banks between 1996 and 2002 and finds that while the East Asian financial crisis caused a short-term increase in efficiency in 1998 primarily due to cost-cutting, increases in non-performing loans after the crisis caused a more sustained decline in bank efficiency. It is also found that mergers, fully Islamic banks, and conventional banks operating Islamic banking windows are all associated with lower efficiency. The paper estimates suggest mild decreasing returns to scale, and an average productivity change of 2.37% that is primarily attributable to technical change, which has nonetheless declined over time. Finally, while Islamic banks have been moderately successful in developing new products and technologies, the results suggest that the potential for Islamic banks to overcome their relative inefficiency is limited.

Loan loss provisions, earnings management and capital management under IFRS:the case of EU commercial banks

Prior research has shown that loan loss provisions are primarily used as a tool for earnings management and capital management by listed banks. Effective 2005 all listed companies in the European Union (EU) are required to comply with International Financial Reporting Standards (IFRS). Adherence to IFRS, it is claimed, should enhance transparency of reporting practices relative to local General Accepted Accounting Principles (GAAP). The overall objective of this paper is to examine the impact of the implementation of IFRS on the use of loan loss provisions (LLPs) to manage earnings and capital. We use a sample of 91 EU listed commercial banks covering a period of 10 years (before and after implementation of IFRS). Since early adopters may have different incentives and motivations relative to those who adopt mandatorily, we dichotomize our sample into early and late adopters. Overall, we find that earnings management (using loan loss provisions) for both early and late adopters while significant over the estimation window is significantly reduced after implementation of IFRS. We also find that, for risky banks, earnings management behavior is more pronounced when compared to the less risky banks, but is significantly reduced in the post IFRS period. Capital management behavior by bank managers is not significant in both pre and post IFRS regimes. Overall, we conclude that the implementation of IFRS in the EU appears to have improved earnings quality by mitigating the tendency of bank managers of listed commercial banks to engage in earnings management using loan loss provisions.

Comparison of crack growth behaviour between spray-formed and commercial plate Al-Zn-Mg-Cu alloy 7150

This paper compares the crack growth resistance of an experimental spray-formed extrusion with that of a commercial aluminium alloy, the two alloys having similar compositions but markedly different grain structures. Tensile and fracture behaviour is similar in both materials and is influenced by inclusion content. The two materials differ in their crack growth resistance, which is shown to be dependent upon grain size and shape. Environmentally-induced crack growth is favoured by aligned grain boundaries and small grain size.

Integration of a graph-based model indexer in commercial modelling tools

Softeam has over 20 years of experience providing UML-based modelling solutions, such as its Modelio modelling tool, and its Constellation enterprise model management and collaboration environment. Due to the increasing number and size of the models used by Softeam’s clients, Softeam joined the MONDO FP7 EU research project, which worked on solutions for these scalability challenges and produced the Hawk model indexer among other results. This paper presents the technical details and several case studies on the integration of Hawk into Softeam’s toolset. The first case study measured the performance of Hawk’s Modelio support using varying amounts of memory for the Neo4j backend. In another case study, Hawk was integrated into Constellation to provide scalable global querying of model repositories. Finally, the combination of Hawk and the Epsilon Generation Language was compared against Modelio for document generation: for the largest model, Hawk was two orders of magnitude faster.