House price dynamics and bank herding: European empirical evidence

This paper investigates the behavior of residential property and examines the linkages between house price dynamics and bank herding behavior. The analysis presents evidence that irrational behaviour may have played a significant role in several countries, including; United Kingdom, Spain, Denmark, Sweden and Ireland. In addition, we also provide evidence indicative of herding behaviour in the European residential mortgage loan market. Granger Causality tests indicate that non-fundamentally justified prices dynamics contributed to herding by lenders and that this behaviour was a response by the banks as a group to common information on residential property assets. In contrast, in Germany, Portugal and Austria, residential property prices were largely explained by fundamentals. Furthermore, these countries show no evidence of either irrational price bubbles or herd behaviour in the mortgage market. Granger Causality tests indicate that both variables are independent.

Bank integration and co-movements across housing markets

This paper investigates whether bank integration measured by cross-border bank flows can capture the co-movements across housing markets in developed countries by using a spatial dynamic panel model. The transmission can occur through a global banking channel in which global banks intermediate wholesale funding to local banks. Changes in financial conditions are passed across borders through the banks’ balance-sheet exposure to credit, currency, maturity, and funding risks resulting in house price spillovers. While controlling for country-level and global factors, we find significant co-movement across housing markets of countries with proportionally high bank integration. Bank integration can better capture house price co-movements than other measures of economic integration. Once we account for bank exposure, other spatial linkages traditionally used to account for return co-movements across region – such as trade, foreign direct investment, portfolio investment, geographic proximity, etc. – become insignificant. Moreover, we find that the co-movement across housing markets decreases for countries with less developed mortgage markets characterized by fixed mortgage rate contracts, low limits of loan-to-value ratios and no mortgage equity withdrawal.

The new localism, anti-political development machines, and the role of planning consultants: lessons from London's South Bank

This paper draws on a study of the politics of development planning in London’s South Bank to examine wider trends in the governance of contemporary cities. It assesses the impacts and outcomes of so-called new localist reforms and argues that we are witnessing two principal trends. First, governance processes are increasingly dominated by anti-democratic development machines, characterized by new assemblages of public- and private-sector experts. These machines reflect and reproduce a type of development politics in which there is a greater emphasis on a pragmatic realism and a politics of delivery. Second, the presence of these machines is having a significant impact on the politics of planning. Democratic engagement is not seen as the basis for new forms of localism and community control. Instead, it is presented as a potentially disruptive force that needs to be managed by a new breed of skilled private-sector consultant. The paper examines these wider shifts in urban politics before focusing on the connections between emerging development machines and local residential and business communities. It ends by highlighting some of the wider implications of change for democratic modes of engagement and nodes of resistance in urban politics.

Unpacking the mechanism by which psychological ownership manifests at the level of the individual: a dynamic model of identity and self

Increasing prominence of the psychological ownership (PO) construct in management studies raises questions about how PO manifests at the level of the individual. In this article, we unpack the mechanism by which individuals use PO to express aspects of their identity and explore how PO manifestations can display congruence as well as incongruence between layers of self. As a conceptual foundation, we develop a dynamic model of individual identity that differentiates between four layers of self, namely, the “core self,” “learned self,” “lived self,” and “perceived self.” We then bring identity and PO literatures together to suggest a framework of PO manifestation and expression viewed through the lens of the four presented layers of self. In exploring our framework, we develop a number of propositions that lay the foundation for future empirical and conceptual work and discuss implications for theory and practice.

The use and impacts of bank support on UK small and medium-sized enterprises

This article examines an under-investigated area in relationship banking, i.e. the use of bank advice and support and its impacts on the financial conditions of small and medium-sized enterprises (SMEs). The findings indicate that the characteristics of businesses and entrepreneurs, among other factors, have determinant effects on the use of bank support by SMEs when they make financial decisions. SMEs can alleviate the severity of their financial problems significantly by using bank support more fully, through developing long-term relationships with banks as primary network partners. The article further recognises the value of advice from banks as a substitute for entrepreneurial human capital, especially when bankers use private information to determine the nature and level of financial and non-financial assistance that they are prepared to supply to their clients.

Bank regulation and the process of internationalisation: a study of Japanese bank entry into London

The paper provides a theoretical insight into bank regulation and the process of internationalisation by examining the concepts of regulatory push and market pull within the context of Japanese bank entry into London during the 1980s. Rugman and Verbeke's [(1998). Corporate strategy and international environmental policy. Journal of International Business Studies, 29(4), 819–833] Consistency of Home and Host Government Goals model is utilised to structure the discussion, which centres on a situation where there is a conflict of goals between multinational enterprises (MNEs) and the home government but goal alignment between MNEs and the host government. As such the paper examines a relatively under-researched aspect of internationalisation and concludes that in certain circumstances internationalisation can occur despite great ‘psychic distance’. The paper also argues that although bank regulation can lead to a conflict situation it can also be conducive to the development of a strong home base and the development of firm specific advantages.

Local ownership and UN peacebuilding: discourse versus operationalization

The UN asserts that local ownership boosts the legitimacy and sustainabil- ity of peacebuilding by preserving the principles of self-determination and nonimposition in an activity that can contravene them. At the same time, it also perceives local ownership to imperil the achievement of its operational goals, thus bringing its normative and operational obligations into conflict. This article evaluates the UN’s discourse and operationalization of local ownership, showing that despite the UN’s invocation of ownership dis- course, it operationalizes ownership in restrictive ways that are intended to protect the achievement of operational goals but that consequently limit self-determination and increase imposition. Moreover, because of contra- dictions in the UN’s practices of ownership, it also undercuts its ability to re- alize the very operational goals that it is trying to protect. KEYWORDS: UN peacebuilding, local ownership, discourse vs. practice.

Whose peace? Local ownership and UN peacebuilding

In recent years, there has been an increasing emphasis on the participation of national actors in United Nations peace operations, reflecting what has become a near orthodox commitment to ‘local ownership.’ Advocates of local ownership assert that it: (1) increases the legitimacy of UN peacebuilding efforts; (2) increases the sustainability of peacebuilding activities after the departure of the UN; and (3) increases democratic governance in post-conflict states. While such thinking about local ownership has informed UN peacebuilding policy to a large extent, the UN has, to date, assumed these positive benefits without critically examining the causal mechanisms that allegedly produce them, specifying the conditions under which this correlation holds, or providing convincing evidence for these assertions. Moreover, exactly what local ownership is, what is being owned, and who local ‘owners’ are remain unclear. Indeed a closer examination of ownership’s relation with legitimacy, sustainability, and democratization reveal a plethora of contradictions that imply that local ownership may in fact decrease the UN’s ability to deliver peacekeeping results. Crucially, however, the UN persists in adopting a local ownership approach to peacebuilding, suggesting that it does so because it is normatively appropriate rather than operationally effective.

Bank market concentration, relationship banking and small business liquidity

This paper examines two contrasting interpretations of how bank market concentration (Market Power Hypothesis) and banking relationships (Information Hypothesis) affect three sources of small firm liquidity (cash, lines of credit and trade credit). Supportive of a market power interpretation, we find that in a highly concentrated banking market, small firms hold less cash, have less access to lines of credit, and are more likely to be financially constrained, use greater amounts of more expensive trade credit and face higher penalties for trade credit late payment. We also find support for the information hypothesis: relationship banking improves small business liquidity, particularly in a concentrated banking market, thereby mitigating the adverse effects of bank market concentration derived from market power. Our results are robust to different cash, lines of credit and trade credit measures and to alternative empirical approaches.

Bank loan terms and conditions: is there a macro effect?

We examine whether macroeconomic factors contain significant information for bank loan contracting terms and conditions (T&Cs), over and above that of standard firm-specific or country-level institutional factors. Our estimation is based on a seemingly unrelated mixed-processes methodology that accommodates two salient data properties: (i) the fact that loan contract terms are determined jointly as a single lending contract, and (ii) the fact that the elements of loan T&Cs are generated by different distributional formats. Our findings indicate that cross-country variation accounts for a significant portion of observed variation in loan T&Cs. In addition, macroeconomic fundamentals significantly explain the “package” of loan T&Cs offered to corporate borrowers, with this effect being distinct from any influence that T&Cs receive from firm-specific factors, and also from country-specific institutional factors.

The option market reaction to bank loan announcements

In this study, we examine the options market reaction to bank loan announcements for the population of US firms with traded options and loan announcements during 1996-2010. We get evidence on a significant options market reaction to bank loan announcements in terms of levels and changes in short-term implied volatility and its term structure, and observe significant decreases in short-term implied volatility, and significant increases in the slope of its term structure as a result of loan announcements. Our findings appear to be more pronounced for firms with more information asymmetry, lower credit ratings and loans with longer maturities and higher spreads. Evidence is consistent with loan announcements providing reassurance for investors in the short-term, however, over longer time horizons, the increase in the TSIV slope indicates that investors become increasingly unsure over the potential risks of loan repayment or uses of the proceeds.

Post-crisis regulatory reforms and bank performance: lessons from Asia

Based on a large dataset from eight Asian economies, we test the impact of post-crisis regulatory reforms on the performance of depository institutions in countries at different levels of financial development. We allow for technological heterogeneity and estimate a set of country-level stochastic cost frontiers followed by a deterministic bootstrapped meta-frontier to evaluate cost efficiency and cost technology. Our results support the view that liberalization policies have a positive impact on bank performance, while the reverse is true for prudential regulation policies. The removal of activities restrictions, bank privatization and foreign bank entry have a positive and significant impact on technological progress and cost efficiency. In contrast, prudential policies, which aim to protect the banking sector from excessive risk-taking, tend to adversely affect banks cost efficiency but not cost technology.

The impact of deregulation and re-regulation on bank efficiency: evidence from Asia

Following the 1997 crisis, banking sector reforms in Asia have been characterised by the emphasis on prudential regulation, associated with increased financial liberalisation. Using a panel data set of commercial banks from eight major Asian economies over the period 2001-2010, this study explores how the coexistence of liberalisation and prudential regulation affects banks’ cost characteristics. Given the presence of heterogeneity of technologies across countries, we use a stochastic frontier approach followed by the estimation of a deterministic meta-frontier to provide ‘true’ estimates of bank cost efficiency measures. Our results show that the liberalization of bank interest rates and the increase in foreign banks' presence have had a positive and significant impact on technological progress and cost efficiency. On the other hand, we find that prudential regulation might adversely affect bank cost performance. When designing an optimal regulatory framework, policy makers should combine policies which aim to foster financial stability without hindering financial intermediation.