Essays on Banking Competition

I study local shocks to consumer credit supply arising from the opening

of bank-related retail stores. Bank-related store openings coincide with

sharp increases in credit card placements in the neighborhood of the

store, in the months surrounding the store opening, and with the bank

that owns the store. I exploit this relationship to instrument for new

credit cards at the individual level, and find that obtaining a new

credit card sharply increases total borrowing as well as default risk,

particularly for risky and opaque borrowers. In line with theories of

default externality, I observe that existing lenders react to the

increased consumer borrowing and associated riskiness by contracting

their own supply. In particular, in the year following the issuance of a

new credit card, banks without links to stores reduce credit card limits

by 24-51%, offsetting most of the initial increase in total credit

limits.

Secrecy Capacity Analysis Over κ–μ Fading Channels: Theory and Applications

In this paper, we consider the transmission of confidential information over a κ-μ fading channel in the presence of an eavesdropper who also experiences κ-μ fading. In particular, we obtain novel analytical solutions for the probability of strictly positive secrecy capacity (SPSC) and a lower bound of secure outage probability (SOPL) for independent and non-identically distributed channel coefficients without parameter constraints. We also provide a closed-form expression for the probability of SPSC when the μ parameter is assumed to take positive integer values. Monte-Carlo simulations are performed to verify the derived results. The versatility of the κ-μ fading model means that the results presented in this paper can be used to determine the probability of SPSC and SOPL for a large number of other fading scenarios, such as Rayleigh, Rice (Nakagamin), Nakagami-m, One-Sided Gaussian, and mixtures of these common fading models. In addition, due to the duality of the analysis of secrecy capacity and co-channel interference (CCI), the results presented here will have immediate applicability in the analysis of outage probability in wireless systems affected by CCI and background noise (BN). To demonstrate the efficacy of the novel formulations proposed here, we use the derived equations to provide a useful insight into the probability of SPSC and SOPL for a range of emerging wireless applications, such as cellular device-to-device, peer-to-peer, vehicle-to-vehicle, and body centric communications using data obtained from real channel measurements.

Joint Information and Jamming Beamforming for Secrecy Rate Maximization in Cognitive Radio Networks

In this paper, we consider the secure beamforming design for an underlay cognitive radio multiple-input singleoutput broadcast channel in the presence of multiple passive eavesdroppers. Our goal is to design a jamming noise (JN) transmit strategy to maximize the secrecy rate of the secondary system. By utilizing the zero-forcing method to eliminate the interference caused by JN to the secondary user, we study the joint optimization of the information and JN beamforming for secrecy rate maximization of the secondary system while satisfying all the interference power constraints at the primary users, as well as the per-antenna power constraint at the secondary transmitter. For an optimal beamforming design, the original problem is a nonconvex program, which can be reformulated as a convex program by applying the rank relaxation method. To this end, we prove that the rank relaxation is tight and propose a barrier interior-point method to solve the resulting saddle point problem based on a duality result. To find the global optimal solution, we transform the considered problem into an unconstrained optimization problem. We then employ Broyden-Fletcher-Goldfarb-Shanno (BFGS) method to solve the resulting unconstrained problem which helps reduce the complexity significantly, compared to conventional methods. Simulation results show the fast convergence of the proposed algorithm and substantial performance improvements over existing approaches.

Secrecy Performance of Wirelessly Powered Wiretap Channels

This paper considers a wirelessly powered wiretap channel, where an energy constrained multi-antenna information source, powered by a dedicated power beacon, communicates with a legitimate user in the presence of a passive eavesdropper. Based on a simple time-switching protocol where power transfer and information transmission are separated in time, we investigate two popular multi-antenna transmission schemes at the information source, namely maximum ratio transmission (MRT) and transmit antenna selection (TAS). Closed-form expressions are derived for the achievable secrecy outage probability and average secrecy rate for both schemes. In addition, simple approximations are obtained at the high signal-to-noise ratio (SNR) regime. Our results demonstrate that by exploiting the full knowledge of channel state information (CSI), we can achieve a better secrecy performance, e.g., with full CSI of the main channel, the system can achieve substantial secrecy diversity gain. On the other hand, without the CSI of the main channel, no diversity gain can be attained. Moreover, we show that the additional level of randomness induced by wireless power transfer does not affect the secrecy performance in the high SNR regime. Finally, our theoretical claims are validated by the numerical results.

This Time is Different: Causes and Consequences of British Banking Instability over the Long Run

This paper addresses three questions: (1) How severe were the episodes of banking instability
experienced by the UK over the past two centuries? (2) What have been the macroeconomic
indicators of UK banking instability? and (3) What have been the consequences of UK banking
instability for the cost of credit? Using a unique dataset of bank share prices from 1830 to 2010
to assess the stability of the UK banking system, we find that banking instability has grown more
severe since the 1970s. We also find that interest rates, inflation, lending growth, and equity
prices are consistent macroeconomic indicators of UK banking instability over the long run.
Furthermore, utilising a unique dataset of corporate-bond yields for the period 1860 to 2010, we
find that there is a significant long-run relationship between banking instability and the creditrisk
premium faced by businesses.

Financial Inclusion of The Small and Marginal Farmers by the Banking Sector in Kerala

Financial inclusion for inclusive growth is central to the developmental philosophy of most of the nations over the past decade. It has been a priority for policy makers and regulators in financial sector development for improving access and usage of financial services to achieve comprehensive financial inclusion. The initiatives taken towards financial inclusion can promote a more effective and efficient process to achieve significant improvements in financial inclusion are to establish and achieve shared and sustainable development and growth. Realising this, an increasing number of countries are committing to promote financial inclusion, encouraged by the growing body of country level experiences (World Bank, 2012). Financial inclusion basically means, broad based growth through participation as well as sharing the benefits from the growth process along with the under privileged and marginal segments of the economy. Evidence suggests that it has substantial benefits for equitable and sustainable growth. Inclusive growth ensures that while economy grows rapidly, all segments of society are involved in this growth process, ensuring equal opportunities, devoid of any regional or sectoral disparitiesIt is widely acknowledged that the objective ofinclusive growth is accomplished through the process of financial inclusion. Financial inclusion envisages bringing everyone, irrespective of financial status, into the banking fold for the individual progress and development and thereby achieving comprehensive growth with equity

Asset Management and Investment Banking

We find evidence that conflicts of interest are pervasive in the asset management business owned by investment banks. Using data from 1990 to 2008, we compare the alphas of mutual funds, hedge funds, and institutional funds operated by investment banks and non-bank conglomerates. We find that, while no difference exists in performance by fund type, being owned by an investment bank reduces alphas by 46 basis points per year in our baseline model. Making lead loans increases alphas, but the dispersion of fees across portfolios decreases alphas. The economic loss is $4.9 billion per year.

Wasta in the Jordanian Culture: a Study in the Banking Sector

Due to globalisation, the emergence and expansion of new overseas markets, extensive use of information and communication technologies in global trade and growing competition between multinational companies, international Human Resource Management (HRM) is an increasingly attractive and popular area of study. However, much of our knowledge is built on an Anglo-Saxon/ European base and there is a paucity of research that considers the transfer of modern (western) principles of HRM to developing countries, particularly in the Middle East. Arguably, Jordan is one country that may benefit from the promise of quality, equality and profitability offered by the systemic approach to managing people. Thus, this paper introduces a PhD research project, currently in its first year, that considers the transfer of western recruitment and selection frameworks into Jordanian culture.

Central banking and inequalities: taking off the blinders

What is the relation between monetary policy and inequalities in income and wealth? This question has received insufficient attention, especially in light of the unconventional policies introduced since the 2008 financial crisis. The article analyzes three ways in which the concern central banks show for inequalities in their official statements remains incomplete and underdeveloped. First, central banks tend to care about inequality for instrumental reasons only. When they do assign intrinsic value to containing inequalities, they shy away from trade-offs with the standard objectives of monetary policy that such a position entails. Second, central banks play down the causal impact monetary policy has on inequalities. When they do acknowledge it, they defend their actions by claiming that it is an unintended side effect, that it is temporary, and/or that any alternative policy would fare even worse. The article appeals to the doctrine of double effect to criticize these arguments. Third, even if one accepts that inequalities should be contained and that today’s monetary policies exacerbate them, is it both desirable and feasible to make containing inequalities part of the mandate of central banks? The article analyzes and rejects three attempts on the part of central banks to answer this question negatively.

CSR Reporting in the Finnish Banking Sector – Status and Recent Development

This thesis reviews the development of CSR reporting in the Finnish banking sector. This was achieved by analyzing the content of specific CSR reports published by three banks during years 2012-2014. The banks selected represent the three largest banks operating in Finland according to their market share, constituting approximately 70 percent of the total perceived market share. The purpose of the analysis is to establish a clear descriptive overview of the status of CSR reporting and how it has thematically developed over the years. The research was conducted with the qualitative content analysis method. By analyzing the contents of the CSR reports it was found that CSR reporting is understood in 3 different themes that reflect the general CSR theory: economic, social and environmental responsibility. The following research focused on analyzing these three core themes separately during years 2012-2014 in order to find specific tendencies in the development of CSR reporting. The results confirm that CSR reporting is developing in the Finnish banking sector. Reporting about economic responsibility is based on core financial performance reporting, and it’s mainly developing in the assessment of the global recession and how the potential fiscal reforms affect to the bank sector’s performance. Economic responsibility is also being understood and reported as a wider concept, including intertwined and shared meanings with the other responsibility reporting themes. The research also suggests that banks value social responsibility reporting increasingly each year. Environmental responsibility reporting is the most standardized form of reporting, however, the reporting development includes the increased use of digitalization as source of lessening the environmental impact.

And now for something completely different: looking ahead to new encryption and secrecy protocols

Transmitting sensitive data over non-secret channels has always required encryption technologies to ensure that the data arrives without exposure to eavesdroppers. The Internet has made it possible to transmit vast volumes of data more rapidly and cheaply and to a wider audience than ever before. At the same time, strong encryption makes it possible to send data securely, to digitally sign it, to prove it was sent or received, and to guarantee its integrity. The Internet and encryption make bulk transmission of data a commercially viable proposition. However, there are implementation challenges to solve before commercial bulk transmission becomes mainstream. Powerful have a performance cost, and may affect quality of service. Without encryption, intercepted data may be illicitly duplicated and re-sold, or its commercial value diminished because its secrecy is lost. Performance degradation and potential for commercial loss discourage the bulk transmission of data over the Internet in any commercial application. This paper outlines technical solutions to these problems. We develop new technologies and combine existing ones in new and powerful ways to minimise commercial loss without compromising performance or inflating overheads.

New Directions in Commercial Secrecy and Encryption Protocols

Secure transmission of bulk data is of interest to many content providers. A commercially-viable distribution of content requires technology to prevent unauthorised access. Encryption tools are powerful, but have a performance cost. Without encryption, intercepted data may be illicitly duplicated and re-sold, or its commercial value diminished because its secrecy is lost. Two technical solutions make it possible to perform bulk transmissions while retaining security without too high a performance overhead. These are: 1. a) hierarchical encryption - the stronger the encryption, the harder it is to break but also the more computationally expensive it is. A hierarchical approach to key exchange means that simple and relatively weak encryption and keys are used to encrypt small chunks of data, for example 10 seconds of video. Each chunk has its own key. New keys for this bottom-level encryption are exchanged using a slightly stronger encryption, for example a whole-video key could govern the exchange of the 10-second chunk keys. At a higher level again, there could be daily or weekly keys, securing the exchange of whole-video keys, and at a yet higher level, a subscriber key could govern the exchange of weekly keys. At higher levels, the encryption becomes stronger but is used less frequently, so that the overall computational cost is minimal. The main observation is that the value of each encrypted item determines the strength of the key used to secure it. 2. b) non-symbolic fragmentation with signal diversity - communications are usually assumed to be sent over a single communications medium, and the data to have been encrypted and/or partitioned in whole-symbol packets. Network and path diversity break up a file or data stream into fragments which are then sent over many different channels, either in the same network or different networks. For example, a message could be transmitted partly over the phone network and partly via satellite. While TCP/IP does a similar thing in sending different packets over different paths, this is done for load-balancing purposes and is invisible to the end application. Network and path diversity deliberately introduce the same principle as a secure communications mechanism - an eavesdropper would need to intercept not just one transmission path but all paths used. Non-symbolic fragmentation of data is also introduced to further confuse any intercepted stream of data. This involves breaking up data into bit strings which are subsequently disordered prior to transmission. Even if all transmissions were intercepted, the cryptanalyst still needs to determine fragment boundaries and correctly order them. These two solutions depart from the usual idea of data encryption. Hierarchical encryption is an extension of the combined encryption of systems such as PGP but with the distinction that the strength of encryption at each level is determined by the "value" of the data being transmitted. Non- symbolic fragmentation suppresses or destroys bit patterns in the transmitted data in what is essentially a bit-level transposition cipher but with unpredictable irregularly-sized fragments. Both technologies have applications outside the commercial and can be used in conjunction with other forms of encryption, being functionally orthogonal.

Analysing intention and action in mobile banking services

Technological advances at the level of mobile devices are transforming the world. Banking users are able to conduct banking services at any place, and at any time, with m-banking. The purpose of this research is to analyse intention and action in m-banking services. A research model was developed and PLS was used to test the causalities in the proposed model. Our proposal extends the existing models with an assessment of the actual usage of m-banking and of how behavioural intention translates into action. This study found that the main determinants of behavioural intention for m-banking are social influence and relative advantage. Furthermore, perceived risk, lack of information and usage barriers have a negative effect on m- banking behavioural intention. Perceived risks, e-banking use, and behaviour intention are found to be significant antecedents of m-banking use. Gender has a positive and significant influence on m-banking usage, but not on the construction of behavioural intention.