Financial openness, liability composition of banks, and bank risk: International evidence

IF 5.4 2区经济学 Q1 BUSINESS, FINANCE

Journal of International Financial Markets Institutions & Money Pub Date : 2024-10-28 DOI:10.1016/j.intfin.2024.102066

Zixian Li, Fernando Moreira

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Abstract

Employing a panel dataset encompassing 4,412 banks from 87 countries from 1990 to 2020, we apply the autoregressive distributed lag (ARDL) model to investigate the relationship between financial openness, banks’ liability composition, and bank risk. Our findings reveal that financial openness can directly lead to an increase in bank risk in the short term but a reduction in bank risk over the long term. Additionally, we identify the composition of bank liabilities as a novel channel between financial openness and bank risk. Specifically, in the short term, financial openness amplifies bank risk through an escalation in the ratio of short-term liabilities juxtaposed with a decrease in the ratio of long-term liabilities. Conversely, in the long term, financial openness diminishes bank risk by diminishing short-term liabilities’ ratios while concurrently enhancing the proportions of long-term liabilities. Furthermore, it is noted that the direct effects of financial openness on banking risk, whether short- or long-term, may exhibit heterogeneity across different periods, country development levels, and types of capital flow.

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金融开放、银行负债构成与银行风险：国际证据

我们运用自回归分布滞后（ARDL）模型研究了金融开放、银行负债构成和银行风险之间的关系，该面板数据集涵盖了 1990 年至 2020 年 87 个国家的 4412 家银行。我们的研究结果表明，金融开放会在短期内直接导致银行风险的增加，但在长期内会降低银行风险。此外，我们还发现银行负债构成是金融开放与银行风险之间的一个新渠道。具体来说，在短期内，金融开放会通过短期负债比率的上升和长期负债比率的下降放大银行风险。相反，从长期来看，金融开放会降低短期负债比率，同时提高长期负债比例，从而降低银行风险。此外，我们还注意到，金融开放对银行风险的直接影响，无论是短期影响还是长期影响，在不同时期、不同国家的发展水平以及不同类型的资本流动中都可能表现出异质性。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of International Financial Markets Institutions & Money Multiple-

CiteScore

6.60

自引率

10.00%

发文量

142

期刊介绍： International trade, financing and investments, and the related cash and credit transactions, have grown at an extremely rapid pace in recent years. The international monetary system has continued to evolve to accommodate the need for foreign-currency denominated transactions and in the process has provided opportunities for its ongoing observation and study. The purpose of the Journal of International Financial Markets, Institutions & Money is to publish rigorous, original articles dealing with the international aspects of financial markets, institutions and money. Theoretical/conceptual and empirical papers providing meaningful insights into the subject areas will be considered. The following topic areas, although not exhaustive, are representative of the coverage in this Journal. • International financial markets • International securities markets • Foreign exchange markets • Eurocurrency markets • International syndications • Term structures of Eurocurrency rates • Determination of exchange rates • Information, speculation and parity • Forward rates and swaps • International payment mechanisms • International commercial banking; • International investment banking • Central bank intervention • International monetary systems • Balance of payments.