IDEAS home Printed from https://ideas.repec.org/p/mcd/mcddps/2017_03.html
   My bibliography  Save this paper

Is bank lending corruption self-regulatory? A note

Author

Listed:
  • Erotokritos Varelas

    (Department of Economics, University of Macedonia)

Abstract

This short article puts forward the possibility that bank-client corruption tends to raise lending rates. If it does and if bank-official corruption counteracts this tendency, bank lending corruption might be seen as a self-regulatory phenomenon, having little if none at all influence on the real economy. An anti-lending-corruption policy is deemed to be necessary only under a zero-lower -bound associated monetary policy and in any case, it should treat the two types of banking-sector corruption symmetrically. The negative effects of bank sector fraud on economic growth should be related to the large volume of cybercrime and money laundering rather than to fraud surrounding bank lending.

Suggested Citation

  • Erotokritos Varelas, 2017. "Is bank lending corruption self-regulatory? A note," Discussion Paper Series 2017_03, Department of Economics, University of Macedonia, revised Mar 2017.
    • Handle: RePEc:mcd:mcddps:2017_03
    as

    Download full text from publisher

    File URL: http://aphrodite.uom.gr/econwp/pdf/dp032017.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Laurent Weill, 2011. "Does corruption hamper bank lending? Macro and micro evidence," Empirical Economics, Springer, vol. 41(1), pages 25-42, August.
    2. Gerasimos T. Soldatos, 2016. "Is the Bureaucrat the Main Responsible for Corruption?," Review of Applied Socio-Economic Research, Pro Global Science Association, vol. 12(2), pages 12-18, December.
    3. Park, Junghee, 2012. "Corruption, soundness of the banking sector, and economic growth: A cross-country study," Journal of International Money and Finance, Elsevier, vol. 31(5), pages 907-929.
    4. Raphael Solomon, 2005. "Pocket Banks and Out-of-Pocket Losses: Links between Corruption and Contagion," Staff Working Papers 05-23, Bank of Canada.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Erotokritos Varelas, 2017. "Is bank lending corruption self-regulatory?," Journal of Economic and Financial Studies (JEFS), LAR Center Press, vol. 5(3), pages 31-34, June.
    2. Asteriou, Dimitrios & Pilbeam, Keith & Tomuleasa, Iuliana, 2021. "The impact of corruption, economic freedom, regulation and transparency on bank profitability and bank stability: Evidence from the Eurozone area," Journal of Economic Behavior & Organization, Elsevier, vol. 184(C), pages 150-177.
    3. Francis Osei-Tutu, 2022. "High Corruption, Less Bank Efficiency?," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 64(3), pages 540-561, September.
    4. Jeleta Kebede & Vincent Tawiah & Ernest Gyapong, 2023. "The effect of corruption on microfinance loan portfolio: A semiparametric analysis," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(1), pages 241-268, January.
    5. Bahoo, Salman, 2020. "Corruption in banks: A bibliometric review and agenda," Finance Research Letters, Elsevier, vol. 35(C).
    6. Ben Ali, Mohamed Sami & Fhima, Fredj & Nouira, Ridha, 2020. "How does corruption undermine banking stability? A threshold nonlinear framework," Journal of Behavioral and Experimental Finance, Elsevier, vol. 27(C).
    7. Kočenda, Evžen & Iwasaki, Ichiro, 2020. "Bank survival in Central and Eastern Europe," International Review of Economics & Finance, Elsevier, vol. 69(C), pages 860-878.
    8. Faisal Mohammed O. Almaslukh & Haliyana Khalid & Alaa Mahdi Sahi, 2022. "The Impact of Internal Marketing Practices on Employees’ Job Satisfaction during the COVID-19 Pandemic: The Case of the Saudi Arabian Banking Sector," Sustainability, MDPI, vol. 14(15), pages 1-15, July.
    9. Gabriel Caldas Montes & Paulo Henrique Luna, 2021. "Fiscal transparency, legal system and perception of the control on corruption: empirical evidence from panel data," Empirical Economics, Springer, vol. 60(4), pages 2005-2037, April.
    10. Kuessi, Richard & Nantob, N'Yilimon & Aguey, Segnon & Couchoro, Mawuli Kodjovi, 2023. "Competition and banking efficiency in the WAEMU: The role of multinationals and institutions," International Economics, Elsevier, vol. 175(C), pages 45-62.
    11. Li, Guangzi & Chan, Kam C., 2021. "Anti-corruption intensity and loan contracting: Evidence from non-state owned firms in China," Emerging Markets Review, Elsevier, vol. 49(C).
    12. Canh, Nguyen Phuc & Schinckus, Christophe & Thanh, Su Dinh & Hui Ling, Felicia Chong, 2020. "Effects of the internet, mobile, and land phones on income inequality and The Kuznets curve: Cross country analysis," Telecommunications Policy, Elsevier, vol. 44(10).
    13. Abdelaziz Hakimi & Rim Boussaada & Majdi Karmani, 2022. "Is the relationship between corruption, government stability and non‐performing loans non‐linear? A threshold analysis for the MENA region," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(4), pages 4383-4398, October.
    14. Janbaz, Mehdi & Hassan, M. Kabir & Floreani, Josanco & Dreassi, Alberto & Jiménez, Alfredo, 2022. "Political risk in banks: A review and agenda," Research in International Business and Finance, Elsevier, vol. 62(C).
    15. Ben Ali, Mohamed Sami, 2022. "Credit bureaus, corruption and banking stability," Economic Systems, Elsevier, vol. 46(3).
    16. Takuma Kunieda & Keisuke Okada & Akihisa Shibata, 2016. "Corruption, Financial Development and Economic Growth: Theory and Evidence From an Instrumental Variable Approach With Human Genetic Diversity," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 45(3), pages 353-392, November.
    17. Petrou, Andreas P. & Thanos, Ioannis C., 2014. "The “grabbing hand” or the “helping hand” view of corruption: Evidence from bank foreign market entries," Journal of World Business, Elsevier, vol. 49(3), pages 444-454.
    18. Song, Chang-Qing & Chang, Chun-Ping & Gong, Qiang, 2021. "Economic growth, corruption, and financial development: Global evidence," Economic Modelling, Elsevier, vol. 94(C), pages 822-830.
    19. Petrou, Andreas P., 2015. "Arbitrariness of corruption and foreign affiliate performance: A resource dependence perspective," Journal of World Business, Elsevier, vol. 50(4), pages 826-837.
    20. Vincent Tawiah & Abdulrasheed Zakari & James Xede, 2023. "Who benefits from corruption; the private individual or the public purse?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(3), pages 2900-2914, July.

    More about this item

    Keywords

    Bank lending corruption; Bank non-lending fraud; Economic activity.;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mcd:mcddps:2017_03. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Theodore Panagiotidis or Anastasia Litina (email available below). General contact details of provider: http://www.uom.gr/index.php?tmima=3 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.