Impact of the Subprime Crisis on Commercial Banksâ€™ Financial Performance
We investigated changes in the financial performance of representatives of the worldâ€™s top 200 commercial banks after the global subprime financial crisis. Our empirical results show that following the subprime-crisis disclosure, all commercial banks exhibited worse performance in asset quality, profitability, liquidity, and growth index, accompanied by risk increases in asset adequacy, managerial ability, profitability, and growth index. Developed markets have suffered a greater negative influence than emerging markets, causing downward pressure on asset adequacy, asset quality, and profitability since the subprime crisis. Commercial banks within developed nations suffered more direct pronounced effects from the subprime crisis than did those in emerging markets. Our results prove that larger commercial banks, particularly those with larger capitalization, have the economies-of-scale advantage to resist the negative effects of economic downturns.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kee-Hong Bae & G. Andrew Karolyi & Rene M. Stulz, 2000.
"A New Approach to Measuring Financial Contagion,"
NBER Working Papers
7913, National Bureau of Economic Research, Inc.
- Dietrich, Andreas & Wanzenried, Gabrielle, 2011. "Determinants of bank profitability before and during the crisis: Evidence from Switzerland," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 21(3), pages 307-327, July.
- Ahmet Faruk Aysan & Sanli Pinar Ceyhan, 2007.
"What Determines the Banking Sector Performance in Globalized Financial Markets: The Case of Turkey?,"
2007/21, Bogazici University, Department of Economics.
- Aysan, Ahmet Faruk & Ceyhan, Şanli Pinar, 2008. "What determines the banking sector performance in globalized financial markets? The case of Turkey," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 387(7), pages 1593-1602.
- Aysan, Ahmet Faruk & Ceyhan, Sanli Pinar, 2007. "What Determines the Banking Sector Performance in Globalized Financial Markets: The Case of Turkey?," MPRA Paper 5495, University Library of Munich, Germany.
- de Haan, Jakob & Poghosyan, Tigran, 2012. "Size and earnings volatility of US bank holding companies," Journal of Banking & Finance, Elsevier, vol. 36(11), pages 3008-3016.
- Beltratti, Andrea & Stulz, René M., 2012.
"The credit crisis around the globe: Why did some banks perform better?,"
Journal of Financial Economics,
Elsevier, vol. 105(1), pages 1-17.
- Beltratti, Andrea & Stulz, Rene M., 2010. "The Credit Crisis around the Globe: Why Did Some Banks Perform Better?," Working Paper Series 2010-5, Ohio State University, Charles A. Dice Center for Research in Financial Economics.
- Knaup, M. & Wagner, W.B., 2009. "A Market Based Measure of Credit Quality and Banks' Performance During the Subprime Crisis," Discussion Paper 2009-35 S, Tilburg University, Center for Economic Research.
- Reinhart, Carmen & Kaminsky, Graciela & Vegh, Carlos, 2003.
"The unholy trinity of financial contagion,"
13878, University Library of Munich, Germany.
- Emilia Peni & Sami Vähämaa, 2012. "Did Good Corporate Governance Improve Bank Performance during the Financial Crisis?," Journal of Financial Services Research, Springer, vol. 41(1), pages 19-35, April.
- Furlong, Frederick T. & Keeley, Michael C., 1989. "Capital regulation and bank risk-taking: A note," Journal of Banking & Finance, Elsevier, vol. 13(6), pages 883-891, December.
- Longstaff, Francis A., 2010. "The subprime credit crisis and contagion in financial markets," Journal of Financial Economics, Elsevier, vol. 97(3), pages 436-450, September.
- Gomez-Gonzalez, Jose E. & Kiefer, Nicholas M., 2006. "Bank Failure: Evidence from the Colombia Financial Crisis," Working Papers 06-12, Cornell University, Center for Analytic Economics.
- Frederick T. Furlong & Michael C. Keeley, 1991. "Capital regulation and bank risk-taking: a note (reprinted from Journal of Banking and Finance)," Economic Review, Federal Reserve Bank of San Francisco, issue Sum, pages 34-39.
- Shrieves, Ronald E. & Dahl, Drew, 1992. "The relationship between risk and capital in commercial banks," Journal of Banking & Finance, Elsevier, vol. 16(2), pages 439-457, April.
- David E. Palmer, 2000. "U.S. bank exposure to emerging-market countries during recent financial crises," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Feb, pages 81-96.
- Nicholas Apergis & Effrosyni Alevizopoulou, 2011. "Bank Efficiency: Evidence from a Panel of European Banks," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 58(3), pages 329-341, September.
- Martin Knaup & Wolf Wagner, 2012. "A Market-Based Measure of Credit Portfolio Quality and Banks' Performance During the Subprime Crisis," Management Science, INFORMS, vol. 58(8), pages 1423-1437, August.
- JosÃ© E. GÃ³mez-Gonzalez & Nicholas M. Kiefer, 2009. "Bank Failure: Evidence From The Colombian Financial Crisis," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 3(2), pages 15-31.
- Cornett, Marcia Millon & Guo, Lin & Khaksari, Shahriar & Tehranian, Hassan, 2010. "The impact of state ownership on performance differences in privately-owned versus state-owned banks: An international comparison," Journal of Financial Intermediation, Elsevier, vol. 19(1), pages 74-94, January.
- Martin, Daniel, 1977. "Early warning of bank failure : A logit regression approach," Journal of Banking & Finance, Elsevier, vol. 1(3), pages 249-276, November.
- Rivard, Richard J. & Thomas, Christopher R., 1997. "The effect of interstate banking on large bank holding company profitability and risk," Journal of Economics and Business, Elsevier, vol. 49(1), pages 61-76, February.
When requesting a correction, please mention this item's handle: RePEc:voj:journl:v:60:y:2013:i:5:p:593-614. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ivana Horvat)The email address of this maintainer does not seem to be valid anymore. Please ask Ivana Horvat to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.