Bank regulation and stock market stability across countries

Walaa Wahid ElKelish, Jon Tucker

Research output: Contribution to journalArticle

1 Downloads (Pure)

Abstract

Purpose: The purpose of this paper is to investigate whether bank capital strength and external auditing requirements influenced international stock market stability during the 2007/2008 global financial crisis. Design/methodology/approach: Bank mandatory regulation data are obtained from the World Bank database, while stock market stability is gauged for 385 listed banks across 43 countries by means of generalised least squares regression models. Findings: The authors find that mandatory capital strength requirements and the existence of mandatory audit increase stock market stability across countries. Further, more profitable banks increase stock market stability. The results are robust to both country institutional settings and economic freedom characteristics. Originality/value: This paper provides evidence of the impact of bank regulations on stock market stability during the global financial crisis, thereby providing a useful insight for stakeholders to enhance financial regulation and policy.

Original languageEnglish
Pages (from-to)402-419
Number of pages18
JournalJournal of Financial Regulation and Compliance
Volume24
Issue number4
DOIs
Publication statusPublished - 1 Jan 2016
Externally publishedYes

Fingerprint

Bank regulation
Stock market
Global financial crisis
International stock markets
Generalized least squares
Financial regulation
Data base
Design methodology
Bank capital
World Bank
Stakeholders
Economic freedom
External auditing
Regression model
Financial policy
Audit

Bibliographical note

Copyright © and Moral Rights are retained by the author(s) and/ or other copyright owners. A copy can be downloaded for personal non-commercial research or study, without prior permission or charge. This item cannot be reproduced or quoted extensively from without first obtaining permission in writing from the copyright holder(s). The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the copyright holders.

Keywords

  • Bank regulation
  • Capital strength
  • Financial crisis
  • Mandatory audit
  • Market stability

ASJC Scopus subject areas

  • Strategy and Management

Cite this

Bank regulation and stock market stability across countries. / ElKelish, Walaa Wahid; Tucker, Jon.

In: Journal of Financial Regulation and Compliance, Vol. 24, No. 4, 01.01.2016, p. 402-419.

Research output: Contribution to journalArticle

@article{7fdab4965463430b8047c56a6ca700ca,
title = "Bank regulation and stock market stability across countries",
abstract = "Purpose: The purpose of this paper is to investigate whether bank capital strength and external auditing requirements influenced international stock market stability during the 2007/2008 global financial crisis. Design/methodology/approach: Bank mandatory regulation data are obtained from the World Bank database, while stock market stability is gauged for 385 listed banks across 43 countries by means of generalised least squares regression models. Findings: The authors find that mandatory capital strength requirements and the existence of mandatory audit increase stock market stability across countries. Further, more profitable banks increase stock market stability. The results are robust to both country institutional settings and economic freedom characteristics. Originality/value: This paper provides evidence of the impact of bank regulations on stock market stability during the global financial crisis, thereby providing a useful insight for stakeholders to enhance financial regulation and policy.",
keywords = "Bank regulation, Capital strength, Financial crisis, Mandatory audit, Market stability",
author = "ElKelish, {Walaa Wahid} and Jon Tucker",
note = "Copyright {\circledC} and Moral Rights are retained by the author(s) and/ or other copyright owners. A copy can be downloaded for personal non-commercial research or study, without prior permission or charge. This item cannot be reproduced or quoted extensively from without first obtaining permission in writing from the copyright holder(s). The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the copyright holders.",
year = "2016",
month = "1",
day = "1",
doi = "10.1108/JFRC-09-2015-0049",
language = "English",
volume = "24",
pages = "402--419",
journal = "Journal of Financial Regulation and Compliance",
issn = "1358-1988",
publisher = "Emerald",
number = "4",

}

TY - JOUR

T1 - Bank regulation and stock market stability across countries

AU - ElKelish, Walaa Wahid

AU - Tucker, Jon

N1 - Copyright © and Moral Rights are retained by the author(s) and/ or other copyright owners. A copy can be downloaded for personal non-commercial research or study, without prior permission or charge. This item cannot be reproduced or quoted extensively from without first obtaining permission in writing from the copyright holder(s). The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the copyright holders.

PY - 2016/1/1

Y1 - 2016/1/1

N2 - Purpose: The purpose of this paper is to investigate whether bank capital strength and external auditing requirements influenced international stock market stability during the 2007/2008 global financial crisis. Design/methodology/approach: Bank mandatory regulation data are obtained from the World Bank database, while stock market stability is gauged for 385 listed banks across 43 countries by means of generalised least squares regression models. Findings: The authors find that mandatory capital strength requirements and the existence of mandatory audit increase stock market stability across countries. Further, more profitable banks increase stock market stability. The results are robust to both country institutional settings and economic freedom characteristics. Originality/value: This paper provides evidence of the impact of bank regulations on stock market stability during the global financial crisis, thereby providing a useful insight for stakeholders to enhance financial regulation and policy.

AB - Purpose: The purpose of this paper is to investigate whether bank capital strength and external auditing requirements influenced international stock market stability during the 2007/2008 global financial crisis. Design/methodology/approach: Bank mandatory regulation data are obtained from the World Bank database, while stock market stability is gauged for 385 listed banks across 43 countries by means of generalised least squares regression models. Findings: The authors find that mandatory capital strength requirements and the existence of mandatory audit increase stock market stability across countries. Further, more profitable banks increase stock market stability. The results are robust to both country institutional settings and economic freedom characteristics. Originality/value: This paper provides evidence of the impact of bank regulations on stock market stability during the global financial crisis, thereby providing a useful insight for stakeholders to enhance financial regulation and policy.

KW - Bank regulation

KW - Capital strength

KW - Financial crisis

KW - Mandatory audit

KW - Market stability

UR - http://www.scopus.com/inward/record.url?scp=85001955848&partnerID=8YFLogxK

U2 - 10.1108/JFRC-09-2015-0049

DO - 10.1108/JFRC-09-2015-0049

M3 - Article

VL - 24

SP - 402

EP - 419

JO - Journal of Financial Regulation and Compliance

JF - Journal of Financial Regulation and Compliance

SN - 1358-1988

IS - 4

ER -