The recent wave of global banking crises raises important questions about the role of public policy during banking crises. Should governments intervene in the banking sector to prevent a crisis? Could policymakers foresee or prevent a crisis? And if so, would politicians act? This thesis adds to current empirical literature on banking crises by investigating how political institutions and considerations affect banking crisis probability. A banking crisis occurs when banking institutions suffer from a major loss of capital, leading to bank failure, government assistance, and/or government intervention. Banking crises are also often preceded by credit booms and a subsequent bust in asset prices when the economic system can no longer sustain the rampant growth. While economic conditions are typically cited as the immediate cause of banking crises, research indicates that economic, institutional, and political decisions help shape an environment that is vulnerable to crisis. I hypothesize that banking crises are the result of government failure to address mounting vulnerabilities due to political considerations. Although policymakers have monetary, fiscal, and regulatory tools to recognize and act against booms, inaction or misguided policy may contribute to the onset of banking crisis—and rightly or wrongly, political considerations play a significant role. I use fixed-effects and random-effects panel logit models that incorporate macroeconomic, institutional and political conditions during 144 episodes of banking crises in 126 countries between the years of 1970–2010. The empirical analysis adds to current literature by controlling for country-specific variation in the panel dataset. The results confirm the hypothesis as well as enhance current literature on the economic and institutional causes of banking crises. Executive elections are found to have a robust and consistently positive relationship with the probability of banking crisis, while legislative elections, more competitive elections, higher fractionalization, and single party governments have a negative, although largely non-significant, effect on banking crisis probability. Political partisanship may also play a role in shaping banking crisis vulnerability. I posit that policymakers face different motivations and constraints based on the role of their policymaking body, leading to different policy outcomes in the face of banking crises.

Chinas 1978 “opening and reform” era prompted the countrys gradual transformation from a destitute and unstable economy to one that sustained double-digit growth. Beginning in the 1990s, privatization efforts spun-off the healthiest state-owned enterprises. While this newfound freedom alleviated political pressures and enabled managers to make business-based decisions, it also created a capital deficit for small and medium-sized enterprises. Managers who once fulfilled policy directives from centrally disbursed funds now found themselves in need of capital to fuel enterprise growth. Concurrently, as a result of conditions for admittance to the World Trade Organization in 2001, Chinas Communist regime opened markets to foreign banks on a city-by-city basis in 2003. This thesis examines cities with and without foreign banks to determine the impact on credit access for small and medium-sized enterprises. The analysis shows that while there is a mildly negative correlation between bank credit reliance and foreign bank presence, the variety of factors that influence a firms capital structure obscure any significant relationship.

This paper will investigate if there is a relationship between Troubled Asset Relief Program (TARP) funds allocated to banks, and the amount of campaign contributions those banks gave to congressmen. There already exists research on campaign contributions and its effects on increasing the probability of voting for a bailout, and there is research that there is a relationship between contributions to politicians and the amount subprime mortgages in each congressional district. In order to control for popular/electoral pressure, I include several socio-economic and financial variables. In addition, this paper will look at the outcome of these contributions and will study if the banks’ contributions lead to a significant increase in probability of receiving bailout funds. I use a logit model with the primary independent variable as the proportion of campaign contributions to each congressman that was from the finance industry. The model will control for income growth, non performing assets, population, political party, inflation, median household income, a congressman not returning to office, and the importance of the financial sector in each congressional district. My findings indicate that campaign contributions and ideology have shaped voting incentives of Congressmen concerning the TARP fund while economic factors only mattered in the second house vote. Congressmen that have a higher percentage of their campaign contributions from finance are more likely to vote for TARP, and Republicans are less likely to vote for TARP. Magnitudes for these two variables decrease in the second house vote, and income growth is the only economic factor that is significant.

Foreclosure was a local problem for minorities before foreclosure became a national problem. Dishonest lenders took advantage of African American and Latino families, contributing to the 2007 economic downturn. Huge gaps persisted in homeownership between minorities and non-minorities. The specific problem was minority homeownership was 26% less than non-minority homeownership. This quantitative correlational study compared survey questionnaires from 109 Compton, California, residents. Quantitative designs used statistics to compare variable association, track trends, and interest levels to determine if the dependent and independent variables were associated with the homeownership gap. This quantitative research examined relationships between discrimination, income, education, predatory lending, credit history, and wealth of homeowners and non-homeowners in Compton, California. Analysis of the six hypotheses determined that a relationship existed between income, education, and wealth. The results indicated that significant relationships existed between the variables but this study did not conclude any variable as the reason for the homeownership gap. The conclusions of this research suggested that additional research was necessary to determine the relationships that contributed to the homeownership gap. This study recommended the variables of home tenure choice, negative equity effects, and inter group comparisons were added to previous variables to develop adequate conclusions about the homeownership gap between minorities and non-minorities.

Using upper echelon theory as a basis, this study provided significant quantitative evidence concerning the relationship of top management team (TMT) national culture and TMT demographic characteristics to corporate profitability. The 57 TMTs in the 2006 Fortune Global 500 banking sector were examined with respect to their companies’ change in return-on-assets from 2007 through 2009. The population and time frame were chosen in order to investigate how these TMTs positioned their companies ahead of the recent global economic recession and also how they reacted to the ensuing crisis. The independent demographic dispersion variables used were TMT tenure, company tenure, years of education, educational specialization, and functional specialization. Hofstede’s long-term-orientation (LTO), masculinity (MAS), individualism (IDV), uncertainly avoidance (UAI), and power distance (PDI) were used as culture-defining independent variables. The dependent variable was change in profitability as a percentage of assets from 2007 through 2009. The study developed an integrated theory relating national culture to cooperation/competition and subsequently to power, hierarchy, cohesion, communication, trust, conflict resolution, problem solving, and decision making. Using this integrated theory, the study examined hypothetical relationships between the independent variables and the emergent dependent variable. The results demonstrated quantitative support for the hypothesis that the variation in profitability over time can be explained more by TMT national culture than by TMT demography alone. Hofstede’s LTO (＋) and MAS (-) were significantly related to profitability. As an unanticipated result, Hofstede’s IDV (＋) was significantly correlated to demographic heterogeneity. The proposed hypothetical relationships of PDI (-) and UAI (＋) with profitability were not supported within the study. Understanding the characteristics and ramifications of TMT national culture is of value in the study and practice of management. This study’s results further pave an avenue for additional research using Hofstede’s cultural dimensions as independent variables in TMT studies. There were several associated limitations, including the selection of a narrow population and the assumption of ceteris paribus. Researchers are encouraged to replicate this study’s methodology using different populations and time periods.

Intensive government regulation over the banking industry did not begin in the United States until the founding of the Federal Reserve in 1914. Before that, commercial banks run a set of community-based self-governance, called the clearing house, throughout the country. The clearing house organized collective action and facilitated mutual assistance during financial crises； it imposed self-discipline and urged prudential operations during regular time. This set of self-governance was deeply embedded in the American ideology of anti-centralization and the political institutions of a weak state. The anti-branching restriction enacted by the National Banking Act in 1864 ruled out a market solution of financial crises through geographical diversification, and called for a collective solution. The clearing house emerged as a community-based coalition through which banks weathered financial turmoil with their peers. The community-based collective action relied on the cooperation among local banking elites. At the end of 19th century, when the scope of economy went beyond local communities, the clearing house became inadequate to dampen financial crises. The first national wide financial crisis, the Panic of 1907, amid the state-building movement championed by progressivists and populists, triggered a request for a public solution that necessitates government intervention. The founding of the Federal Reserve embarked on a new era of government regulation. Moreover, the failure of government regulation in preventing the biggest financial crisis in history, the Great Depression, did not result in the resurgence of private solutions, but further strengthened the state control. I conduct the empirical testing of the efficacy of private and public regulations using the population of commercial banks in Manhattan from 1840 to 1980. I investigate the effectiveness of the New York Clearing House Association, the oldest and also the largest clearing house in the country, in constraining its members behaviors. I find that the overall bank failure rate is lower during the clearing house period than during the free-market period or the government regulation period. What contributes to the lower overall failure rates during the clearing house period is that banks that participated in the NYCHA had a significantly lower failure rate. Moreover, the effectiveness of the self-governance hinged on its nature as a city-based coalition that included a relatively small number of densely-connected banks. Especially, elite bankers affiliations with elite clubs in New York constituted a network that enabled the self-governance to be effective. The density of elite bankers network had a significant moderating effect on the effectiveness of the NYCHA in reducing member banks failure rates and their operational risks. This self-governance lost its efficacy after the government actively intervened with the governance of banking. But the governments safety-nets introduced a moral hazard problem, in that banks that participated in government institutions tended to be more risk-taking. By showing the efficacy of private institutions in solving the problems of commons, my dissertation helps to shatter pessimistic convictions based on the free-rider problem. Specially, by emphasizing the structure of the community in which a private institution is embedded, my dissertation reveals a scope condition in affecting the effectiveness of private institutions. A close-knit community facilitates information transfer, nurtures trust and social interactions, and thus helps to solve the free-riding problem that plagues some private institutions. Thus, identifying whether a private institution is embedded within the right social structure helps to reconcile the conflicting empirical results regarding the efficacy of private institutions, and sheds light on the question why private institutions are neither rare nor ubiquitous. The community-based institutions are decentralized, localized, and embedded within social relations. The community-based institutions are an organic form of initiatives that local actors reply on mutual aid societies and self-organized associations to solve their commons problems, and an intermediary between the extremes of the market and the state. In recent decades, sociologists have repeatedly called into our attention the increasing atomization, the loss of social capital, and the demise of civic groups. These problems can be at least partially attributed to the over focus on the market or the state instead of the community. At one end, the free competition ideology popularized by neoliberlism delegitimizes cooperation among industrial peers, and hence their social interactions. At the other end, the reply on the state as one major supplier of institutions have similarly displaced local arrangements and weakened social relations. Nurturing vibrant community-based institutions are an effective instrument to defeat the taboo against cooperation, to cultivate local associations that turn strangers to trusting neighbors, and to advance diversity and innovations rather than homogenization or centralization. This is because the community-based institutions are glue, the operation of which depends on social coordination instead of atomized transactions or impersonal bureaucracies. Abstract shortened by UMI.)

Jensen and Meckling 1976) depict the firm as a nexus of financial contracts that offer optimal mechanisms to mitigate various frictions between agents, e.g., equity holders versus debt holders, principal versus agent, etc. In this study, we focus on two particular types of loan contract, performance pricing and revolving line of credit. Chapter 1 examines how default risk and accounting quality of borrowers affect the likelihood of using performance pricing in bank loan contracts. Consistent with the notion of negative hedging, higher default risk firms are less likely to use performance pricing loans. We also find that firms with poorer accounting quality are less likely to receive performance pricing loans. Stronger lender-borrower relationship that would mitigate information asymmetry and enhance monitoring, is found to be associated with greater likelihood of using performance pricing loans. In addition, we find that conditional on using performance pricing loans, firms with lower higher) accounting quality are more likely to receive credit rating accounting) based performance pricing provision. Furthermore, we document that the likelihood of receiving performance pricing loans is significantly reduced after borrowers accounting quality deteriorates, e.g., after they restate their financial reports. These results supports the positive accounting theory, suggesting that a significant cost associated with performance pricing loans is borrowers incentives to manipulate accounting information so as to obtain a lower loan spread. Theoretical literature suggests that firms use lines of credit as a liquidity insurance to secure a desirable investment level in the event of future downturn Tirole, 2005). In Chapter 2, we examine whether lines of credit provide liquidity insurance or simply convenience to firms via focusing on the drawdown rate. We find that drawdown rate is on average significantly lower than the imputed market rate on a bank loan given the financial condition of a firm at the time of drawdown, which supports the theoretical notion that lines of credit offer liquidity insurance. In addition, we document that stronger or existence of) prior lending relation is associated with a lower drawdown rate, however bank reputation has no impact on the drawdown rate. Furthermore, we find that the impact of lending relation on the drawdown rate only exists in borrowers subject to greater information asymmetry. While we document that borrowers are penalized paying a higher spread and more likely pledging collateral) on new lines of credit issued after their drawdown, they are penalized much less as they borrow from high reputation banks. Our results suggest that bank reputation and lending relation help provide a more efficient liquidity insurance, however via different channels. Chapter 3 examines how a firms performance pricing loans affect managers incentive to manipulate earning. We find that firms with a greater slope or convexity in their performance pricing loans have significantly larger discretionary accruals. However, the positive association between the slope or convexity of PSD and discretionary accruals is significantly reduced as the lenders are of higher reputation or have had a prior lending relationship with the borrowers. These results suggest that bank reputation and prior lending relation serve as an effective monitoring mechanism, which in turn mitigates managers incentive to manage earnings.

The main goal set for this work is to investigate and analyze the Islamic financial and banking market in the USA, specifically its development, evolution, and perspectives and to find out whether the USA is an attractive financial market to offer Shariah compliant products and services by examining the demand for Islamic financial services. To find out the answer a questionnaire was developed to gauge consumer perceptions and attitudes of Islamic Banking and its products. Although Islamic Banking and Finance has been a part of the American financial environment for quite some time, its development has been a relatively slow process. However, due to the recent economic shocks in the US, further development of the Islamic Banking industry has a much better chance of being more quickly and further integrated as people look for a more ethical and responsible method of banking. The study provides evidence that Islamic Banking fits into the reality of traditional banking within the US but further future development of a regulatory structure is needed to make the integration more successful. Finally, as the data revealed consumers within the US are willing to do business with nontraditional forms of banking and financial institutions. However, the general public remains unaware of the alternative that Islamic Banking and Finance provides, as evident by responses to the accessibility and advertisement questions provided in the questionnaire. Although there are numerous Islamic Banking institutions in the US, the number is still too small and more importantly however is the fact that there is no national Islamic Banking institution in existence thereby severely limiting standardization. It is crucial that more Islamic Banks be created throughout the US and that at some point consolidation takes place. Furthermore, the lack of advertisement is also a worrisome aspect that needs to be addressed in order for Islamic Banking and Finance to gain more utility and acceptance. At no other time has there been such a potential opportunity for Islamic Banking and Finance to further establish and strengthen its foundations within the US. The only question now is whether it will take advantage of that opportunity.

This thesis examines the sales managers coaching of employees and its effectiveness in the sales context. While some authors maintain that managers would do well to spend more time coaching their sellers to improve their performance, a review of the literature reveals that coaching is still not well defined and that the positive impact of managerial coaching on employee development and performance has yet to be established. Most authors who have addressed the concept approach it from an individual perspective of leadership or management. Though very interesting, this perspective does not take into account the exchanges between the two parties. For this reason, we recommend a theoretical framework based on an interpersonal perspective in which coaching is considered from the point of view of communication and is conceptualized as a developmental interaction between the manager and the seller. This model is supported by the interactivity principle applied to one-on-one sessions between the manager and the seller. We propose a classification of one-on-one sessions that takes into account the following two aspects: the relationship adopted and the coaching process employed. We consider the effect of coaching through the sellers perception. The results of a survey conducted in Quebecs financial services sector support our model. They reveal that seller performance is influenced both by the coaching method and by the type of relationship developed during the coaching sessions. In other words, adopting a structured method and maintaining a partnership relationship with an employee increases the employees performance. Therefore, in addition to determining for the first time how sellers perceive the coaching practices implemented by their managers, our research allows us to assess the various elements that play a role in improving seller performance. We suggest a number of managerial implications that are supported by the results of our study. Our conclusions draw attention to the value of the practice for the employee who benefits from it and, by extension, for the manager who applies it. Keywords: Supervision, coaching, selling and sales management in action, performance, relational marketing.

A History of Interest uses methods inspired by the work of Michel Foucault to uncover institutional aspects of credit and debt. It explores three hypotheses and covers the period 1290–1914. During this period, Anglo-American society went from a system of debt conscription and usury restrictions in the Middle Ages to a system of voluntary bankruptcy and credit reporting by the late 19th century. This thesis explains how that transition occurred. Situating these changes in Foucault’s notion of disciplinary writing, it also suggests what that transition means for the modern world.