Title: Destabilising the financial system via banking channel

Authors: Athanasios Tsagkanos; George Golfis; Konstantina Pendaraki

Addresses: Department of Business Administration, University of Patras, University Campus – Rio, P.O. Box 1391, Patras 26500, Greece ' Department of Business Administration of Food and Agricultural Enterprises, University of Patras, 2, G. Seferi Str. Agrinio 30100, Greece ' Department of Business Administration of Food and Agricultural Enterprises, University of Patras, 2, G. Seferi Str. Agrinio 30100, Greece

Abstract: This paper aims to investigate the effects of banking channel in destabilisation of the financial system. We make an effort to reconcile certain conflicting findings of prior literature. To this end, we focus on the involvement of management on bank earnings volatility through the quality of bank financial statements. We use data from commercial banks of three countries of Euro-zone that adopted a different approach regarding their growth model. We employ panel data analysis for a period which begins on 2001 and ends on 2014. Our key findings point to that in Greece the banking channel deteriorates the financial conditions through the bad quality of bank financial statements. However, the other countries which share similar banking size with Greece enjoy an entirely different effect by their banking channel. We perform the robustness analysis using the bootstrap standard deviation.

Keywords: bank financial statements; destabilisation; financial crises; bank regulation.

DOI: 10.1504/IJFMD.2019.104081

International Journal of Financial Markets and Derivatives, 2019 Vol.7 No.2, pp.191 - 202

Received: 18 Jun 2019
Accepted: 30 Aug 2019
Published online: 11 Dec 2019 *

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