Faculty of Business Administration
FBA Distinguished Scholar Seminar
Hosted by The Business Research and Training Center
Corruption, Lending and Bank Performance
Prof. Philip MOLYNENX
Emeritus Professor at Bangor University, Wales, UK
Date: Thursday, 2 December 2021
Time: 7:00 pm
Format: Online via Zoom
Deadline for Registration: 28/12/2021
Abstract
This study uses a sample of 7235 banks from160 countries between 2000 and 2016 to investigate the link between corruption, lending and bank performance. It considers both country- and bank-level corruption. The study finds that while corruption increases bank lending, it has an adverse impact on bank profits and risks (credit, solvency and distance to default). Corporate lending is found to be most influenced by corruption. Bank-level corruption influences bank performance in both developed and developing countries whereas country-level corruption has a lesser effect on lending in developing countries. The study also finds that greater bank competition, market concentration and improved regulatory environments reduce the effect of corruption on bank lending and performance. Policy makers should focus on enhancing regulatory rules and institutions in order to deal with the adverse impact of corruption on bank performance.
Biography
Prof. Philip MOLYNEUX is Emeritus Professor at Bangor University, Wales, UK. Previously he was Dean of the College of Business Administration at the University of Sharjah, UAE and Dean of the College of Business, Law, Education and Social Sciences at Bangor University. His main area of research is on the structure and efficiency of banking markets and he has published widely in this area with papers in the Review of Finance, Journal of Banking and Finance, Journal of Money, Credit and Banking, European Economic Review, the European Central Bank and Bank for International Settlements working paper series. His most recent texts include: An Introduction to Banking (3rd edition with Barbara Casu and Claudia Girardone) Wiley 2021; Introduction to Global Financial Markets 8th edition (with Stephen Valdez) Palgrave Macmillan 2015 and The Oxford Handbook of Banking 3rd edition (edited with Allen N Berger and John Wilson) Oxford University Press 2019. In the past he has acted as a consultant to: New York Federal Reserve Bank, European Commission, UK Treasury; Citibank Private Bank, Barclays Wealth, McKinsey & co and various other international banks and consulting firms.
