Use this URL to cite or link to this record in EThOS: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.640867
Title: An explorative study of performance management in the German cooperative banking sector in response to regulatory and market forces
Author: Fischer, Stefan W.
ISNI:       0000 0004 5348 8302
Awarding Body: University of Strathclyde
Current Institution: University of Strathclyde
Date of Award: 2014
Availability of Full Text:
Access from EThOS:
Access from Institution:
Abstract:
The effects of the Subprime Crisis in 2007, which evolved into the still continuing economic crisis, have caused worldwide financial damages in excess of USD 1,6 trillion until 2009 alone according to banks' estimates and renewed awareness for the way financial institutions are run and regulated. It has captured the interest of regulatory standard-setters in their efforts to adjust their supervisory frameworks in order to improve financial stability forcing bank executives to re-think and adjust their business models in order to adapt to the new regulatory environment. Several studies and other publications have been produced on this topic. However, these are limited by their focus on banks in general, especially large-scale and shareholder-oriented banks with sufficient information publicly available. This project contributes to current debates by analysing the impact of the new regulatory measures, Basel III, as well of other competitive forces on the German cooperative banking sector being the smallest of the so-called Three Pillar System, consisting of ap. 1.100 individual banks (primary banks) with 30 million customers and 17 million shareholders (members) plus two central institutions organized within the Cooperative Financial Services Network. Particularly, the aim is to explore and identify how primary banks react and adjust or have to adjust their modus operandi in order to stay competitive given the special characteristics and limitations within their network. Considering tangible as well as intangible assets, this is done via a multi-level research design using a number of methodologies and referencing a range of information and informants while taking advantage of the privileged status of having hands-on access to real-life subjects, i.e. cooperative banks, to gather relevant practical data. This research has concluded that the effect of Basel III on cooperative banks is not as severe as commonly assumed when the entire banking sectory is regarded. Especially with regard to equity, being the focus of the majority of literature, evidence suggests a low impact, with liquidity issues, having been of secondary attention, representing higher pressure. However, no need to conduct material reorganisations has been identified upon analysing current data and historical performance. Giving the dependence on interest income, the on-going low interest level in connection with limitations on conducting maturity transformation poses the biggest threat to performance requiring primary banks to carry out new thinking. A number of key topics have been researched and also implemented as part of this project. One of the main findings in this context was that there is in fact a well-developed awareness of issues and challenges, however, a lack of willingness to change. This is regarded a problem associated with core principles of adherence to cooperative values and the regional principle, a principle of the cooperative banking sector that requires primary banks to operate within a practically limited area. However, evidence and research suggests that there is high potential for performance improvements by introducing structured concepts and the enhanced use of the cooperative network. Quantitative and as well as qualitative instruments tested, such as a financial model for regulatory compliance or the BSC to improve operational improvements, have been successfully tested. With regard to the ideas and strategies proposed to improve competitiveness some will argue that it is not feasible. However, this research confirms that the economic and regulatory environment leaves no choice by to change the old-established way of operation. It forces banks, especially smaller ones, to react and fight with no time to lose.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (D.B.A.) Qualification Level: Doctoral
EThOS ID: uk.bl.ethos.640867  DOI: Not available
Share: