A stable and sound financial system plays a critical role in mediating funds from surplus units to investors, making it a prerequisite for economic development. Financial intermediaries have been vulnerable to adverse changes in the local and global economy and experienced frequent bubble-and-bust episodes historically. Analyses of financial crises reveal that the incentive created by neo-liberal financial principles is inconsistent with stable financial systems, and viable solutions require structuring institutions in a way that incentives are well aligned with the fundamental principles of financial systems.
By drawing on the theoretical framework of the financial restraint model, this book analyses financial sectors’ rents or bank rents and their effects on banks’ performance and stability, and presents evidence on the relationship between rent and incentive through case studies of both developed and developing countries.
Part I: Theoretical framework for empirical analyses
1. Overview of theories of financial sector rent and bank rent opportunities: a critical view (Yasushi Suzuki, Mohammad Dulal Miah, and Manjula, K. Wanniarachchige)
2. Banks as financial intermediaries and their roles in economic development (Manjula K. Wanniarachchige, Mohammad Dulal Miah, Yasushi Suzuki)
3. Creating bank rent in developing countries: an integrated model (Manjula K. Wanniarachchige)
4. A new conceptualization of Islamic bank rent (Yasushi Suzuki and S.M. Sohrab Uddin)
Part II: Empirical studies
5. China's non-performing bank loan crisis: the role of economic rents (Yasushi Suzuki and Mohammad Dulal Miah)
6. Bank Rent, bank performance and financial stability in Sri Lanka (Manjula K. Wanniarachchige)
7. Islamic bank rent: comparison among Bangladesh, Indonesia, Malaysia and Pakistan (Yasushi Suzuki, S. M. Sohrab Uddin, Sigit Pramono and Shoaib Khan)
8. Financial sector rents in GCC Countries: are Islamic banks different? (Yasushi Suzuki and Mohammad Dulal Miah)
9. Japan's quantitative easing policy: implications for bank rents (Yasushi Suzuki and Mohammad Dulal Miah)