The Impact of Changes in Financial Supervision on the Profitability of the Hungarian Banking Sector
Since 2013, the central bank has been responsible for supervision in Hungary. In addition to the regulatory change, a law was published in the same year that started the process of abolishing the savings co-operative system. This paper investigates the impact of these two significant changes on the...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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MDPI AG
2022-07-01
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| Series: | Economies |
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| Online Access: | https://www.mdpi.com/2227-7099/10/7/176 |
| _version_ | 1797439910497484800 |
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| author | Tibor Bareith Tibor Tatay József Varga |
| author_facet | Tibor Bareith Tibor Tatay József Varga |
| author_sort | Tibor Bareith |
| collection | DOAJ |
| description | Since 2013, the central bank has been responsible for supervision in Hungary. In addition to the regulatory change, a law was published in the same year that started the process of abolishing the savings co-operative system. This paper investigates the impact of these two significant changes on the profitability of the Hungarian banking sector between 2003 and 2019 using dynamic panel model estimates. The supervisory change has reduced the profitability of credit institutions and tighter supervision has been implemented. The transformation of the savings co-operative system was in fact an integration that led to the disappearance of savings co-operatives by 2019. Competition in the market has been weakened, which has increased the profitability of the remaining financial institutions. The results were robust in terms of the multiple specifications and profitability ratio. |
| first_indexed | 2024-03-09T11:59:31Z |
| format | Article |
| id | doaj.art-64e5faaad8c14508a48b55f696331f43 |
| institution | Directory Open Access Journal |
| issn | 2227-7099 |
| language | English |
| last_indexed | 2024-03-09T11:59:31Z |
| publishDate | 2022-07-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Economies |
| spelling | doaj.art-64e5faaad8c14508a48b55f696331f432023-11-30T23:04:58ZengMDPI AGEconomies2227-70992022-07-0110717610.3390/economies10070176The Impact of Changes in Financial Supervision on the Profitability of the Hungarian Banking SectorTibor Bareith0Tibor Tatay1József Varga2Department of Investment, Finance and Accounting, Hungarian University of Agriculture and Life Sciences, Kaposvár Campus, HU7400 Kaposvár, HungaryDepartment of Economic Analyses, Széchenyi István University, HU9026 Győr, HungaryDepartment of Investment, Finance and Accounting, Hungarian University of Agriculture and Life Sciences, Kaposvár Campus, HU7400 Kaposvár, HungarySince 2013, the central bank has been responsible for supervision in Hungary. In addition to the regulatory change, a law was published in the same year that started the process of abolishing the savings co-operative system. This paper investigates the impact of these two significant changes on the profitability of the Hungarian banking sector between 2003 and 2019 using dynamic panel model estimates. The supervisory change has reduced the profitability of credit institutions and tighter supervision has been implemented. The transformation of the savings co-operative system was in fact an integration that led to the disappearance of savings co-operatives by 2019. Competition in the market has been weakened, which has increased the profitability of the remaining financial institutions. The results were robust in terms of the multiple specifications and profitability ratio.https://www.mdpi.com/2227-7099/10/7/176supervision changeprofitabilitystructural changeprofit persistence |
| spellingShingle | Tibor Bareith Tibor Tatay József Varga The Impact of Changes in Financial Supervision on the Profitability of the Hungarian Banking Sector Economies supervision change profitability structural change profit persistence |
| title | The Impact of Changes in Financial Supervision on the Profitability of the Hungarian Banking Sector |
| title_full | The Impact of Changes in Financial Supervision on the Profitability of the Hungarian Banking Sector |
| title_fullStr | The Impact of Changes in Financial Supervision on the Profitability of the Hungarian Banking Sector |
| title_full_unstemmed | The Impact of Changes in Financial Supervision on the Profitability of the Hungarian Banking Sector |
| title_short | The Impact of Changes in Financial Supervision on the Profitability of the Hungarian Banking Sector |
| title_sort | impact of changes in financial supervision on the profitability of the hungarian banking sector |
| topic | supervision change profitability structural change profit persistence |
| url | https://www.mdpi.com/2227-7099/10/7/176 |
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