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Financial Markets and Institutions and Financial Crises
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Financial Markets and Institutions and Financial Crises

A special issue of Journal of Risk and Financial Management (ISSN 1911-8074). This special issue belongs to the section "Financial Markets".

Deadline for manuscript submissions: 30 September 2026 | Viewed by 15589

Special Issue Editor

Dr. Saktinil Roy

E-Mail Website
Guest Editor
Faculty of Business, Athabasca University, 201-13220 St. Albert Trail, Edmonton, AB T5L 4W1, Canada
Interests: financial markets and institutions; financial stability; financial crises; financial regulation; macroeconomics and monetary economics; international economics/finance; time series analysis; behavioral economics/finance

Special Issue Information

Dear Colleagues,

This Special Issue invites papers on all aspects of financial markets and institutions related to financial stability, risk management, financial regulation, and the potential causes of financial crises (banking and currency crises). The Special Issue intends to explore important topics relating to the working of financial systems and financial stability, as frequently discussed in academia and the policy arena, since the onset of the global financial crisis of 2007–2009. Papers on both macro- and microeconomic aspects of financial markets relevant to the discussion of financial market stability and financial regulation will be considered for publication. Topics related to the potential causes of financial crises and macroprudential policies needed to avert such crises are of special interest. The Special Issue intends to contribute to the financial regulation policymaking of the future, considering both current and historical experiences.

Dr. Saktinil Roy
Guest Editor

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 250 words) can be sent to the Editorial Office for assessment.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Journal of Risk and Financial Management is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1600 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • financial markets
  • financial institutions
  • financial risk management
  • financial crises
  • financial regulation

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Further information on MDPI's Special Issue policies can be found here.

Published Papers (6 papers)

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Research

28 pages, 339 KB  
Article
Internal Capital Markets and Macroprudential Policy Lessons from the 2007–2009 Crisis
by Nilufer Ozdemir
J. Risk Financial Manag. 2026, 19(2), 116; https://doi.org/10.3390/jrfm19020116 (registering DOI) - 4 Feb 2026
Abstract
Financial regulation assumes that parent firms reliably support distressed subsidiaries during crises. We test this assumption with evidence from the 2007–2009 financial crisis and find that parent support was selective rather than reliable. Using novel measures of sibling distress and granular parent-affiliate funding [...] Read more.
Financial regulation assumes that parent firms reliably support distressed subsidiaries during crises. We test this assumption with evidence from the 2007–2009 financial crisis and find that parent support was selective rather than reliable. Using novel measures of sibling distress and granular parent-affiliate funding flows, our findings reveal that capital allocation within bank holding companies (BHCs) disproportionately favored stronger affiliates. The results show that BHCs channeled capital toward more liquid and resilient subsidiaries while limiting support to weaker ones. Profitable parents became increasingly selective under stress, and nonbank subsidiaries emerged as critical internal liquidity providers when external markets froze. This selective reallocation highlights a gap between regulatory doctrine and actual behavior: intra-group capital allocation mechanisms can amplify systemic stress rather than mitigate it. By examining overlooked internal market dynamics during this major financial crisis, the study offers insights for strengthening financial stability against future systemic shocks. Assessing parent firm strength alone appears insufficient. Effective crisis prevention requires supervisory frameworks that monitor sibling fragility across conglomerates, evaluate the liquidity roles of nonbank affiliates, and stress test intra-group capital flows. Full article
(This article belongs to the Special Issue Financial Markets and Institutions and Financial Crises)
21 pages, 1452 KB  
Article
No Guarantee, Still Gains? Rethinking the Relation Between Loans Without Personal Guarantees and Bank Profitability
by Yuto Yoshinaga and Kanjiro Onishi
J. Risk Financial Manag. 2025, 18(12), 725; https://doi.org/10.3390/jrfm18120725 - 18 Dec 2025
Viewed by 745
Abstract
Japanese financial authorities have been promoting lending without personal guarantees, with the aim of enhancing the stability of the banking sector. However, banks’ willingness to provide loans without personal guarantees varies. Furthermore, no prior study has directly examined the impact of such loans [...] Read more.
Japanese financial authorities have been promoting lending without personal guarantees, with the aim of enhancing the stability of the banking sector. However, banks’ willingness to provide loans without personal guarantees varies. Furthermore, no prior study has directly examined the impact of such loans on bank profitability. Since Japanese regional banks recently began disclosing the proportion of the concerned loans, this study aims to clarify their impacts on bank profitability, utilizing 352 bank/year observations from fiscal years 2019 to 2023. The results indicate that the statistical significance of the impacts of the proportion of loans without personal guarantees on bank profitability is not robust, and that the impacts are economically insignificant. This study contributes to the literature by providing the first empirical evidence on the impact of personal guarantees on bank profitability. It also offers practical insights to financial authorities, demonstrating that loans without personal guarantees do not significantly affect the profitability of regional banks, at least during the examined sample period. Full article
(This article belongs to the Special Issue Financial Markets and Institutions and Financial Crises)
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26 pages, 855 KB  
Article
Regulation, Disclosure, and the Displacement of Internal Governance in Saudi Banks
by Ali Al-Sari
J. Risk Financial Manag. 2025, 18(12), 705; https://doi.org/10.3390/jrfm18120705 - 11 Dec 2025
Viewed by 838
Abstract
This study examines whether strengthened prudential supervision reduces the marginal influence of internal governance mechanisms on the performance of Saudi banks during the Vision 2030 reform period. Using a panel of ten listed Saudi banks from 2018 to 2024, governance measures are hand [...] Read more.
This study examines whether strengthened prudential supervision reduces the marginal influence of internal governance mechanisms on the performance of Saudi banks during the Vision 2030 reform period. Using a panel of ten listed Saudi banks from 2018 to 2024, governance measures are hand collected to align with Saudi Central Bank definitions, focusing on insider ownership and board independence. To address endogeneity arising from performance persistence and reverse causality, two-step system generalized method of moments with collapsed lagged internal instruments and Windmeijer-corrected standard errors are employed. The results reveal that insider ownership and board independence are statistically and economically insignificant for accounting performance and market valuation, whereas lagged performance remains the dominant predictor. Hansen J and Arellano–Bond AR(2) diagnostics support instrument validity, and robustness checks using alternative estimators and variable specifications produce consistent findings. The results suggest that in contexts where prudential oversight is comprehensive and consistently enforced, internal governance mechanisms may provide limited incremental monitoring value. However, they do not imply that boards or insiders are irrelevant during crises or when enforcement is uneven. Therefore, refining supervisory tools and disclosure practices should be prioritized over imposing additional structural mandates on boards or ownership configurations. Full article
(This article belongs to the Special Issue Financial Markets and Institutions and Financial Crises)
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23 pages, 504 KB  
Article
Non-Performing Loans and Their Impact on Investor Confidence: A Signaling Theory Perspective—Evidence from U.S. Banks
by Richard Arhinful, Bright Akwasi Gyamfi, Leviticus Mensah and Hayford Asare Obeng
J. Risk Financial Manag. 2025, 18(7), 383; https://doi.org/10.3390/jrfm18070383 - 10 Jul 2025
Cited by 7 | Viewed by 7210
Abstract
Bank operations are contingent upon investor confidence, particularly during periods of economic distress. If investor confidence drops, a bank faces difficulties obtaining money, higher borrowing costs, and lower stock values. Non-performing loans (NPLs) potentially jeopardize a bank’s long-term viability and short-term profitability, and [...] Read more.
Bank operations are contingent upon investor confidence, particularly during periods of economic distress. If investor confidence drops, a bank faces difficulties obtaining money, higher borrowing costs, and lower stock values. Non-performing loans (NPLs) potentially jeopardize a bank’s long-term viability and short-term profitability, and investors are naturally wary of institutions that pose a high credit risk. The purpose of the study was to explore how non-performing loans influence investor confidence in banks. A purposive sampling technique was used to identify 253 New York Stock Exchange banks in the Thomson Reuters Eikon DataStream that satisfied all the inclusion and exclusion selection criteria. The Common Correlated Effects Mean Group (CCEMG) and Generalized Method of Moments (GMM) models were used to analyze the data, providing insight into the relationship between the variables. The study discovered that NPLs had a negative and significant influence on price–earnings (P/E) and price-to-book value (P/B) ratios. Furthermore, the bank’s age was found to have a positive and significant relationship with the P/E and P/B ratio. The moderating relationship between NPLs and bank age was found to have a negative and significant influence on price–earnings (P/E) and price-to-book value (P/B) ratios. The findings underscore the importance of asset quality and institutional reputation in influencing market perceptions. Bank managers should focus on managing non-performing loans effectively and leveraging institutional credibility to sustain investor confidence, particularly during financial distress. Full article
(This article belongs to the Special Issue Financial Markets and Institutions and Financial Crises)
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40 pages, 1803 KB  
Article
“Feeling Stressed?” A Critical Analysis of the Regulatory Prescribed Stress Tests for Financial Services in the UK
by Stavros Pantos
J. Risk Financial Manag. 2025, 18(5), 246; https://doi.org/10.3390/jrfm18050246 - 1 May 2025
Viewed by 3720
Abstract
This paper captures a qualitative review of the regulatory prescribed stress tests for UK financial services designed by the Bank of England and the Prudential Regulation Authority (PRA)/Financial Conduct Authority (FCA) after the Global Financial Crisis. It presents a critical analysis of the [...] Read more.
This paper captures a qualitative review of the regulatory prescribed stress tests for UK financial services designed by the Bank of England and the Prudential Regulation Authority (PRA)/Financial Conduct Authority (FCA) after the Global Financial Crisis. It presents a critical analysis of the use of stress testing as part of supervisory practices for UK banking institutions and insurance undertakings, commenting on their qualitative characteristics, after looking at the regulatory prescribed stress tests from three key categories: the macroeconomic scenarios for banks, denoted as the bank stress tests (BST), the insurance stress tests (IST), and the biennial exploratory scenarios (BES). In this study, five trends describing regulatory prescribed stress are identified: (1) the regulatory collaboration, (2) cross-industry stress tests, (3) exploratory scenarios, (4) reporting and disclosure requirements, and (5) the underlying modelling capabilities and tools. The associated challenges of (A) governance, (B) frequency, (C) individual disclosures, (D) data and modelling, and (E) capabilities and skillset from participating institutions underpinning these stresses are highlighted, shaping the policy recommendations for future exercises. These address the gaps identified from existing stress tests towards the effective prudential supervision of UK financial services, based on each scenario category, for improvements and advances to practices. Full article
(This article belongs to the Special Issue Financial Markets and Institutions and Financial Crises)
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11 pages, 249 KB  
Article
Public Law Liability of the Financial Market Supervisor
by Michal Janovec and János Kálmán
J. Risk Financial Manag. 2024, 17(6), 232; https://doi.org/10.3390/jrfm17060232 - 1 Jun 2024
Viewed by 1616
Abstract
This article deals with the liability of the supervisory authority of the financial market. It could be questioned whether the supervisory authority, as the public authority, is liable for the supervisory performance. If the answer is yes, then the question is what kind [...] Read more.
This article deals with the liability of the supervisory authority of the financial market. It could be questioned whether the supervisory authority, as the public authority, is liable for the supervisory performance. If the answer is yes, then the question is what kind of liability could be found and if any special conditions (prerequisites) are needed. In general, there could be two lines of public liability found. One is systemic liability for the safe financial market—e.g., financial market stability. The other perspective is individual liability for damages caused by unlawful administrative procedure or maladministration, where unlimited strict liability is granted. This kind of liability might be widely questioned, especially when the central bank is the supervisory authority, like in the Czech Republic, Slovakia, Hungary, and other EU member states. This article aims to evaluate the liability of the supervisory authority in the Czech Republic and Hungary concerning the European level of such liability. Full article
(This article belongs to the Special Issue Financial Markets and Institutions and Financial Crises)
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