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    Security in information systems :the identification of risks in selected electronic banking applications : a thesis presented in partial fulfilment of the requirements for the degree of Master of Business Studies in Information Systems at Massey University
    (Massey University, 1988) Kemp, Elizabeth Angela
    This thesis considers the security threats associated with the introduction of electronic banking. In electronic banking services the paper based instructions for the movement of money are replaced by the electronic transmission of data. Since electronic banking relies heavily on advanced information technology (the use of computers and communications), security is a matter of grave concern. This thesis identifies the principle risks to security in five electronic applications : Automated Teller Machines (ATMs), Electronic Funds Transfer, Point-of-Sale (EFTPOS), credit cards, home banking and wire transfers. Both the information technology used and the applications are described. The major threats to each element of the computer system, hardware, software, data, communications and the environment are identified and related to the appropriate service. Five major risk categories are described: disaster, accident, error, computer abuse and sabotage. These headings are used as the starting point for the analysis of risks to each component of the system.
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    An empirical analysis of the usefulness of the Basel II Pillar 3 disclosures on bank risk management to monitor bank performance and forecast bank profitability during periods of economic instability : a thesis presented in partial fulfilment of the requirements for the degree of Master of Management in Banking at Massey University, Manawatu, New Zealand
    (Massey University, 2012) Ainsworth, Rachel
    The third pillar of the Basel II capital adequacy framework requires banks to disclose risk information to the market to supplement regulators’ monitoring. It is expected that this “allows market discipline to work earlier and more effectively” (BCBS, 1998, pp. 6). The expectation that the pillar 3 disclosures will lead to market discipline is supported in the theoretical literature but not demonstrated in the empirical literature. The purpose of this thesis is to determine if the information contained in banks’ disclosures is useful to monitor bank performance and to explain bank profitability as this is a precondition for effective market disclosure. The usefulness of information in the pillar 3 disclosures was examined for twenty of the largest global banks from 2008 and 2009. It was found that pillar 3 disclosures are useful to analyse and monitor the performance of banks as the disclosures can be used to identify banks for which key risk metrics are inconsistent with other metrics. The pillar 3 variables did not however significantly improve the explanatory ability of earnings models over models containing only financial information, although this may be due to the small sample size. These results show that there is valuable information contained within pillar 3 disclosures which could be used by the market to provide market discipline as expected in the Basel II framework.
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    The efficiency of the commercial banks in six Pacific Island countries : a dissertation in partial fulfilment of the requirements for the degree of Doctor in Philosophy, Banking Studies, School of Economics and Finance, Massey University, Palmerston North, New Zealand
    (Massey University, 2010) Maea, Samisoni Fotu
    This thesis explores the efficiency of the commercial banks in six Pacific Island Countries (PICs): Fiji, Papua New Guinea, Samoa, Solomon Islands, Tonga, and Vanuatu over the period 2000 to 2006 using Data Envelopment Analysis (DEA). The use of DEA is justified primarily due to the small number of commercial banks operating in these small countries. This is the first detailed study of the relative efficiency and performance of banking firms in this selected group of small countries. The dominant feature of this research is to investigate the primary prudential tools commonly used by banking supervisors in regulating the local banking system. In our understanding, this is the first effort to investigate the link between individual prudential tools and bank efficiency. The small number of banks in this dataset further enables a structural investigation of the relative efficiency across commercial banks nationally and across countries, employs a series of explanatory variables to explain the possible sources of efficiency variation, and provides a series of practical measures to validate resulting efficiency scores from DEA. This comprehensive structural construct is also a new development in bank efficiency studies. The key research finding is the identification of liquidity requirements as the main source of bank inefficiency. Capital requirements are not only ineffective in promoting bank efficiency but in the absence of formal liquidity requirements, they become a contributing factor for causing asset deterioration. Hence, asset quality is inversely related to bank efficiency. Scale inefficiency is unusually large compared with reported scale inefficiency in the literature and in most countries, it dominates technical inefficiency. Finally, efficiency-based ratios should continue to supplement resulting efficiency scores, at least in the current measurement and development of bank efficiency in the context of smaller developing economies.
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    Reshaping the reserve : the political economy of central banking in Australasia : a thesis presented in fulfilment of the requirements for the degree of Doctor of Philosophy in Public Policy at Massey University, Turitea, Palmerston North, New Zealand
    (Massey University, 1999) Eichbaum, Christopher John; Eichbaum, Christopher John
    Changes in the relative influence of state and market in the final quarter of the twentieth century are no better evidenced than in the institutional evolution of the central bank. Central banks are increasingly possessed of a large measure of independence from political authorities, set the limits on economic growth and on employment, and to a very large extent the parameters within which governments exercise taxation and expenditure decisions. In 1989 the New Zealand Parliament passed the Reserve Bank of New Zealand Act. The Act mandated the Bank to focus exclusively on one objective - price stability - and provided the Bank with complete operational independence to pursue that objective. The New Zealand legislation is perhaps the cleanest expression of an institutional prescription supported by the rational economics literature. Central bank independence - by which is meant operational independence to deliver price stability - is seen as the remedy for a democratic distemper in which politicians will manipulate policy levers in an opportunistic manner, and with adverse economic consequences. The statute repealed by the 1989 New Zealand legislation offended against the rational economics prescription - the Bank was required to direct policy towards multiple objectives and was dependent on the government of the day for much of its operational direction. That earlier statute had much in common with Australia's Reserve Bank Act 1959 which required the Reserve Bank of Australia to protect the stability of the currency, maintain full employment, and contribute to economic prosperity and welfare, and vested policymaking in a Board combining officials and lay members variously drawn from business, labour, and the academic community. That statute, largely unchanged since 1945, remains in force today. The early 1990s would see a political contest for the Australian central bank, a contest which would see the appropriateness of the Coombsian post War institutional scheme questioned, and the 'New Zealand model' cited as the exemplar of institutional best practice. In 1999 that contest is over, the legislation has not been revisited, the Coombsian scheme remains intact, and it enjoys bi-partisan political support. The institution has been reshaped, but within the context of the Coombsian scheme. The thesis takes as its point of departure the fact of institutional difference, and illuminates the causes and consequences of two markedly different trajectories of institutional reshaping. A most similar systems research strategy provides the methodological framework, with the theoretical base provided by a political economy model which posits that particular institutional configurations and trajectories of institutional reshaping will reflect the relative influence of actors within the political economy. The model seeks to remedy what is a principal deficiency in the rational economics literature, namely the treatment of central bank independence as exogenous. By situating institutional reshaping within the political economy, the nature of choices relating to institutional form and trajectories of institutional reshaping are made endogenous. Elements from both rational-choice and historical institutionalism are imported into the model, which posits that a condition of institutional equilibrium condition will obtain where attributes of the institutional mix serve to maximise endowments of credibility and legitimacy. Credibility of institution and of policy is a requirement in order to remedy any dynamic inconsistency constraint, and typically is advanced by operational independence and a focus on price stability. Institutional and policy legitimacy posits both that independence be balanced with appropriate accountability provisions, and that economic growth, macroeconomic stability and an appropriate measure of policy co-ordination form part of the central bank mandate. Institutional credibility and legitimacy are manifest both in particular attributes of institutional form - policy objectives and governance arrangements in particular - and in the conduct of relations between central banks and actors within the political economy. For the first time, the thesis articulates a comparative political economy of central banking in Australasia, and illuminates the causes and consequences of differing trajectories of institutional reshaping within an integrated model. The thesis advances an explanation for the markedly different trajectories of institutional reshaping, and foreshadows the likely trajectory of future reform under circumstances of institutional dis-equilibrium. The thesis extends and modifies the institutionalist literature on the political economy of central banking, and is an original contribution in keeping with what Sharpf has identified as the positive and normative import of policy research - producing effective and legitimate solutions to policy problems.
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    Switching costs in the New Zealand banking market : a thesis presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Banking at Massey University, Palmerston North, New Zealand / Claire Dianne Matthews
    (Massey University, 2009) Matthews, Claire Dianne
    This thesis explores issues related to bank switching costs, in the context of the New Zealand banking market. Switching costs comprise the range of economic costs faced by customers changing bank, including monetary switching costs, the loss of the relationship with bank staff, and needing to learn new systems. An important effect of switching costs is customers become locked in to their bank, which has implications for market competition, and this raises questions about the need for a regulatory response. The study comprised a mail survey to 2983 people drawn from New Zealand electoral rolls, with a response rate of 34%. The survey instrument was a questionnaire of 70 questions in four sections: banking relationships, switching behaviour, switching costs, and demographic information. Nine categories of switching costs were used: Learning, Search, Monetary Loss, Benefit Loss, Personal Relationship, Brand Relationship, Service Disruption, Uncertainty, and Hassle. These categories are found to be appropriate. Furthermore, the three higher order categories of Procedural, Financial and Relational found by Burnham, Frels and Mahajan (2003) are confirmed. Although prior studies have recognised different switching costs, there has been limited work to understand whether they differ in their impact on attitudes and behaviour around switching. Different switching costs are found to have different effects. The study also examined whether the experience of switching matches the perception, and found switching is easier than expected. Furthermore, customers who have switched banks have different perceptions of switching costs to those who have not. Customers are different, and their attitudes and needs should therefore vary. Prior research has found differences in attitudes towards financial issues based on the family life cycle, but the relationship between switching costs and family life cycle has not been explored. This thesis finds perceptions of switching costs and switching behaviour vary significantly between life cycle groups, which appears in part to be related to associated changes in the complexity of the banking relationship. Four recommendations for regulators are generated from the results of the study. These include recommending greater acknowledgement of the existence and effect of switching costs, and investigation of bank account number portability.