Banking Resilience in Times of Financial Crisis: A Comparative Regulatory Analysis
Keywords:
Banking Resilience, Financial Crisis, Regulatory Stringency, Capital Adequacy, ESG Performance.Abstract
This study empirically investigates the determinants of banking resilience during systemic financial crises through a cross-country comparative analysis encompassing both advanced and emerging economies over the 2015–2023 period. Utilizing a balanced panel of commercial and Islamic banks, resilience is operationalized as a multidimensional construct encompassing capital adequacy, liquidity sufficiency, profitability stability, and risk containment. The research employs dynamic panel GMM estimations to address endogeneity, persistence, and heterogeneity, incorporating regulatory stringency indices, sustainability orientation metrics, and bank-specific controls. Findings indicate that higher capital buffers and liquidity coverage ratios significantly enhance crisis-period stability, while ESG-oriented strategies reinforce long-term resilience, particularly in jurisdictions with stringent supervisory frameworks. Islamic banking models exhibit differential sensitivity to regulatory interventions, suggesting that financial architecture and governance play pivotal roles in mediating systemic shocks. Moreover, disparities between advanced and emerging economies underscore the interaction between macroeconomic conditions and institutional quality. The results provide robust empirical evidence for policymakers, highlighting the importance of harmonized regulatory standards and sustainable finance practices in mitigating crisis-induced vulnerabilities.
Downloads
References
Alvi, J., Arif, I., & Nizam, K. (2024). Advancing financial resilience: A systematic review of default prediction models and future directions in credit risk management. Heliyon, 10(21).
Anani, M., & Owusu, F. (2023). Regulatory capital and bank risk-resilience amid the Covid-19 pandemic: How are the Basel reforms faring?. Finance Research Letters, 52, 103591.
Ansari, M. S., Akhtar, S., Khan, A., & Shamshad, M. (2022). Consequence of financial crisis on liquidity and profitability of commercial banks in India: An empirical study. Studies in Economics and Business Relations, 3(2), 36-50.
Cao, Y., & Chou, J. Y. (2022). Bank resilience over the COVID-19 crisis: The role of regulatory capital. Finance Research Letters, 48, 102891.
Chiaramonte, L., Dreassi, A., Girardone, C., & Piserà, S. (2022). Do ESG strategies enhance bank stability during financial turmoil? Evidence from Europe. The European Journal of Finance, 28(12), 1173-1211.
Dewi, A. K. (2025). Sustainable finance in Islamic banking: A systematic review in the context of economic instability. Jurnal Ilmiah Manajemen Kesatuan, 13(4), 2395-2404.
El-Chaarani, H., Ismail, T. H., El-Abiad, Z., & El-Deeb, M. S. (2024). The impact of COVID-19 on financial structure and performance of Islamic banks: a comparative study with conventional banks in the GCC countries. Journal of Economic and Administrative Sciences, 40(4), 769-797.
Farah, A. A., Mohamed, M. A., Ali Farah, M., Yusuf, I. A., & Abdulle, M. S. (2025). Impact of Islamic banking on economic growth: a systematic review of SCOPUS-indexed studies (2009–2024). Cogent Economics & Finance, 13(1), 2490819.
Flögel, F., & Hejnová, T. (2024). Regional banks and economic resilience: the impact of the global financial crisis and COVID-19 on countries with decentralised and centralised banking systems. Finance and Space, 1(1), 460-488.
Foroughi, Z., Ebrahimi, P., Aryankhesal, A., Maleki, M., & Yazdani, S. (2022). Hospitals during economic crisis: a systematic review based on resilience system capacities framework. BMC Health Services Research, 22(1), 977.
Hun, Y., Bashir, A., & Raza, M. (2024). The impact of FinTech partnerships on banking digitalization and post-crisis economic resilience. Journal of Business and Economic Options, 7(3), 1-9.
Lee, S., Song, H. J., Yoon, H., Kim, C. S., & Ham, S. (2024). Resilience of the hospitality industry during crises: A comparison between the 2008 financial crisis and COVID-19. International Journal of Hospitality Management, 116, 103622.
Mateev, M., Sahyouni, A., & Al Masaeid, T. (2024). Bank performance before and during the COVID-19 crisis: Does efficiency play a role?. Review of Managerial Science, 18(1), 29-82.
Nasim, A., Nasir, M. A., & Downing, G. (2025). Determinants of bank efficiency in developed (G7) and developing (E7) countries: role of regulatory and economic environment: A. Nasim et al. Review of Quantitative Finance and Accounting, 65(1), 257-294.
Omar, B., Avdukic, A., & Khan, A. F. (2025). Impact of Islamic finance and Islamic banking on financial stability: a systematic literature review. Journal of Islamic Business and Management (JIBM), 15(01).
Omri, M. B. (2022). Understanding the relationship between liquidity and banking financial stability in Islamic and conventional banks. Journal of Business and Economic Options, 5(1), 39-47.
Papadimitriou, T., Gogas, P., & Agrapetidou, A. (2022). The resilience of the US banking system. International Journal of Finance & Economics, 27(3), 2819-2835.
Quaglia, L., & Verdun, A. (2023). The European Central Bank, the Single Supervisory Mechanism and the COVID-19 related economic crisis: a neofunctionalist analysis. Journal of European Integration, 45(1), 139-156.
Rafique, A., Ali, A., & Audi, M. (2025). Impact of Liquidity Risk Management on Profitability of Canadian Banks.
Tahir, M. S., & Richards, D. W. (2025). A systematic literature review of financial resilience: antecedents, consequences and future research agenda. Journal of Financial Regulation and Compliance.
Thiemann, M. (2024). Taming the cycles of finance?: central banks and the macro-prudential shift in financial regulation. Cambridge University Press.
Velliscig, G., Floreani, J., & Polato, M. (2022). Capital and asset quality implications for bank resilience and performance in the light of NPLs’ regulation: a focus on the Texas ratio. Journal of Banking Regulation, 24(1), 66.
Viktorija, S. (2025). A Comparative Study of Commercial Banks’ Resilience Across Crisis Timeframe: Case of Lithuania. Economics and Culture, 22(2), 32-41.
Wanke, P., Skully, M., Wijesiri, M., Walker, T., & Dalla Pellegrina, L. (2022). Does ownership structure affect firm performance? Evidence of Indian bank efficiency before and after the Global Financial Crisis. International transactions in operational research, 29(3), 1842-1867.
Zamil, M. H., & Mojumder, M. U. (2022). Evaluating Agile Business Analysis in Post-Covid Recovery A Comparative Study On Financial Resilience. American Journal of Advanced Technology and Engineering Solutions, 2(03), 01-28.
