Assessment of Financial Stability in Emerging Economies: Evidence from Nigeria

2017 ◽  
pp. 191-207 ◽  
Author(s):  
Abiola A. Babajide ◽  
Felicia O. Olokoyo
Keyword(s):  
Emerging Economies ◽  
Financial Stability

The inter-relationships among liquidity creation, bank capital and credit risk: evidence from emerging Asia–Pacific economies

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tu D.Q. Le ◽  
Xuan T.T. Pham
Keyword(s):  
Credit Risk ◽  
Emerging Economies ◽  
Financial Stability ◽  
Generalized Method Of Moments ◽  
Negative Relationship ◽  
Capital Requirements ◽  
Asia Pacific ◽  
Bank Capital ◽  
Content Type ◽  
Small Banks

PurposeThis study investigates the inter-relationships among liquidity creation, bank capital and credit risk in selected emerging economies between 2012 and 2016.Design/methodology/approachA three-step procedure as proposed by Berger and Bouwman (2009) is used to measure liquidity creation. Thereafter, a simultaneous equations model with the generalized method of moments (GMM) estimator is used to examine the links between liquidity creation, bank capital and credit risk.FindingsThe findings indicate that bank capital and credit risk affect each other positively after controlling for liquidity creation. Also, the findings show a negative impact of credit risk on liquidity creation while our findings do not find any evidence to confirm the reverse relationship between them. Furthermore, the findings demonstrate a two-way negative relationship between liquidity creation and bank capital in these emerging economies. Finally, the results indicate a positive relationship between capital and credit risk, especially in the case of small banks in the sample.Practical implicationsThe findings suggest that the trade-off between the benefits of financial stability induced by tightening capital requirements and those of improved liquidity creation has crucial implications for policymakers and bank regulators in making the banking system more resilient. A positive impact of capital on credit risk emphasizes that the authorities in selected emerging economies should put more attention on small banks to ensure their exposures under target control.Originality/valueThis is the first study that examines the dynamic interrelationships among liquidity creation, bank capital and credit risk in the Asia–Pacific region.

A Fantastic Rain of Gold: European Migrants' Remittances and Balance of Payments Adjustment During the Gold Standard Period

2009 ◽  
Vol 69 (4) ◽  
pp. 951-985 ◽  
Author(s):  
Rui Esteves ◽  
David Khoudour-Castéras
Keyword(s):  
Emerging Economies ◽  
Financial Stability ◽  
Balance Of Payments ◽  
Optimum Currency Area ◽  
Adjustment Mechanism ◽  
Currency Area ◽  
Mountain Agriculture ◽  
Optimum Currency ◽  
Opening Up ◽  
Related Pattern

While the pre-1914 mass migrations have been widely studied, the related pattern of emigrants' remittances is still largely untouched. This article aims at filling this gap by analyzing the contribution of remittances to financial stability. In the optimum currency area theory, labor mobility can ease the adjustment mechanism for countries under fixed exchange rate regimes. We confirm this claim by showing that emigrants' remittances reduced the incidence of financial disturbances among a sample of emerging economies characterized by substantial emigration. This result underscores the benefits for emerging economies from opening up to international factor flows, despite the associated financial turbulence.“A fantastic rain of gold.” Thus observers in the decades between the nineteenth and the twentieth century described the influx of capital toward Italy generated by emigration remittances. These flows were spread piecemeal across the countryside of the entire peninsula, especially into the poorest regions of marginal mountain agriculture.1

Testing the interrelatedness of banking stability measures

2014 ◽  
Vol 6 (1) ◽  
pp. 25-45 ◽  
Author(s):  
Vighneswara Swamy
Keyword(s):  
Emerging Economies ◽  
Financial Stability ◽  
Banking System ◽  
Financial System ◽  
Capital Adequacy ◽  
System Stability ◽  
Var Model ◽  
Content Type ◽  
Banking Stability ◽  
Asset Quality

Purpose – This study aims to investigate the inter-relatedness and the dynamics of banking stability measures and offers answers for some of the related issues such as does financial stability require the soundness of banking institutions, the stability of markets, the absence of turbulence and low volatility? and to what extent the soundness of banking sector in the case of emerging economies can help financial system stability. Design/methodology/approach – This study investigates banking stability by structuring a recursive micro panel vector auto regressive (VAR) model and corroborates the significance of the interrelatedness of the bank-specific variables such as liquidity, asset quality, capital adequacy and profitability by employing a robust panel data drawn from 56 leading banks for a period of 12 years. Findings – A significant contribution of this study is in establishing that liquidity in the banking-dominated financial system is reciprocally related with asset quality, capital adequacy, and profitability of the banking system and in effectively forecasting banking stability employing micro panel recursive VAR model. Research limitations/implications – The study could be further broadened by employing a macro and structural VAR modelling to forecast banking stability. Practical implications – This paper is one among the evolving body of literature that underscores the significant relationship between banking system resilience and financial stability in the context of emerging economies dominated with banking systems. Further, the forecast model is able to capture the dynamics of banking stability with greater and appreciable accuracy. Originality/value – The uniqueness of the study is in modelling banking stability measures in the context of banking-dominated emerging economy financial systems by employing micro panel recursive VAR model by deriving data from 58 leading banks for the period of 12 years from 1996 to 2009 and in offering insights in understanding financial stability with comprehensive literature review.

scholarly journals Financial Stability in Emerging Economies in the Near Future

2016 ◽  
Vol 2 (1) ◽  
pp. 120-124
Author(s):  
Fernando Cardim de Carvalho
Keyword(s):  
International Economic ◽  
Financial Crisis ◽  
Emerging Economies ◽  
Financial Stability ◽  
Economic Stability ◽  
Private Debt ◽  
Near Future

Financial Stability in Emerging Economies in the Near Future Emerging economies have gone through a reversal of fate lately. In the aftermath of the financial crisis of 2007/8, the group was considered to be the next frontier of expansion of world capitalism. Nowadays, most of the countries in the group are mired in difficulties and are seen as a threat to international economic stability rather than an engine of growth. In this comment, we explore some key fragilities that are recognized in emerging economies, particularly those related to the accumulation of private debt. The perspectives for the near future are proposed to illustrate Keynes’s concept of true uncertainty and encourage the search for liquidity by wealth-holders worldwide.

scholarly journals G20 Governance for an Inclusive Liberal Order

2019 ◽  
Vol 01 (01) ◽  
pp. 1850001
Author(s):  
John Kirton
Keyword(s):  
Free Trade ◽  
Emerging Economies ◽  
Financial Crises ◽  
Financial Stability ◽  
Prime Minister ◽  
The Core ◽  
The Us ◽  
The World ◽  
Globalized World ◽  
Real Test

The Group of Twenty (G20) was created first at the ministerial level and later upgraded to the summit level as a response to the global financial crises that first erupted from Asia in 1997, and then from the US in 2008 and Europe in 2010. These crises called into question the core principles and practices of the liberal order based on the economic, social and political openness that had been progressively internationally institutionalized since 1944. The G20 was designed with a dual distinctive foundational mission to promote financial stability and to make globalization work for all. It combined all established and emerging economies with high capability and connectivity, to operate as equals, to protect all within their borders and those beyond. It increasingly did so since its first summit in 2008. Its performance spiked at the summit in Hangzhou, China, on 3–4 September, 2016, and again at Hamburg, Germany, on 7–8 July, 2017. The latter coped with the new populist, protectionist US president and UK prime minister, whose countries had hosted the first three summits. G20-supported initiatives and agreements for full free trade have advanced since the first summit in 2008. No other center of global summit governance has emerged to guide an increasingly globalized world. The G20 has also steadily become an effective governor of global security. As the forces that propelled this rise will intensify, the Argentinian-hosted G20 summit on 30 November–1 December, 2018, promises to proceed along this path. It is guided by a country again afflicted by a financial crisis but now dedicated to following the core liberal order and making it work better for all. The real test will arrive in 2019, when Japan as host must co-operate with Korea and China, its neighbouring Asian powers and previous G20 hosts, to provide a new center of inclusive, progressive, liberal global governance that the world badly needs.

scholarly journals Capital Flows and Financial Stability in Emerging Economies

2017 ◽  
Author(s):  
Christopher (Kit) F. Baum ◽  
Madhavi Pundit ◽  
Arief Ramayandi
Keyword(s):  
Emerging Economies ◽  
Capital Flows ◽  
Financial Stability

scholarly journals The future of global financial stability

European View ◽  
2010 ◽  
Vol 9 (1) ◽  
pp. 23-27
Author(s):  
Mario Draghi
Keyword(s):  
Emerging Economies ◽  
Financial Stability ◽  
Current Crisis ◽  
High Quality ◽  
Global System ◽  
Quality Regulation ◽  
Current Economic Crisis ◽  
Financial Governance ◽  
Fundamental Shift ◽  
Global Financial System

The current economic crisis has revealed the shortcomings of the current global financial system, and it is clear that there must be a fundamental shift in the approaches to global financial governance. The seeds for a more comprehensive global system have been sown, as evidenced by the increasing amount of international dialogue, not only amongst the global economic giants but also amongst emerging economies. However, there is a need to develop mechanisms for high-quality regulation rather than falling into the trap of reacting to the current crisis.

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