Simulation of the Effect of Financial Regulation on the Stability of Financial Systems and Financial Institution Behavior

2018 ◽  
pp. 341-353 ◽  
Author(s):  
Takamasa Kikuchi ◽  
Masaaki Kunigami ◽  
Takashi Yamada ◽  
Hiroshi Takahashi ◽  
Takao Terano
Keyword(s):  
Financial Regulation ◽  
Financial Institution ◽  
Financial Systems ◽  
The Stability

scholarly journals The Key Role of the Financial Regulation in FinTech Ecosystem: A Model Validation

2021 ◽  
Vol 39 (12) ◽  
Author(s):  
Mohammad Fahmi Arkanuddin ◽  
Ferdinand D. Saragih ◽  
Bernardus Yuliarto Nugroho
Keyword(s):  
Credit Risk ◽  
Consumer Protection ◽  
Financial Regulation ◽  
Financial Institution ◽  
Rapid Development ◽  
Big Data Analytics ◽  
Disruptive Innovation ◽  
Protection Agency ◽  
The Stability

The objective of this research is for describing the key role of financial (FinTech) regulation to manage the risks, keep-up the balance and stability of FinTech ecosystem from the highest impact of risks’ in this industry. FinTech lending has grown rapidly in recent years in many countries and becomes a promising business model in the future, because it is a disruptive innovation to today's financial and banking markets. The rapid development of FinTech lending due to the use of internet-based mobile application platforms, so that it is easily accessible by anyone and anywhere, it encourages an increase in lending to the customers, however credit risk (although absorbed by lenders or investors, still indirectly affects the platform operators), experienced an increase due to non performing loan or NPL. The increase in NPL is an important concern for FinTech lending industry stakeholders, and if it is not addressed it will disrupt the FinTech ecosystem, let alone cause systemic risk, it will be the toughest disturbance in the stability of the FinTech ecosystem, considering that the risk of FinTech lending has a significant influence on the FinTech ecosystem, so that if the level of risk increases, it affects the FinTech ecosystem, this condition requires the key role of financial (FinTech) regulation that can mitigate risk, because financial (FinTech) regulation has a very strong correlation or relationship, so that it can mitigate the risks faced. Another key role of financial (FinTech) regulation is to strengthen the FinTech ecosystem, with new elements needed by the industry and encourage the industry to develop the concept of ecosystem-based risk management in this industry, because it is believed that this concept can mitigate risk as well. Fundamental risks in the FinTech lending industry include: (i) credit risk, (ii) operational risk and (iii) liquidity risk, meanwhile pandemic risk is a new element that is also being investigated, the results of the study show that pandemic risk has a positive correlation with start-up FinTech companies, this means that a pandemic still allows this industry to develop and grow. Financial (FinTech) regulation as a key role is supported by 2 (two) main rules, namely (i) regulatory and (ii) supervisory and 2 (two) complementary provisions to strengthen regulations related to IT process support, namely big data analytics, automation & robotics and FinTech consumer protection agency. The FinTech ecosystem also needs to be strengthened, with new elements needed to exist, such as credit insurance institutions that stand alone and are separated from traditional financial institution element and FinTech consumer protection agency.

Bankenwettbewerb und die Stabilität von Finanzsektoren

2021 ◽  
Vol 70 (1) ◽  
pp. 1-36
Author(s):  
Toni Richter
Keyword(s):  
Economic Policy ◽  
Precise Measurement ◽  
Policy Discourse ◽  
Competitive Effect ◽  
Too Big To Fail ◽  
Financial Systems ◽  
The Subject ◽  
State Of Research ◽  
The Stability ◽  
Elementary Basis

Abstract Since the financial crisis of 2008 and intensified during the corona crisis, the interdependence between the stability of the financial systems and the prevailing degree of competition (DC) has been the subject of scientific and economic policy discourse on fragmented markets and „too-big-to-fail“ banks. In theory and empiricism, two fundamentally contrary causal concepts are opposed, the elementary basis of which is the precise measurement of the DC: Competition-stability- versus Fragility-Hypothesis. Based on the recent state of research, it can be shown that alternative DC-Measurements consistently show significantly different competitive conditions and in consequence the evidence for or against a stability-enhancing competitive effect seems to be predetermined by the chosen DC-Measurement.

scholarly journals Research on Computer Modeling of Fractional Differential Equation Applied Mathematics

2021 ◽  
Vol 2083 (3) ◽  
pp. 032036
Author(s):  
Linlin Su
Keyword(s):  
Differential Equation ◽  
Time Series ◽  
Hopf Bifurcation ◽  
Equilibrium Solution ◽  
Applied Mathematics ◽  
Bifurcation Diagrams ◽  
Financial Systems ◽  
Fractional Differential ◽  
The Stability ◽  
Evolution Behavior

Abstract This paper qualitatively analyzes the stability of the equilibrium solution of a class of fractional chaotic financial systems and the conditions for the occurrence of Hopf bifurcation, and uses the Adams-Bashford-Melton predictive-correction finite difference method to pass the analysis Bifurcation diagrams, phase diagrams, and time series diagrams are used to simulate the complex evolution behavior of the system.

The GATS and Financial Regulation: Time to Clear-House?

2019 ◽  
Vol 19 (3) ◽  
pp. 379-401 ◽  
Author(s):  
George A. Papaconstantinou
Keyword(s):  
Financial Services ◽  
Financial Regulation ◽  
Global Financial Crisis ◽  
Trade Law ◽  
International Economic Law ◽  
The Stability ◽  
Domestic Regulation ◽  
First Time ◽  
The Eu

AbstractIn the aftermath of the 2008 global financial crisis, European Union regulators introduced the mechanism of ‘third-country equivalence’ for non-European financial institutions to access the EU internal market. This article evaluates for the first time the GATS-consistency of the European rules on third-country clearinghouses. Through this exercise, the article sheds light on the tension between financial regulation and WTO law, exploring how these two different disciplines can be reconciled. Building on the international economic law principles of non-discrimination and transparency, the analysis reveals that the European financial regulation could negatively impact the access of smaller countries to the EU market. The regulation in question is assessed under the GATS Article VI (Domestic Regulation), Article II (MFN), Article VII (Recognition), and the Annex on Financial Services prudential carve-out. The findings of the European case study indicate that the vast flexibility that trade law has delegated to national regulators possibly has adverse effects on the liberalization of financial services. The article concludes that if WTO Members do not derogate from their GATS obligations and commitments, the stability of the financial system would not be jeopardized, while the prospect of international integration would be increased.

Das European Shadow Financial Regulatory Committee: Ein Beitrag zur Regulierungskultur in Europa

2000 ◽  
Vol 1 (3) ◽  
pp. 319-335
Author(s):  
Harald A. Benink ◽  
Reinhard H. Schmidt
Keyword(s):  
United States ◽  
Financial Markets ◽  
Financial Regulation ◽  
The United States ◽  
Political Integration ◽  
The Us ◽  
The Stability ◽  
Financial Regulatory ◽  
Regulatory Committee ◽  
Shadow Financial Regulatory Committee

AbstractThe turbulence in the international financial markets in the 1980s inspired the idea that independent academics might be in a position to make a contribution to the improvement of regulation and thus ultimately also to the stability of the national financial sector in the United States. This led to the creation of the US “Shadow Financial Regulatory Committee“, a group of academics and other independent experts working in the field of financial regulation, which meets regularly and issues statements concerning conceptual as well as current issues in financial regulation. Two years ago, a similar shadow committee was founded in Europe. It is composed of members from 11 different countries. The special problems of financial regulation in Europe, as well as the special features of the European Shadow Financial Regulatory Committee (ESFRC), derive from the fact that despite the trend towards economic and political integration, Europe is still a collection of different nations with different institutional set-ups and political and economic traditions. In this paper, Harald Benink, chairman of the ESFRC, and Reinhard H. Schmidt, one of the two German members, describe the origin, the objectives and the functioning of the committee and the thrust of its recommendations.

Durability and Change in Financial Systems

2016 ◽  
Author(s):  
Richard Deeg ◽  
Elliot Posner
Keyword(s):  
Financial Market ◽  
Market Integration ◽  
Analytical Approach ◽  
Financial Regulation ◽  
Financial Integration ◽  
Historical Institutionalism ◽  
Financial Systems ◽  
Financial Market Integration ◽  
European Financial Integration

Historical institutionalism features extensively in the study of banking and financial regulation in Europe. This chapter reviews scholarship that explicitly, implicitly or inadvertently draws heavily on that tradition’s central tenets. The authors find that historical institutionalism can help explain the emergence, persistence, and evolution of distinct kinds of financial systems in Europe, as well as the pattern and effects of European financial integration. However, they find there is considerable untapped potential for historical institutionalism as an analytical approach for studying European financial market integration and regulation.

scholarly journals Theoretical and Empirical Research on The Analysis and The Assessment of The Stability of National Financial Systems. Romania’s Experience

2017 ◽  
Vol 23 (2) ◽  
pp. 124-129
Author(s):  
Leontin Stanciu ◽  
Liliana-Mioara Stanciu
Keyword(s):  
Sustainable Development ◽  
Empirical Research ◽  
National Economy ◽  
Financial Stability ◽  
Central Banks ◽  
The Other ◽  
Financial Systems ◽  
The Sustainable Development ◽  
Regulatory Authorities ◽  
The Stability

Abstract The stability of the financial systems is an objective necessity for the sustainable development of each national economy. Within this framework, ensuring financial stability is a priority for the central banks and for the other macro-prudential supervisory and regulatory authorities. In order to ensure the stability and "the health" of the national financial system, the competent authorities should analyze, assess and adopt optimal and timely measures to eliminate potential imbalances. These and other aspects are the main objectives of our research.

scholarly journals OTORITAS JASA KEUANGAN: SISTEM BARU DALAM PENGATURAN DAN PENGAWASAN SEKTOR JASA KEUANGAN

2012 ◽  
Vol 12 (3) ◽  
Author(s):  
HestyD Lestari
Keyword(s):  
Key Words ◽  
Capital Market ◽  
Financial Services ◽  
Pension Fund ◽  
Financial Institution ◽  
Financial System ◽  
Financial Services Industry ◽  
Banking Supervision ◽  
Market Insurance ◽  
The Stability

A new institution has been created by Act Number 21 of 2011 regarding the Financial Services Authority (Otoritas Jasa Keuangan/OJK). The new institution, also named OJK, has the function of conducting an integrated regulatory and supervisory sistem for the whole activities in the financial services industry. It takes over the function of the Bank of Indonesia in banking supervision and the function of the Capital Market and Financial Institution Supervisory Agency in supervising capital market, insurance, pension fund, and other financial services. OJK is responsible for maintaining the stability of the Indonesian financial system. Key words: FSA, financial system, banking supervision

scholarly journals Need of Legal, Administrative and Judicial Reforms in Pakistan to Combat Money Laundering and Terrorism Financing: An Analytical Study

2020 ◽  
Vol 3 (1) ◽  
pp. 91-100
Author(s):  
Khalil Haider ◽  
Naureen Akhtar
Keyword(s):  
Money Laundering ◽  
Analytical Study ◽  
Economic Prosperity ◽  
Financial Systems ◽  
Global Problems ◽  
Terrorism Financing ◽  
Financing Of Terrorism ◽  
The Stability ◽  
Combat Money Laundering

The main objective of this article is to discuss, review and analyze money laundering and terrorism financing simultaneously as both share common incentives, line of action and executing strategies. Money laundering and financing of terrorism are global problems which not only threaten security but also compromise the stability, transparency and efficiency of financial systems, thus undermining economic prosperity and peace of a country. This research defines and expounds the terms ‘money laundering’ and ‘terrorism financing’, and common strategies to execute both of these criminal activities. It also analyzes the current predicament of legal, administrative and judicial skeleton of Pakistan which makes the country more vulnerable to money laundering and terrorism financing. Furthermore, it would also provide its readers with the most needed reforms in the all-over blueprint of the country, and imperative amendments to make the Anti-money Laundering Act, 2010 and the Anti-terrorism Act, 1997 more efficacious to encounter money laundering and terrorism financing in one fell swoop.

scholarly journals Retrospectives: Regulating Banks versus Managing Liquidity: Jeremy Bentham and Henry Thornton in 1802

2020 ◽  
Vol 34 (4) ◽  
pp. 195-209
Author(s):  
John Berdell ◽  
Thomas Mondschean
Keyword(s):  
Systemic Risk ◽  
Financial Crises ◽  
Financial System ◽  
Jeremy Bentham ◽  
Credit System ◽  
Lender Of Last Resort ◽  
Financial Systems ◽  
Bank Regulations ◽  
Systemic Crisis ◽  
The Stability

At nearly the same moment, Jeremy Bentham and Henry Thornton adopted diametrically opposed approaches to stabilizing the financial system. Henry Thornton eloquently defended the Bank of England’s actions as the lender of last resort and saw its discretionary management of liquidity as the key stabilizer of the credit system. In contrast, Jeremy Bentham advocated the imposition of strict bank regulations and examinations, without which, he predicted, Britain would soon experience a systemic crisis—which he called “universal bankruptcy.” There are strong parallels but also dramatic differences with our recent attempts to reduce systemic risk within financial systems. The Basel III bank regulatory framework effectively intertwines Bentham’s and Thornton’s diametrically opposed approaches to stabilizing banks. Yet Bentham’s and Thornton’s concerns regarding the stability of the wider financial system remain alive today due to financial innovation and the politics of responding to financial crises.

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