scholarly journals Constructing banking networks under decreasing costs of link formation

2021 ◽  
Author(s):  
Dietmar Maringer ◽  
Ben Craig ◽  
Sandra Paterlini
Keyword(s):  
Real World ◽  
Optimization Problem ◽  
Balance Sheet ◽  
Financial Networks ◽  
Fixed Costs ◽  
Balance Sheets ◽  
Search Heuristics ◽  
Banking Networks ◽  
Link Formation ◽  
Do So

AbstractThe structure of networks plays a central role in the behavior of financial systems and their response to policy. Real-world networks, however, are rarely directly observable: banks’ assets and liabilities are typically known, but not who is lending how much and to whom. This paper adds to the existing literature in two ways. First, it shows how to simulate realistic networks that are based on balance-sheet information. To do so, we introduce a model where links cause fixed-costs, independent of contract size; but the costs per link decrease the more connected a bank is (scale economies). Second, to approach the optimization problem, we develop a new algorithm inspired by the transportation planning literature and research in stochastic search heuristics. Computational experiments find that the resulting networks are not only consistent with the balance sheets, but also resemble real-world financial networks in their density (which is sparse but not minimally dense) and in their core-periphery and disassortative structure.

scholarly journals HETEROGENEITY, CORRELATIONS AND FINANCIAL CONTAGION

2012 ◽  
Vol 15 (supp02) ◽  
pp. 1250058 ◽  
Author(s):  
FABIO CACCIOLI ◽  
THOMAS A. CATANACH ◽  
J. DOYNE FARMER
Keyword(s):  
Balance Sheet ◽  
Capital Requirements ◽  
Financial Networks ◽  
Financial Contagion ◽  
Power Law Distribution ◽  
Balance Sheets ◽  
Banking Networks ◽  
High Connectivity ◽  
Degree Correlations ◽  
The Stability

We consider a model of contagion in financial networks recently introduced in Gai, P. and Kapadia, S. [Contagion in financial networks, Proc. R. Soc. A466(2120) (2010) 2401–2423], and we characterize the effect of a few features empirically observed in real networks on the stability of the system. Notably, we consider the effect of heterogeneous degree distributions, heterogeneous balance sheet size and degree correlations between banks. We study the probability of contagion conditional on the failure of a random bank, the most connected bank and the biggest bank, and we consider the effect of targeted policies aimed at increasing the capital requirements of a few banks with high connectivity or big balance sheets. Networks with heterogeneous degree distributions are shown to be more resilient to contagion triggered by the failure of a random bank, but more fragile with respect to contagion triggered by the failure of highly connected nodes. A power law distribution of balance sheet size is shown to induce an inefficient diversification that makes the system more prone to contagion events. A targeted policy aimed at reinforcing the stability of the biggest banks is shown to improve the stability of the system in the regime of high average degree. Finally, disassortative mixing, such as that observed in real banking networks, is shown to enhance the stability of the system.

BANKING NETWORKS AND LEVERAGE DEPENDENCE IN EMERGING COUNTRIES

2015 ◽  
Vol 18 (07n08) ◽  
pp. 1550022 ◽  
Author(s):  
DIEGO APARICIO ◽  
DANIEL FRAIMAN
Keyword(s):  
Balance Sheet ◽  
Banking System ◽  
Emerging Countries ◽  
Financial Networks ◽  
Leverage Ratio ◽  
Network Interaction ◽  
Banking Networks ◽  
Accounting Rules ◽  
Dependence Level ◽  
Credit Shocks

We construct banking networks using bank-level balance sheet data from 2005 to 2010 from five emerging countries: Argentina, Brazil, Mexico, South Africa, and Taiwan. The network interaction is based on the leverage ratio dependence between each pair of banks within a same country. Despite leverage and accounting rules heterogeneity, the results are robust across countries. The leverage diversity produces financial networks with a modular structure characterized by one large bank community, some small ones, and isolated banks. However, these groups of banks merge together creating a financial network topology that converges to a unique large cluster at a relatively low leverage dependence level. Finally, we simulate the banking system through a model of corporate and interbank loans with credit shocks, where links between banks arise due to insufficient liquidity. The model yields leverage-based networks that are similar to the empirical ones. A model prediction for banks’ growth is presented and tested in the data.

Jones Enterprises Real Estate Investment Trust: Comparing U.S. and Canadian Acquisition Accounting, Balance Sheet and Security Commission Reporting, and Initial Public Offering Location

2018 ◽  
Vol 33 (2) ◽  
pp. 35-42
Author(s):  
Natalie Tatiana Churyk ◽  
Alan Reinstein ◽  
Lance Smith
Keyword(s):  
Real Estate ◽  
Initial Public Offering ◽  
Financial Reporting ◽  
Balance Sheet ◽  
Accounting Students ◽  
Real Estate Investment ◽  
Generally Accepted Accounting Principles ◽  
Balance Sheets ◽  
Advantages And Disadvantages ◽  
Public Offering

ABSTRACT Based on a Big 4 real estate audit partner's client, this case introduces graduate research and advanced financial accounting students to acquisition accounting under U.S. generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRS), provides a perspective on real estate investment trusts (REITs), and requires analyzing a U.S. versus Canadian (Ontario) initial public offering (IPO). Students list U.S. and Canadian advantages and disadvantages of REITs, record a portfolio purchase, prepare U.S. GAAP and IFRS balance sheets in order to grasp major REIT reporting differences, contrast the key provisions between U.S. and Canadian (Ontario) securities commissions' IPO reporting, and consider ongoing securities commissions' reporting options. Finally, students will recommend whether the IPO should be issued in the U.S. or Canada. Completing the case helps students: (1) grasp U.S. GAAP and IFRS acquisition accounting methods and different REIT presentations; and (2) recognize that the country selected for the IPO depends upon the issuer's circumstances and preferences.

scholarly journals Camp stability predicts patterns of hunter–gatherer cooperation

2016 ◽  
Vol 3 (7) ◽  
pp. 160131 ◽  
Author(s):  
Daniel Smith ◽  
Mark Dyble ◽  
James Thompson ◽  
Katie Major ◽  
Abigail E. Page ◽  
...  
Keyword(s):  
Real World ◽  
Ecological Context ◽  
Hunter Gatherers ◽  
Ecological Conditions ◽  
Resource Transfers ◽  
Experimental Games ◽  
Using Data ◽  
Over Time ◽  
Do So

Humans regularly cooperate with non-kin, which has been theorized to require reciprocity between repeatedly interacting and trusting individuals. However, the role of repeated interactions has not previously been demonstrated in explaining real-world patterns of hunter–gatherer cooperation. Here we explore cooperation among the Agta, a population of Filipino hunter–gatherers, using data from both actual resource transfers and two experimental games across multiple camps. Patterns of cooperation vary greatly between camps and depend on socio-ecological context. Stable camps (with fewer changes in membership over time) were associated with greater reciprocal sharing, indicating that an increased likelihood of future interactions facilitates reciprocity. This is the first study reporting an association between reciprocal cooperation and hunter–gatherer band stability. Under conditions of low camp stability individuals still acquire resources from others, but do so via demand sharing (taking from others), rather than based on reciprocal considerations. Hunter–gatherer cooperation may either be characterized as reciprocity or demand sharing depending on socio-ecological conditions.

Solving a Two-stage Supply Chain Network Design Problem with Fixed Costs by a Hybrid Genetic Algorithm

2021 ◽  
Author(s):  
Ovidiu Cosma ◽  
Petrică C Pop ◽  
Cosmin Sabo
Keyword(s):  
Genetic Algorithm ◽  
Supply Chain ◽  
Network Design ◽  
Design Problem ◽  
Optimization Problem ◽  
Hybrid Genetic Algorithm ◽  
Network Design Problem ◽  
Supply Chain Network Design ◽  
Supply Chain Network ◽  
Fixed Costs

Abstract In this paper we investigate a particular two-stage supply chain network design problem with fixed costs. In order to solve this complex optimization problem, we propose an efficient hybrid algorithm, which was obtained by incorporating a linear programming optimization problem within the framework of a genetic algorithm. In addition, we integrated within our proposed algorithm a powerful local search procedure able to perform a fine tuning of the global search. We evaluate our proposed solution approach on a set of large size instances. The achieved computational results prove the efficiency of our hybrid genetic algorithm in providing high-quality solutions within reasonable running-times and its superiority against other existing methods from the literature.

Critical Perspectives to Non-performing Assets of Indian Banks, Shrinking Balance Sheet, Challenges and Way Ahead

2021 ◽  
pp. 231971452110402
Author(s):  
Pramahender
Keyword(s):  
Banking Sector ◽  
Balance Sheet ◽  
High Rate ◽  
Balance Sheets ◽  
Coverage Ratio ◽  
Public Sector Banks ◽  
Bad Loans ◽  
Bankruptcy Code ◽  
Indian Banks ◽  
Debt Recovery

Indian banking sector is facing the problem of rising bad loans as gross non-performing assets (GNPA) of Indian banks is on continuous rise. The present study is an attempt to analyse rising bad loans scenario of Indian banks, various factors that contributes to non-performing assets (NPA), along with the present state of Indian banks. This study found that poor recovery measures, lack of proper credit and risk management system at bank level, wilful default by borrowers, lack of stringent regulation, poor level of corporate governance and misuse of funds by borrowers are the key factors behind the rising level of bad loans of Indian banks. It was found that public sector banks (PSB) are suffering the most from rising level of NPA, high rate of NPA of banks have adverse impact on banks’ balance sheets, their assets quality, increased provisioning coverage ratio of banks and low return on assets. Although various concerned stakeholders have taken numerous measures to curb the situation, such as recapitalization of PSB, construction of assets reconstruction companies (ARC), Debt Recovery Tribunals for speedy recovery of bad loans and enactment of insolvency and bankruptcy code (IBC),still there is much more to do, and have a huge scope to bring reforms in banking sector, especially in PSB of India.

The Rationality of Compiling a Forest Resource Balance Sheet

2021 ◽  
Vol 71 (4) ◽  
pp. 309-321
Author(s):  
Lijun Jin ◽  
Meng Lin ◽  
Guoshuang Tian
Keyword(s):  
Balance Sheet ◽  
Forest Products ◽  
Theory And Practice ◽  
Practical Significance ◽  
Accounting System ◽  
Forest Resource ◽  
Balance Sheets ◽  
Service Value ◽  
Supporting Effect ◽  
Resource Accounting

Abstract The existing forest resource accounting system is limited to the valuation of wood and forest products; the service value of the forest resource ecosystem is not yet included. This study adopts an empirical approach to studying the rationality and influencing factors of compiling a forest resource balance sheet (FRBS). An FRBS can systematically reflect the contribution of forest resources to the economy, ecology, and society in terms of both physical quantity and value quantity. A questionnaire survey was used to collect the data. We found that the determination and measurement of forest resource assets and liabilities and the calculation of the service value of the ecosystem had a supporting effect on the rationality of compiling an FRBS. This study expands the field and scope of forest resource accounting, facilitates the compilation of natural resources and government balance sheets, and presents the practical significance for the theory and practice behind the development of an FRBS.

scholarly journals Twenty-one years without monetary correction in Brazil: impacts on the comparability of the accounting information of siderurgical and metallurgical companies

2018 ◽  
Vol 29 (78) ◽  
pp. 355-374
Author(s):  
Wellington Rodrigues Silva Souza ◽  
Marcos Peters ◽  
Aldy Fernandes da Silva ◽  
Maria Thereza Pompa Antunes
Keyword(s):  
Balance Sheet ◽  
Financial Statements ◽  
Financial Accounting ◽  
Net Income ◽  
Negative Effects ◽  
Statistical Parameters ◽  
Return On Assets ◽  
Balance Sheets ◽  
Return On Equity ◽  
Accounting Recognition

Abstract The purpose of this study was to empirically verify the existence or not of a distortion in the comparability of information when inflationary effects are omitted from financial statements. Although inflation has been under control in Brazil since the Plano Real, with indices well below those recorded in the 1980s and 1990s, discussing the need for accounting recognition of the effects of inflation remains an extremely relevant and pertinent issue in light of the proposal of accounting to produce faithful information that closely reflects the economic reality in which organizations operate. The results of the research show that financial accounting has been directly affected by the omission of inflationary effects in financial statements, drawing attention to the negative effects this has caused on the quality of the information produced. In order to operationalize the research, the Balance Sheet Monetary Correction (BSMC) was applied to the balance sheets of Brazilian companies from the siderurgical and metallurgical sector listed on the BM&FBOVESPA in the period from 1996 to 2016. Based on the variables net income, return on equity (ROE), and return on assets (ROA), and two conceptual axes of comparability (between entities and between periods), the statistical parameters were developed and the hypotheses were defined, which were tested using the Student t parametric test. This article shows the damage caused to the decision-making process of the external users for whom financial statements are intended when these are prepared neglecting the effects of inflation. This is verifiable through the analyses of the results obtained, including the observation of significant distortions between the means of the corrected indicators and the means of the historical indicators, such as in the case of net income in 2001, 2002, 2012, 2013, 2014, and 2016 (33.98%, 91.92%, -65.54%, -30.01%, -53.59%, and 26.30% variation, respectively), of ROE (-67.16%, -61.43%, -53.06%, -63.46%, -133.81%, and 65.00% variations in 2008, 2009, 2010, 2011, 2014, and 2015, respectively), and of ROA (-26,70%, -41.14%, -33,34%, -43,49%, 98,83%, and -413,68% in 2005, 2009, 2010, 2011, 2012, and 2014, respectively).

scholarly journals Structural Transformation, Deep Downturns, and Government Policy

2019 ◽  
pp. 34-44
Author(s):  
Joseph E. Stiglitz
Keyword(s):  
Government Policy ◽  
Service Sector ◽  
Balance Sheet ◽  
Structural Transformations ◽  
Government Policies ◽  
Balance Sheets ◽  
The Great Depression ◽  
Balance Sheet Effects ◽  
Limited Efficacy ◽  
Economic Transformations

Most recessions are a result of some shock to the economic system, typically amplified by financial accelerators, and leading to large, persistent balance sheet effects on households and firms. Over time, however, the balance sheets get restored. Even banks recover. But episodically, the ‘shock’ is deeper. It is structural. Among advanced countries, such large economic transformations include the movement from agriculture to manufacturing (completed in the twentieth century), and the more recent movement from manufacturing to the service sector. The associated downturns are longer lasting. The usual tools for restoring growth, particularly monetary policy, are of only limited efficacy. Policies have to be designed to facilitate such transformations: markets on their own typically do not do well. This chapter explains why such transformations are associated with persistently high unemployment, and what kinds of government policies are needed. It looks at the lessons of the Great Depression both for the advanced countries and the developing countries today as they go through their structural transformations.

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