scholarly journals Ethiopia

2020 ◽  
pp. 327-348
Author(s):  
Toni Weis
Keyword(s):  
Banking Sector ◽  
Basel Ii ◽  
International Standards ◽  
Financial Industry ◽  
Financial Repression ◽  
Asian Tiger ◽  
National Bank ◽  
Ethiopian Government ◽  
Domestic Banks ◽  
Regulatory Convergence

Ethiopia has chosen to diverge from international standards and not to adopt any aspect of Basel II or III. Ethiopia has the least internationalized banking sector among our case countries. Despite significant exposure to the Basel standards through donors and the IMF, banking supervisors at the National Bank of Ethiopia (NBE) have little use for Basel II and III. Ethiopia’s decision to diverge from the international Basel framework results from a strong preference for political control over the financial industry. The Ethiopian government seeks to emulate the example of East Asian ‘tiger’ economies, for whom financial repression was a key tool in the pursuit of rapid industrialization. However, as Ethiopia’s domestic banks struggle to sustain transformative growth, pressures for greater financial openness (and, by extension, for increased regulatory convergence) are beginning to mount.

scholarly journals The Current State and Prospects of Banking Innovations in the Context of Improving the Quality of Customer Service

2021 ◽  
Vol 4 (519) ◽  
pp. 204-209
Author(s):  
V. Y. Volokhata ◽  
Keyword(s):  
Development Strategy ◽  
Customer Service ◽  
Banking Sector ◽  
New Technologies ◽  
Goods And Services ◽  
Current State ◽  
National Bank ◽  
Domestic Banks ◽  
Effective Development

In the context of globalization of the unstable situation in the financial market, the coronavirus pandemic, strengthened interbank competition, lack of financial resources and increasing their value, raising standards by the National Bank of Ukraine, it is imperative to improve the banking business management system by introducing innovations in the form of the use of new technologies that are adequate in view of development strategies and new banking products. That is why innovative development becomes the driving force of the efficiency of the banking sector’s activity. The article is aimed at evaluating the current state of innovative banking technologies and prospects for their development in Ukraine in the context of improving the quality of customer service. Priority directions of innovations for effective development of banking institutions and ways of their solution are defined. When analyzing trends in innovative activities of domestic banks, the major ones are identified. The most popular innovative products in the domestic banking market are listed and their characterizations are provided. A detailed analysis of normative and legislative acts is carried out, determining the prospects for the development of innovations in the banking sector in the near future and by 2025, such as: FinTech development strategy 2025; electronic payment system at the National Bank (EFT) in the 23/7 regime; service of sharing of digital documents; procedure for using a digital handwritten signature; creation and use of QR codes for credit transfers and when paying for goods and services; change of remote identification and verification of bank customers, etc.

scholarly journals Corporate Social Responsibility and Profitability in the Banking Sector: The Case of Selected Private Banks in Ethiopia

2021 ◽  
Vol 11 (5) ◽  
Author(s):  
Yohannes Workeaferahu Elifneh ◽  
Jagadish Brahma Goulap ◽  
Dagmawi Solomon
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Banking Sector ◽  
Second Phase ◽  
Financial Industry ◽  
Independent Variables ◽  
Private Banks ◽  
National Bank ◽  
Corporate Social ◽  
The Relationship

In this article, we explore the relationship between corporate social responsibility and profitability with particular reference to Ethiopian financial industry. In line with this, the paper investigated the practice of corporate social responsibility and its impact on profitability in two private banks in Ethiopia. The study used two sampling phases. The first one is to sample out the two banks among the sixteen private banks operated in the country and the second phase is to select number of respondents within the selected banks. According to National Bank of Ethiopia, (NBE, 2020) annual report among the sixteen private commercial banks operated in the country, six of them were operated in the industry for more than 20 years and two banks namely Dashen and United banks were randomly selected for the study. The study used questionnaires as an instrument for data collection and the Cronbach alpha test was used to test the reliability of the instrument. Correlation analysis was carried out to identify the nature of strength and direction of the relationship between the independent variables (philanthropic, ethical, legal and economic responsibilities) and the dependent variables (profitability), regression analysis was also employed to determine the degree in which the dependent variable can be predicated or explained from the independent variables. The finding reveals that ethical, philanthropic, legal and economic responsibilities of CSR dimension have a positive and significant impact on profitability of the banks. Furthermore, the overall finding of the study suggested that CSR practice of banks has a significant impact on the level of their profitability. The study recommends that banks should improve their efforts exerted towards their CSR practice in order to enhance their profitability.

scholarly journals Pakistan

2020 ◽  
pp. 105-125
Author(s):  
Natalya Naqvi
Keyword(s):  
World Bank ◽  
Financial Services ◽  
Banking Sector ◽  
Basel Ii ◽  
International Standards ◽  
Basel Iii ◽  
The World Bank ◽  
The World ◽  
Over Time

Pakistan has the highest level of implementation among our case study countries. The impetus for converging on international standards has come from different actors over time. The adoption of Basel I adoption in the 1980s was driven by the World Bank and IMF. In the 1990s and early 2000s, the adoption of Basel II was driven first by politicians promoting the expansion of financial services, and then by banking sector regulators. Most recently, as banks have internationalized, they have championed the implementation of Basel III. Pakistan is one of the few cases where all three major actors—politicians, regulators, and major banks—are now aligned behind the implementation of the standards, leading to a high and ambitious level of implementation.

scholarly journals MODERN APPROACHES TO ASSESS BANKING RISKS

2021 ◽  
Author(s):  
Olena Zarutska ◽  
Ludmila Novikova ◽  
Tetiana Rudianova ◽  
Anna Kovalenko
Keyword(s):  
Risk Management ◽  
Financial Stability ◽  
Banking Sector ◽  
Banking System ◽  
Interest Rate Risk ◽  
Risk Modeling ◽  
Mathematical Methods ◽  
Risk Management Process ◽  
National Bank ◽  
Domestic Banks

The article examines modern approaches to the organization of the risk management process in Ukrainian banks. Requirements for modeling banking risks are growing in modern conditions. Recent financial and economic crises have demonstrated the devastating effects of unforeseen risks. The dynamic development of banking technologies and products requires a detailed analysis of the possible consequences of their implementation. Contingency losses require a probabilistic study. The buffer for the absorption of these losses is the capital of the bank. Losses from anticipated risks include the creation of reserves. The basis of modern approaches to risk modeling is the recommendations of the Basel Committee on Banking Supervision. The National Bank of Ukraine clearly regulates the requirements for the organization of risk management systems, but does not interfere in the construction of models. Banks develop internal policies, procedures and risk management models independently. In recent years, domestic banks have made significant progress in modeling and stress testing of risks. Each bank carries out a comprehensive assessment of at least the following significant types of risks: credit risk, liquidity risk, interest rate risk of the banking book, market risk, operational risk, compliance risk, and other significant types of risks. The issue of validation of risk assessment models by external experts is very relevant. Such specialists may be scientists who conduct research in the field of finance, banking and economic and mathematical methods of modeling complex systems. The interaction of scientists and practitioners has a double effect. Scholars are able to provide useful advice on the features of models and tools for assessing risks, systemic risks and financial stability of the banking sector at the macro level. Specific models of banks lay the foundations for current research topics of teachers and graduates. The authors of the article share the experience of model validation, analyze the current state of the banking system and the risk profile of domestic banks. Bank reporting data are considered in the dynamics and analyzed in terms of specific risks. The obtained conclusions are compared with the Risk Map of banks of the National Bank of Ukraine.

STUDY OF THE NBU’S DISCOUNT RATE ROLE IN THE MACROECONOMIC REGULATION OF THE UKRAINIAN ECONOMY

2017 ◽  
Author(s):  
Lidiia Bondarenko ◽  
Keyword(s):  
Monetary Policy ◽  
Discount Rate ◽  
Economic Activity ◽  
Banking Sector ◽  
Deterrent Effect ◽  
Economic Cycles ◽  
National Bank ◽  
Strategic Goals ◽  
Domestic Banks ◽  
The Impact

The article is devoted to the analysis of the essence, specifics of use and the main trends of the discount rate of the National Bank of Ukraine as an effective and one of the most important instruments of the state monetary policy. An assessment of the NBU’s discount rate dynamics over the past 15 years allows us to build a holistic picture of monetary regulation of economic cycles in Ukraine. Furthermore, particular attention is paid to the study of the Ukrainian economy’s specific conditions, which influenced the change in the discount rate, and of the macroeconomic goals, the achievement of which was planned by the NBU. Additionally, the article profoundly analyzes the relationship between the discount rate and the inflation intensity. It is observed that the discount rate increases with increasing inflation, as the higher discount rate has a deterrent effect on inflation processes. The article also shows how the level of the discount rate depends on the level of economic activity, which is characterized by GDP. Taking into consideration the specific economy conditions and strategic goals set during the NBU's monetary policy implementation, it becomes obvious that raising the discount rate suspends the economic activity of counterparties, while reducing it stimulates economic development. Based on statistical data of 2006-2020, the impact of the discount rate on the volume of attracted deposits and loans provided by the Ukrainian banking sector is confirmed. Moreover, it is found that in the period of economic instability, when the discount rate rises, the volume of loan and deposit portfolios of domestic banks is significantly reduced. To sum up, forecast judgments on the further dynamics of the NBU’s discount rate in the context of the COVID-19 pandemic are made and the validity of the current discount rate on compliance with the needs and state of the Ukrainian economy is characterized.

scholarly journals Regulatory assessment of the bank market risk: international approaches and Ukrainian practice

2018 ◽  
Vol 13 (4) ◽  
pp. 73-84 ◽  
Author(s):  
Yana Kuznichenko ◽  
Serhiy Frolov ◽  
Fedir Zhuravka ◽  
Mykola Yefimov ◽  
Volodymyr Fedchenko
Keyword(s):  
Banking Sector ◽  
Market Risk ◽  
Capital Requirements ◽  
Basel Ii ◽  
International Standards ◽  
Regulatory Capital ◽  
Alternative Scenarios ◽  
Optimal Approach ◽  
Method R ◽  
Risk Coverage

The implementation of international standards for the bank risk assessment and market risk, in particular, in Ukrainian banking practice is aimed at achieving common standards for regulating banking activities in different countries. This should help to increase the banking sector stability in Ukraine and, accordingly, increase the interest of foreign investors.The article deals with the methodological approaches to assessing the bank market risk (in particular, SA, IMA and R-SbM approaches) recommended by the Basel Committee on Banking Supervision in terms of standardization and unification of the normative framework of capital requirements for Ukrainian banks. Considering the analysis results, it was determined that the choice and implementation of an optimal approach in the context of Ukrainian banking practice can be carried out in one of two alternative scenarios: 1) a simplified version of a sensitivity based method (R-SbM); and 2) a recalibrated version of the Basel II standardized approach. In this case, the Basel II recalibrated version is more acceptable for use by banks, since it is most relevant to volume and complexity of transactions carried out by Ukrainian banks.The obtained results are aimed at improving the existing methodology for calculating the adequacy ratio of banks' regulatory capital (N2), which currently considers only the needs for credit risk coverage, and at refining the methodology in terms of considering banks' market-risk coverage needs.

scholarly journals Kenya

2020 ◽  
pp. 218-238
Author(s):  
Radha Upadhyaya
Keyword(s):  
Central Bank ◽  
Driving Force ◽  
Banking Sector ◽  
Financial Sector ◽  
Policy Networks ◽  
Basel Ii ◽  
International Standards ◽  
International Policy ◽  
Policy Ideas

In Kenya the impetus for Basel implementation has come from the regulator, the Central Bank of Kenya (CBK), which is highly independent, has strong links to international policy networks, and is very receptive to international policy ideas. Since 2003, the incumbent politicians have also been keen to adopt the latest international standards in order to attract investment into Kenya’s financial sector. Meanwhile, as the banking sector is relatively well capitalized, there has been little opposition from banks, with some international and large local banks being mildly in favour of Basel II and III adoption. In the Kenyan case the regulator has been the driving force for Basel adoption, supported by internationally oriented politicians and banks.

scholarly journals The Politics of Regulatory Convergence and Divergence

2020 ◽  
pp. 68-102
Author(s):  
Emily Jones
Keyword(s):  
Financial Services ◽  
Business Models ◽  
Analytical Framework ◽  
International Standards ◽  
Local Context ◽  
International Banking ◽  
Financial Policies ◽  
Convergence And Divergence ◽  
Domestic Banks ◽  
Regulatory Convergence

This chapter sets out an analytical framework that explains why regulators in peripheral developing countries respond in different ways to international banking standards. It identifies four factors that generate incentives for convergence on international standards: politicians seeking to integrate their countries into global finance and expand financial services sectors; domestic banks looking to enhance their reputation as they expand into international markets; regulators with strong connections to peer regulators and transnational policy networks; and sustained engagement with the IMF and World Bank. It also identifies four factors that generate incentives for divergence: politicians pursuing interventionist financial policies; politicians and business oligarchs using banks to direct credit to political allies; regulators who are sceptical about the applicability of Basel standards for their local context; and banks with business models focused on the domestic market for whom there are high costs and few benefits. The chapter identifies specific pathways to regulatory convergence and divergence, and salient features of each.

Role of The Halal Industry in Recovering the National Economy in Covid-19 Pandemic

2020 ◽  
Vol 8 (2) ◽  
pp. 202-214
Author(s):  
Cucu Susilawati
Keyword(s):  
National Economy ◽  
Banking Sector ◽  
Developed Countries ◽  
Online News ◽  
Financial Industry ◽  
National Economic ◽  
Halal Food ◽  
Vigorous Growth ◽  
Business Sectors

The outbreak of the Covid-19 pandemic in Indonesia is attacking not only public health but also the economy. The presence of Covid-19 has many important impacts on developed countries. There are at least four industries most impacted by this pandemic, including households, MSMEs, companies and the financial industry. However, the halal industry is believed to be more resilient to the Covid-19 pandemic. This durability is because of the principles attributed to the halal sector, namely the importance of fairness, balance and openness. The author’s goal is therefore to carry out more in-depth research on the role of the halal industry in supporting the national economy, which is under pressure because of the COVID-19 pandemic. This type of study is a literature review with a material analysis approach that explores the conditions of the halal industry in Indonesia in depth. The material received is as books, published information, and online news. The findings of this study reveal that there are three halal business sectors that are believed to be more vulnerable to the Covid-19 pandemic in order to facilitate national economic recovery. Halal finance, halal food and halal fashion industries are among them. Halal finance from both the banking sector and the Islamic stock market has proved to be more robust than the mainstream financial sector. Besides guaranteed halal food, its wellbeing is also guaranteed, and halal fashion is now on the rise as Muslim fashion is increasingly innovative and global. We believe the three of them to have experienced vigorous growth, and also to continue to draw customers. And also after the Covid-19 pandemic, these three sectors could survive. Thus the halal industry also contributes to Indonesian economy.

scholarly journals The Determinants of Audit Expectation Gap: An Empirical Study from Kingdom of Bahrain

2018 ◽  
Vol 7 (3) ◽  
pp. 54 ◽  
Author(s):  
Sayed Ali Ahmed Alawi ◽  
Rami Mohammad Abu Wadi ◽  
Gagan Kukreja
Keyword(s):  
Financial Reporting ◽  
Quantitative Research ◽  
Financial Statements ◽  
International Standards ◽  
Kingdom Of Saudi Arabia ◽  
The Public ◽  
Financial Reporting Standards ◽  
Expectation Gap ◽  
Audit Firms ◽  
National Bank

The research aims at identifying the determinants of audit expectation gap between the auditors and the users of financial statements in the Kingdom of Bahrain. This issue is noticed in many frauds or errors or illegal matters by the general public after every scam whether Enron and WorldCom from United States or Satyam and Punjab National Bank from India or Tesco and BHS from United Kingdom or Mobily from Kingdom of Saudi Arabia. As per International Standards on Auditing (ISAs), auditors are not responsible to detect each and every fraud or error or illegal act as it is the responsibility of management. However, auditors are expected to assess the possibility of an error or fraud to occur and assess risks of material misstatement due to error or fraud and they are supposed to express their independent and objective opinion on financial statements whether financial statements are prepared in accordance to suitable criteria (International Financial Reporting Standards in the case of Bahrain).This quantitative research and its descriptive design aims empirically to analyze determinants that may impact the audit expectation gap in the Kingdom of Bahrain. The study used a detailed questionnaire as a measuring instrument across the sample group to measure 4 determinants that are expected to have a significant impact on the level of the audit expectation gap. Those determinants are the efforts of auditors, the skills of auditors, the knowledge of the public about the audit profession and the users’ needs from auditors. The research inferred that identified factors found to have a significant impact on the level of audit expectation gap. It is recommended that audit firms should provide training to the audit staff that how to utilize the required efforts in conducting an audit engagement and go extra miles to fill the gap. Furthermore, the auditors should keep themselves updated about the latest frauds and the best audit practices. 

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