scholarly journals Banking and Financial Regulation

2017 ◽  
pp. 422-446
Author(s):  
Steven L. Schwarcz
Keyword(s):  
Economic Development ◽  
Financial Regulation ◽  
Financial System ◽  
Shadow Banking ◽  
Universal Principles

This chapter focuses on the universal principles of banking and financial regulation. Banking and financial regulation is needed to protect the financial system, which provides functions essential to economic development. Traditionally, financial regulation focused on banking because banks historically have aggregated moneys (primarily by taking deposits from customers) and then allocated those monies (by making loans to borrowers). Traditional financial regulation is geared toward ensuring that deposit-taking banks can continue to perform these functions efficiently. In recent years, however, shadow banking has begun to overtake traditional banking. Financial regulation has two overall goals: to ensure that the components of the financial system—firms and markets—can efficiently perform their underlying economic functions, and to ensure the financial system’s ability to itself function as a network within which those components can operate.

scholarly journals Financial Markets: From the “Tragedy of Commons” to Balanced Regulation

2020 ◽  
Vol 15 (2) ◽  
pp. 173-190
Author(s):  
Anastasia Podrugina ◽  
◽  
Anton Tabakh ◽  
Keyword(s):  
Financial Markets ◽  
Financial Stability ◽  
Banking Sector ◽  
Financial Regulation ◽  
Financial System ◽  
Political Influence ◽  
Regulation System ◽  
Shadow Banking ◽  
Financial Industry ◽  
Tax Legislation

Nowadays the global financial system faces a triple challenge: the threat of a new systemic financial crisis at both global and regional levels; difficulties of constant adaptation of existing financial business and regulatory practices to intensive technological innovations; direct and hidden consequences of excessive political influence on the financial system through sanctions and selectively applied practices for sanction purposes. Improving the quality of financial regulation will require deeper cooperation between regulators of leading economies and a proactive position of the financial industry, as well as the decentralization of financial regulation. However, it is unlikely that this will happen at the global level. Financial stability became a key goal of global financial regulation in the post-crisis period. We consider financial stability as the «tragedy of commons». The article describes the main trends of financial markets regulation after the crisis: transformation of global financial architecture, anti-money laundering and counter-terrorism financing practices (AML/ CT), financial sanctions. The article analyzes the existing failures of modern post-crisis financial regulation: credit crunch, reduction in the effectiveness of monetary policy, regulatory arbitrage, and increased compliance costs (AML/CT legislation, tax legislation, and the sanctions regime). In the future we expect simultaneous trends of harmonization and standardization of requirements in traditional sectors of financial markets (including traditional institutions of the shadow banking sector), but at the same time regulatory arbitrage1 will induce new financial technologies in order to reduce regulatory costs. The crisis triggered by the coronavirus pandemic in 2020 despite its non-financial nature will almost inevitably have a major impact on financial markets and their regulation. Possible steps to eliminate failures in the financial regulation system are proposed, including recommendations for international organizations.

scholarly journals How the Financial Sector Could Fight The Increasing Generational Divide (1)

2018 ◽  
Vol 10 (2) ◽  
pp. 89
Author(s):  
Luciano Monti
Keyword(s):  
Economic Development ◽  
Financial Regulation ◽  
Financial System ◽  
Financial Sector ◽  
Family Welfare ◽  
System Support ◽  
Social And Economic Development ◽  
Generational Divide

How can the financial system support young people’s social and economic development? Is the financing of startups the only way to combat the growing generational divide in Europe? This paper, using the Generational Divide Index, focusses on four domains: Financing, Income, Wealth and Family Welfare—to demonstrate why financial regulation should intervene during a young person’s life to combat emerging intergenerational inequalities. The aim of this paper is to examine the extent to which the Credit, Wealth and Family Welfare domains affect the generational divide—referring, in particular, to the new Generational Divide Index (GDI 2.0) indicators—which have been recently modified with a new set of sub-indicators in the domains of Financing, Income, and Wealth.

Analyzing the impact of financial momentum on the development of the economy

2020 ◽  
Vol 26 (2) ◽  
pp. 299-315
Author(s):  
V.V. Smirnov
Keyword(s):  
Financial Regulation ◽  
Systems Approach ◽  
Financial System ◽  
Modern Economic ◽  
And Performance ◽  
The Interest Rate ◽  
National Economies ◽  
Economic Ties ◽  
The Impact ◽  
Global Financial System

Subject. The article discusses the momentum in finance. Objectives. The study reveals the impact of financial momentum as the unity of antipodes in the development of the national economy. Methods. The study is based on a systems approach and methods of descriptive statistics. Results. I discover the ultimate goal of globalization, i.e. the substantive simplification of national economies and strengthening of global economic ties. The goals determine the logic tendency of national economies for reducing the interest rate so as to gain the financial momentum and, consequently, fanning the crisis risk in the global financial system. The global financial system became the substance of global economic processes, which determined development opportunities of national economies. I reveal what countries have the high and low financial momentum. Conclusions and Relevance. Being the unity of antipodes in the modern economic development, financial momentum causes countries to lose their economic identity, making them just functions of the global financial system. The cyclical development model of national economies is replaced with the metron model that rests on fluctuating advanced economies with the low financial momentum at its bottom and emerging economies at its top. The findings crystallize the concept and new competencies for a person who decide on the determination and performance of financial regulation activities.

scholarly journals Transformation of the Banking Sector of Ukraine: Reasons and Consequences

2017 ◽  
Vol 1 (13) ◽  
pp. 33-48
Author(s):  
Myroslava Khutorna
Keyword(s):  
Economic Development ◽  
Banking Sector ◽  
Financial System ◽  
Market Concentration ◽  
The Other ◽  
Real Economy ◽  
The Real ◽  
Other Hand ◽  
The One

This paper is devoted to the consideration of the preconditions and results of the banking sector of Ukraine transforming, its influence on the sector’s productivity, stability and significance for the real economy. It’s grounded that banking sector of Ukraine has seriously weakened its potential for the economic development stimulation. On the one hand, due to the banking sector clearance from the bad and unscrupulous banks the system has become much more sensitive to the monetary instruments and its state is going to be more predictable and better controlled. But on the other hand, massive banks’ liquidations have caused the worsening of the confidence in financial system and radical increasing of the market concentration the highest degree of which is observed in the householders’ deposit market.

scholarly journals Research on the Development of City Financial Systems under the Rural Revitalization Strategy

2021 ◽  
Vol 5 (5) ◽  
pp. 14-19
Author(s):  
Jilu Liu ◽  
Qiaoyu Zhang ◽  
Xiaoming Zeng
Keyword(s):  
Economic Development ◽  
Product Innovation ◽  
Financial System ◽  
Agricultural Product ◽  
Credit System ◽  
Financial Systems ◽  
Rural Economic Development ◽  
Rural Revitalization ◽  
Multi Level ◽  
The City

The implementation of the rural revitalization strategy can provide a better solution for problems such as the “three rural” development limitations and the imbalance of urban and rural economic development as it is the key to comprehensive building of a well-off society. Based on Linhai City’s finance status, this article analyzes the financial needs of the city for a better economic development under the rural revitalization strategy which prioritizes the policy of building a city financial system. The city’s financial system should be organized in a multi-level stucture for better economic development. This will improve the credit system of villages and towns, strengthen agricultural product innovation financially, and improve the finances of rural residents.

Dynamic interactions between stock markets and the real economy

2016 ◽  
Vol 11 (4) ◽  
pp. 715-746 ◽  
Author(s):  
Nikiforos T. Laopodis ◽  
Andreas Papastamou
Keyword(s):  
Economic Development ◽  
Stock Market ◽  
Methodological Approach ◽  
Financial System ◽  
Cointegration Analysis ◽  
Policy Implications ◽  
Real Economy ◽  
Dynamic Interactions ◽  
Content Type ◽  
The Real

Purpose The purpose of this paper is to re-examine the relationship between a country’s aggregate stock market and general economic development for 14 emerging economies for the period from 1995 to 2014. Design/methodology/approach The methodological approach of the paper is multifold. First, the authors use cointegration analysis to determine the simple dynamics among the variables. Second, the authors utilize vector autoregression analysis to study the dynamics among the variables for the 14 countries. Third, the authors employ panel analysis to determine common variations among the variables and across countries. Findings When examining the linkage between the stock market and economic development, proxied by gross domestic product growth or with gross fixed capital formation growth, the authors did not find a meaningful relationship between them. However, when the authors included additional control variables strong, dynamic interactions between the two magnitudes surfaced. Specifically, it was found that the stock market is positively and robustly correlated with contemporaneous and future real economic development and, thus, it directly contributed to a country’s economic development either through the production of goods and services or the accumulation of real capital. Thus, it can be inferred that the stock market alone is not capable of boosting economic development in these countries unless being part of a comprehensive financial system (which includes banks) as well as investment in real capital. Research limitations/implications The policy implications are clear. Government authorities must recognize that the stock market alone is not a driver of economic development and that a sound, efficient financial system (which includes banks) must be present in order to contribute and foster economic development. Originality/value The study is original in the sense that it examines various financial and economic variables to determine the degree of (or dynamic interactions among) the stock market and the real economy for each and all emerging markets in the sample.

scholarly journals Macroprudential policy debate, concepts and the Brazilian context

2018 ◽  
Vol 4 (1) ◽  
pp. 35
Author(s):  
Míriam Oliveira Silva Portugues ◽  
Viviane Luporini ◽  
Luis Antonio Licha
Keyword(s):  
Financial Stability ◽  
Banking System ◽  
Financial System ◽  
International Standards ◽  
Capital Inflows ◽  
Shadow Banking ◽  
Policy Debate ◽  
Macroprudential Policy ◽  
Intrinsic Nature ◽  
Economics Literature

<div class="page" title="Page 1"><div class="layoutArea"><div class="column"><p><span>The economics literature related to the financial system seeks to define the concepts of financial stability, systemic risk and macroprudential instruments for the purpose of drafting a policy that essentially "leans against the wind", that is, a policy that monitors macroeconomic vulnerabilities and combats system instability. Such a policy should cover all financial institutions involved in credit intermediation (not just banks) and consider the pro-cyclical and intrinsic nature of risk in the financial system, and account for the spillovers effects of policies in other countries, that is, the global context. This article summarizes the main concepts related to macroprudential policy discussed in the economics literature after the crisis the 2008 financial crisis. In addition, we describe macroprudential policy in the context of the Brazilian financial system, specifically major policies implemented in the banking regulatory environment related to Basel III and non-bank regulations related to shadow banks. After the 2008 crisis, Brazil was one of the precursors countries in operating macroprudential instruments to curb excessive credit growth and strong capital inflows. The Brazilian financial system has a broad regulatory perimeter, adhering to international standards and covering the Shadow banking system. This system has a weak connection with the banking system and is small relative to the financial assets of the national and global systems. </span></p></div></div></div>

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