Financing Russian firms: Ireland and round tripping

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Cillian Doyle ◽  
Jim Stewart
Keyword(s):  
Design Methodology ◽  
Banking Sector ◽  
Banking System ◽  
Shadow Banking ◽  
Professional Networks ◽  
Content Type ◽  
Form Part ◽  
Charitable Trust ◽  
Shadow Banking System ◽  
Gross Flows

Purpose Ireland has become one of the main sources of finance for Russian based firms. The purpose of this paper is to quantify and analyse these flows to examine governance and regulatory issues, in particular the possible effect of sanctions. Design/methodology/approach The paper is based on detailed searches of publicly available filings in Company House, Ireland to identify Russian connected conduits. Data was extracted from available accounts and prospectuses for 106 conduits operating in Ireland for some or all of the period 2005-2017. Findings The paper shows gross flows from Irish based conduits to Russian firms amounted to €118bn for 2005-2017; flows may be partly explained by round tripping; sanctions have also affected flows; flows are facilitated by close linkages with professional networks both within Ireland, and other offshore financial centres, especially London; The conduits examined have no employees and are mostly owned by a charitable trust or trust. They have become a major part of a largely unregulated shadow banking system. Originality/value This paper used searches of publicly available company filings to create a unique database of individual firms. Data on the use of financial centres by individual firms is hard to obtain and the results of this study may be indicative of the use and nature of conduits in other financial centres which form part of the shadow banking sector.

Perception of stakeholders on governance dimensions of the Islamic banking sector

2019 ◽  
Vol 14 (4) ◽  
pp. 601-619
Author(s):  
Ibrahim Abiodun Oladapo ◽  
Roshayani Arshad ◽  
Ruhaini Muda ◽  
Manal Mohammed Hamoudah
Keyword(s):  
Banking Sector ◽  
Banking System ◽  
Simple Random Sampling ◽  
Islamic Banking ◽  
Policy Makers ◽  
Content Type ◽  
Stakeholder Groups ◽  
Body Of Knowledge ◽  
Form Part ◽  
Global Growth

Purpose The perception of different stakeholder groups on governance dimensions, such as transparency, accountability and ethics, in the Islamic banking sector is examined, given the global growth of Islamic banking and its purpose of enhancing economic growth and development through Shari’ah-compliant instruments. The purpose of this paper is to determine whether the stakeholders in Nigeria perceive each dimension differently. Design/methodology/approach The data for the study were collected using a survey questionnaire. Simple random sampling was used to select the respondents. The respondents are customers, employees and shareholders of the Islamic banking sector in Nigeria. Findings Findings show that ethics is highly perceived as the key dimension in governance for the Islamic banking sector, whilst a positive and significant relationship is observed between the variables. Based on the variance analysis, there were statistically significant differences in perception between the stakeholders groups in the Islamic banking system. However, similar positive perceptions are accorded towards the overall governance dimensions across stakeholder groups namely, customers, employees and shareholders. Originality/value This study will extend the current body of knowledge in the field of Islamic finance by providing insights into policy makers, operators and regulators of the Islamic banking sector in Nigeria on the prospective stakeholders’ level of perception of the governance dimension, which could form part of the solutions to many contemporary issues in the banking system. This contribution is important, considering the clear relationship among governance dimensions which should be viewed in light of Islamic ideals.

Shadow banking in China: expanding scale, evolving structure

2014 ◽  
Vol 6 (3) ◽  
pp. 198-211 ◽  
Author(s):  
Tong Li
Keyword(s):  
Financial Stability ◽  
Banking System ◽  
Bank Loans ◽  
Data Sources ◽  
Shadow Banking ◽  
Real Economy ◽  
Content Type ◽  
Comprehensive Picture ◽  
Shadow Banking System ◽  
Banking Credit

Purpose – This paper aims to survey available data sources and put China’s shadow banking system in perspective. Although bank loans still account for the majority of credit provided to China’s real economy, other channels of credit extension are growing rapidly. The fast expansion of shadow banking has spurred wide concerns regarding credit quality and financial stability. Design/methodology/approach – This paper explores various data sources, provides an overview of shadow banking activities in China, discusses their close ties with banks and summarizes regulatory issues. Extensive descriptive data are included to provide a comprehensive picture of the nature of shadow banking activities in China. In particular, institutions and products are discussed in great details. Findings – While China’s shadow banking system is by no means simple, it does not (yet) involve the extensive use of financial derivatives. Rather, shadow banking credit is often directly extended to the real economy. In addition, shadow banks are typically interconnected with commercial banks in various ways. The expanding scale and constantly evolving structure of the shadow banking system has posed challenges for financial regulators. Originality/value – This paper attempts to quantify the scale and scope of China’s shadow banking activities and provides a consistent framework as the basis for cross-country comparison of shadow banking systems. This is one of the first scholarly research products that discusses the origin, nature and risks of China’s shadow banking system in a regulatory context.

scholarly journals Macroeconomic Determinants of Shadow Banking – Evidence from EU Countries

2016 ◽  
Vol 9 (2) ◽  
pp. 111-129 ◽  
Author(s):  
Teodora Cristina Barbu ◽  
Iustina Alina Boitan ◽  
Sorin Iulian Cioaca
Keyword(s):  
Interest Rates ◽  
Banking Sector ◽  
Banking System ◽  
Point Of View ◽  
Stock Index ◽  
Shadow Banking ◽  
Investment Funds ◽  
Banking Regulations ◽  
Shadow Banking System ◽  
Macroeconomic Determinants

AbstractShadow banking is a topical, debated issue on the agenda of national and European macro-prudential regulatory and supervisory authorities. It is generally accepted that shadow banks and the traditional banking system have some core functions in common, such as credit and maturity transformation, and the exposure to similar risks. However, the tight banking regulations and the decreasing trend recorded by interest rates in the post-crisis period create prospects for shadow banking sector growth. Against this background, the present paper aims at investigating the particular impact that shadow banking activity exerts on macroeconomic fundamentals. The analysis covers 15 European Union countries, including Romania, during the period 2008 – 2015, using quarterly data. Shadow banking system is used as a proxy by monetary funds, due to breaks in the series or unbalanced number of observations across selected countries. By employing panel regression, it was found that the shadow banking total assets’ variation is negatively influenced by the GDP growth, short term interest rates, M2/GDP ratio and the ratio of investment funds’ assets in GDP, and positively determined by stock index dynamics and long term interest rates. The findings sustain the literature’s point of view

scholarly journals When Brussels meets shadow banking – Technical complexity, regulatory agency and the reconstruction of the shadow banking chain

2020 ◽  
Vol 24 (3-4) ◽  
pp. 225-247
Author(s):  
Vanessa Endrejat ◽  
Matthias Thiemann
Keyword(s):  
Mutual Funds ◽  
Banking Sector ◽  
Time Pressure ◽  
Banking System ◽  
Money Market ◽  
Shadow Banking ◽  
Money Market Mutual Funds ◽  
High Maturity ◽  
Shadow Banking System ◽  
Bank Balance Sheets

At the heart of the last financial crisis stood the shadow banking system, a mesh of financial activities and entities that grew outside of bank balance sheets but with the support of the banking sector. These activities were not regulated or supervised like banks, and they were characterized by high maturity mismatches and leverage. Two prime elements were Money Market Mutual Funds and Asset-Backed Commercial Papers, which jointly performed bank-like functions. This paper sheds light on the fate of these entities post-crisis and the regulatory dynamics at play as policymakers shifted their focus from constraining their activities to drafting a European regulatory infrastructure that delivers both stability and growth. Based on expert interviews and document analysis, we show how European policymakers opened up to private experts during this shift to learn about the technical complexity of Money Market Mutual Funds and Asset-Backed Commercial Papers, but in the end were restricted in their efforts to craft such regulation due to competing national factions and the legislative time pressure at the European level. We argue that the process was heavily influenced by, first, nationally held visions about the future role of financial markets that came to the fore at pivotal moments during the negotiations, and, second, the specific European institutional set-up and its electoral cycle.

Funny Money or Legitimate Finance? Shadow Banking and Policy Impacts in China

2021 ◽  
pp. 000276422110200
Author(s):  
Sara Hsu ◽  
Xun Han
Keyword(s):  
Banking Sector ◽  
Banking System ◽  
Financial System ◽  
Financial Sector ◽  
Banking Regulation ◽  
Shadow Banking ◽  
Data Set ◽  
Money Flows ◽  
Shadow Banking System ◽  
The Impact

Government officials in China have taken different views regarding shadow banking. Some have seen the industry as overly risky, potentially undermining the formal financial system, while others have asserted that it is an increasingly important part of the financial system, filling a gap in finance provision to particular sectors and smaller firms. Do their views matter? Regulators have striven to crack down on the riskiest practices in shadow banking, but are the policies effective? In this article, we analyze the impact of government attitudes and actions on the shadow banking sector. Using a unique data set based on information collected from various sources in a difference-in-difference model, we find that shadow banking regulation plays a strong role in China’s financial sector, while contradictory government views (in the form of commentary in the People’s Daily) on shadow banking do not. This reveals that shadow banking is strongly affected by political authority when it is codified into regulation. Only some aspects of shadow banking can be legitimized through regulation, while the remainder of China’s financial system remains constrained due to state dominance over the financial sector. This underscores the “funny” nature of shadow banking’s money flows. This article is one of the first to study the effects of government views and regulations on the shadow banking system.

scholarly journals Shadow Banking, Bank Liquidity and Monetary Policy Shocks in Emerging Countries: A Panel VAR Approach

2020 ◽  
Vol 11 (6(J)) ◽  
pp. 52-65
Author(s):  
Sheunesu Zhou
Keyword(s):  
Monetary Policy ◽  
Banking Sector ◽  
Emerging Market ◽  
Banking System ◽  
Shadow Banking ◽  
Panel Var ◽  
Shadow Banking System ◽  
Monetary Policy Shock ◽  
Positive Shock ◽  
The Impact

The study provides an analysis of the relationships between monetary policy, shadow banking and bank liquidity in emerging market economies. It is aimed at broadening knowledge on the effect of shadow banking on monetary policy transmission. Furthermore, the study seeks to analyze the impact of changes in bank liquidity on the growth of the shadow banking sector. We employ panel VAR technique to analyse the dynamics of monetary policy, shadow banking and bank liquidity using data for 15 emerging economy countries. A contractionary monetary policy shock results in a decrease in shadow banking and a decrease in bank liquidity. We also find that a positive shock in bank liquidity increases shadow bank growth and a positive shock in shadow banking also increases bank liquidity. The results point to complementarity between shadow banking and bank liquidity; and the interconnectedness between the two markets in emerging economies. We suggest continuous monitoring of shadow banking activities to minimize transmission of risk from the shadow banking system into the banking sector.

Systemic risk contagion within US states

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tonmoy Choudhury ◽  
Kevin Daly
Keyword(s):  
Systemic Risk ◽  
Design Methodology ◽  
Banking Sector ◽  
Banking System ◽  
Content Type ◽  
Us States ◽  
Explanatory Variables

Purpose This study aims to examine the systemic risk contagion in banks from 15 US states using extreme shocks in their distance to risk. Design/methodology/approach The authors contemplate a model that inputs co-exceedances in the base US states’ banking sector as the dependent variable and the co-exceedances in other states’ banking sector (along with other underlying variables of a banking system) as the explanatory variables. Findings The authors find smaller states transmit and receive more systemic shocks than their larger counterparts and larger states exhibit a better shock-resisting capacity than their smaller counterparts. The authors also find that bigger shocks are more contagious than the smaller shocks. Originality/value This will be the first paper that will investigate the inner linkage of US states’ banking network using three different distance to risk methods, thus providing timely guidance for regulators.

scholarly journals The effects of shadow banking on the traditional banking system in Zimbabwe

2015 ◽  
Vol 4 (4) ◽  
pp. 605-611
Author(s):  
Virimai Mugobo ◽  
Misheck Mutize
Keyword(s):  
Banking Sector ◽  
Banking System ◽  
Good Alternative ◽  
Bank Loan ◽  
Critical Element ◽  
Shadow Banking ◽  
Shadow Banks ◽  
The Face ◽  
Shadow Banking System ◽  
Market Needs

The growth of shadow banks changed the face of banking in Zimbabwe. Their inconsistent product nature and complexity of form has been a cause for concern to regulatory authorities. The interrelationship between their financial intermediary role and that of formal banks has made them good substitutes to formal banking. This study conducts a statistical analysis of the country’s monetary aggregates and the total formal bank loan-to-deposits balances. The findings of this analysis show that the shadow banking system has always been a critical element of the formal banking sector which resulted from market needs and it completes the banking system. The shadow banking system does not pose direct threat to the formal banking system but it was a result of failure to attract savers who found shadow banks as a good alternative.

scholarly journals Shadow Banking in India: Nature, Trends, Concerns and Policy Interventions

2019 ◽  
Vol 12 (2) ◽  
pp. 29-46
Author(s):  
Sashi Sivramkrishna ◽  
Soyra Gune ◽  
Kasturi Kandalam ◽  
Advait Moharir
Keyword(s):  
Banking Sector ◽  
Banking System ◽  
Shadow Banking ◽  
Secondary Sources ◽  
Shadow Banks ◽  
Massive Growth ◽  
Policy Interventions ◽  
Systemic Risks ◽  
Credit Cycle ◽  
Shadow Banking System

AbstractWhile the origin of shadow banks may be traced to the 1970s, developing countries have witnessed a massive growth of shadow banks in more recent decades. India too has seen a similar growth in shadow banks; however, the recent 2018 collapse of IL&FS Group, a major shadow bank, disrupted the credit cycle, stalled investment and even affected overall GDP growth. With experts warning that shadow banks are susceptible to systemic risks and crisis, it becomes imperative to understand the shadow banking system better. In this paper, we use exploratory data analysis – both quantitative and qualitative – to draw attention to the need for definitional clarity in the concept of shadow banks and how they operate. Trends in Indian shadow banking are discussed using data drawn from secondary sources. Systemic risks in India’s shadow banking sector are identified and policy interventions are discussed. The study is imperative for highlighting the importance of shadow banking in India, its growth and the evolving policy interventions regulating this important component of the financial system.

A taxing assessment

2019 ◽  
Vol 26 (1) ◽  
pp. 293-312
Author(s):  
Paul Nkoane
Keyword(s):  
Design Methodology ◽  
Banking Sector ◽  
Case Law ◽  
Tax Law ◽  
Original Solution ◽  
Content Type ◽  
Form Part ◽  
Tax Fraud ◽  
The Impact ◽  
Practical Implications

Purpose The purpose of this paper is to enlighten the reader about the development in tax law. Moreover, the author intends to show that other measures could be implemented to supplement the existing machinery. Design/methodology/approach The paper explores the duty vested in the courts to probe the merits of transactions meant to evade or avoid the burden of tax. So much of the text is based on case law. The methodology is based on literature research rather interpersonal research. Findings The paper highlights that the current tax machinery has solved a number of tax issues. However, the machinery has not addressed the problem of fraud committed in the banking sector. The paper therefore recommends solutions to this problem. Research limitations/implications The paper was formulated before the current tax laws where implemented. The current law contains the solution this study advanced. In a sense, this study examines the impact of the current law and the duty of the court to probe the merits of impeachable transactions. Practical implications The study would give the legislature food for thought and would also guide the courts with matters of tax fraud. Originality/value Though the original recommendations form part of the current statute, this study is still immensely original in delivery and thought. It provide not only an original influence on the court but also the legislature with original solution to the existing problem.

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