scholarly journals Burning the buffer: New Zealand's budgetary response to COVID-19

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ian Ball
Keyword(s):  
New Zealand ◽  
Financial Management ◽  
Global Financial Crisis ◽  
Balance Sheet ◽  
Content Type ◽  
Net Worth ◽  
Fiscal Impacts ◽  
Financial Management System ◽  
The Global Financial Crisis

PurposeThe New Zealand Government has progressively strengthened its balance sheet position since the mid-1990s, other than for the four years immediately following the global financial crisis and the Canterbury earthquakes. This paper describes the nature and the forecast and actual fiscal impacts of the COVID-19 response, and identifies the transparency mechanisms which reveal these impacts. It also expresses a viewpoint on the implications of the COVID-19 response for the future resilience of the Government's fiscal position.Design/methodology/approachThe paper draws on the suite of official budgetary documents to demonstrate both the transparency of the disclosures on the COVID-19 impact and the substance of the forecast and actual fiscal impacts.FindingsThe paper reveals the change in the long-term fiscal aspirations of the New Zealand Government from one of achieving and maintaining a significant net worth buffer, to one which accommodates in the long-term a markedly smaller buffer and lower level of net worth.Originality/valueThe public financial management system in New Zealand is notable for its transparency. The Government's response to the pandemic is used to illustrate the nature and extent of that transparency.

GAAP-adjusted earnings disclosures by New Zealand companies

2015 ◽  
Vol 27 (3) ◽  
pp. 329-352 ◽  
Author(s):  
Liz Rainsbury ◽  
Carol Hart ◽  
Nonthipoth Buranavityawut
Keyword(s):  
New Zealand ◽  
Financial Reporting ◽  
Global Financial Crisis ◽  
Relevant Information ◽  
Annual Reports ◽  
Content Type ◽  
Future Earnings ◽  
Reporting Practices ◽  
Financial Reporting Standards ◽  
The Global Financial Crisis

Purpose – This paper aims to examine motivations for the reporting of generally accepted accounting practice (GAAP)-adjusted earnings by New Zealand companies. Design/methodology/approach – The study uses multivariate analysis of data from New Zealand company annual reports for the period from 2004 to 2012. Findings – Evidence suggests that management of some New Zealand firms are motivated to use GAAP-adjusted earnings to provide a more favourable impression of earnings. However, across firms, these adjusted earnings provide a better predictor of future earnings and provide more value-relevant information to the market than GAAP earnings. Thus, a desire to disclose a more accurate indicator of permanent earnings appears to be a strong factor in the reporting of GAAP-adjusted earnings. Research limitations/implications – The study uses firms listed on the New Zealand share market. The number of firms examined is small, but we compensate by studying the entire population, thus avoiding sampling issues. The results suggest that New Zealand’s regulatory response of recommending guidelines for reporting alternative earnings measures is appropriate. Originality/value – The study contributes to the literature on the relationship between reporting statutory earnings and non-GAAP earnings. It uses a period that includes three major events in the New Zealand economy and reporting environment: the adoption of international financial reporting standards, a change in tax law and the global financial crisis. Recognition of these events allows us to better interpret the GAAP-adjusted reporting practices taken by managers.

scholarly journals Shareholder empowerment, steps forward and steps back

2019 ◽  
Vol 27 (2) ◽  
pp. 169-196
Author(s):  
Saad Almohammed Alrayes
Keyword(s):  
Global Financial Crisis ◽  
Effective Means ◽  
Fiduciary Duty ◽  
Content Type ◽  
Shareholder Engagement ◽  
The Usa ◽  
The Global Financial Crisis ◽  
The Uk ◽  
The Impact

Purpose The global financial crisis of 2007-2008 prompted a significant debate on corporate governance and shareholder empowerment. A question arises as to whether shareholders ought to be further empowered to have a greater influence over the companies’ activities. Yet, it is not self-evident that shareholder empowerment ensures better-run companies’ corporate activities. Thus, the purpose of this paper is to critically examine, identify and explain the corporate regulation forms and control collectively to evaluate the effectiveness of shareholder empowerment fully. Design/methodology/approach To do so, this paper sets out a comparative analysis approach between two jurisdictions, the UK and Delaware in the USA. The paper further addresses by undertaking three case studies; Barclays Plc which illustrated the Comply or Explain role, AVIVA (2012) that concentrated on the impact of the shareholder revolt, and the case of Hills Stores Co. v. Bozic (2000), which involved a claim brought by shareholders on the grounds of a breach of fiduciary duty. Findings This paper argues that the shareholder empowerment theoretically provides an effective means through which corporate activities can be regulated. However, to do this, account must be taken that a distinction should be made between long-term and short-term investors to encourage shareholder engagement by responsible long-term investors. Furthermore, the shareholders can exercise their powers effectively and influence the Board’s decision to award executive compensation. Originality/value This paper offered two distinct contributions: assessing whether in times of crisis shareholder empowerment represents a way to regulate corporate activities and by assessing the distinction between the perception of shareholder empowerment and the reality in practice.

scholarly journals France

2019 ◽  
Vol 19 (321) ◽  
Author(s):  
Keyword(s):  
At Risk ◽  
Global Financial Crisis ◽  
Housing Prices ◽  
Balance Sheet ◽  
International Comparisons ◽  
Stress Tests ◽  
Balance Sheets ◽  
Net Worth ◽  
Near Term ◽  
The Global Financial Crisis

Corporates. The debt of French nonfinancial corporations has been on a rising trend in percent of GDP, especially in recent years, in contrast what is observed in peer European countries. This trend on non-consolidated data is mostly accounted for by bond issuances and loans among nonfinancial corporations (NFCs) while bank credit to NFCs has also grown but at a slower pace. While, across countries, French firms do not appear to be more indebted on average or to be more likely to have their debt-at-risk than their peers, there exists a tail of firms with debt-at-risk that has remained fatter than before the global financial crisis, despite the low interest rate environment. Moreover, some banks may have somewhat significant exposures to individual large indebted corporates. Stress tests show that under downside macrofinancial scenarios, corporate debt may increase significantly (up to around 11 percent of GDP in the broad sample of firms) but would remain broadly manageable. However, banks’ large exposures to corporates with debt at risk would increase significantly under the adverse scenario and in aggregate would amount to a significant share of capital. • Households. There is no clear evidence of vulnerabilities in households’ balance sheets at an aggregated level. Households have continued to build their financial net worth by accumulating financial assets even faster than debt. Their saving rate is healthy, and they appear to invest their inflows primarily in safe assets. Household debt is not high in international comparisons. However, some households—lower income, younger—may have experienced a deterioration of their balance sheet along certain dimensions. Such potential pockets of vulnerabilities should be further studied when data are available. The residential real market appears to be broadly aligned with its supply-side and demand-side fundamentals, and there are limited near-term downside risks to housing prices. However, there is a need to remain prudent, because the likelihood of adverse price developments is sensitive to negative shocks to macrofinancial conditions.

Identification of systemically important banks in India using SRISK

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Juhi Gupta ◽  
Smita Kashiramka
Keyword(s):  
Systemic Risk ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Balance Sheet ◽  
Data Set ◽  
Content Type ◽  
Long Run ◽  
Marginal Expected Shortfall ◽  
The Global Financial Crisis ◽  
Systemically Important Banks

Purpose Systemic risk has been a cause of concern for the bank regulatory authorities worldwide since the global financial crisis. This study aims to identify systemically important banks (SIBs) in India by using SRISK to measure the expected capital shortfall of banks in a systemic event. The sample size comprises a balanced data set of 31 listed Indian commercial banks from 2006 to 2019. Design/methodology/approach In this study, the authors have used SRISK to identify banks that have a maximum contribution to the systemic risk of the Indian banking sector. Leverage, size and long-run marginal expected shortfall (LRMES) are used to compute SRISK. Forward-looking LRMES is computed using the GJR-GARCH-dynamic conditional correlation methodology for early prediction of a bank’s contribution to systemic risk. Findings This study finds that public sector banks are more vulnerable to macroeconomic shocks owing to their capital inadequacy vis-à-vis the private sector banks. This study also emphasizes that size should not be used as a standalone factor to assess the systemic importance of a bank. Originality/value Systemic risk has attracted a lot of research interest; however, it is largely limited to the developed nations. This paper fills an important research gap in banking literature about the identification of SIBs in an emerging economy, India. As SRISK uses both balance sheet and market-based information, it can be used to complement the existing methodology used by the Reserve Bank of India to identify SIBs.

Is the development of policy in New Zealand based on Prevention First?

2017 ◽  
Vol 33 (2) ◽  
pp. 127-148
Author(s):  
Garth den Heyer
Keyword(s):  
New Zealand ◽  
Service Delivery ◽  
Global Financial Crisis ◽  
Operating Costs ◽  
Efficiency And Effectiveness ◽  
The Global Financial Crisis ◽  
Organizational Costs ◽  
Delivery Efficiency ◽  
Preventative Approach

The New Zealand Police, in response to the global financial crisis and escalating operating costs, implemented in 2008 the first of a number of change programs to increase its service delivery efficiency and effectiveness. The programs concentrated on reallocating resources from reactive service delivery to more proactive or preventative activities. By 2012, the change in emphasis enabled the police to reduce its organizational costs and achieve a number of government outcomes. It was hypothesized that owing to the success of the New Zealand Police, other New Zealand Government departments have adopted a preventative approach to reduce long-term social costs. By analyzing the strategic documents of three randomly selected, nonjustice sector government agencies, it was found that all three agencies had changed the focus of their service delivery to concentrate on specific prevention outputs with the intention of improving services and decreasing operating costs.

Financial crisis and SME capital structure: Swedish empirical evidence

2019 ◽  
Vol 46 (4) ◽  
pp. 925-941 ◽  
Author(s):  
Darush Yazdanfar ◽  
Peter Öhman ◽  
Saeid Homayoun
Keyword(s):  
Financial Crisis ◽  
Capital Structure ◽  
Large Scale ◽  
Global Financial Crisis ◽  
Ordinary Least Squares ◽  
Data Availability ◽  
Cross Sectional ◽  
Content Type ◽  
The Global Financial Crisis

Purpose The purpose of this paper is to empirically examine capital structure determinants of small- and medium-sized enterprises (SMEs) during and after the global financial crisis. Design/methodology/approach Statistical methods, including ordinary least squares and the generalised method of moments, were used to analyse a sample of over 40,800 Swedish SMEs operating in four industries during the 2008–2015 period. Findings The results indicate that the independent variables – i.e. financial crisis, profitability, size, tangibility and industry affiliation – to various degrees explain changes in short-term debt (STD) and long-term debt (LTD) ratios. In particular, the empirical findings indicate that the sampled SMEs tended to rely more on STD and LTD during (2008–2009) than after (2010–2015) the financial crisis. Research limitations/implications Due to data availability, the current study is limited to a sample of Swedish SMEs in four industries covering eight years. Further research could examine the generalisability of these findings by investigating other firms operating in other industries and other countries. Originality/value This study is one of few examining determinants of short- and long-term SME debt during and after the global financial crisis, using data from a large-scale cross-sectional database.

scholarly journals Public Wealth in the United States

2019 ◽  
Vol 19 (139) ◽  
pp. 1
Author(s):  
Fabien Gonguet ◽  
Klaus-Peter Hellwig
Keyword(s):  
World War Ii ◽  
Public Sector ◽  
Global Financial Crisis ◽  
Stress Test ◽  
Balance Sheet ◽  
The United States ◽  
Net Worth ◽  
The Us ◽  
History Of ◽  
The Global Financial Crisis

We analyze the US public sector balance sheet and project it forward under the assumption that current policies remain in place. We first document the history of the balance sheet and its components since World War II, with a detailed account of its evolution during and after the global financial crisis. While, based on assets and liabilities alone, public sector net worth is negative, additional challenges arise from commitments to future spending implied by current legislation and demographic trends. To quantify the risks to the balance sheet, we then apply the macroeconomic scenarios from the Federal Reserve’s bank stress test to the public sector balance sheet.

Regulatory change in Australia and New Zealand following the global financial crisis

2015 ◽  
Vol 7 (1) ◽  
pp. 8-28 ◽  
Author(s):  
Christine Ann Brown ◽  
Kevin Davis ◽  
David Mayes
Keyword(s):  
New Zealand ◽  
Financial Crisis ◽  
Financial Regulation ◽  
Global Financial Crisis ◽  
Regulatory Change ◽  
Content Type ◽  
Regulatory Changes ◽  
Global Standards ◽  
The Global Financial Crisis ◽  
Practical Implications

Purpose – The purpose of this study is to explain rationale for regulatory change in Australia and New Zealand after the global financial crisis. Design/methodology/approach – Outline regulatory changes and relate to crisis experience and regulatory shortcomings exposed. Findings – Regulatory change was driven primarily by need, as capital importing nations, to comply with emerging global standards, and the different approaches in both nations are also related to domestic political considerations. Research limitations/implications – The process of regulatory change in response to the crisis is ongoing. Practical implications – A number of areas for further improvement in financial regulation are identified. Social implications – Costs of poor regulation and financial crises are identified. Originality/value – A comparison of regulatory approaches in two countries dominated by the same four large banks helps understand the challenges of cross-border financial regulation cooperation.

Financial Sustainability and Infrastructure Finance

2018 ◽  
Author(s):  
Felipe Carvalho de Rezende
Keyword(s):  
Financial Institutions ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Financial Sustainability ◽  
Infrastructure Finance ◽  
Strategic Role ◽  
Development Banks ◽  
The Global Financial Crisis ◽  
Capital Development

Among the lessons that can be drawn from the global financial crisis is that private financial institutions have failed to promote the capital development of the affected economies, and to dampen financial fragility. This chapter analyses the macroeconomic role that development banks can play in this context, not only providing long-term funding necessary to promote economic development, but also fostering financial stability. The chapter discusses, in particular, the need for public financial institutions to provide support for infrastructure and sustainable development projects. It concludes that development banks play a strategic role by funding infrastructure projects in particular, and outlines the lessons for enhancing their role as catalysts for mitigating risks associated with such projects.

Financial distress determinants among SMEs: empirical evidence from Sweden

2020 ◽  
Vol 47 (3) ◽  
pp. 547-560 ◽  
Author(s):  
Darush Yazdanfar ◽  
Peter Öhman
Keyword(s):  
Financial Crisis ◽  
Financial Distress ◽  
Large Scale ◽  
Global Financial Crisis ◽  
Binary Logistic Regression ◽  
Data Availability ◽  
Cross Sectional ◽  
Data Set ◽  
Content Type ◽  
The Global Financial Crisis

PurposeThe purpose of this study is to empirically investigate determinants of financial distress among small and medium-sized enterprises (SMEs) during the global financial crisis and post-crisis periods.Design/methodology/approachSeveral statistical methods, including multiple binary logistic regression, were used to analyse a longitudinal cross-sectional panel data set of 3,865 Swedish SMEs operating in five industries over the 2008–2015 period.FindingsThe results suggest that financial distress is influenced by macroeconomic conditions (i.e. the global financial crisis) and, in particular, by various firm-specific characteristics (i.e. performance, financial leverage and financial distress in previous year). However, firm size and industry affiliation have no significant relationship with financial distress.Research limitationsDue to data availability, this study is limited to a sample of Swedish SMEs in five industries covering eight years. Further research could examine the generalizability of these findings by investigating other firms operating in other industries and other countries.Originality/valueThis study is the first to examine determinants of financial distress among SMEs operating in Sweden using data from a large-scale longitudinal cross-sectional database.

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