Pressure on Iran’s banks raises chances of collapse

2022 ◽  
Keyword(s):  
Central Bank ◽  
Interest Rates ◽  
Financial Institutions ◽  
Banking Sector ◽  
Task Force ◽  
Banking System ◽  
Reliable Data ◽  
Content Type ◽  
Bank Managers ◽  
Financial Action Task

Significance However, the signs of strain are becoming more marked. On December 15, the Central Bank of Iran (CBI) issued an official warning to all financial institutions, threatening legal penalties for bank managers who try to compensate for rising inflation by offering savers higher interest rates than is legally permitted. Impacts If US sanctions are not lifted, further economic deterioration will increase pressure on the banking system. Iran’s blacklisting by the Financial Action Task Force will be an ongoing burden for the banking sector. Tight credit will make it hard for consumers to get even small loans, such as those for which newlyweds used to be automatically eligible. There are no reliable data, but comprehensive restructuring of the banking system would likely cost hundreds of billions of dollars.

scholarly journals Monetary policy collision on the performance of banking sector in India

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Belavadi Nikhil ◽  
Shivakumar Deene
Keyword(s):  
Monetary Policy ◽  
Public Sector ◽  
Central Bank ◽  
Interest Rates ◽  
Banking Sector ◽  
Banking System ◽  
Economic Situation ◽  
Content Type ◽  
Public Sector Banks ◽  
The Impact

Purpose The study aims to identify the impact of monetary policy tools on the performance of banks in India, and this could be an excellent suggestion to the regulators in framing the favourable interest rates which would meet the macroeconomic objectives of the Indian economy. Design/methodology/approach The design adopted in this study is descriptive and analytical research. Correlation and regression analysis is used to determine the relationship between bank rate (BR) and the performance of public sector banks in India. The sample chosen for this study is the public sector banks actively performing in India. Findings The performance is measured by taking three factors, and they are deposits, loans and advances (L&A) and total asset value of the banks. All three factors have shown an impact of BR on them during the five years. L&A affected the least amongst the three factors, but the other two were significantly impacted by the change in BR by the Reserve Bank of India. So, there should be a favourable fluctuation in the BR which will bring flexibility in the banking system, and they can perform well in the economy and the central bank also can concentrate on the macro-economic situation in the country. Originality/value This paper helps in giving suggestions to the Central bank, researchers, financial institutions to look into the financial performance and monetary policy rates and the central bank also can concentrate on the macro-economic situation in the country.

Iran’s banking reforms will falter

2017 ◽  
Keyword(s):  
Central Bank ◽  
Dispute Resolution ◽  
Banking Sector ◽  
Banking System ◽  
Banking Reform ◽  
Content Type ◽  
Global Standards ◽  
Central Asian ◽  
European Banks ◽  
Dispute Resolution Mechanism

Subject Iran’s banking sector in urgent need of reform. Significance Tehran's banks face major corruption scandals, and a complex policy environment. In July 2016, the Central Bank of Iran (CBI) announced major plans to reform the country’s banking system in line with global standards. Iranian banks have been cut off from the international financial system since 2012, owing to sanctions. After the 2015 nuclear deal, Iran expected that the lifting of sanctions would reverse this situation. However, despite interest among Central Asian and Turkish banks, progress has been limited. Impacts European banks will be slow to engage with Iran, fearing unpredictable US penalties. Differing US and Iranian interpretations of sanctions lifting under the nuclear deal may come up before the dispute resolution mechanism. Macroeconomic strains will put depreciatory pressure on the currency. If President Hassan Rouhani fails to win re-election in May, the chances of banking reform would be much lower.

Polish banking scandal may lead to more consolidation

2018 ◽  
Keyword(s):  
Interest Rates ◽  
Financial Institutions ◽  
Banking Sector ◽  
Financial Sector ◽  
Household Consumption ◽  
Financial Supervision ◽  
External Shocks ◽  
Content Type ◽  
Near Term ◽  
Loan Growth

Significance Allegations of bribery and corruption against the former chairman of Poland’s Financial Supervision Authority (KNF), the financial sector regulator, have stoked both political and regulatory tensions. Impacts The banking sector is resilient to domestic and external shocks, but a slowdown in GDP could dampen household loan growth next year. Further sector consolidation is likely and would further underline the dominance of large, state-backed financial institutions. Interest rates are unlikely to be raised before end-2019 at the earliest, providing some support to household consumption in the near term.

Tajik remittance slump will weaken flawed banks

2016 ◽  
Keyword(s):  
Financial Institutions ◽  
Banking Sector ◽  
Banking System ◽  
International Financial Institutions ◽  
Content Type ◽  
Bank Deposits ◽  
The Rich ◽  
The Government ◽  
Main Banks ◽  
Poor Management

Subject Tajikistan's troubled banking sector. Significance Tajikistan's banking system has been in crisis since 2015, as problems in Russia feed through to this remittance-dependent economy. A decline in funds sent home by labour migrants has shrunk bank deposits, and the proportion of non-performing loans has risen sharply. The cash crisis is exacerbated by poor management and cronyism in financial institutions. The main banks, Tojiksodirotbank and Agroinvestbank, have restricted customer withdrawals. Impacts International financial institutions will condition assistance on reforms. However, the government will balk at any reform measures liable to hurt the rich and powerful. The government may seek Chinese support for the banking sector.

Evolution of Islamic liquidity management in Turkey

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ufuk Can ◽  
Mehmet Emin Bocuoglu
Keyword(s):  
Central Bank ◽  
Financial Institutions ◽  
Banking System ◽  
Liquidity Risk ◽  
Management Tools ◽  
Liquidity Management ◽  
Content Type ◽  
Playing Field ◽  
The Past ◽  
Funding Liquidity

Purpose There is not a comprehensive study which covers the evolution of the Turkish Islamic liquidity management landscape so far. The purpose of this study is to show how Turkish PBs have been gradually furnished with the needed liquidity management instruments by the Turkish Treasury, Central Bank of the Republic of Turkey and other related regulatory bodies and to analyze the repercussions of the evolution of Islamic liquidity management on balance sheets of participation banks (PBs) over time. This study also aims to come up with some humble policy recommendations that can improve Islamic liquidity management set up going forward. Design/methodology/approach The study acknowledges that at least two important elements of liquidity management should be in place on the way of improving the Islamic liquidity management environment. The first one is asset side liquidity or having an adequate amount of high-quality liquid assets. The second one is liability side liquidity, meaning that having access to funding liquidity, especially to central bank liquidity. Historical development of liquidity-related asset-side and liability-side balance sheet items between 2010 and 2020 are analyzed and visualized to demonstrate the progress in the Islamic liquidity management landscape in Turkey. Findings From 2010 to 2020, Turkish financial authorities made a great effort to get PBs to have more proper liquidity management tools. Turkish authorities have leveled the playing field for PBs via enriching liquidity management tools. Government sukuk issuances has filled the liquid asset gap, improved the liquidity profile of PBs and lessened overall liquidity risk while introduced central bank liquidity facilitates have reduced funding liquidity risk. Islamic liquidity management setup is much more advanced and participation banking system is more resilient than the past, but there are still some missing steps that can further ameliorate the Islamic liquidity management ecosystem in Turkey. Research limitations/implications This study is a visualized ratio analysis of PB’s improving liquidity profile in the past 10 years and fills an important gap in terms of displaying the overall Islamic liquidity management landscape in Turkey. Further studies and analysis can be built on this paper on Islamic liquidity management, banking and finance in the future. This paper can be a useful basement for researchers who intend to study on potential impacts of improving the liquidity of PBs on monetary transmission, banking profitability and overall banking system systemic risks. Practical implications Three different and interconnected areas should be further improved. These are enriching the diversity of government securities, providing central bank liquidity facilities under various available Islamic contracts and establishing an organized Islamic money market which will facilitate fund flows among various Islamic Financial Institutions (IFIs) and conventional financial institutions. Policymakers should act together, handle arising issues in a holistic manner, design and operationalize these incomplete parts of the puzzle to further optimize the playing field for the IFIs. Thus, there will be a more inclusive and competitive finance industry in which all risks are better managed and resources are more efficiently allocated. Originality/value Although various other studies are available on the Turkish Islamic banking industry, there is not such a specific study on Islamic liquidity management of Turkish PBs which makes this study a preliminary and different one. Apart from shedding light on the Turkish journey that has built a sound Islamic liquidity management infrastructure in the past 10 year, this study also shows an exemplary country experience in developing a more inclusive and robust financial ecosystem. This paper also contributes to financial development and inclusion literature as a policy paper.

New developments in Hong Kong’s anti-money laundering laws

2016 ◽  
Vol 19 (3) ◽  
pp. 291-297 ◽  
Author(s):  
David Kwok
Keyword(s):  
Money Laundering ◽  
Financial Institutions ◽  
Design Methodology ◽  
Task Force ◽  
Case Law ◽  
New Developments ◽  
Content Type ◽  
Proceeds Of Crime ◽  
Financial Action Task ◽  
Law And Legislation

Purpose The purpose of this paper is to discuss briefly new developments in Hong Kong’s (HK) Anti-Money Laundering (AML) laws, both in terms of case law and legislation. Design/methodology/approach In terms of case law, the author discusses two decisions given by HK’s Court of Final Appeal relating to the dealing of proceeds of crime offence. Also, a guideline case on sentencing is also examined. In terms of legislation, the author briefly outlines the main provisions of the newly enacted AML and Counter-Terrorist Financing (Financial Institutions) Ordinance. Findings As suggested by the Financial Action Task Force, new measures need to be put in place. The AML laws, as they presently stand, need further improvement. Originality/value A good AML regime is necessary as HK continues to thrive as a major financial/banking centre in Asia. This paper seeks to encourage more discussion on the topic.

Sanctions will reinforce Iran’s money supply woes

2018 ◽  
Keyword(s):  
Central Bank ◽  
Money Supply ◽  
Banking Sector ◽  
Banking System ◽  
Content Type ◽  
Better Regulation ◽  
The Government

Significance Inflation has to a great extent been driven by a depreciation of the rial following Washington’s decision to reimpose sanctions, yet deep structural flaws in the banking sector are also to blame. Poor regulation and widespread corruption mean that the Central Bank of Iran (CBI) has for decades created excess money. Impacts Sanctions will distract from the need to enforce better regulation of the banking system. The government will avoid painful reforms, fearing a popular backlash. The CBI will respond to sanctions-related pressures by creating more money.

The EU will struggle to crackdown on money laundering

2019 ◽  
Keyword(s):  
Money Laundering ◽  
Direct Investment ◽  
Banking Sector ◽  
Screening Programme ◽  
Task Force ◽  
International Standards ◽  
Content Type ◽  
Financial Action Task ◽  
National Governments ◽  
The Eu

Subject EU money-laundering concerns. Significance On 5 April, Swedbank Chairman Lars Idermark resigned, following criticism of how the bank has handled allegations of money laundering. The allegations follow similar revelations relating to Danske Bank last year. In addition to raising further questions about the integrity of the Nordic banking sector, it also highlights the EU’s continued exposure to money laundering. Impacts Money-laundering scandals suggest that the international standards set by the Financial Action Task Force are inadequately upheld. Such scandals could increase suspicion among voters that national governments and the EU serve the interests of the elite. Further cases of money laundering could undermine the EU’s new foreign direct investment screening programme. Addressing the proportional divergence in the transparency and rules of national regulatory regimes is high on the EU’s agenda.

The determinants of anti-money laundering compliance among the Financial Action Task Force (FATF) member states

2018 ◽  
Vol 26 (3) ◽  
pp. 442-459 ◽  
Author(s):  
Emmanuel Senanu Mekpor ◽  
Anthony Aboagye ◽  
Jonathan Welbeck
Keyword(s):  
Money Laundering ◽  
Banking Sector ◽  
Task Force ◽  
Ordinary Least Squares ◽  
Member States ◽  
Financial Action Task Force ◽  
Content Type ◽  
Regulatory Quality ◽  
Financial Action Task ◽  
Financial Intelligence

Purpose This paper aims to compute a measure for anti-money laundering/counter-financing of terrorism (AML/CFT) compliance and investigate its determinants. Design/methodology/approach Using the Financial Action Task Force (FATF) recommendations and assigning weights to them, the study computes a measure for AML compliance. Further, the determinants of AML compliance were investigated using ordinary least squares (OLS) data of 155 countries between 2004 and 2016. Findings The findings suggest that AML compliance have slightly improved over the years. Further, the OLS regression results show that technology, regulatory quality, bank concentration, trade openness and financial intelligence center significantly determined and improved AML compliance. Practical implications From the findings, it is evident that countries that wish to improve the AML compliance should focus more on technology, regulatory quality, structure of the banking sector, size of the economy and institution of financial intelligence center so as to enhance AML compliance. Originality/value To the best of the author’s knowledge, this paper reveals a first AML/CFT compliance index that measures the cross-country level of AML/CFT compliance from the year 2004 to 2016. Subsequently, this paper adopted an OLS econometric model to identify the key determinants of AML/CFT compliance among member states of FATF.

Bank competition in India: revisiting the application of Panzar–Rosse model

2020 ◽  
Vol 46 (11) ◽  
pp. 1455-1477
Author(s):  
Bijoy Rakshit ◽  
Samaresh Bardhan
Keyword(s):  
Interest Rates ◽  
Banking Sector ◽  
Monopolistic Competition ◽  
Global Financial Crisis ◽  
Small And Medium Enterprises ◽  
Banking System ◽  
Optimal Level ◽  
Annual Data ◽  
Bank Competition ◽  
Content Type

PurposeThe paper measures the degree of bank competition in Indian banking over the period 1996–2016. Using bank-level annual data, we revisit the case of banking competitiveness during the prefinancial and postfinancial crisis and examine whether the global financial crisis alters the level of bank competition in India. Additionally, this paper addresses the misspecification issues associated with the widely used Panzar–Rosse model in Indian banking context.Design/methodology/approachWe apply Panzar and Rosse (1987) H-statistic and evaluate the degree of bank competition by estimating the extent to which changes in input prices are reflected in revenues earned by banks. Subsequently, we link this measure of competitiveness to a number of structural indicators (HHI and CRn) to examine the structure-conduct-performance hypothesis, which assumes that a concentrated banking system can impair competition. The simple panel regression model was used to handle the empirical estimations.Findingsfindings reveal that the Indian banking system operates under competitive conditions and earns revenues as if under the monopolistic competition. We also find evidence that Indian banks are competitive, even under a concentrated market structure. This observation runs, in contrary, to the prediction of the structure–conduct–performance hypothesis. The findings also indicate the differences in the estimated H-statistic value after considering the misspecifications of the P–R model.Practical implicationsFrom policy perspectives, policymakers should focus more on maintaining an optimal level of bank competition by mitigating entry restrictions, exercising less consolidation and withdrawing overregulation from banking activities. A competitive banking industry ensures both efficiency and stability.Social implicationsA competitive banking sector by lowering interest rates margin provides easier access to finance to both households and small and medium enterprises (SMEs).Originality/valueThis is the only study that addresses the misspecification of the P–R model while assessing competition in Indian banking and provides a thorough understanding of the role of concentration on bank competition.

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