FinTech, Transformation of Financial Intermediation and Financial Stability

Purpose The purpose of this paper is to analyze the financial friction effect of non-performing loans (NPLs) on financial intermediation (FI) through empirical evidence from the Brazilian experience. Design/methodology/approach The authors develop a new variable, financial intermediation flow and a new indicator, FI, both measures of FI. To empirically test FI, the authors use a dynamic panel data framework that draws on 101 banks (December 2000 to December 2015). Findings An increase in NPL reduces FI. Thus, NPL amplifies financial friction in FI. This result holds in different time frames, such as the pre-crisis period, the crisis period and the post-crisis period. Practical implications The FI measure developed in this study offers the policymakers a possibility to monitor financial stability. Originality/value This study adds to this debate by proposing a measure of FI derived from financial flows. This measure allows one to estimate the role of NPL as a financial friction that can pose a threat to financial stability.

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ENGLISH: Rethinking Ribā and the ‘Islamic’ Banking Experimentation

rahatulquloob ◽

10.51411/rahat.5.2.2021/358 ◽

2021 ◽

pp. 81-103

Author(s):

Waqas Ali Haider ◽

Muhammad Arsalan Aqeeq ◽

Dr. Abdul Ghaffar

Keyword(s):

Economic Development ◽

Property Rights ◽

Financial Stability ◽

Critical Appraisal ◽

Financial Intermediation ◽

Allocative Efficiency ◽

Islamic Banking ◽

Deterministic Approach ◽

Banking And Finance ◽

Definition Of

The efficiency of a financial intermediation system is assessed by its ability to achieve allocative efficiency, asset transformation and the subsequent economic development. In case of an Islamic Banking and Finance as an alternate financial intermediation system adherence to the injunction of Islam is also critical. A critical appraisal of the state of contemporary Islamic Banking and finance (IBF) reveals that IBF has neither been able to achieve the aspirations of Islamic rhetoric, nor has been efficient in terms of asset transformation and economic development. This paper is an intuitive pursuit to explore the economic sense of established principles of IBF, and the reasons of the persistent divergence of IBF, being accused to be based on ruses and sophistry. Disentangling the varying viewpoints, the underdevelopment of IBF has been attributed to misinterpretation of Ribā, which has been explicated through a narrow fiqhi and legally deterministic approach. Deeming ‘a collaborative and dynamic Ijtihād’ as the elixir, this paper insists on the exigency of revisiting the definition of Ribā through a dynamic and collaborative Ijtihādi effort – i.e. a definition that incorporates the modern modes of economic cooperation and the contemporary financial intermediation ecosystem. The paper articulates Ribā in an agency theoretic framework to eschew expropriation of wealth, and assure protection of property rights, to sustain financial stability and economic development.

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NON-PERFORMING LOANS AND FINANCIAL STABILITY OF DEPOSIT TAKING SACCOS REGULATED BY SASRA

International Journal of Finance and Accounting ◽

10.47604/ijfa.1408 ◽

2021 ◽

Vol 6 (2) ◽

Author(s):

Rahab Ntoiti ◽

Ambrose Jagongo

Keyword(s):

Financial Stability ◽

Financial Intermediation ◽

Low Cost ◽

Field Research ◽

Secondary Data ◽

Vital Role ◽

Unique Contribution ◽

Nonperforming Loans ◽

Online Journals ◽

Desk Research

Purpose: The study sought to investigate the effect of non-performing loan on financial stability of deposit taking SACCOs in Kenya. Materials and Methods: The study adopted a desktop methodology. Desk research refers to secondary data or that which can be collected without fieldwork. Desk research is basically involved in collecting data from existing resources hence it is often considered a low cost technique as compared to field research, as the main cost is involved in executive’s time, telephone charges and directories. Thus, the study relied on already published studies, reports and statistics. This secondary data was easily accessed through the online journals and library Results: Nonperforming loans and their effect on the financial stability of SACCOs using have not been adequately featured in any of the studies reviewed. This leaves a gap that needs to be filled. SACCOs play a very vital role in the financial intermediation in the Kenyan economy and their uniqueness in operations. This study will therefore focus on filling this gap. Unique contribution to theory, practice and policy: the study findings of this study will assist the regulators of Sacco’s SASRA to formulate stringent policies to tame the rising cases of non-performing loans. The findings of this study will be useful to SACCOs within Nairobi County in evaluating how effective their approach to managing NPLs has been. This will enable them to identify the gaps in their management of NPLs and adjust accordingly.

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BigTech and the changing structure of financial intermediation

Economic Policy ◽

10.1093/epolic/eiaa003 ◽

2019 ◽

Vol 34 (100) ◽

pp. 761-799 ◽

Cited By ~ 14

Author(s):

Jon Frost ◽

Leonardo Gambacorta ◽

Yi Huang ◽

Hyun Song Shin ◽

Pablo Zbinden

Keyword(s):

Financial Services ◽

Financial Stability ◽

Financial Intermediation ◽

Financial Institution ◽

Contract Enforcement ◽

Economic Welfare ◽

Money Management ◽

Vast Amount ◽

Digital Services ◽

Early Evidence

SUMMARY Pablo Zbinden?>We consider the drivers and implications of the growth of ‘BigTech’ in finance – i.e. the financial services offerings of technology companies with established presence in the market for digital services. BigTech firms often start with payments. Thereafter, some expand into the provision of credit, insurance and money management products, either directly or in cooperation with financial institution partners. Focusing on credit, we show that BigTech firms lend more in countries with less competitive banking sectors and less stringent bank regulation. Analysing the case of Argentina, we find support for the hypothesis that BigTech lenders, by acquiring a vast amount of non-traditional information, have an advantage in credit assessment relative to a traditional credit bureau. They also serve unbanked borrowers, and may have an advantage in contract enforcement. It is too early to judge the extent of BigTech’s eventual advance into the provision of financial services. However, the early evidence allows us to pose pertinent questions that bear on their impact on financial stability and overall economic welfare.

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REPORTING AND FINANCIAL INTERMEDIARIES: META-ANALYSIS OF KEY CONCEPTS

Vìsnik Sumsʹkogo deržavnogo unìversitetu ◽

10.21272/1817-9215.2021.3-2 ◽

2021 ◽

Vol 2021 (3) ◽

Author(s):

Y. Serpeninova ◽

A. Yaroshyna

Keyword(s):

Financial Reporting ◽

Hedge Funds ◽

Financial Stability ◽

Financial Intermediation ◽

Positive Impact ◽

Meta Analysis ◽

Capital Allocation ◽

Research Topic ◽

Financial Intermediaries ◽

Shadow Banking

Financial intermediaries increase the efficiency of capital allocation by accumulating it between the parties to match the needs of all stakeholders. Due to market imperfections and information asymmetries, financial intermediaries have moved from traditional banking to intermediaries that are more complex: investment banks, pension funds, venture capital funds, mutual funds and hedge funds. The interrelation between intermediaries and economic indicators is a topic of discussion for many scholars around the world. The final opinion on this does not yet exist, because the hypotheses that are put forward are polar in nature. This study is based on the assumption that financial intermediaries have a positive impact on economic development. This study is aimed at bibliometric analysis by means of VOSviewer v.1.6.16 to identify key contextual areas of the research topic. The paper identifies numerous trends in the study of financial intermediation. The main national and foreign approaches to the studied concept are systematized. Key subject groups of the studied phenomenon are revealed. The most cited authors who worked in this direction are analyzed. Articles on key aspects of the study were clustered. The connection between the concepts of "financial intermediation" and "non-financial reporting" is revealed. Google Books Ngram Viewer and Google Trends analyzed the frequency of mentions of research concepts and the frequency of user queries. As a result, on the basis of 405 documents indexed by the Scopus database during 2012 - 2018, 6 clusters were identified, focusing on: the place of financial intermediaries in the financial system; role in ensuring financial stability; the prerequisites for the formation of this phenomenon; roles in the financial market; interactions between financial intermediaries and systemic risks; connection with shadow banking. The growing number of mentions of the research topic among Ukrainian and foreign scientists indicates an increased interest in the nature and role of this phenomenon.

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