scholarly journals Loan Waivers and Bank Credit: Reflections on the Evidence and the Way Forward

2019 ◽  
Vol 44 (4) ◽  
pp. 198-210
Author(s):  
Sudha Narayanan ◽  
Nirupam Mehrotra
Keyword(s):  
Financial Distress ◽  
Large Scale ◽  
Banking Sector ◽  
Banking System ◽  
Well Being ◽  
Policy Instrument ◽  
Negative Consequences ◽  
Executive Summary ◽  
Long Run ◽  
Macroeconomic Implications

Executive Summary In the past decade, farm loan waivers have become a policy instrument to alleviate the financial distress of farmers. Despite agreement on the theoretical rationale for such debt forgiveness and its deep contextual relevance, many fear that in the long run, loan waivers might vitiate the repayment culture in the farm sector and undermine the financial status of banks. At present, critiques of large-scale loan waivers rest on limited evidence. This article reviews and synthesizes existing research and available data on the implications of loan waivers, especially for the flow of credit to farmers from banks. On most of the issues, such as farmer well-being and repayment culture, there seems to be mixed evidence on the consequences of debt waivers. Credible evidence on macroeconomic implications is limited, mainly on account of methodological challenges. This article concludes that even if loan waivers are an inappropriate strategy to support farm incomes in sustainable ways, the wide-ranging negative impacts on the formal banking sector are perhaps overstated. A more fruitful approach would be to focus on whether loan waivers can be designed to reduce the possible negative consequences for the formal banking system as well as for macroeconomic system. The article identifies three possible instruments—loan insurance products that will help banks cope with the consequences of large-scale defaults. Second, to explore the creation of a distress fund that will cushion state finances, should there be a need for debt waivers. Third, it would be useful to consider the operation of debt relief commissions to have an ongoing process for debt waivers.

scholarly journals The relationship between financial distress and well-being: Exploring the role of self-employment

2020 ◽  
pp. 026624262096538
Author(s):  
Jenny Berrill ◽  
Damien Cassells ◽  
Martha O’Hagan-Luff ◽  
André van Stel
Keyword(s):  
Financial Distress ◽  
Employment Status ◽  
Well Being ◽  
Negative Association ◽  
Econometric Analysis ◽  
The Self ◽  
Negative Consequences ◽  
Self Employment ◽  
The Relationship

This article investigate the relationship between financial distress, well-being and employment status. Using several indicators of financial distress and of well-being, our econometric analysis shows that the negative association between financial distress and well-being is moderated by employment status in the sense that financial problems are more strongly associated with poor well-being for the self-employed compared to the wage-employed. Hence, when self-employed workers find themselves in a situation of financial distress, the negative consequences for their well-being are more severe. This is found to hold both for the self-employed with and without employees.

scholarly journals The Negative Impact of the Effects of Coronavirus on the Well-Being of Children and Families Who Are Clients of Child Protection Authorities in Finland

2021 ◽  
Vol 2 (1) ◽  
pp. 37-46
Author(s):  
J. Kuokkanen ◽  
A Tiili ◽  
A. Paasivirta
Keyword(s):  
Child Protection ◽  
Large Scale ◽  
Negative Impact ◽  
Well Being ◽  
Negative Consequences ◽  
Children And Families ◽  
Negative Effects ◽  
State Of Emergency ◽  
Large Scale Survey ◽  
Restrictive Measures

In the spring 2020, the first wave of the coronavirus pandemic quickly spread across Finland, having significant negative consequences for people’s living conditions. On March 16, 2020, the Finnish government declared a state of emergency and imposed several restrictive measures that were in effect until July 16, 2020 [13; 16]. The coronavirus and its aftermath have weakened the resilience of the Finnish welfare state, thereby challenging the welfare state’s ability to protect those most in need of its support. Recent studies have shown that the most vulnerable populations, such as children, are most affected by the negative effects of the pandemic in Finland and worldwide [5; 9; 11; 14; 18]. In autumn 2020, the Central Union for Child Welfare (CUCW) and the National Institute for Health and Welfare (THL) conducted a large-scale survey among the heads of child protection authorities (15.08.—13.10.2020), the aim of which was to find out how the consequences of the coronavirus and government restrictions have affected the well-being of children and their families who are clients of child protection authorities during the fall 2020. This article presents the main results and conclusions of the survey.

scholarly journals Mental and Behavioral Disorders in the Civilian Population of Regions Affected by Local Warfare

2020 ◽  
Vol 10 (4) ◽  
pp. 185-197
Author(s):  
N.M. Zakharova ◽  
M.G. Tsvetkova
Keyword(s):  
Behavioral Disorders ◽  
Negative Impact ◽  
Preventive Treatment ◽  
Well Being ◽  
Stress Disorders ◽  
Traumatic Experience ◽  
Negative Consequences ◽  
Persistent Problem ◽  
Long Run ◽  
Mental And Behavioral Disorders

Currently an acute and persistent problem for humanity is participation in military activities, including local conflicts which oftentimes involve activities of radical organizations. Shooting, shelling, bombing, taking hostages, forceful retention, which provide imminent threat to the lives and well-being of people, belong to the most significant psychologically traumatic factors of modern life. The article looks into the consequences of the negative impact of the distress which civilians and refugees (including children) have gone through. Not infrequently these negative consequences lead to deterioration in the quality of life, development of pathological personality traits, social maladaptation, emergence of co-morbid mental and somatic diseases. In the number of the studies we analyzed it is emphasized that massive negative impact on the mental health from the multiple traumatizing factors turns out to be more devastating in the long run than it is in the beginning. Therefore, the following becomes critically important: the earliest possible detection of mental and behavioral disorders in the victims, preventive treatment of their post-stress disorders at the remote stages of the traumatic experience as well as their complete and timely rehabilitation and reintegration into society.

Effects of immigration on labour markets and government budgets: the case of the Netherlands

2004 ◽  
Vol 12 (3) ◽  
pp. 377-398
Author(s):  
HANS ROODENBURG ◽  
ROB EUWALS ◽  
HARRY TERRELE
Keyword(s):  
The Netherlands ◽  
Labour Market ◽  
Large Scale ◽  
Financial Burden ◽  
Well Being ◽  
Fiscal Impact ◽  
The Public ◽  
Long Run ◽  
Labour Immigration ◽  
The Impact

Employing methods extracted from the literature, in combination with data on the Dutch economy, we assess the impact of immigration on the labour market and the public sector in the Netherlands. Additional labour supply due to immigration will have only a limited positive effect on the total income of natives, though redistribution between native groups is relatively large. The long run fiscal impact of immigrants will only be positive if their labour market performance at least equals that of natives. We conclude that selective labour immigration may contribute to the economic well-being of the host country. However, large-scale immigration of labour is not considered to be effective in alleviating the financial burden of ageing in the Netherlands.

scholarly journals Deposit Competition and Financial Fragility: Evidence from the US Banking Sector

2017 ◽  
Vol 107 (1) ◽  
pp. 169-216 ◽  
Author(s):  
Mark Egan ◽  
Ali Hortaçsu ◽  
Gregor Matvos
Keyword(s):  
Financial Distress ◽  
Multiple Equilibria ◽  
Banking Sector ◽  
Banking System ◽  
Financial Fragility ◽  
Supply Side ◽  
Capital Requirement ◽  
Bank Run ◽  
Bank Regulations ◽  
The Us

We develop a structural empirical model of the US banking sector. Insured depositors and run-prone uninsured depositors choose between differentiated banks. Banks compete for deposits and endogenously default. The estimated demand for uninsured deposits declines with banks' financial distress, which is not the case for insured deposits. We calibrate the supply side of the model. The calibrated model possesses multiple equilibria with bank-run features, suggesting that banks can be very fragile. We use our model to analyze proposed bank regulations. For example, our results suggest that a capital requirement below 18 percent can lead to significant instability in the banking system. (JEL E44, G01, G21, G28, G32)

Predicting Financial Distress in the Indian Banking Sector: A Comparative Study Between the Logistic Regression, LDA and ANN Models

2021 ◽  
pp. 097215092110267
Author(s):  
Nandita Mishraz ◽  
Shruti Ashok ◽  
Deepak Tandon
Keyword(s):  
Prediction Model ◽  
Financial Distress ◽  
Prediction Accuracy ◽  
Banking Sector ◽  
Banking System ◽  
Bankruptcy Prediction ◽  
Linear Discriminant ◽  
Ann Models ◽  
Artificial Neural Network Ann ◽  
Indian Banks

Financial distress is a socially and economically significant issue that affects almost every firm across the world. Predicting financial distress in the banking industry can substantially aid in the reduction of losses and can help avoid misallocation of banks’ financial resources. Models for financial distress prediction of banks are being increasingly employed as important tools to identify early warning signals for the whole banking system. This study attempts to forecast the financial distress of commercial banks by developing a bankruptcy prediction model for banks. The sample size for the study is 75 Indian banks. Logistic, linear discriminant analysis (LDA) and artificial neural network (ANN) models have been applied on the last 5 years’ (2015–2019) data of these banks. Data analysis results reveal the logistic and LDA models exhibiting similar prediction accuracy. The results of the ANN prediction model exhibit better prediction accuracy. It is expected that the results of this study will be useful for managers, depositors, regulatory bodies and shareholders to better manage their interests in the banking sector of the country.

scholarly journals Propensity for premature filing for judicial financial recovery in large-scale agriculture in Brazil

2021 ◽  
pp. 1-12
Author(s):  
Antonio Carlos Ortiz ◽  
Henrique Monaco ◽  
Vitor Machado ◽  
Michael Boehlje
Keyword(s):  
Incomplete Information ◽  
Financial Distress ◽  
Large Scale ◽  
Financial Statements ◽  
Negative Consequences ◽  
Agricultural Credit ◽  
Financial Condition ◽  
Complete Set ◽  
Financial Indices ◽  
Financial Recovery

In the Brazilian agricultural space, numerous cases of large farmers have declared themselves in severe financial distress and filed for Judicial Financial Recovery (JFR) in the past few years. Our statistical analysis, although preliminary and based on limited available data, indicates that these operations have shown financial indices at levels that, in general, did not significantly differ from a sample of other larger farmers’. Only ‘liquidity’ presented a more persistent relationship with the cases of Judicial Recovery. Therefore, it seems that farmers may be resorting to the JFR route prematurely. Within a limited subsample of cases of farmers who filed for JFR, data also shows a pattern with indications that farmers may tend to time their filing to coincide with having their main crops ready for commercialization immediately preceding or after harvesting. This suggests that these farmers might be seeking to free their most recent crop from previous financial and commercial commitments by pursuing a favorable court decision to their JFR. Some factors may be driving this behavior: (1) most farmers in Brazil do not produce a complete set of financial statements on accrual bases, which may lead to errors and incomplete information; (2) not all farmers’ debt is registered at the Central Bank, making debt consolidation a challenging discovery process to lenders, who may overleverage clients; (3) farm revenues are concentrated in only a few weeks of the year, allowing farmers that file for Judicial Recovery to carry on with their business, if the courts halt service of previous debt; (4) courts have also allowed these farmers to release assets from collateralized loans. In sum, there may be inaccurate interpretation of the farmers’ financial condition due to incomplete information, and a component of moral hazard motivating large farmers filing prematurely for JFR in Brazil. The number and magnitude of these cases may generate negative consequences to agricultural credit costs and availability in the future.

scholarly journals ACTIVITIES OF THE NATIONAL BANK OF UKRAINE DURING THE COVID-19 PANDEMIC OUTBREAK

2021 ◽  
Author(s):  
Natalia Danik ◽  
Kateryna Lohachova ◽  
Inna Grebenuk
Keyword(s):  
Banking Sector ◽  
Banking System ◽  
Financial System ◽  
Economic Security ◽  
Economic Downturn ◽  
Negative Consequences ◽  
National Bank ◽  
The Stability ◽  
As Stress ◽  
The Impact

The article considers the impact of the COVID-19 pandemic on the regulatory activities of the National Bank of Ukraine. The interdependence of the banking and economic systems and the impact of their inefficient interaction on banking in general and each individual commercial bank in particular are analyzed. It is established that before the onset of the pandemic crisis in the world, the banking system of Ukraine was characterized as stress-resistant, taking into account the reforms of liquidity and recapitalization. The stability of the banking system is affected by economic pressures caused by the spread of coronavirus and lower oil prices. According to one of the world’s three reputable rating agencies, Fitch Ratings, the level of pressure on banks depends on the depth and duration of the economic downturn, specific risks to the national economy and external finances (for example, tourism revenues or remittances), national government measures and individual banks. The implementation of anti-crisis measures developed by the National Bank of Ukraine as tools to increase financial and economic security in the country as a whole, and financial institutions in terms of increasing banking risks caused by the outbreak of the COVID-19 pandemic. The spread of this infection also has negative consequences for the economy and financial system of Ukraine. Therefore, the National Bank of Ukraine has introduced a system of anti-crisis measures during quarantine in the country. The NBU covers information about events in the economy through its own website, social media pages, and the media. These measures are implemented to mitigate the impact of coronavirus disease on citizens and businesses, and to ensure the quality and smooth operation of the financial system. The banking system continues to operate, without imposing any restrictions on the operation of banks and their operations. As a result of the study, a system of measures of national support for the banking sector by the National Bank of Ukraine and the International Monetary Fund was proposed through the prism of a number of guidelines and regulatory points, which are supporting instruments rather than control and regulatory ones.

scholarly journals Concentration of Ukraine’s Banking System: Myths and Facts

2015 ◽  
pp. 6-38 ◽  
Author(s):  
Vladyslav Rashkovan ◽  
Roman Kornyliuk
Keyword(s):  
Mergers And Acquisitions ◽  
Banking Sector ◽  
Banking System ◽  
Bank Mergers ◽  
Negative Consequences ◽  
Public Authorities ◽  
Substantial Impact ◽  
Banking Concentration ◽  
National Bank ◽  
Market Consolidation

This article attempts to find answers to questions of current significance: How concentrated is Ukraine’s banking system from the viewpoint of the world’s best regulatory practices and in comparison with other countries? What has been the driving force behind the growing concentration in recent years and does this process pose a threat to competition in the banking system? What effect would mergers and acquisitions in the banking sector have on the concentration of the banking system? And finally, do public authorities have to stimulate consolidation in the banking system or, on the contrary, restrain potential bank mergers and acquisitions? The results of empirical analysis dispel the persisting myths about the risks of fast and excessive concentration resulting from continuing market consolidation and about the substantial impact of inequality on the growing concentration, and refute the perceived danger of mergers and acquisitions in the banking sector. Instead, it was discovered that concentration of banking assets in Ukraine is not substantial according to the Herfindahl–Hirschman Index (HHI), CRn concentration index and other ratios. At the same time, in the conditions of continuing consolidation of the banking system via mergers and acquisitions and a decreasing number of banks, upward trends are observed within moderate, average European levels. Therefore, these new conditions require closer attention on the part of banking regulators to assess possible consequences of concentration. This article provides recommendations to the National Bank of Ukraine (NBU) and the Antimonopoly Committee of Ukraine (AMCU) on how to improve monitoring of banking concentration processes and better regulate consolidation processes in bank mergers and acquisitions. A complex of preventive macroprudential measures was offered to offset the negative consequences of concentration and achieve an optimal degree of market consolidation.

scholarly journals State oil and gas policy in the context of Ukraine’s national security

2021 ◽  
Vol 1 (1) ◽  
pp. 82-88
Author(s):  
Yuriy Slyusarenko
Keyword(s):  
National Security ◽  
State Policy ◽  
Alternative Energy ◽  
Large Scale ◽  
Oil And Gas ◽  
Gas Production ◽  
Negative Consequences ◽  
Alternative Energy Sources ◽  
Long Run ◽  
Oil And Gas Sector

The purpose of the article is to identify and characterize the potential risks and threats to the implementation of state policy in the oil and gas sector, given ensuring the national security of Ukraine. The study analyzes the nature of the development of legal relations in the oil and gas sector in the context of identifying potential threats to national security. The reasons for changes in state policy in the oil and gas sector, depending on foreign policy challenges, have been identified. Promising reforming such an approach given the development of globalization processes and implementing the Russian Federation's quasi-civilization project is highlighted. It is determined that the state policy of Ukraine in the oil and gas sector depends on the position of powerful subjects of international politics, the realization of whose geopolitical interests can significantly adjust the actions of domestic authorities. An analysis of the leading countries of the EU and the Russian Federation suggests that in certain circumstances, economic interests may prevail over the declared political slogans. The termination of European countries' contracts with Russia's Gazprom using the take-or-pay formula may affect these countries' management in the amount of fuel supplied to Ukraine in reverse. The future abandonment of the take-or-pay procedure, which has created difficulties in paying for gas under long-term contracts, may reduce European partners' interest in reverse gas supplies to Ukraine. Therefore, reverse gas supply to Ukraine can be considered a tactical measure. In the long run, it is essential to focus on the use of alternative energy sources and the development of our gas deposits, including shale gas production. The state's national security interests also require a significant reduction in bylaws to determine legal relations in the oil and gas sector. Such a reduction may be dictated by the growing dependence of government decisions on the political situation, the interests of large financial and industrial groups and individual politicians. And the priority of such claims over the parts of statebuilding can cause large-scale negative consequences for Ukraine.

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