scholarly journals Global Finance and Capital Adequacy Regulation: Recreating Capitalist Social Relations

2017 ◽  
Vol 50 (1) ◽  
pp. 66-81
Author(s):  
Chris Rogers
Keyword(s):  
Social Relations ◽  
Historical Perspective ◽  
Jel Classification ◽  
Two Dimensions ◽  
Capital Adequacy ◽  
Global Finance ◽  
Capital Adequacy Regulation

The paper argues that capital adequacy regulation has served to recreate the neoliberal form of capitalist social relations. It identifies two dimensions to this process. First, the paper argues that capital adequacy regulation in historical perspective can be understood to have incentivized, facilitated, and legitimated the kind of arbitrage that allow it to proceed. Second, it argues revisions to capital adequacy requirements serve to discipline mutual and cooperative forms of finance. JEL Classification: G28, P13, P16

scholarly journals Do Share Repurchases Distort Stock Prices? Evidence from the United States and Malaysia

2021 ◽  
pp. 232102222110243
Author(s):  
Chong-Meng Chee ◽  
Nazrul Hisyam bin Ab Razak ◽  
Bany Ariffin bin Amin Noordin
Keyword(s):  
Stock Prices ◽  
The United States ◽  
Jel Classification ◽  
Share Repurchases ◽  
Alternative Measure ◽  
Share Repurchase ◽  
Price Support ◽  
Global Finance ◽  
The Usa ◽  
Sample Support

Heavy share buyback years after the global finance crisis 2008–2009 drew criticism from scholars and financial press that share repurchases were being used by firms to manipulate their stock prices. This paper examines whether a greater firm’s repurchase intensity distorts stock prices reflecting to information. We analyse 2 sets of unbalanced panel data that contain a sample of 337 US and another sample of 167 Malaysian repurchasing firms between 2012 and 2016. Contrary to the criticism, we find that a greater firms’ share buyback intensity in the USA stimulates faster incorporation of information in price and results in more efficient stock prices. The main findings hold true and are robust when an alternative measure of share repurchase intensity was used. The findings of US sample support the notion that share repurchase serves as a signalling tool and price support to promote more efficient stock prices. We also find no strong evidence supporting the notion that shares repurchased by Malaysian firms distort stock prices. JEL Classification: G10, G14, G35

Dimensions of Expertise in Wine Evaluation

2016 ◽  
Vol 12 (1) ◽  
pp. 59-83 ◽  
Author(s):  
Robert H. Ashton
Keyword(s):  
Cognitive Abilities ◽  
Jel Classification ◽  
Two Dimensions ◽  
Chemical Components ◽  
Component Level ◽  
The Past ◽  
Hedonic Evaluation ◽  
Expert Novice ◽  
Taste And Smell ◽  
Cognitive Dimensions

AbstractThis article explores the question of what distinguishes novices from experts in wine evaluation. Is it experts’ superior sensory abilities related to taste and smell, their superior cognitive abilities related to knowledge and memory, or a combination of both—and if a combination, which of the two dimensions of expertise, sensory or cognitive, seems to be more important? I address these issues by considering what has been learned in the past 30+ years from research concerning the sensory and cognitive dimensions of expertise in wine evaluation. The research examines expert/novice differences at both the chemical component level (detecting, discriminating among, and describing wine-relevant chemical components) and the holistic level (hedonic evaluation of wine as an integrated manifestation of its components). (JEL Classification: C93)

Agent-based modeling for benchmarking banking regulation regimes: Application for the CBDC

2021 ◽  
Vol 16 (4) ◽  
pp. 261-272
Author(s):  
Vladimir Nechitailo ◽  
Henry Penikas
Keyword(s):  
Banking Regulation ◽  
Agent Based Modeling ◽  
Capital Adequacy ◽  
Fractional Reserve Banking ◽  
Reserve Requirement ◽  
Agent Based ◽  
The Great Depression ◽  
Reserve Banking ◽  
Von Mises ◽  
Capital Adequacy Regulation

COVID-19 pandemic challenges the sustainability of the modern financial system. International central bankers claim that banks are solid. They have accumulated significant capital buffers. Those buffers should be further more augmented by 2027 in line with Basel III reforms. However, disregarding such a consecutive rise in the banking capital adequacy requirements, the US financial authorities undertook an unprecedented step. First time in the country history they lowered the reserve requirement to zero at the end of March 2020. Friedrich von Hayek demonstrated the fragility of the modern fractional reserve banking systems. Together with Ludwig von Mises (von Mises, 1978) he was thus able to predict the Great Depression of 1929 and explain its mechanics much in advance. Thus, we wish to utilize the agent-based modeling technique to extend von Hayek’s rationale to the previously unstudied interaction of capital adequacy and reserve requirement regulation. We find that the full reserve requirement regime even without capital adequacy regulation provides more stable financial environment than the existing one. Rise in capital adequacy adds to modern banking sustainability, but it still preserves the system remarkably fragile compared to the full reserve requirement. We also prove that capital adequacy regulation is redundant when the latter environment is in place. We discuss our findings application to the potential Central Bank Digital Currencies regulation.

Slowdown in Bank Credit Growth: Aggregate Demand or Bank Non-performing Assets?

2018 ◽  
Vol 12 (3) ◽  
pp. 257-275 ◽  
Author(s):  
Ashima Goyal ◽  
Akhilesh Verma
Keyword(s):  
Interest Rates ◽  
Aggregate Demand ◽  
Balance Sheet ◽  
Bank Lending ◽  
Jel Classification ◽  
Capital Adequacy ◽  
Credit Growth ◽  
Bank Ownership ◽  
Negative Effect ◽  
Asset Quality

We estimate the determinants of credit and of non-performing assets (NPAs) using a firm and a bank panel with data up to 2015 in order to test bank lending against the aggregate demand channel as an explanation for slow Indian credit growth. The results support demand as the key constraint. Only demand variables affect corporate credit for a broad set of firms. Balance sheet weakness reduced credit only for a narrow subset of indebted firms in a difference-in-difference type analysis. Even so, sales remained the dominant variable. From the bank panel, the asset quality review (AQR) did have a strong negative effect on advances but gross NPAs did not. While high interest rates and low growth raised NPAs, so did past credit. Low demand not only reduced credit, it also increased NPAs. That the capital adequacy ratio (CAR) significantly reduces NPAs points to the productivity of fund infusion. When other determinants are controlled, bank ownership does not affect NPA ratios, again supporting external shocks as causal. The results suggest that apart from structural reform to clean balance sheets, recovery of demand is necessary for revival of credit growth. JEL Classification: G21, E51

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