scholarly journals BANKS OF THE CASPIAN REGION COUNTRIES IN THE BANKING SYSTEM OF RUSSIA: CURRENT TRENDS AND DEVELOPMENT PROBLEMS

2019 ◽  
Vol 8 (3) ◽  
pp. 7-28
Author(s):  
Olga Viktorovna Bogacheva ◽  
Oleg Alekseevich Lepekhin
Keyword(s):  
Global Economy ◽  
Banking Sector ◽  
Balance Sheet ◽  
Banking System ◽  
Operating Efficiency ◽  
Caspian Region ◽  
Banking Systems ◽  
Internalization Process ◽  
Business Entities ◽  
Credit Institutions

The mutual penetration of capital from one country into another has become a characteristic feature of the world financial system. This is largely due to the current globalization processes in the global economy, the continuous development of banking technologies, the need to maintain foreign economic activity of business entities and the rationale for expanding the scales of business activity as a tool to increase operating efficiency. The purpose of the article is to study the current internalization process in the banking systems of the Caspian region countries in terms of the penetration of the banks from the Caspian region countries into the Russian banking sector. Methodology. We have identified the sample of the Russian credit institutions fully controlled by the shareholders from the Caspian region states. Using the data, presented in turnover balance reports (Form 101), we have calculated key performance indicators in 2015–2018. We used the Bank of Russia’s practice to estimate the aggregate balance sheet of the 30 largest credit institutions as the basis for our algorithm. We have analyzed tendencies in funding base, structure of assets and operating efficiency. Results. The analysis of the financial statements shows that within the chosen business model, the banks of the sample are more likely to focus on international financial settlements, servicing foreign trade transactions, than on traditional types of banking business such as lending to non-financial enterprises and individuals. Their performance is significantly lower than the industry benchmarks, which so far does not allow us to expect an increase in their scale of presence in the Russian market in the near future. Practical implications. The analysis of current processes in the field of internationalization of banking systems can be used to assess the financial and economic integration of the countries of the Caspian countries and to develop corrective measures aimed at its further development and deepening.

scholarly journals Assessing the Impact of Corporate Governance Index on Financial Performance in the Romanian and Italian Banking Systems

2021 ◽  
Vol 13 (10) ◽  
pp. 5535
Author(s):  
Marco Benvenuto ◽  
Roxana Loredana Avram ◽  
Alexandru Avram ◽  
Carmine Viola
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Banking Sector ◽  
Research Question ◽  
Interactive Effect ◽  
Banking System ◽  
Capital Adequacy ◽  
Banking Systems ◽  
Governance Index ◽  
The Impact

Background: Our study aims to verify the impact of corporate governance index on financial performance, namely return on assets (ROA), general liquidity, capital adequacy and size of company expressed as total assets in the banking sector for both a developing and a developed country. In addition, we investigate the interactive effect of corporate governance on a homogenous and a heterogeneous banking system. These two banking systems were chosen in order to assess the impact of corporate governance on two distinct types of banking system: a homogenous one such as the Romanian one and a heterogeneous one such as the Italian one. The two systems are very distinct; the Romanian one is represented by only 34 banks, while the Italian one comprises more than 350 banks. Thus, our research question is how a modification in corporate governance legislation is influencing the two different banking systems. The research implication of our study is whether a modification in legislation, thus in the index of corporate governance, is feasible for two different banking sectors and what the best ways to increase the financial performance of banks are without compromising their resilience. Methods: Using survey data from the Italian and Romanian banking systems over the period 2007–2018, we find that the corporate governance has a significant, positive and long-lasting effect on profitability and capital adequacy in both countries. Results: Taking the size of the company into consideration, the impact of the Index of Corporate Governance (ICG) on a homogenous banking system is positive while the impact on a heterogeneous banking system is negative. Conclusions: Our study provides evidence of the impact of IGC on financial performance and sheds light on the importance of the size of the company. Therefore, one can state that the corporate governance principles applied do not encourage the growth of large banks in heterogeneous banking sectors, thereby suggesting new avenues of research associated with new perspectives.

Bank Capital Requirements after the Financial Crisis

2019 ◽  
pp. 706-735
Author(s):  
Mark E. Van Der Weide ◽  
Jeffrey Y. Zhang
Keyword(s):  
Financial Crisis ◽  
Structural Changes ◽  
Banking Sector ◽  
Balance Sheet ◽  
Banking System ◽  
Capital Requirements ◽  
Bank Capital ◽  
Regulatory Capital ◽  
Stress Tests ◽  
Global Banking

Regulators responded with an array of strategies to shore up weaknesses exposed by the 2008 financial crisis. This chapter focuses on reforms to bank capital regulation. We first discuss the ways in which the post-crisis Basel III reforms recalibrated the existing framework by improving the quality of capital, increasing the quantity of capital, and improving the calculation of risk weights. We then shift to the major structural changes in the regulatory capital framework—capital buffers on top of the minimum requirements; a leverage ratio that explicitly accounts for off-balance-sheet exposures; risk-based and leverage capital surcharges on the largest banks; bail-in debt to facilitate orderly resolution; and forward-looking stress tests. We conclude with a quantitative assessment of the evolution of capital in the global banking system and in the US banking sector.

scholarly journals Navigating the financial crisis in Helvetic Waters: An analysis of the banking sector (2007-09)

2011 ◽  
Vol 1 (2) ◽  
pp. 65-78
Author(s):  
Elisabeth Paulet ◽  
Francesc Relano
Keyword(s):  
Financial Crisis ◽  
Business Model ◽  
Financial Institutions ◽  
Banking Sector ◽  
Balance Sheet ◽  
Banking System ◽  
Characteristic Structure ◽  
International Banks ◽  
Business Approach ◽  
Domestic Banks

As has been argued throughout this paper, the different way in which banks have been affected by the crisis is closely linked to their distinct business model. Consequently, the characteristic structure of the balance sheet in big banks and ethical banks is correlated with their divergent dynamic during the crisis. While the financial turmoil has left the business approach of ethical banks unchanged, as evidenced in the striking stability of their balance sheet from 2007 to 2009, the pattern shown by big banks has substantially changed over this same period. These developments would tend to suggest the need to reform the business model of big banks. There is no clear empirical evidence that a banking system with a large number of small institutions would be any more stable than the system as it currently stands. Besides, financing certain big projects would always require the existence of large international banks. Both types of financial institutions are in fact complementary. How to regulate the banking and financial sector is thus a complex and multifaceted issue. One cannot impose the same requirements on big international-oriented banks and small domestic banks. As this paper has tried to demonstrate, both have a distinct business model.

scholarly journals Risks and stability of the banking system of the Republic of Moldova

2021 ◽  
Author(s):  
Grigore Duhlicher ◽  
Keyword(s):  
Financial Markets ◽  
Financial Crises ◽  
Banking Sector ◽  
Banking System ◽  
Republic Of Moldova ◽  
Banking Systems ◽  
The Republic ◽  
And Performance ◽  
The Stability ◽  
Financial Balance

The banking sector is constantly affected by a multitude of risks, which jeopardize its stability and performance. The multiplication, diversification and continuous intensification of banking risks emphasizes the need to define, identify, analyze and manage these phenomena, this process having a major impact on the stability of national banking systems and global financial balance. Efforts to this end must maintain the stability of financial-banking systems, characterized by a lack of major imbalances, which could lead to systemic financial crises, the inability of financial institutions to conduct financial operations, or the collapse of financial markets.

scholarly journals Investment policy of the banking sector: data from Russia

2021 ◽  
Vol 10 (42) ◽  
pp. 149-162
Author(s):  
Alexei Zverev ◽  
Victoria Mandron ◽  
Tatiana Rebrina ◽  
Maria Mishina ◽  
Yulia Karavaeva
Keyword(s):  
Banking Sector ◽  
Banking System ◽  
Investment Policy ◽  
Investment Portfolio ◽  
Investment Activity ◽  
Composition And Structure ◽  
High Volatility ◽  
Investment Portfolios ◽  
Credit Institutions

The growing investment activity of banking sector organisations is an important condition for securing diversification of assets and obtaining additional sources of income, as well as maintaining the required level of liquidity. Economic crises and instability of stock markets affect the investment policy of a bank, the quality of its investment portfolio, and the scope of investment transactions with securities. The purpose of the research is to carry out a comprehensive analysis of the investment mechanism of the Russian banking sector and its organisation, to characterise the investment policy and risks connected with investment activities, to determine the criteria for financial instruments included in the structure of investment portfolios of Russian credit institutions. The authors used the analytical, regulatory, comparative, and statistical methods of research to define the dynamics, composition, and structure of investment portfolios and risks involved in the business of financial and credit institutions, in the course of the formation of investment policy. It was concluded, as a result of the research, that enhanced performance, stability, and liquidity of credit institutions were conditioned by the structure and quality of portfolio investments. Improving the efficiency of the banking investment mechanism is a priority area of development, for strengthening the competitive positions of credit institutions in the national banking system. The article presents conclusions regarding the quality of investment operations and transactions with securities effectuated by banks at the present stage. The authors undertook a comparative analysis of indicators characterising the structure of investment assets of the banking sector, grouped by types of investment portfolio. Proceeding from the above, particular directions were developed for practical use, that allow for efficient selection of stock market instruments for inclusion in the investment portfolio of credit institutions in the conditions of high volatility and uncertainty of the financial market.

Estimating the efficiency of Greek banking system during the last decade of world economic crisis

2018 ◽  
Vol 25 (6) ◽  
pp. 1762-1794 ◽  
Author(s):  
Zois Sompolos ◽  
Maria Mavri
Keyword(s):  
Economic Crisis ◽  
Banking Sector ◽  
Returns To Scale ◽  
Banking System ◽  
Operational Efficiency ◽  
Operating Efficiency ◽  
Content Type ◽  
Dea Model ◽  
The Impact ◽  
Constant Returns To Scale

Purpose The purpose of this paper is to examine the efficiency of the four largest Greek banking organizations for the period 2004–2014, including both a period of strong economic growth and a period of economic crisis and recession, which is still plaguing the Greek economy and more specifically the Greek banking sector. Design/methodology/approach The study incorporates the application of financial ratio analysis and the data envelopment analysis (DEA) in order to calculate the technical efficiency of Greek financial institutions. More specifically, a two-stage output-oriented DEA model is developed in order to estimate the global efficiency of banks. The banking function is considered as consisting of two stages in series, a service/operational efficiency and a profitability efficiency. In both output-oriented models, methods of constant returns to scale and variable returns to scale were applied. Findings The results show that in terms of operational efficiency, banks started from a low rate of return in 2004, which improved until 2008, which marked the peak of operational efficiency. By 2010, the operating efficiency varied with downward trend until 2012–2013. In terms of profitability efficiency, the image is clearer, since the impact the financial crisis had on bank’s profit efficiency led, by 2012, to a plunge in the average efficiency by 30–40 percent. Originality/value A multi-stage DEA process, input oriented, was used in order to estimate changes in the performance and efficiency of banking system. The period 2004–2014 has not been examined until recently and all previous studies used the output-oriented DEA model.

scholarly journals A Comprehensive Approach for Calculating Banking Sector Risks

2020 ◽  
Vol 8 (4) ◽  
pp. 69
Author(s):  
Carmelo Salleo ◽  
Alberto Grassi ◽  
Constantinos Kyriakopoulos
Keyword(s):  
Banking Sector ◽  
Balance Sheet ◽  
Banking System ◽  
Contingent Claims ◽  
Comprehensive Approach ◽  
Real Economy ◽  
Claims Analysis ◽  
Contingent Claims Analysis ◽  
Government Sector ◽  
Risk Metric

We propose a comprehensive approach for the analysis of real economy and government sector risk transmission to the banking system and apply it in ten Euro-Area countries from 2005 to 2017. A flexible methodology is developed to model banks’ assets according to the risk-adjusted balance sheet of the counterparts. The use of distance to distress as a popular risk metric shows that Contingent Claims Analysis underestimates banks risk in stable periods and overstates it during crisis. Furthermore, the approach succeeds in detecting spillovers from households, non-financial corporations and sovereign sectors: for the countries examined the main source of instability comes from the Non-Financial Corporation sector and its increased assets volatility.

scholarly journals CREDIT AND INVESTMENT ACTIVITY IN THE CONDITIONS OF THE COVID-19 PANDEMIC

2020 ◽  
Vol 1 (3) ◽  
pp. 51-59
Author(s):  
P. P. Pastushenko ◽  
V. M. Vasylkovskyi
Keyword(s):  
Interest Rates ◽  
Global Economy ◽  
Banking Sector ◽  
Banking System ◽  
Economic Consequences ◽  
Investment Activity ◽  
Lending Activity ◽  
The Individual ◽  
Investment Process ◽  
The Impact

The article is devoted to the practical analysis of credit and investment activity in the conditions of the COVID-19 pandemic. A vision of the factors influencing the COVID- 19 pandemic on the global economy has been formed. The dynamics of issued loans is analyzed and the scale of lending activity is calculated. It is noted that the impact of the COVID-19 pandemic on lending occurs in the presence of the following risks: declining incomes of potential borrowers limit their ability to service loans, and there is uncertainty about the recovery of income of citizens and businesses in the near future; deteriorating creditworthiness of borrowers and increasing credit risk lead to higher interest rates on loans, which limits the demand for them; banks are tightening lending standards, including lowering limits on credit products; restriction of borrowers' mobility, which has become an obstacle to obtaining a loan and is absolutely critical for those of them who do not use remote banking; lack of capital in banks to increase lending. Areas of participation of banks in the investment process are highlighted: mobilization of funds by banks for investment purposes; providing loans of investment nature; investing in securities (both at the expense of the bank and on behalf of the client). The comparison of credit and investment activity is carried out. It is proved that the period of the COVID-19 pandemic did not significantly affect the credit and investment activities of the banking system of Ukraine. It is determined that the economic consequences of the pandemic and the slowdown in economic growth may further affect the banking sector of Ukraine, and this will require unprecedented action at both the individual and national levels. Further research involves identifying different scenarios.

scholarly journals Adjustment of prudential norms, determining vector of the banking sector development

Upravlenie ◽  
2020 ◽  
Vol 7 (4) ◽  
pp. 32-43
Author(s):  
N. V. Gryzunova
Keyword(s):  
Internal Control ◽  
Business Models ◽  
Banking Sector ◽  
Banking System ◽  
System Reform ◽  
Banking Supervision ◽  
Interest Rate Policy ◽  
Credit Line ◽  
Russian Economy ◽  
Credit Institutions

Currently, the Bank of Russia carries out radical reforms in the administration system of banking supervision and regulation. You can observe the interaction between monetary policy and macro prudential policy. The purpose of the traditional regulator is protection of investors', shareholders', customers' capital. The main problem of the Russian economy is the shortage of investment and working capital from non-credit institutions and the difficulty to get a foothold lending. The main objective of the banking system reform is to create additional sources of investment for non-credit institutions. The tightening Supervisory requirements although eliminate the total bank risks, but reduce business activity and agility of the banking system. The curve of investment demand in the Russian economy is flat, that characterizes the low profitability of investments and the weak dependence on interest-rate policy. In this connection, it has been suggested to consider investment companies as the main criterion of competitiveness and the main argument in decision-making about granting a credit line.The feasibility of the allocation of investment criteria in the monetary rule has been shown in the article. The urgency proportional distribution of regulatory indicators of banking supervision by tier banking system, which are formed from the pacing of functional and regional specificity, – has been substantiated. The mechanism of price stability based on the clustering of financial institutions has been offered. It has been suggested to use the investment criteria as justification for a transfer service of non-bank organization to another bank cluster. Possible trends and implications of key planned reforms of the banking system including the bank's tier and the distribution tier of powers and functions have been analysed.Due to measures of preventive supervision and bank clustering, it is possible to expect regional market segmentation, improving the effectiveness of internal control systems, based on the distribution of the control functions in bank tiers, simplify management and risk reduction in accordance with the profile of the company and the level of the bank's operations. It has been proved in the paper that a focused segmentation of the credit market allows us to reduce the credit risks for banks, as well as to link market characteristics with the business models of each cluster.

scholarly journals Contradictory tendencies in banking systems of the Slovak Republic and the Russian Federation

2017 ◽  
Vol 1 (2) ◽  
pp. 108-118
Author(s):  
Simona Heseková
Keyword(s):  
European Union ◽  
Russian Federation ◽  
Banking Sector ◽  
Foreign Capital ◽  
Slovak Republic ◽  
Banking System ◽  
The European Union ◽  
European Union Law ◽  
Banking Systems ◽  
The Russian Federation

The paper analyzes the banking systems of the Slovak Republic under the influence of the European Union legislation and banking system of the Russian Federation from the perspective of opening the banking sector to foreign capital. A fundamental difference between the given legislations, which is reflected mainly in the recent period, lies in the degree of openness of the banking system to foreign capital. While the banking system of the Slovak Republic under the influence of the European Union law can be considered as highly open banking system to foreign capital, the legislation concerning the Russian banking system is characteristic by legal limitation for foreign capital entry. The analysis of these contradictory tendencies which have common goal – to ensure a stable banking system could bring important knowledge that may help in resolving the issue of stability of the banking system at the global level.

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