scholarly journals MONETARY DISCRETION BY FISCAL MEANS: THE CASE OF BULGARIA

2019 ◽  
Vol 7 ◽  
Author(s):  
Preslav Dimitrov ◽  
Ivan Todorov ◽  
Stoyan Tanchev ◽  
Petar Yurukov
Keyword(s):  
Interest Rates ◽  
Balance Sheet ◽  
Liquidity Effect ◽  
Currency Board ◽  
Automatic Adjustment ◽  
Adjustment Mechanism ◽  
Study Results ◽  
National Bank ◽  
The Impact ◽  
Reserve Ratio

The specific design of the Bulgarian currency board arrangement (CBA), which provides an opportunity for the Bulgarian government to conduct discretionary monetary policy by changes in the fiscal reserve, was analyzed. The impact of government deposit fluctuations on the dynamics of reserve money and interbank interest rates was investigated. The hypotheses of an automatic adjustment mechanism and a liquidity effect under the Bulgarian currency board arrangement were tested. The methodology employed was a vector autoregression, which included the following variables: MB – monetary base; BP – the balance of payments; GD – government deposit on the balance sheet of the Issue Department of the Bulgarian National Bank; MRR – minimum required reserve ratio of commercial banks. The target variable was MB. Monthly data for the period of January 1998 - December 2018 were used. The study results did not provide evidence of a statistically significant impact of changes in government deposit on reserve money and interbank interest rates. The hypotheses for the existence of an automatic adjustment mechanism and a liquidity effect did not find an empirical confirmation.

scholarly journals Liquidity and Off-Balance Sheet Items: A Comparative Study of Public and Private Sector Banks in India

2017 ◽  
Vol 8 (1) ◽  
pp. 47 ◽  
Author(s):  
N. Pushkala ◽  
J. Mahamayi ◽  
K. A. Venkatesh
Keyword(s):  
Private Sector ◽  
Banking Sector ◽  
Balance Sheet ◽  
Vital Role ◽  
Public And Private ◽  
Banking Business ◽  
Public And Private Sector ◽  
The Impact ◽  
Reserve Ratio ◽  
Of Greece

Liquidity is the life-line of every business. Banking business’ liquidity was the bone of contention during the economic crisis of Greece and the downfall of Finance Behemoth like Lehman Brothers. Banking Sector-Illiquidity was the epicentre of such crisis. Globally, the Off-Balance Sheet Exposure played a vital role in managing liquidity and solvency issues of commercial banks. This research paper explores the concepts, aspects, analysis of liquidity and the impact of Off-Balance Sheet Items on Liquidity and Solvency. Furthermore, this paper focuses on the liquidity aspects of Public and Private Sector banks towards scrutinizing whether the ownership has any influence on the liquidity and solvency aspects of the banking structure, under the backdrop of Off-Balance Sheet Exposure. Besides, it looks into the unpredictability of RBI’s policies on liquidity like Cash Reserve Ratio, Statutory Liquidity Ratio etc.

scholarly journals FEATURES OF INTEREST-BEARING MONETARY POLICY INSTRUMENTS OF THE CZECH NATIONAL BANK

2020 ◽  
pp. 127-133
Author(s):  
A. V. Berdyshev ◽  
N. S. Bobyr
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Inflation Targeting ◽  
Global Financial Crisis ◽  
Policy Instruments ◽  
Macroeconomic Policies ◽  
Exact Test ◽  
Macroeconomic Indicators ◽  
National Bank ◽  
The Impact

The features of the economic development of the Czech Republic after the global financial crisis, the role of the Czech National Bank in the formation of macroeconomic policies, as well as the peculiarities of monetary regulation in the study period have been defined in the article. The main goal of the paper is to assess the impact of interest rates used by the Czech National Bank in the process of monetary regulation on the dynamics of the main macroeconomic indicators, which is considered as one of the necessary conditions for the effectiveness of the inflation targeting regime. By the results of the correlation analysis and Fisher’s exact test, it has been determined that the Czech National Bank could affect the main macroeconomic indicators based on the percentage of monetary policy instruments used.

scholarly journals Pre- and Post-GFC Policy Multipliers

2020 ◽  
Vol 20 (237) ◽  
Author(s):  
Sam Ouliaris ◽  
Celine Rochon
Keyword(s):  
Central Bank ◽  
Interest Rates ◽  
Balance Sheet ◽  
Quantitative Easing ◽  
Dynamic Effects ◽  
Real Gdp ◽  
Rate Environment ◽  
The Impact ◽  
Policy Multipliers ◽  
The U.S

This paper estimates the change in policy multipliers in the U.S. relative to their pre-2008 financial crisis levels using an augmented Blanchard-Perotti model to allow for the dynamic effects of shocks to the central bank balance sheet, real interest rates and debt levels on economic activity. Given the elevated debt level and significantly larger central bank balance sheet in the U.S. after 2008, the paper estimates the likely impact of new stimulus packages. We find that expenditure multipliers have fallen post-2008 crisis because of higher government debt, implying that the effectiveness of fiscal policy has declined. The analysis also investigates the impact of quantitative easing. The results suggest that it is beneficial, but requires sizable balance sheet interventions to lead to noticeable effects on real GDP. The results are used to assess the impact of the policy packages to address COVID-19. Because of rising debt stocks, dealing with a crisis is becoming more and more costly despite the current low interest rate environment.

Fed policy move will mean lower rates for even longer

2020 ◽  
Keyword(s):  
Interest Rates ◽  
Economic Activity ◽  
Yield Curve ◽  
Balance Sheet ◽  
Content Type ◽  
Us Economy ◽  
The Us ◽  
The Impact

Significance The Fed reduced interest rates to 0-0.25% and almost doubled the size of its balance sheet to offset some of the impact of the COVID-19 pandemic on the US economy but clear signs of economic activity rebounding are now prompting the Fed to look further out. Impacts The Fed will reassure markets that there will be no rate increases under virtually any circumstances in the next few years. Eventually the Fed will consider reducing the size of its balance sheet; this will require adroit management to avoid worrying investors. There appears to be little support at the Fed for negative rates; adopting yield-curve control remains possible if the recovery disappoints.

scholarly journals Assessment of the Influence of the National Bank of Ukraine Monetary Policy on Food Security of the State

2020 ◽  
pp. 45-51
Author(s):  
Donatello Caruso ◽  
◽  
Tetiana Lunkina ◽  
Alla Burkovska ◽  
Anna Burkovska ◽  
...  
Keyword(s):  
Monetary Policy ◽  
Food Security ◽  
Interest Rates ◽  
Discount Rate ◽  
Economic Security ◽  
Security System ◽  
Financial Resources ◽  
National Bank ◽  
Integrated Food Security ◽  
The Impact

Food security is central to the state's economic security system and is an important component of its sovereignty. Attracting financial resources by agricultural producers on favorable terms has a direct impact on improving agricultural infrastructure, product quality management systems, modernization of means of production, etc., which contributes to food security in terms of its main components: food availability and food security. At the same time, cheaper consumer loans for the population can strengthen an equally important element of food security – the affordability of food. The object of the study is the processes of food security regulation of the country due to changes in the discount rate of the National Bank. The subject of the study is a set of theoretical, methodical and practical aspects of the monetary policy of the National Bank of Ukraine and their impact on the formation of food security. The purpose of the article is a comprehensive analysis and assessment of the impact of monetary policy of the National Bank of Ukraine, which is recently reflected in lowering the discount rate on food security, which is expressed in the availability of credit resources to meet consumer demand and modernize agricultural enterprises. The analysis of the discount rate and interest rates for loans on different periods, which were given to the enterprises of Ukraine, was performed. The authors propose to improve the financial component of the integrated food security mechanism, which aims to ensure the use of economic levers and create conditions for attracting financial resources for the functioning of the food security system by forming a system of multi-channel financing.

The Impact of Financial Deepening on Economic Growth in Jordan: Econometric Study (1980-2015)

2017 ◽  
Vol 5 (1) ◽  
pp. 35-53
Author(s):  
Ahmad Abdelkhaleq Ahmad Jabae ◽  
Ahmad Ibrahim Malawi
Keyword(s):  
Economic Growth ◽  
Interest Rates ◽  
Annual Data ◽  
Financial Deepening ◽  
Interest Rate Spread ◽  
Study Results ◽  
Stationary Test ◽  
The Impact ◽  
Integration Analysis

This study aimed to investigate the effect of financial deepening on the economic growth for the case of Jordan during the period of 1980-2016. To this end, the study used multiple econometric model based on Autoregressive Distribution Lag approach (ARDL) and co-integration analysis among the variables based on annual data. Philips-Perron (PP) test have been utilized for stationary test. The study results show that there is positive and significant effects between the financial deepening and economic growth when the amount of broad money supply/gross demostic product is used as proxy of financial deepening, and there are negative and significantly effects between financial deepening indicators were captured by interest rate spread, credit to the private sector, and negative insignificantly effects between commercial –central bank assests and economic growth. Based on the obtained results the study recommended to develop the  role of financial sectors to increase the degree of  financial deepening in the Jordanian economy, and directing the bank credit to the highly productive sectors, and reconsidering the interest rates on deposits and  loans to increase the financial deepening degree in the Jordanian economy.

scholarly journals Measuring the Performance of Bank Loans under Basel II/III and IFRS 9/CECL

Risks ◽  
2020 ◽  
Vol 8 (3) ◽  
pp. 93
Author(s):  
Bernd Engelmann ◽  
Ha Pham
Keyword(s):  
Interest Rates ◽  
Balance Sheet ◽  
Economic Loss ◽  
Bank Loans ◽  
Regulatory Capital ◽  
Stress Tests ◽  
Loan Loss ◽  
Loan Loss Provisions ◽  
Full Life Cycle ◽  
The Impact

In the last two decades, both internal and external risk management of banks have undergone significant developments. Banking supervision encourages banks to use a risk-based approach for computing minimum regulatory capital. Accounting rules have been tightened requiring more timely loss reserves for impaired loans. In this article, we propose a comprehensive scheme for calculating the profitability of a loan that could be used both for setting risk-based interest rates when originating a loan and for accurately determining the profitability of existing clients. The scheme utilizes the credit models developed for regulatory purposes and takes the impact of regulation on loan performance into account. We show that accounting loan loss provisions cannot be applied in a performance measurement scheme because they do not reflect the true economic loss. In addition, we demonstrate that it is crucial to measure loan performance over the full life cycle of a loan. Restricting profitability measurement to a time horizon of one year as often observed in practice could be misleading. Although our focus is on profitability measurement, the framework could be applied in a wider context, i.e., for macroeconomic stress tests, bank balance sheet projections, capital management, or evaluating the impact of securitizing parts of a bank’s loan portfolio.

The Impact of Financial Deepening on Economic Growth in Jordan: Econometric Study (1980-2015)

2017 ◽  
Vol 5 (1) ◽  
pp. 35-53
Author(s):  
Ahmad Abdelkhaleq Ahmad Jabae ◽  
Ahmad Ibrahim Malawi
Keyword(s):  
Economic Growth ◽  
Interest Rates ◽  
Annual Data ◽  
Financial Deepening ◽  
Interest Rate Spread ◽  
Study Results ◽  
Stationary Test ◽  
The Impact ◽  
Integration Analysis

This study aimed to investigate the effect of financial deepening on the economic growth for the case of Jordan during the period of 1980-2016. To this end, the study used multiple econometric model based on Autoregressive Distribution Lag approach (ARDL) and co-integration analysis among the variables based on annual data. Philips-Perron (PP) test have been utilized for stationary test. The study results show that there is positive and significant effects between the financial deepening and economic growth when the amount of broad money supply/gross demostic product is used as proxy of financial deepening, and there are negative and significantly effects between financial deepening indicators were captured by interest rate spread, credit to the private sector, and negative insignificantly effects between commercial –central bank assests and economic growth. Based on the obtained results the study recommended to develop the  role of financial sectors to increase the degree of  financial deepening in the Jordanian economy, and directing the bank credit to the highly productive sectors, and reconsidering the interest rates on deposits and  loans to increase the financial deepening degree in the Jordanian economy.

scholarly journals E-Banking and Monetary Policy in Nigeria

2021 ◽  
Vol 8 (3) ◽  
pp. 237-258
Author(s):  
Nathan Audu
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Interest Rates ◽  
Balance Sheet ◽  
Central Banks ◽  
Financial Instability ◽  
Monetary Aggregates ◽  
New Instrument ◽  
Velocity Of Money ◽  
The Impact

The goal of this paper is to assess the impact of e-banking, which are distinct from conventional banking systems, on central banks’ monetary policy. E-banking poses a challenge to central banks’ ability to control interest rates and it may also increase endogenous financial instability. The challenge to interest rate control stems from the possibility that e-banking may diminish the financial system’s demand for central bank liability, rendering central banks unable to conduct meaningful open market operations. Increased financial instability could emerge from the increased elasticity of private money production and from the periodic runs out of e-banking into central bank money that generates liquidity crises. Similarly, the future of e-banking is dependent on its growth, regulation and increased technological advancements that would boost the security of the new instrument. It will directly impact the central bank’s control of monetary policy unless it is included in its measurements of monetary aggregates. We therefore recommend that since the impact of e-banking on monetary policy depends solely on how fast it will spread and the extent to which it will substitute for cash, it is vital that Central Bank of Nigeria (CBN) considers taking steps to compensate the resulting decrease in its balance sheet. Also, CBN must have to impose special obligations with the money reserve on the e-banking issuer in case of any large increase in e-banking creativity that will affect the monetary policy at the end. The government must keep the rate of prices stable and with this condition, where e-banking will be equal to other forms of money which maintain by apportion percentage as a reserve ratio to the central bank. Similarly, if e-banking spreads moderately, there will be a decrease in the seigniorage income and thus, the decrease in the balance sheet of CBN will be limited. Hence, it must include e-banking in monetary aggregates that the spread of e-banking may lead to a change in the velocity of money. Keywords: monetary policy, e-banking, technology, velocity of money

Monetary transmission mechanism (lending channel)

1998 ◽  
Vol 7 (4) ◽  
Author(s):  
Vratislav Izák
Keyword(s):  
Interest Rates ◽  
Industrial Production ◽  
Time Lag ◽  
Vector Autoregressions ◽  
Lending Channel ◽  
Causality Tests ◽  
National Bank ◽  
The One ◽  
The Impact ◽  
Credit Structure

The Czech National Bank (CNB) has influenced the money market rates (Pribor) through repo rates effectively. The strong cointegration has been valid for the further step, too - the impact of Pribor rates on the interest rates of newly granted credits. <p>The expected negative correlation between interest rates on the one side end both investment and newly granted credits have been found, however, the results are not statistically significant. <p>Industrial production and credits in domestic currency into industry have not been cointegrated. The causality tests say that credits Granger cause industrial production with a time lag of 5 months. Another tool of vector autoregressions - variance decomposition reveals that in forecasting these two variables the variance is influenced by their own dynamics first of all. <p>More detailed analysis of the credit structure in industry in 1997 shows the increasing ratio of credits in foreign currencies for credits in CZK to avoid the impacts of tight domestic monetary policy.

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