scholarly journals Bank lending in Ukraine and simulation of credit activity by methods of system dynamics

2021 ◽  
Vol 2021 (2) ◽  
pp. 89-109
Author(s):  
Hlushchenko Svitlana ◽  
◽  
Ivakhnenkov Sergiy ◽  
Demkiv Sofiia ◽  
◽  
...  
Keyword(s):  
System Dynamics ◽  
Interest Rates ◽  
Growth Rates ◽  
Commercial Banks ◽  
Banking Sector ◽  
Supply And Demand ◽  
Bank Lending ◽  
Bank Loans ◽  
Short Term ◽  
Loan Portfolio

The trends of bank crediting of businesses and households in Ukraine are determined and credit interrelations between subjects of economy by means of methods of system dynamics simulated. The article shows that by end 2020 the main trends in the Ukrainian banking sector are: 1) increasing the dynamics of return on capital, consistently high interest rates on loans until 2019 and their declining dynamics in 2020; 2) declining trends in the dynamics of the share of loans in the assets of commercial banks and the indicator of the financial depth of lending to the Ukrainian economy; 3) predominance of the share of loans to businesses in comparison with the share of loans to households in the loan banking portfolio; 4) faster growth rates of bank loans to households compared to the growth rates of lending to businesses; 5) in the sectoral context, the largest share in lending to business units is accounted for by trade and in lending to households – by consumer lending; 6) half of the loan portfolio of commercial banks are short-term loans for up to one year; 7) the share of non-performing loans in the loan portfolio remains high; 8) gradual reduction of non-deposit sources among the liabilities of commercial banks and their transition to almost full financing at the expense of customer deposits; 9) increase in the share of short-term and decrease in the share of long-term deposit financing of commercial banks. Based on the methods of system dynamics, the authors created a model that allows to trace the relationship between commercial banks-businesses-households, as well as to calculate the forecast volumes of bank loans in accordance with the demand for loans from businesses and households (weighted by the maximum value credit load) and supply of credit resources by commercial banks. From a practical point of view, determining the characteristic trends of bank lending, modeling the interaction of its main participants and determining the volume of bank loans using system dynamics helps to identify key factors influencing the supply and demand of bank credit resources at the present stage of Ukraine’s development and predict future lending dynamics.

scholarly journals BANK LENDING IN UKRAINE AND SIMULATION OF CREDIT ACTIVITY BY METHODS OF SYSTEM DYNAMICS

2021 ◽  
Vol 2021 (2) ◽  
pp. 101-127
Author(s):  
Svitlana Hlushchenko ◽  
◽  
Sergiy Ivakhnenkov ◽  
Sofiia Demkiv ◽  
◽  
...  
Keyword(s):  
System Dynamics ◽  
Interest Rates ◽  
Commercial Banks ◽  
Banking Sector ◽  
Bank Lending ◽  
Bank Loans ◽  
Bank Loan ◽  
Short Term ◽  
Loan Portfolio ◽  
Stage Of Development

The article identifies trends in bank lending to companies and households in Ukraine and considers modeling and integrated mapping of demand and supply of bank loans using the methods of system dynamics. The article shows that by 2020 the main trends in the Ukrainian banking sector are: a) increased dynamics of return on capital (29.7%) and reduced dynamics of interest rates on deposits (6.6%) and loans (14.8%); b) growth of the dynamics of bank loans in general, including the following characteristics: the largest share of the bank loan portfolio is accounted for by loans to economic entities, while loans to households account for 21.9%; loans to households are growing faster compared to the growth rate of loans to businesses; in the sectoral context, the largest share in lending is accounted for by the trade sector; short-term consumer loans predominate in household lending (82%); half of the loan portfolio of commercial banks consists of short-term loans; the share of non-performing loans in the total volume of issued loans remains high (48.75%); c) the deposit portfolio is dominated by household deposits, but in the dynamics there is a tendency to decrease in their share. Based on the methods of system dynamics, the authors present a model that allows to trace the relationship between commercial banks and legal entities and individuals, as well as to forecast the amounts of bank loans in accordance with the demand for loans from businesses and households (weighted by the maximum value credit load) and supply of credit resources by commercial banks. From a practical point of view, characterization of trends in banking, modeling the interaction of major participants in bank lending and determining the volume of bank loans using methods of system dynamics will help identify the main factors influencing the supply and demand of bank credit resources at the current stage of development of Ukraine and predict future dynamics of lending.

scholarly journals Negative interest rates as a consequence of the transformation of monetary arrangements in modern economy: A literature review

2020 ◽  
Vol 26 (4) ◽  
pp. 856-873
Author(s):  
V.K. Burlachkov
Keyword(s):  
Interest Rates ◽  
Commercial Banks ◽  
Banking Sector ◽  
Bank Lending ◽  
Central Banks ◽  
Payment Systems ◽  
Modern Economy ◽  
Negative Interest Rates ◽  
Effective Instrument ◽  
Business Entities

Subject. The article considers negative interest rates applied by both central and commercial banks on deposits and loans under conditions of significant changes in monetary arrangements of the modern economy. Currently, the number of central and commercial banks using such interest rates tends to increase. Objectives. The aim is to review theoretical and practical scientific studies on identifying the root causes of using the negative interest rates and the implications of this practice in the modern economy. Methods. The study involves methods of induction, deduction, synthesis, and comparative analysis. Results. The application of negative interest rates by central banks is aimed at stimulating the use of money (the banking sector liquidity) in central banks’ payment systems. The application of negative rates by commercial banks is related to the absence of commercial banks’ interest in using the deposits of business entities in conditions when the volumes of bank lending are restricted by Basel standards, i.e. by the Capital to Risk (Weighted) Assets Ratio (CRAR). Conclusions. Using the negative interest rates due to the specifics of the modern monetary arrangements cannot be characterized as an effective instrument of modern monetary policy implementation. Refusal to apply negative interest rates practices should be supported by effective coordination between the central bank money (the banking sector liquidity) and M1 money supply, which is formed as result of commercial banks’ credit transactions.

scholarly journals ANALISIS INTEREST RATE PASS-THROUGH PADA MEKANISME TRANSMISI KEBIJAKAN MONETER INDONESIA

2017 ◽  
Vol 1 (1) ◽  
pp. 125
Author(s):  
Risna Amalia Hamzah ◽  
Handri Handri
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Interest Rates ◽  
Commercial Banks ◽  
Money Market ◽  
Bank Loans ◽  
Short Term ◽  
Consumer Loans ◽  
Pass Through ◽  
The Interest Rate

This reseach aimed to evaluate the performance of monetary policy, toexamine and test the magnitude of the response rates on deposits and bank loans to the money market interest rate, and how fast adjustment of the interest rate of deposits and loans in response to changes in money market interest rates. The performance evaluation of the level of adjustment of interest rate pass-through is done by testing the coefficient of adjustment of the interest rate deposits and loans in response to changes in money market interest rates. The object of this reseach is reported in interest rates interbank money market (rPUAB) and bank interest rates (loans and deposits) of all commercial banks in Indonesia, the data used in the form of a row of monthly time (monthly time series) of the annual report of Bank Indonesia and SEKI ( Economic and Financial statistics Indonesia), in the period 2005-2016. The method used in this research is the Autoregressive Distributed Lag (ARDL) for calculating the amount of long-term coefficients and Error Correction Model (ECM) -ARDL for calculating the amount of short-term coefficients. We find of the analysis indicate a change of monetary policy in the short term through the interest rate channel with its operational targets interest rates interbank money market (interbank) did not respond in full by the rates on deposits and loans in commercial banks in Indonesia, represented by the value of the degree of pass- through which less than 1 and there is a tendency that the longterm interest rates on loans and deposits experienced incomplete pass-through, then interest rates on consumer loans and deposits of 24 months has the speed of the slowest, which means consumer loans and deposits of 24 months in Indonesia unresponsive to changes in interbank rates. keywords: ARDL, ECM, Interest Rate pass-through, PUAB.

scholarly journals Progress of Self Help Group-Bank Linkage Programme in India

2021 ◽  
Vol 9 (2) ◽  
pp. 41-51
Author(s):  
N Muthu
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Bank Loans ◽  
Statistical Tools ◽  
North West ◽  
Self Help ◽  
The Poor ◽  
National Bank ◽  
Self Help Group ◽  
Remarkable Progress

In this paper an attempt has been made to analyse the progress of SHG-Bank linkage programme in India during the period between 2007-2008 and 2019-2020. The progress of SHG-Bank linkage programme has been analyzed in terms growth of savings of SHGs with banks and growth of bank loans disbursed to SHGs. For this purpose the data required for the study were collected from the official publication of National Bank for Agricultural and Rural Development (NABARD), different published reports, journals and existing available literature. This study employed simple statistical tools such as percentage analysis and averages to analyze the data. The result of the study shows that there is significant raise in the amount of savings of SHGs with banking sector and amount of loans disbursed to SHGs, During this study period. However the agency-wise analyses of savings of SHGs and loans disbursed to SHGs show that the Commercial banks lead in getting savings of SHGs and loans disbursed to them followed by Regional Rural Banks and Co-operative banks. Not with standing the remarkable progress, geographically there has been skewed development of SHG-Bank linkage programme in India. There is wide regional disparity in the spread of SHGs, savings of SHGs with banks and loans disbursed to SHGs under this programme. The outreach of this programme is spectacular in Southern region while North, West and Eastern regions are lagging behind. In view of the large outreach, predominant position and the possible benefits to the poor, it is very important to see the benefits of this programme to reach across all sections of the society and regions. So far the SHG movement is India is mostly South-Centric and it is yet to take off the real sense in other regions of India.

CONSOLIDATION WITHIN THE BANKING SECTOR AND SAVINGS DEPOSITS: EFFECTS ON LIQUIDITY, OUTPUT, AND PROFITABILITY WITHIN THE NIGERIAN ECONOMY

2015 ◽  
Vol 10 (01) ◽  
pp. 1550001 ◽  
Author(s):  
OGHENOVO ADEWALE OBRIMAH ◽  
CHIDINMA EDITH EBERE
Keyword(s):  
Social Welfare ◽  
Interest Rates ◽  
Banking Sector ◽  
Banking System ◽  
System Structure ◽  
Efficiency Frontier ◽  
Loan Portfolio ◽  
Welfare Benefits ◽  
Banking Structure ◽  
Effectiveness Of Regulation

In this study, we find savings deposits have contributed significantly to the effectiveness of regulation induced consolidation within the banking sector in so far as improvements in banking system structure, output, profitability and competitiveness are concerned. Specifically, we find savings deposits are key parameters in the transition from a banking structure within which profitability is primarily determined by liquidity during the pre-consolidation period (2007–2008) to a banking structure within which profitability is primarily a function of loan portfolio growth (output) during the post-consolidation period (2010–2012). In spite of the increase in importance of savings deposits for banking system competition, output, or profitability during the post-consolidation period, savings deposit rates have decreased by about 50% between the pre- and post-consolidation periods. Interest rates on savings deposits also do not lie on the efficiency frontier for loan production. Combined, our findings indicate the benefits of consolidation that accrue from savings deposits have yet to translate into social welfare benefits for banks' retail customers.

Pro-cyclicality of the Basel Capital Requirement Ratio and Its Impact on Banks

2011 ◽  
Vol 10 (2) ◽  
pp. 22-36 ◽  
Author(s):  
Naoyuki Yoshino ◽  
Tomohiro Hirano
Keyword(s):  
Interest Rates ◽  
Stock Prices ◽  
Bank Lending ◽  
Bank Loans ◽  
Capital Requirement ◽  
Land Prices ◽  
Minimum Capital ◽  
Cross Border ◽  
Minimum Capital Requirement ◽  
Boom Period

This paper proposes replacing the present Basel capital requirement with a new counter-cyclical measure. Optimally, (i) the Basel capital requirement ratio should depend on various economic factors such as the cyclical stage of GDP, credit growth, stock prices, interest rates, and land prices—hence, avoiding the expansion of bank loans during a boom period and a credit crunch during a sluggish period; (ii) the Basel minimum capital requirement rule should be different from country to country since the economic structures and the behavior of banks are different; and (iii) cross-border bank operation should follow the minimum capital requirement ratio where bank lending activities occur rather than the origin of the source of funds.

scholarly journals Management and Organization Issues of the Banking Sector in Kyrgyzstan

2017 ◽  
Author(s):  
Celaleddin Serinkan
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Banking System ◽  
General Information ◽  
Senior Management ◽  
Effective Management ◽  
Short Term ◽  
Measurement Tools ◽  
Staff Recruitment ◽  
And Training

The banking system is an integral part of contemporary economy. There are many reasons behind the success of the banks. One of the most important of these reasons is the development of effective management and organization in the banks. This study has been applied to commercial banks in Kyrgyzstan banking sector. The aim of this study is to identify the problems of commercial banks in Kyrgyzstan and to contribute to new work on their solution. The main issues such as planning, organization, decision making, human resources and training related to management and organizational problems of the enterprises in the study are discussed. Besides the general information about the research, the research method, sampling and measurement tools are given. Findings from the questionnaires were evaluated on the percentage (%) and frequency (f). In the results obtained, it was observed that commercial banks were making short-term plans and staff recruitment was dependent on management. It has been understood that senior management does not resort to employees' opinions when making a decision.

scholarly journals INTERNATIONAL EXPERIENCE OF ASSESSMENT OF CREDIT CAPACITY OF BORROWERS BY COMMERCIAL BANKS

2021 ◽  
Author(s):  
Natalia Ostrovska
Keyword(s):  
Commercial Banks ◽  
System Analysis ◽  
Bank Lending ◽  
Management Skills ◽  
Loan Portfolio ◽  
Scientific Methods ◽  
Financial Condition ◽  
Credit Risks ◽  
Scientific Principles ◽  
General Scientific

The country's economy is still in a state where its development is hampered by the lack of clearly defined, priority programs to stimulate entrepreneurship and industries, including through credit. Bank lending to businesses is an effective way out of the crisis. The strengthening of the role of credit relations as a means of stimulating the development of production is manifested in various aspects. The purpose of the article is to analyze and assess the creditworthiness of borrowers by commercial banks in the international space and the possibility of their introduction into the mechanism of bank lending, which is based on world practice. The study uses the fundamental provisions of economic theory, credit theory, banking, as well as studies of domestic and foreign scholars. General scientific principles of conducting complex scientific researches were used to solve the set tasks. In the process of research a number of general scientific methods were used, in particular: analogies, logical generalization and system analysis. Based on the identified problems, foreign experience was studied, on the basis of which the prospects for improving the assessment of creditworthiness of borrowers by commercial banks in Ukraine were identified. Based on studies of various methods of assessing creditworthiness, set out in the economic literature and used in banking practice, the author proposes an improved method of assessing the creditworthiness of a legal entity, which includes analysis of both quantitative and qualitative indicators of the borrower (financial condition, collateral, credit history, management skills). the borrower's ability to repay the loan). This method contains a sufficient, in the author's opinion, a set of indicators that will allow you to make decisions on the loan agreement and minimize credit risks. To reduce the risks of the loan portfolio, measures should be applied both at the level of risk management of the loan portfolio as a whole and at the level of the specific borrower.

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