scholarly journals DUAL MONETARY INSTRUMENTS’ IMPACT ON THE PERFORMANCE AND STABILITY OF JAKARTA ISLAMIC INDEX

2018 ◽  
Vol 3 (2) ◽  
pp. 315-348
Author(s):  
Bazari Azizi
Keyword(s):  
Monetary Policy ◽  
Financial Market ◽  
Capital Market ◽  
Balance Sheet ◽  
Monetary Policies ◽  
Monetary System ◽  
Balance Sheet Channel ◽  
Monetary Policy Transmission Mechanism ◽  
The Stability ◽  
The Impact

The monetary instruments and capital market are closely related as these tools are operating in the money market. The influence of the monetary policy to the stocks and indexes’ performance has been the research interest in the previous literature. The monetary policies along with its’ instruments are transmitted not only in banking lending channel to affect the economic growth but also in the balance sheet channel. However, the conventional tools and policies are not adhering the sharia tenets. Hence, the sharia-compliance monetary system is emanated in Muslim majority countries, including Indonesia. Additionally, this establishment of policy is coupled with the emergence of the Islamic capital market in Indonesia. Thus, the analysis of the impact of either Islamic or conventional monetary system on the Islamic capital market in Indonesia that represented by the Jakarta Islamic Index (JII) is essential to look at its’ furthers effect on financial market growth.This study examines the impact of the Islamic and conventional monetary variables on the performance of the Jakarta Islamic Index in Indonesia. It also investigates the stability of the JII under the occurrence of the shock derived from the monetary instruments. Monthly closing value of the JII, conventional or interest rate, Islamic policy rate, and monetary base are assessed to address the research objectives in this paper. This study employs the VAR-VECM and Granger analysis to analyse the phenomenon. The monetary policy transmission mechanism through the financial market channel is the main channel that will be investigated in this paper. The study comprises of introduction, literature review, methodology, and lastly the discussion and conclusion.

scholarly journals Credit Supply and Monetary Policy: Identifying the Bank Balance-Sheet Channel with Loan Applications

2012 ◽  
Vol 102 (5) ◽  
pp. 2301-2326 ◽  
Author(s):  
Gabriel Jiménez ◽  
Steven Ongena ◽  
José-Luis Peydró ◽  
Jesús Saurina
Keyword(s):  
Monetary Policy ◽  
Firm Heterogeneity ◽  
Supply And Demand ◽  
Balance Sheet ◽  
Economic Conditions ◽  
Balance Sheet Channel ◽  
Loan Demand ◽  
Loan Supply ◽  
Credit Restriction ◽  
The Impact

We analyze the impact of monetary policy on the supply of bank credit. Monetary policy affects both loan supply and demand, thus making identification a steep challenge. We therefore analyze a novel, supervisory dataset with loan applications from Spain. Accounting for time-varying firm heterogeneity in loan demand, we find that tighter monetary and worse economic conditions substantially reduce loan granting, especially from banks with lower capital or liquidity ratios; responding to applications for the same loan, weak banks are less likely to grant the loan. Finally, firms cannot offset the resultant credit restriction by applying to other banks. (JEL E32, E44, E52, G21, G32)

scholarly journals Money Decentralization under Direct Democracy Procedures. The Case of Classical Athens

2021 ◽  
Vol 14 (1) ◽  
pp. 30
Author(s):  
Emmanouil-Marios L. Economou ◽  
Nicholas C. Kyriazis ◽  
Nikolaos A. Kyriazis
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Direct Democracy ◽  
Hellenistic Period ◽  
International Currency ◽  
Monetary System ◽  
Mediterranean World ◽  
The Stability ◽  
City State

By analyzing the case of Athens during the Classical period (508-323 BCE) the main thesis of this paper is that under direct democracy procedures and the related institutional setup, a monetary system without a Central Bank may function relatively well. We focus on the following issues: (i) Τhe procedures of currency issuing in the Athenian city-state, (ii) why the Athenian drachma become the leading international currency in the Mediterranean world (iii) how and towards which targets monetary policy without a Central Bank was possible (iv) defining the targets of monetary policy and the mechanisms for its implementation (v) the role of money in the economy (vi) the issue of deficit spending (vii) the reasons of the replacement of the Athenian drachma as a leading currency by others from the Hellenistic period onwards (viii) the correlation of our findings regarding the decentralized character of monetary policy in Classical Athens to today’s realities, such as the issue of cryptocurrencies. Our analysis shows that monetary policy without a Central Bank was possible, with its foremost aim being the stability of the currency (mainly, silver coins) in order to enhance trust in it and so, make it an international currency which could outcompete other currencies. Since there was no Central Bank like today, monetary policy decisions were taken by the popular assembly of citizens in combination with the market forces themselves.

The Impact of the Credit Channel on Macroeconomic Variables and Bank Characteristics in the Brazilian Economy from 2009 to 2018

2021 ◽  
Vol 40 (1) ◽  
Author(s):  
Mohammad Farajnezhad
Keyword(s):  
Monetary Policy ◽  
Fixed Effect Model ◽  
Credit Channel ◽  
Macroeconomic Variables ◽  
Brics Countries ◽  
Effect Model ◽  
Level Data ◽  
Monetary Policy Transmission Mechanism ◽  
The Interest Rate ◽  
The Impact

This article uses commercial bank-level data to examine a credit channel of the monetary policy transmission mechanism in the Brazilian economy from BRICS countries.  Static panel data with a fixed-effect model are used for data analysis. Using a sample of 212 commercial banks from 2009 to 2018. According to the findings of this study, there is a significant and positive relationship between macroeconomic variables that affect the interest rate and GDP with the loan amount, but not with the inflation rate. Also, it is reasonable to conclude that banks in Brazil react to monetary policy in a variety of ways.

scholarly journals Impacts of Monetary Policy on Commercial Banks’ Profits: The Case of Vietnam

2017 ◽  
Vol 13 (8) ◽  
pp. 32
Author(s):  
Thanh Nhan Nguyen ◽  
Ngoc Huong Vu ◽  
Ha Thu Le
Keyword(s):  
Monetary Policy ◽  
Commercial Banks ◽  
Positive Impact ◽  
Monetary Policies ◽  
Significance Level ◽  
Doing Business ◽  
Panel Data Regression ◽  
Banking Market ◽  
Data Regression ◽  
The Impact

This paper mainly concentrates on examining the impact of monetary policy on commercial banks’ profit in Vietnam by using panel data regression. In our study, the data is collected from 20 commercial banks which were doing business in Vietnam’s banking market, ranging from 2007 to 2014 in annually frequency. Monetary base (MB), discount rate (DIS) and required reserve ratio (RRR) are used as proxies for monetary policy. Profit before tax (PROFIT) is used to represent commercial banks’ performance. The results show that there is a positive relationship between banks’ profits and monetary policies. Among those chosen variables representing SBV’s monetary policy, only MB has a significant positive impact on bank’s profit at the significance level of 10%. On this premise, the study recommends that MB should be one of the variables in the center of being concerned in the SBV’s policies regarding the banking performance and stability.

scholarly journals Quantitative Easing In Overcoming the Crisis: Criticism ofQeinthe Monetary System Of Capitalism

2021 ◽  
Vol 12 (3) ◽  
pp. 3703-3714
Author(s):  
Aang Kunaifi Et.al
Keyword(s):  
Monetary Policy ◽  
Qualitative Approach ◽  
Research Approach ◽  
Quantitative Easing ◽  
Literature Study ◽  
Fiscal Stimulus ◽  
Monetary System ◽  
Economic Shock ◽  
The Impact ◽  
Alternative Solutions

This study aims to describe the form of Quantitative Easing applied by the Central Bank as well as qualitatively measure its benefits and excesses. To obtain a description and know the benefits and excesses in question, the research approach uses a qualitative approach by conducting a literature study of several facts and quantitative easing studies by Bank Indonesia and the Fed from various literature and media inductively relevant theories. This study's findings show that excesses can be detrimental to society, and countries that are shariah are harmful that should be avoided. This research is expected to encourage further research to determine the correlation of Quantitative Easing policy to the resolution of economic crisis and obtain alternative solutions by implementing the Islamic monetary system. The impact of the covid-19 pandemic that continues to this day causes economic shock, the slowing flow of goods commodities, decreased production, and decreased purchasing power of the community. Various policy efforts are carried out through fiscal stimulus as well as support through monetary policy in the form of quantitative easing.

The Channels of Transmission of Monetary Policy

2021 ◽  
pp. 45-88
Author(s):  
Juan Antonio Morales ◽  
Paul Reding
Keyword(s):  
Monetary Policy ◽  
Emerging Market ◽  
Asset Price ◽  
Balance Sheet ◽  
Transmission Mechanism ◽  
Monetary Transmission ◽  
Monetary Transmission Mechanism ◽  
The Interest Rate ◽  
The Impact ◽  
Transmission Of Monetary Policy

This chapter explores the monetary transmission mechanism (MTM) in low financial development countries (LFDCs). It successively discusses the interest rate, asset price, bank credit, balance sheet, expectations, and real balance channels. For each channel, conceptual aspects about how it operates, how it transmits monetary policy impulses to the economy’s financial and real spheres, are first presented. Next, the impact of the specificities of LFDCs on the channel’s strength and reliability are examined and the available empirical evidence is surveyed. The chapter concludes with a global assessment of the effectiveness of the monetary transmission mechanism in LFDCs. Evidence points to a transmission mechanism that is effective although not very strong, and possibly also more uncertain than in advanced and emerging market countries.

The Impact of US Monetary Policy and Other External Shocks on the Hong Kong Economy

2019 ◽  
pp. 239-260
Author(s):  
Hongyi Chen ◽  
Andrew Tsang
Keyword(s):  
Monetary Policy ◽  
Hong Kong ◽  
Financial Stability ◽  
Mainland China ◽  
External Shocks ◽  
Monetary Policies ◽  
Macroprudential Policies ◽  
Loan Quality ◽  
The Impact ◽  
Us Monetary Policy

This chapter uses the factor-augmented vector autoregression framework to study the impact on the Hong Kong economy of the diverging monetary policies by the Fed, the European Central Bank (ECB), and the Bank of Japan (BoJ), as well as the slowdown of the Mainland economy. The empirical results show that shocks in US monetary policy rate mainly affect interest rate-sensitive sectors in Hong Kong and that monetary easing from the ECB and the BoJ somewhat offsets the impact of tightening of the Fed. Real variables such as real GDP growth and the unemployment rate are more sensitive to the economic slowdown in Mainland China. However, Hong Kong’s financial stability, particularly with regard to loan quality, banks’ capital and liquidity, is well maintained by macroprudential policies, suggesting that Hong Kong’s financial system is resilient to external shocks.

Does bank capital affect the monetary policy transmission mechanism? A case study of Emerging Market Economies (EMEs)

2019 ◽  
Vol 06 (02) ◽  
pp. 1950019
Author(s):  
Zia Abbas ◽  
Syed Faizan Iftikhar ◽  
Shaista Alam
Keyword(s):  
Monetary Policy ◽  
Emerging Market ◽  
Generalized Method Of Moments ◽  
Transmission Mechanism ◽  
Bank Capital ◽  
Monetary Policy Transmission ◽  
Policy Transmission ◽  
Loan Supply ◽  
Monetary Policy Transmission Mechanism ◽  
The Impact

The objective of this study is to investigate the impact of bank capital on monetary policy transmission mechanism during the period from 2010 to 2016 for 20 Emerging Market Economics (EMEs) by using the two-step system generalized method of moments (GMM). The coefficient of excess capital in low-asset countries is found to be negative which reveals the importance of excess capital for the effectiveness of monetary transmission. However, the study could not find the significance of excess capital for high-asset countries as they may afford the risky way to generate their income by increasing the loan supply.

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