scholarly journals Inflation Thresholds-Financial Development Nexus in South-Eastern Asian Emerging Markets

2017 ◽  
Vol 9 (4) ◽  
pp. 14
Author(s):  
Kunofiwa Tsaurai
Keyword(s):  
Emerging Markets ◽  
Financial Development ◽  
Banking Sector ◽  
Negative Impact ◽  
Empirical Literature ◽  
Macroeconomic Policies ◽  
Threshold Levels ◽  
South Eastern ◽  
Definition Of ◽  
Asian Emerging Markets

This paper investigated the maximum inflation threshold levels beyond which financial development declines in the South-Eastern Asian emerging markets using static panel threshold regression framework proposed by Bick (2010) with data ranging from 1994 to 2014. The negative impact of inflation on financial development is a settled matter in both theoretical and empirical literature. However, this study was prompted by recent literature (Boyd et al., 2001; Abbey, 2012; Kim and Lin, 2010) which argued that the relationship between inflation and financial development is not linear and is characterised by inflation thresholds. Moreover, no previous study that the author is aware of used the approach suggested by Bick (2010) to determine inflation threshold levels and financial development. Among previous inflation-finance studies, the current study is the first one according to the author’s best knowledge to use banking sector, stock market and bond sector development variables as previous studies were narrow focused in their definition of financial development. The study observed that lower levels of inflation is good for financial development whilst higher levels of inflation slows down the rate at which banking sector, stock and bond markets develop. These results agree with the theory underpinning inflation-financial development nexus. South-Eastern Asian emerging economies are therefore urged to implement macroeconomic policies that ensure inflation rates are kept at lower levels that do not stifle financial development.

scholarly journals Inflation Thresholds-Financial Development Nexus in South-Eastern Asian Emerging Markets

2017 ◽  
Vol 9 (4(J)) ◽  
pp. 14-24
Author(s):  
Kunofiwa Tsaurai
Keyword(s):  
Emerging Markets ◽  
Financial Development ◽  
Banking Sector ◽  
Negative Impact ◽  
Empirical Literature ◽  
Macroeconomic Policies ◽  
Threshold Levels ◽  
South Eastern ◽  
Definition Of ◽  
Asian Emerging Markets

This paper investigated the maximum inflation threshold levels beyond which financial development declines in the South-Eastern Asian emerging markets using static panel threshold regression framework proposed by Bick (2010) with data ranging from 1994 to 2014. The negative impact of inflation on financial development is a settled matter in both theoretical and empirical literature. However, this study was prompted by recent literature (Boyd et al., 2001; Abbey, 2012; Kim and Lin, 2010) which argued that the relationship between inflation and financial development is not linear and is characterised by inflation thresholds. Moreover, no previous study that the author is aware of used the approach suggested by Bick (2010) to determine inflation threshold levels and financial development. Among previous inflation-finance studies, the current study is the first one according to the author’s best knowledge to use banking sector, stock market and bond sector development variables as previous studies were narrow focused in their definition of financial development. The study observed that lower levels of inflation is good for financial development whilst higher levels of inflation slows down the rate at which banking sector, stock and bond markets develop. These results agree with the theory underpinning inflation-financial development nexus. South-Eastern Asian emerging economies are therefore urged to implement macroeconomic policies that ensure inflation rates are kept at lower levels that do not stifle financial development.

scholarly journals Financial Development, Economic Growth, and Environmental Degradation Nexus in ASIAN Emerging Markets

2020 ◽  
Vol 18 (2) ◽  
pp. 177-189
Author(s):  
Intan Dana Lestari ◽  
Nury Effendi ◽  
Anhar Fauzan Priyono
Keyword(s):  
Economic Growth ◽  
Emerging Markets ◽  
Financial Development ◽  
Environmental Degradation ◽  
Capital Market ◽  
Banking Sector ◽  
Sector Model ◽  
Market Sector ◽  
Asian Emerging Markets

Environmental degradation is one of the major problems in the world recently and one of the United Nations’ (UN) sustainable development goals (SDGs). Emerging markets countries that have become major players in the global economy and the main source of world economic growth have great potential to contribute the environmental degradation due to increased economic activities. This paper investigates the impact of financial development and economic growth on environmental degradation in Asian emerging markets. A panel environmental degradation model using financial development from banking sector and capital market sector, economic growth, Foreign Direct Investment (FDI), and urbanization variables that are major determinants of CO2 emission as a proxy of environmental degradation. The periods considered were 1980 – 2018 for banking model, and 1996 – 2018 for financial sector model (banking sector and capital market sector). A panel data approach applied such as cross-section dependence, panel unit root, panel cointegration, Fully Modified OLS (FMOLS) and Dynamic Ordinary Least Square (DOLS). The empirical finding revealed that in Asian emerging markets there is positively long-term relationship between financial development from banking model with environmental degradation. Nevertheless, we do not find any long-term relationship between financial development from financial sector model with environmental degradation. Moreover, the quadratic negative signed for economic growth showed the existence of Environmental Kuznets Curve (EKC).

scholarly journals The Impact of Banking Sector Competition on Banks’ Risk-Taking in Transition Economies of Central and South-Eastern Europe

2018 ◽  
Vol 13 (1) ◽  
pp. 31-42
Author(s):  
Arben Mustafa ◽  
Valentin Toçi
Keyword(s):  
Eastern Europe ◽  
Risk Taking ◽  
Fixed Effects ◽  
Banking Sector ◽  
Negative Impact ◽  
Eu Countries ◽  
South Eastern ◽  
South Eastern Europe ◽  
The Impact ◽  
The Eu

Abstract This paper uses the Panzar-Rosse H-statistic to provide empirical evidence on the impact of competitive behaviour of banks on risk-taking, using the Fixed Effects Vector Decomposition Method on panel data of banks in 15 Central and South-Eastern Europe countries during the period 1999-2009. The findings suggest that banking sector competition has had a negative impact on banks’ risk-taking implying that competition contributed to the improvement of the loan-portfolio quality. However, the results differ significantly when distinguishing between the EU and non-EU countries of the CESEE region. While for the EU countries the relationship between banking sector competition and risk-taking remains negative, this relationship is positive for the non-EU countries of the region, suggesting that an increase of competition in the non-EU countries may be detrimental for the stability of the banking sector in these countries. These results are robust to different model specifications and measures of competition

scholarly journals A Study of Non Performing Advances and It’s Management With Special Reference to Punjab National Bank

2021 ◽  
pp. 507-512
Author(s):  
Dr. Martha Sharma
Keyword(s):  
Banking Sector ◽  
Negative Impact ◽  
Capital Adequacy ◽  
Reserve Bank ◽  
Capital Adequacy Ratio ◽  
National Bank ◽  
Performance Area ◽  
Definition Of ◽  
Reserve Bank Of India

Banking industry plays an important role in the development of an economy. Banks have become very cautious in extending loans. The reason being mounting non-performing assets (NPAs). NPAs put negative impact on the profitability, capital adequacy ratio and credibility of banks. It is defined as a loan asset, which has ceased to generate any income for a bank whether in the form of interest or principal repayment. As per the prudential norms suggested by the Reserve Bank of India (RBI), a bank cannot book interest on an NPA on accrual basis. In other words, such interests can be booked only when it has been actually received. Therefore, this has become what is called as a ‘critical performance area’ of the banking sector as the level of NPAs affects the profitability of a bank. This paper touches upon the meaning and consequently the definition of a non-Performing asset, the conceptual framework of non-performing assets, classification of loan assets and provisions. The study also evaluates the adverse effect of non-performing assets on the return on total assets of Punjab National Bank Limited for the period 2013 to 2015, 2016-17, and 2019-20. Particularly discussing some remedial measures taken up by the Bank to overcome this situation of NPA.

Foreign Direct Investment, Financial Development, and Economic Growth Nexus in Bangladesh

2020 ◽  
pp. 056943452093867
Author(s):  
Md. Noman Siddikee ◽  
Mohammad Mafizur Rahman
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Financial Development ◽  
Direct Investment ◽  
Banking Sector ◽  
Negative Impact ◽  
Capital Formation ◽  
Long Run ◽  
Short Run ◽  
The Impact

This article aims to explore the short- and long-run impact of foreign direct investment (FDI), financial development (FD), capital formation, and the labor forces on the economic growth of Bangladesh. We applied the Granger causality test and Vector Error Correction Model (VECM) for this study. The World Bank data for the period of 1990–2018 are taken into account for the analysis. Our findings suggest, in the long run, capital formation has a positive impact, and in the short run, it has a negative impact on gross domestic product (GDP) implying a lack of higher efficiency is persisting in capital management. Similarly, labor forces have an insignificant impact in the short run and a negative impact in the long run on GDP, which confirms the presence of a huge number of unskilled laborers in the economy with inefficient allocation. The impact of FD is found tiny positive in the short run but large negative in the long run on GDP indicating vulnerability of banking sector. These also confirm fraudulence and inefficient use of the domestic credit supplied to the private sector. The impact of FDI is approximately null both in the short and long run, indicating Bangladesh fails to achieve the long-term benefits of FDI. Finally, this study suggests using FDI more in the capital intensive project of the public–private partnership venture than infrastructural development only and also improving the credit management policy of the banking sector. JEL Classifications: F21, F43, J21

scholarly journals ТЕОРЕТИЧНІ АСПЕКТИ ФУНКЦІОНУВАННЯ БАНКІВСЬКОГО СЕКТОРУ В УКРАЇНІ

2020 ◽  
pp. 285-292
Author(s):  
Olena Kozlianchenko
Keyword(s):  
Economic Efficiency ◽  
Banking Sector ◽  
Negative Impact ◽  
Structural Elements ◽  
Modern Economy ◽  
Banking Institutions ◽  
Main Factors ◽  
Definition Of

The article considers the economic essence and terminological interpretation of the concept of “banking sector”. Scientific approaches to the consideration of the essence of this concept are investigated. The own definition of the “banking sector” as a system that has certain specific functions and consists of many banking institutions is proposed. The role of banking institutions in the modern economy is substantiated.The role of the principles of forming an effective structure of the banking sector in its functioning is highlighted. The socio-economic efficiency of the banking sector is determined. The author identified various types of connections that arise in the banking sector between its structural elements. The main factors that may have a negative impact on the development of the banking sector as a whole are considered.

scholarly journals Ensuring the Central Bank Discretion in Issuing Stabilization Loans in Times of Covid-19 Pandemic

2020 ◽  
Vol 9 (2) ◽  
pp. 65-86
Author(s):  
Oleg Podtserkovnyi ◽  
Kristina Vozniakovska
Keyword(s):  
Central Bank ◽  
Banking Sector ◽  
Negative Impact ◽  
Economic Consequences ◽  
Scientific Methods ◽  
Analysis And Synthesis ◽  
Forecasting Analysis ◽  
The Stability ◽  
Definition Of ◽  
Restrictive Measures

Restrictive measures imposed by governments around the world to counter the Covid-19 pandemic undoubtedly have a negative impact on the economy. One of the instruments of the state, which makes it possible to save entire sectors of the economy, including the banking sector, from bankruptcy, is the stabilization loans of the central bank. Accordingly, the analysis of the discretionary powers of central banks and their governing bodies in issuing stabilization loans to overcome the economic consequences of the Covid-19 pandemic is relevant and timely. The authors used different scientific methods, such as the dialectical method, the method of comparison, the method of elementary-theoretical analysis and synthesis, the hermeneutic and the forecasting analysis. As a result of the study, the authors substantiated a definition of the powers of the governing body of the central bank in making decisions on the provision of stabilization loans to banks, as part of the function of the central bank to maintain the stability of the national currency and the indicative regulation of banks. The authors concluded that there is a need for an expanded approach to the limits of the discretion of the central bank, on the basis of harmonization of economic purpose of decisions on the issuance of stabilization loans to banks, in accordance with the constitution and the laws.

The long-run environmental impacts of economic growth, financial development, and energy consumption: Evidence from emerging markets

2019 ◽  
Vol 31 (4) ◽  
pp. 634-655 ◽  
Author(s):  
Mumin Atalay Cetin ◽  
Ibrahim Bakirtas
Keyword(s):  
Energy Consumption ◽  
Emerging Markets ◽  
Financial Development ◽  
Fossil Fuel ◽  
Negative Impact ◽  
Dynamic Panel Data ◽  
Green Energy ◽  
Kuznets Curve ◽  
Long Run ◽  
Credit Channels

In this study, the long-term interactions between carbon dioxide (CO2) emissions, real gross domestic product, fossil fuel consumption, and financial development are examined for 15 emerging markets during 1980–2014 by using heterogeneous dynamic panel data techniques. Long-run elasticity results show that the environmental Kuznets curve hypothesis is not valid for emerging markets. Besides, long-run findings reveal that fossil fuel energy consumption has a powerful negative impact on the environmental quality of emerging markets. Moreover, long-run findings of emerging markets show that 1% increase in financial development raises CO2 emissions at 0.76% level. Considering empirical findings, emerging markets should tend to use environmentally friendly technologies to avoid the possible environmental problems caused by pollution. Therefore, green energy investors should be supported by possible incentive policies. In addition, emerging markets should turn towards financial regulations, which extend credit channels for clean industries whereby emerging countries could achieve their sustainable development goals.

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