scholarly journals Corporate green investment imperative and risk of a credit crunch in Poland

2021 ◽  
Vol 2021 (154) ◽  
pp. 233-248
Author(s):  
Irena PYKA ◽  
◽  
Jan PYKA ◽  
Keyword(s):  
Global Economy ◽  
Banking Sector ◽  
Credit Rating ◽  
Banking System ◽  
Bank Loans ◽  
Bank Loan ◽  
Credit Crunch ◽  
The European Union ◽  
Social Implication ◽  
Polish Economy

Purpose: The main subject of the article is a phenomenon that is increasingly common in countries of the global economy referred to as the so-called credit crunch. The study analyses the reasons that favour the escalation of risk of a credit crunch in the banking systems. The main objective of the article is to expose them as widely as possible, combining it with verification of the determinants of a credit crunch. Design approach: The empirical research conducted in this study focuses on the Polish banking system. For the first time the credit crunch was observed there in the second half of 2008. It was then that lending to households decreased by 25% and to enterprises by as much as 33%. In the Polish banking system, a drop in the volume of loans to enterprises has been observed for a long time, favouring the increase in risk of a credit crunch. Findings: The article evaluates the potential risk of a credit crunch in the Polish banking system pointing out their links resulting from the implementation of the new climate policy in the European Union as well as the COVID-19 pandemic. This is caused by the fact that during the COVID-19 crisis, credit rating of Polish enterprises decreased significantly, causing partial restrictions or even elimination of bank loan in industries threatened by the crisis. Research implication: The Polish economy is facing a significant challenge of meeting the EU criteria for limiting CO2 emissions, which will force domestic enterprises to invest considerably in environmental protection and will increase their demand for debt financing, including bank loans. Banks are preparing for green lending to the Polish economy which signifies a strong transition of loans to investments which meet the taxonomy criteria and are therefore subject to climate objectives. Practical and social implication: Industry risk will determine lending of Polish enterprises under the conditions of the European Green Deal. Green financing of investments of Polish enterprises is therefore becoming a significant potential cause of increasing risk of a credit crunch in the Polish banking sector. Originality/value: Presentation of the enterprise credit dilemmas in the conditions of financial instability of the global economy in the perspective of credit-crunch in Poland is a novel, original and contemporary subject. The diagnosis of the determinants of this threat has facilitated their positioning relatively to the risk of credit-crunch in the Polish banking sector. The results of this analysis underline the risks in this sector and the consequences of introducing European taxonomy of green investments as factors limiting credit actions and enterprise credits in banks.

ADMINISTRATIVE, LEGAL AND SUPERVISORY DETERMINANTS OF GLOBALIZATION OF FINANCIAL MARKETS AND THE BANKING SYSTEM IN POLAND

2015 ◽  
Vol 2 (2) ◽  
pp. 0-0 ◽  
Author(s):  
Sylwia Gwoździewicz ◽  
Dariusz Prokopowicz
Keyword(s):  
Financial Markets ◽  
Banking Sector ◽  
Banking System ◽  
Financial System ◽  
Developed Countries ◽  
Central Banking ◽  
The European Union ◽  
Legal Norms ◽  
Recent Financial Crisis ◽  
Polish Economy

Since the early 90s of the last century, the growing importance of globalization processes in Poland, executing in the field of socio-economic and cultural unification of the community has been observed. Due to the ongoing process of the transformation of the Polish economy, this process was also determined successively increasing integration of financial markets and the development of ICT. Currently operating in Poland, the financial system and the banking sector is one of the most globalized sectors of the economy. This process has been intensified Polish accession to the European Union in 2004. High scale of financial markets globalization in Poland was visualized during the recent financial crisis 2008 years. The process of globalization of financial markets and the banking system in Poland is determined mainly by factors such as administrative and supervisory functions of central banking and supervisory bodies in the financial system and to adapt legal norms to the standards of Western developed countries.

Discretionary Accruals in Italian Private Firms and Non-Linear Bank Loan Granting

2017 ◽  
pp. 83-99
Author(s):  
Elisabetta Mafrolla ◽  
Viola Nobili
Keyword(s):  
Financial Reporting ◽  
Banking System ◽  
Regulatory System ◽  
Discretionary Accruals ◽  
Bank Loans ◽  
Bank Loan ◽  
Banking Union ◽  
Private Firms ◽  
European Banking Union

This paper investigates whether and at what extent private firms reduce the quality of their accruals in order to signal a better portrait to the bank and obtain new or larger bank loans. We measure earnings discretionary accruals of a sample of Italian private firms, testing whether new and larger bank loans are associated with a higher (lower) quality of earnings in borrowers' financial reporting. We study bank loan levels and changes and how they impact discretionary accruals and found that, surprisingly, private firms' discretionary accruals are systematically positively affected by an increase in bank loans, although they are negatively affected by the credit worthiness rating assigned to the borrowers. We find that the monitoring role of the banking system with regard to the adoption of discretionary accruals is effective only when the loan is very large. This paper may have implications for policy-makers as it contributes to the understanding of the shortcomings of the banking regulatory system. This is an extremely relevant issue since the excessive amount of non-performing loans held by Italian banks recently threatened the stability of the European Banking Union as a whole.

Bank Loans with Chinese Characteristics: Some Evidence on Inside Debt in a State-Controlled Banking System

2011 ◽  
Vol 46 (6) ◽  
pp. 1795-1830 ◽  
Author(s):  
Warren Bailey ◽  
Wei Huang ◽  
Zhishu Yang
Keyword(s):  
Banking System ◽  
Bank Loans ◽  
Bank Loan ◽  
Inside Information ◽  
Inside Debt ◽  
Social Instability ◽  
Chinese Characteristics ◽  
Loan Approval ◽  
Loan Announcements ◽  
Local Stock

AbstractWe study a transitional economy where state-controlled banks make loan decisions based on noisy inside information on prospective borrowers, and may lend to avert unemployment and social instability. In China, poor financial performance and high managerial expenses increase the likelihood of obtaining a bank loan, and bank loan approval predicts poor subsequent borrower performance. Negative event study responses occur at bank loan announcements, particularly for borrowers measuring poorly on quality and creditworthiness, or for lenders or borrowers involved in litigation regarding loans. Our results highlight dilemmas in a state-led financial system and the local stock market’s sophistication in interpreting news.

scholarly journals Bank Competition, Efficiency, and Stability in Macau

2019 ◽  
Vol 8 (4) ◽  
pp. 157
Author(s):  
Harry Xia ◽  
Kevin Lei ◽  
Jiaochen Liang
Keyword(s):  
Economies Of Scale ◽  
Banking Sector ◽  
Banking System ◽  
Bank Loans ◽  
Bank Competition ◽  
Income Volatility ◽  
Bank Efficiency ◽  
Insolvency Risk ◽  
Relationship Of ◽  
The Relationship

Macau has the uppermost population density and the fourth-highest GDP per capita in the world. Macau’s banking system is regarded as one of the most important indicators of Macau’s macroeconomic growth and stability during its transformation into a wealthy and modern metropolis. In this study, we use a sample of 26 banks to explore the relationship of bank competition, efficiency and stability in Macau from its return to China in 1999 to 2016. Our results demonstrate that bank competition does cause efficiency in Macau throughout the study period. We also find indications of a positive but not significant connection between bank market power and bank fragility including income volatility and insolvency risk. Moreover, this study finds no evidence that the size of operations proxied by total bank loans and total assets would impact bank efficiency, indicating that economies of scale or bank market share don’t necessarily bring about efficiency in Macau. Our evidence contributes to the literature by being the first to thoroughly examine the relation of bank competition, efficiency and stability in Macau. The findings provide meaningful implications to the practitioners and policymakers to make sound decisions accordingly, especially to closely monitor and maintain a proper level of competition in Macau’s banking sector.

THE DEVELOPMENT OF THE BANKING SYSTEM IN POLAND DETERMINED BY THE PROCESSES OF ADJUSTMENT TO THE NORMATIVE AND TECHNOLOGICAL STANDARDS OF THE EUROPEAN UNION AND CONTEMPORARY PROCESSES OF ECONOMIC AND INFORMATIONAL GLOBALIZATION

2018 ◽  
Vol 4 (2) ◽  
pp. 339-367
Author(s):  
Jan Grzegorek ◽  
Dariusz Prokopowicz ◽  
Adrian Chojan ◽  
Mirosław Matosek
Keyword(s):  
Financial Markets ◽  
Capital Flows ◽  
Banking Sector ◽  
Stock Exchange ◽  
International Monetary System ◽  
Banking System ◽  
Economic Transformation ◽  
The European Union ◽  
Market Institutions ◽  
Main Determinants

The current processes of economic and information globalization are mainly related to the successively progressing integration of financial markets, the development of ICT and Internet technologies. The liberalization of capital flows, progressing since the 1970s, was determined by many economic and political factors, including the modification of the international monetary system. The main determinants of economic and information globalization include such processes as liberalization of capital flows, deregulation of international financial markets and progress in the field of ICT. These processes constituted favorable conditions for the reconstruction of the market financial system, including the banking sector in Poland in the 1990s. Since the beginning of the systemic and economic transformation that has been taking place in Poland since 1989, the banking system and capital market institutions have been rebuilt. It referred to the Warsaw Stock Exchange market institutions, taking into account the opening of the economy to foreign capital. Foreign financial corporations taking over domestic banking entities in Poland have introduced their modern transactional and teleinformation technologies and new standards for entering into financial transactions. These processes were the main determinants of economic and information globalization that has been made in Poland since the 1990s.

scholarly journals GDP Fluctuation and Changes in Consumption and Investment. Comparative Analysis of Polish Economy and Some Countries of the European Union

Equilibrium ◽  
2012 ◽  
Vol 7 (3) ◽  
pp. 43-53
Author(s):  
Joanna Rydarowska-Kurzbauer
Keyword(s):  
European Union ◽  
Global Economy ◽  
Aggregate Demand ◽  
Turn Of The Century ◽  
Rate Of Change ◽  
The European Union ◽  
Dimensional Changes ◽  
Starting Point ◽  
Global Demand ◽  
Polish Economy

The turn of the century was full of dynamic and multi-dimensional changes in the global economy. The most spectacular phenomena may include financial crises. They exerted influence not only on the economy, in which they appeared, but as a result of deepening of globalization, spread "infecting" others. The purpose of this article was an attempt to find similarities in the dynamics of changes in production and global demand that characterized the economy of the selected European Union countries. The starting point was to show the dynamics of gross domestic product (GDP) in selected countries and to find similarities between them. In the next section attention was focused on the changes in the two components of aggregate demand: consumption and investment, particularly on their correlation with the rate of change of GDP. For analysis and comparisons the following economies were selected: the economy of the European Union (represented by the euro zone) and the economy of Central and Eastern Europe.

scholarly journals The Impact of the European Integration Process on the Banking System – an Overview

2010 ◽  
Author(s):  
Bogdan Ilut
Keyword(s):  
European Union ◽  
European Integration ◽  
Banking Sector ◽  
Banking System ◽  
Main Channel ◽  
The European Union ◽  
Integration Process ◽  
Fully Integrated ◽  
Is Integration ◽  
The Impact

<p>In the last decade the European integration process was the main focuses of the European Union, as its completion could bring a huge step toward a fully integrated European Union. As the banking sector is the main channel for funding of the European economy, it has become now more clearly than ever that is integration is of the up more essence. The aim of this paper is to quantify the progresses registered by the main European Union’s economies in the process of banking integration, as their example is generally followed by the other member states. First we underline the necessity of the European integration and the progress made using an extended literature review doublet by an analysis of the main indicators for the banking systems of these countries. We also present, in a non-exhaustive way, the main trends that have characterised the banking sectors of these countries in the last decade: diversification, vertical product differential and consolidation underlying their impact on the sectors architecture.</p>

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 Appraisal of Financial Situation of the Polish Banking Sector from 2008 to 2012

Management ◽  
2013 ◽  
Vol 17 (2) ◽  
pp. 177-189
Author(s):  
Paweł Trippner
Keyword(s):  
Economic Development ◽  
Financial Markets ◽  
Financial Institutions ◽  
Banking Sector ◽  
Banking System ◽  
Financial System ◽  
The European Union ◽  
Financial Situation ◽  
Financial Condition ◽  
European Union Countries

Summary Appraisal of Financial Situation of the Polish Banking Sector from 2008 to 2012 The banking system is a very important element of the financial system of a country. As institutions of public trust, banks play a crucial role in the process of transforming savings into investments, which directly affects the country’s economic development. Maintaining the banking sector in a good financial condition guarantees stability of the financial system and economic development of Poland. The article aims to present the essence of operations of banks as financial institutions, present their role in the economy, and describe various methods of appraising their financial condition. In order to fulfil the above goals, a research hypothesis is put forward stating that the financial condition of the banking sector in Poland deteriorated in the analysed period as a result of an adverse impact of turbulence in financial markets and problems in banking sectors in the European Union countries.

scholarly journals Credit Management Practices and Loan Performance: Empirical Evidence from Commercial Banks in Kenya

2020 ◽  
Vol 2 (1) ◽  
pp. 51-63
Author(s):  
Irene Muthoni Mburu ◽  
Lucy Wamugo Mwangi ◽  
Stephen M.A Muathe
Keyword(s):  
Commercial Banks ◽  
Management Practices ◽  
Banking Sector ◽  
Banking System ◽  
Secondary Data ◽  
Bank Loan ◽  
Primary Data ◽  
Credit Management ◽  
Lending Policy ◽  
Debt Collection

Commercial banks in Kenya as per the World Bank report were recording higher non-performance in loans over the study period than the standard globally in spite of Kenya having the most stable and developed banking system in East and Central Africa region. Commercial banks non-performing loans for five years from 2015 to 2018 averaged eleven percent which was higher than the recommended rate of one percent. In Kenya, commercial banks’ non-performing loans remain higher than the recommended rate which could be due to inadequate credit management practices. The study therefore aimed at examining the effect of credit management practices on loan performance of commercial banks in Kenya. Specifically, the study sought to establish the effect of debt collection policy, client appraisal and lending policy on the loan performance of commercial banks in Kenya. The underpinning theory of the study was the 5Cs model for credit. The study used explanatory research design and the research philosophy adopted was positivism. The target population was 44 commercial banks in Kenya and a census approach was used. Both primary and secondary data were used. Primary data was collected through structured questionnaires and related to credit management practices while secondary data was obtained from review of existing bank loan records in relation to loan amount advanced and non-performing loans for a period of four years from 2015-2018. The data collected was analyzed using both descriptive and inferential statistics with the help of SPSS version 22. The study found out that debt collection policy and lending policy had a positive significant effect on loan performance of commercial banks in Kenya. However, client appraisal had no significant effect on loan performance of commercial banks in Kenya. Therefore, the study concluded that commercial banks’ loan performance could be largely attributed to the efficiency of the credit management practices put in place at the institutions. The study recommended that commercial banks to regularly evaluate and update practices relating to debt collection policy, client appraisal and lending policy that are capable of ensuring that credit risks are identified and recorded from departmental level to the institution at large. This is vital in light of technological innovations in the banking sector like mobile lending that may limit commercial banks’ ability to evaluate and manage credit using traditional methods.

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