scholarly journals he Impacts of Bounced Checks on Economic Growth Through the Banking Credit Risk Channel Emphasis on Enforcement of Laws: Provincial Panel Approach

2020 ◽  
Vol 10 (40) ◽  
pp. 7-32
Author(s):  
Hassan Dargahi ◽  
◽  
Mojtaba Ghasemi ◽  
Sajjad Fatollahi ◽  
◽  
...  
Keyword(s):  
Economic Growth ◽  
Credit Risk ◽  
Banking Credit

scholarly journals Option-Based Credit Spreads

2018 ◽  
Vol 108 (2) ◽  
pp. 454-488 ◽  
Author(s):  
Christopher L. Culp ◽  
Yoshio Nozawa ◽  
Pietro Veronesi
Keyword(s):  
Economic Growth ◽  
Credit Risk ◽  
Risk Premium ◽  
Bond Market ◽  
Credit Spreads ◽  
Put Options ◽  
No Arbitrage ◽  
Primary Determinant ◽  
Default Risks ◽  
Bond Spreads

We present a novel empirical benchmark for analyzing credit risk using “pseudo firms” that purchase traded assets financed with equity and zero-coupon bonds. By no-arbitrage, pseudo bonds are equivalent to Treasuries minus put options on pseudo firm assets. Empirically, like corporate spreads, pseudo bond spreads are large, countercyclical, and predict lower economic growth. Using this framework, we find that bond market illiquidity, investors' overestimation of default risks, and corporate frictions do not seem to explain excessive observed credit spreads but, instead, a risk premium for tail and idiosyncratic asset risks is the primary determinant of corporate spreads. (JEL E23, E32, E44, G13, G24, G32)

Risk Behavior, Country Governance, and Bank Stability in Pakistan

2021 ◽  
pp. 185-203
Author(s):  
Hafiz Waqas Kamran ◽  
Abdelnaser Omran
Keyword(s):  
Economic Growth ◽  
Credit Risk ◽  
Risk Behavior ◽  
Commercial Banks ◽  
Financial Stability ◽  
Operational Risk ◽  
Bank Stability ◽  
Regression Methods ◽  
The Stability ◽  
Control Of Corruption

Keeping risk behavior and country governance in observation, this study has investigated the trends in financial stability for a sample of 22 commercial banks in Pakistan while controlling the effect of economic growth. Over the period of 2007 to 2016, the authors have applied OLS, FE, and RE regression methods to investigate which risk and governance factors are influencing the stability measures of the banks. It is found that financial stability in overall banks is affected by credit risk, operational risk, country risk, and financial crisis risk while control of corruption is also affecting ZROA in an adverse way.

IMPROVING MANAGING THE CREDIT RISK IN CONDITIONS SLOWING ECONOMIC GROWTH

2015 ◽  
Vol 1 (1) ◽  
pp. 17-29
Author(s):  
Dariusz Prokopowicz
Keyword(s):  
Economic Growth ◽  
Financial Crisis ◽  
Credit Risk ◽  
Economic Downturn ◽  
Financial Systems ◽  
Financial Products ◽  
Increased Risk ◽  
Business Entities ◽  
Recent Financial Crisis ◽  
Lending Institutions

The recent financial crisis in 2008 has made a significant contribution to the growing importance of the analysis of processes of credit risk management and forced to take measures to improve the process. Sources of the financial crisis is now largely associated with the activities of mainly US investment banks that sold derivatives on the basis of income from high-risk mortgages. Increased risk recorded in the banking business, as a rule, also a derivative of the economic downturn in the sectors of bank customers, including non-financial business entities. In such a situation, banks are limited to provide customers with a more risky loan pro-active financial products. Given the global nature of financial markets and the importance of investment banking in the financial systems and the necessary actions to improve the tools for identifying, quantifying and managing banking risks, especially credit and lending institutions to protect themselves from potential sources of risk. The present analysis showed that the anti-crisis measures are mainly focused on the introduction of additional restrictions in the provision of financial products that may not be enough and may even be harmful, helping to reduce the economic growth of individual countries. Measures are also needed to strengthen supervisory agencies in the financial systems, including transnational supervision.

scholarly journals Credit Risk Models For Five Major Sectors In Indonesia

2018 ◽  
Vol 20 (4) ◽  
pp. 376-396
Author(s):  
Ndari Surjaningsih ◽  
Ina Nurmalia Kurniati ◽  
Reni Indriani
Keyword(s):  
Economic Growth ◽  
Credit Risk ◽  
Manufacturing Industry ◽  
Housing Price ◽  
Nominal Exchange Rate ◽  
Economic Sectors ◽  
Commodity Trade ◽  
Price Inflation ◽  
Credit Risks ◽  
Main Driver

This paper analyze Nonperforming Loan ratio to total credit (NPL), as a proxy forcredit risk, for five major economic sectors by utilizing panel data of 117 commercialbanks in Indonesia over period 2000Q1 to 2016Q3. Our empirical analysis shows thatreal economic growth is the main driver that is negatively correlated with credit risksin all sectors. The inverse relation is also found in commodity and housing price.Commodity price inflation affects NPL in manufacturing industry and trade sectors,meanwhile housing price inflation influences NPL in manufacturing industry, trade,and construction sectors. In addition, decreased in policy rate will decline credit riskin commodity, trade, and other sectors, meanwhile nominal exchange rate only affectscredit risks in other sector. Our assessment shows that credit risks in commodity andother sectors are more sensitive to real economic growth than those on manufacturingindustry and trade sectors. Real economic growth elasticities to credit risk forcommodity and other sectors are almost twice higher than for manufacturing industryand trade sectors. Thus, during economic contraction phase, NPL in commodity andother sectors will increase higher than NPL in manufacturing industry and tradesectors.

scholarly journals Banking Sector Consolidation: Possible Effects for Sectoral Credit Allocation and Economic Growth in Nigeria

2017 ◽  
Vol 3 (01) ◽  
Author(s):  
Alwell Nteegah
Keyword(s):  
Economic Growth ◽  
Banking Sector ◽  
Oil And Gas ◽  
Time Series Data ◽  
Manufacturing Sector ◽  
Percent Level ◽  
Job Creation ◽  
Series Data ◽  
Credit Allocation ◽  
Banking Credit

This study investigated possible effects of banking sector consolidation- credit allocation to selected sectors on the growth of Nigerian economy. utilizing time series data on growth rate of GDP, banking sector credit distribution to the agriculture, manufacturing, oil and gas/mining, commercial (export financing) sectors and bank size (number of Deposit money bank branches) for the period 1981 - 2015 and employing Vector Error Correction Model (VECM), the results indicate that only banking sector credit allocation to the manufacturing sector is positive and significant at 5 percent level. Banking credit to agriculture, oil & gas/mining, commercial and bank size were all insignificant at 5 percent level. This result revealed that funds allocated to the manufacturing sector spurred economic growth in Nigeria during the duration of this investigation. Other finding of study shows that the manufacturing sector has higher propensity for increasing investment, job creation and value addition hence attracts funds from the banks than other sectors. Based on these findings, the paper suggested creation of enabling environment and enactments of policies that will enhance higher credit allocation to manufacturing sector in particular and the real sector in general in order to spur investment, job creation and stimulate economic growth in Nigeria.

scholarly journals Comparing Credit Risk in Islamic and Conventional Banking Using Bank-Level Panel Data

2020 ◽  
Vol 11 (2) ◽  
pp. 235-262
Author(s):  
Akhmad Akbar Susamto ◽  
Danes Quirira Octavio ◽  
Dyah Titis Kusuma Wardani
Keyword(s):  
Economic Growth ◽  
Credit Risk ◽  
Method Of Moments ◽  
Generalized Method Of Moments ◽  
Dynamic Panel ◽  
Gmm Estimator ◽  
Panel Regressions ◽  
Conventional Banks ◽  
Risk Determinants ◽  
Asset Size

Abstract: This paper investigates if there is a difference in the level of the credit risk of Islamic as compared to the level of credit risk of conventional banks. This paper further investigates the importance of various credit risk determinants and possible differences in how such determinants affect credit risk in Islamic and conventional banking industries. This paper employs dynamic panel regressions using system GMM estimators. The sample includes 11 Islamic and 95 conventional banks in Indonesia throughout 2003-2018. Based on the results, it is concluded that there is no difference in the level of the credit risk of Islamic as compared to that of conventional banks. It is also concluded that credit risk is significantly affected by current and lagged asset size, lagged financing, current profitability, lagged economic growth, and current inflation. The effect of lagged financing, current profitability, and lagged economic growth is different in Islamic and conventional banking.Abstrak: Makalah ini menganalisis apakah terdapat perbedaan antara tingkat risiko kredit pada perbankan syariah dan tingkat risiko kredit pada perbankan konvensional. Makalah ini selanjutnya juga menganalisis signifikansi faktor-faktor yang diduga mempengaruhi risiko kredit dan kemungkinan perbedaan pengaruh faktor-faktor tersebut terhadap risiko kredit pada perbankan syariah dibandingkan pada perbankan konvensional. Makalah ini menggunakan regresi panel dinamis dengan system generalized method of moments (GMM) estimator. Sampel dalam makalah ini mencakup 11 bank syariah dan 95 bank konvensional di Indonesia selama periode 2003-2018. Berdasarkan hasil analisis, dapat disimpulkan bahwa tidak terdapat perbedaan perbedaan antara tingkat risiko kredit pada perbankan syariah dan tingkat risiko kredit pada perbankan konvensional. Begitu pula, dapat disimpulkan bahwa risiko kredit secara signifikan dipengaruhi oleh ukuran aset tahun ini dan tahun lalu, pembiayaan tahun lalu, profitabilitas tahun ini, pertumbuhan ekonomi tahun lalu dan inflasi tahun ini. Pengaruh pembiayaan tahun lalu, profitabilitas tahun ini, dan pertumbuhan ekonomi tahun lalu, secara khusus berbeda pada perbankan syariah dibandingkan pada perbankan konvensional.

scholarly journals Finansowanie południowokoreańskiego cudu gospodarczego – w świetle rekomendacji konsensusu waszyngtońskiego

2017 ◽  
Vol 5 (1) ◽  
pp. 67-77
Author(s):  
Marta Kightley
Keyword(s):  
Economic Growth ◽  
Industrial Development ◽  
High Performance ◽  
Industrial Structure ◽  
Main Tool ◽  
Building Blocks ◽  
Developmental State ◽  
Private Sector Investment ◽  
Local Companies ◽  
Banking Credit

This paper addresses the topic of the methods used to finance accelerated economic growth in South Korea during Park Chung Hee’s rule (1961–1979). The author describes government policy concerning foreign direct investment and banking credit and takes a position in the dispute between neoclassical and statist economists concerning the mechanisms of the Korean economic miracle. Discussing the issue of financing Korean industrial development, she refers to the economic policy prescriptions described in the Washington Consensus. The author argues that not only did Korea not comply with these prescriptions, but contradictory measures constituted the building blocks of its developmental state policy. The decision to base economic development on local companies facilitated the creation of a comprehensive and strong industrial structure which enabled high economic growth for the following decades. Credit policy implemented by state-owned banks was the main tool for coordinating private-sector investment decisions and ensuring high performance.

scholarly journals DIVERSIFIKASI KREDIT, MONITORING, DAN KINERJA PERBANKAN DI INDONESIA

2020 ◽  
Vol 6 (1) ◽  
Author(s):  
Iin Emy Prastiwi ◽  
Anik Anik Anik
Keyword(s):  
Credit Risk ◽  
Research Method ◽  
Monitoring And Evaluation ◽  
Diversification Strategy ◽  
Bank Profitability ◽  
The Government ◽  
The Right ◽  
Banking Credit ◽  
Credit Analysis

ABSTRACT This study aims to determine the banking credit diversification strategy that can control credit risk and credit diversification can increase the profitability of banks in Indonesia. This study also aims to discuss the role of monitoring in the implementation of diversification and its impact on the performance of Indonesian banks. The theoretical benefits of this research contribute to banks, especially in evaluating banking diversification strategy policies. Is the credit diversification strategy can reduce credit risk and improve banking performance or vice versa. For customers / investors, this research is one of the information that can be considered in choosing a safe bank in terms of the level of credit risk and bank profitability. This research method uses descriptive qualitative analysis. The results of this study indicate that credit diversification is the right strategy applied to banks in Indonesia. The government needs to implement further policies that support the implementation of credit diversification, such as conducting credit analysis, monitoring and evaluation.

scholarly journals Analisis pengaruh kredit perbankan, pembiayaan bank syariah dan investasi terhadap pertumbuhan ekonomi di Indonesia periode sebelum pandemi Covid-19 (2015-2019) dan periode pandemi Covid-19 tahun 2020

2021 ◽  
Vol 1 (9) ◽  
pp. 844-853
Author(s):  
Deni Andrean ◽  
Imam Mukhlis
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Financial Services ◽  
Time Series Data ◽  
T Test ◽  
Series Data ◽  
Islamic Banking ◽  
Negative Effects ◽  
Paired Samples ◽  
Banking Credit

Abstract This study aims to identify the effects of conventional banking credit, Islamic banking financing, PMA and PMDN investment on Indonesia’s economic growth in the before (2015-2019) and after (2019-2020) Covid-19. This study used quantitative method with VAR/VECM analysis. In this study, the time series data were analyzed using eviews 10, while the comparison between before (2019) and after (2020) Covid-19 was carried out using paired samples t-test. The data were collected from various sources, including Financial Services Authority and central Bureau of Statistics. The findings show that the total investment carries significant negative effects on Indonesia’s economic growth, while conventional banking credit carries no effect on Indonesia economic growth. The Islamic banking financing brings positive significant effects in long-term toward Indonesia economic growth. Abstrak Penelitian ini bertujuan untuk mengetahui pengaruh antara kredit perbankan konvensional, pembiayaan perbankan syariah dan investasi PMA dan PMDN terhadap pertumbuhan ekonomi di Indonesia pada periode sebelum covid -19 tahun 2015 sampai 2019 dan periode covid-19 tahun 2019-2020. Penelitian ini menerapkan metode penelitian kuantitatif menggunakan analisis VAR/VECM dengan menggunakan data time series dan diolah menggunakan eviews 10, dan perbandingan perbedaan antara seluruh variabel dari tahun sebelum pandemi (2019) dan setelah adanya pandemic (2020) menggunakan pengujian Uji Beda Paired Samples t-test, data ini dikumpulkan dari berbagai sumber utama termasuk Otoritas Jasa Keuangan (OJK) dan Badan Pusat Statistik (BPS). Temuan ini menunjukkan bahwa total investasi berpengaruh negatif signifikan terhadap pertumbuhan ekonomi di Indonesia, kredit perbankan konvensional tidak berpengaruh terhadap pertumbuhan ekonomi di Indonesia. Sedangkan pada variabel pembiayaan perbankan syariah menunjukkan bahwa pembiayaan perbankan syariah berpengaruh positif signifikan dalam jangka panjang terhadap pertumbuhan ekonomi di Indonesia

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