scholarly journals OPTIMIZATION OF LENDING SYSTEM IN THE CONDITIONS OF GLOBAL PANDEMIC IN GEORGIA

2021 ◽  
Author(s):  
Natia Kakhniashvili ◽  
Keyword(s):  
Developing Country ◽  
21St Century ◽  
Financial Crises ◽  
Financial Stability ◽  
Banking Sector ◽  
Financial Sector ◽  
Modern World ◽  
Community Life ◽  
Business Sector ◽  
Global Pandemic

The banking sector is the backbone of the country's economy, where ongoing processes significantly determine the financial stability of the country. In the modern world, this topic does not lose its relevance, moreover, it is becoming more and more the center of attention. As it is known, Georgia is a developing country, where the largest share of the financial sector belongs to the banking sector. Community life, including primarily the business sector, which significantly depends on the effective functioning of the credit sector. The article is dedicated to modern trends, first of all the Covid-19 pandemic the biggest challenge of the 21st century, because of it the banking sector faced the biggest challenges and completely changed the credit environment. The article reflects the reality of whether the Georgian banking sector is ready to deal with various types of financial crises in the changing environment.

scholarly journals RESPONSIBLE LENDING - RESULTS AND PROSPECTS

2020 ◽  
pp. 96-103
Author(s):  
RAMIN TSINARIDZE ◽  
LASHA BERIDZE
Keyword(s):  
Banking Sector ◽  
System Analysis ◽  
Aggregate Demand ◽  
Financial Sector ◽  
Developed Countries ◽  
Modern World ◽  
Economic Science ◽  
Economic Sectors ◽  
Lending Policy ◽  
Responsible Lending

Research on financial sector activity is especially important for developing countries, including Georgia, as this sector is the main driving force of the country›s economy. Any economic reforms undertaken in the country have a significant impact on the general economic policy and economic growth.Under the new regulation from January 1, 2019 the lending procedure from the financial sector has been tightened. At present time, they operate by the principle of responsible lending, which means, that a potential customer of a bank product should not be subject to a financial obligation that he or she will not be able to pay without financial difficulties.The purpose of this study is to analyze the positive and negative effects of already existing responsible lending regulations, which is directing against indebtedness and to predict the expected future results. At the same time, the task of the research is to identify challenges, risks, results that accompany the reform based on the practices of developed and developing countries.The study uses a combination of quantitative and qualitative methods. Also, in the research are used methods of system analysis, analogy, forecasting, synthesis, processing of statistical data and other methods. The methodological of the research is the fundamental articles of economic science. The paper widely used scientific and popular works by local and foreign authors, scientific studies, methodological publications and articles. In the modern world any banking reform in developing and developed countries is linked to economic and political (often painful) changes, but this reform implementation is inevitable in all states, regardless of their level of development. The main reason for this is the reduction of indebtedness in the public and economic sectors, but this requires the introduction of a proper lending system that should not limit the development of the financial sector and, on the other hand, be an optimal source of replenishment of financial deficits.Interest rate cuts are likely to have a short-term effect, which will not only help tighten lending policy by itself, and will require other macro-prudential decisions, especially when the NBG has raised its refinancing rate from 6.5% to 7%, due to inflation targeting. It implements the monetary policy transmission mechanism and negatively impacts on the interest rate on loans issued by the banking sector and on aggregate demand itself, so economic growth is likely to be adjusted again.

Macro and micro financial liberalizations, savings and growth

2018 ◽  
Vol 10 (2) ◽  
pp. 290-309 ◽  
Author(s):  
Gonçalo Pina
Keyword(s):  
Financial Crises ◽  
Financial Stability ◽  
Capital Accumulation ◽  
Financial Sector ◽  
Financial Contracts ◽  
Content Type ◽  
Growth Effects ◽  
Savings Rate ◽  
Domestic Savings

Purpose This paper aims to empirically and theoretically study the role of domestic savings behind the financial stability and growth effects of different financial liberalizations, when the government is not able to commit to enforce financial contracts. The following liberalizations are considered. Macro financial liberalizations target capital flow and interest rate liberalization, whereas micro financial liberalizations target competition in the financial sector. Simultaneous liberalizations target both micro and macro dimensions. Design/methodology/approach This study theoretically solves a new simple model of different types of financial liberalizations, micro, macro and simultaneous. The focus is on the crisis and growth effects of countries liberalizing only macro dimensions of financial policy, relative to both micro and macro dimensions together, and on how the level of savings determines these effects. The study empirically uses data on macro and micro financial liberalizations for 91 countries between 1973 and 2005 to provide a taxonomy of liberalization strategies, and empirically tests whether domestic savings are related to the success of different strategies. Capital accumulation, investment profile and the frequency of financial crises are also evaluated. Findings The findings show that, empirically, simultaneous liberalizations are associated with larger growth only if the savings rate is large. If the savings rate is low, growth is larger when liberalizations target macro dimensions. Capital accumulation increases more with macro liberalizations under low savings and simultaneous liberalizations with high savings. Simultaneous liberalizations with low savings increase risks related to contract viability and expropriation, profits repatriation and payment delays. Simultaneous liberalizations with high savings are associated with smaller probabilities of financial crises. These observations are consistent with the theoretical model, where reduced competition in the financial sector can improve financial stability and reduce financial crises when savings are low. Originality/value The contribution of this paper, relative to the vast literature on financial liberalizations, is to document how savings determine the crisis and growth effects of macro and micro liberalizations. It provides and tests empirically a new channel for the role of savings when governments cannot commit to enforce financial contracts. This is informative for policymakers and policy institutions facing different strategies of financial liberalizations.

scholarly journals The Growing Importance of the Financial Sector in the Founding Countries of the European Union

2021 ◽  
Vol 2 (26) ◽  
pp. 37-49
Author(s):  
Tomasz Florczak
Keyword(s):  
European Union ◽  
Economic Development ◽  
United Kingdom ◽  
Financial Crisis ◽  
21St Century ◽  
Banking Sector ◽  
Financial Sector ◽  
Developed Countries ◽  
The Other ◽  
The European Union

The economies of the 21st century countries operate on the principle of connected vessels. A significant element of changes in economies is the growth of the financial sector. The process of financial sector growth is often referred as financialization. The significant impact of this sector on economic development was shown during the financial crisis of 2008. Financialization is more visible in highly developed countries. Undoubtedly the founding countries of the European Union belong to highly developed countries. It is possible that the financialization is higher in bigger countries like France, Germany, Italy or United Kingdom, which can also have bigger financial sectors. From the other side there is also country, which economy is based on banks. The aim of the article is to indicate the growth of the financial sector in the founding countries of the European Union. To determine the growth of the financial sector, the author used the indicators appearing in the literature of subject. There are indicators relating to functioning of the economy and banking sector. The second method helps to determine in which country financialization is higher. To made the research there was used zero unitarization method. The results of the study allows to determine in which of the subjects the financial sector is at a higher level of development. It is possible, that during researched period there were changes in financializiation of researched countries.

scholarly journals Financial stability and liquidity risks in the banking sector across the CEMAC region

2021 ◽  
Vol 9 (1) ◽  
pp. 343-354
Author(s):  
Henri Kouam
Keyword(s):  
Commercial Banks ◽  
Financial Stability ◽  
Banking Sector ◽  
Central Government ◽  
Financial Sector ◽  
Real Economy ◽  
Capital Assets ◽  
Long Run ◽  
Domestic Credit ◽  
The Impact

How does credit from the financial sector and claims on the central government affect banking sector liquidity and financial stability risks? This paper constructs an algorithm, which investigates the impact of domestic credit from the financial sector, bank to capital assets ratio, claims on the central government on banking sector liquidity – a proxy for financial stability. The results show a positive and statistically significant impact of the capital assets ratio on the bank's liquidity of 3.1%. It equally finds that domestic credit and claims on central government hurt bank liquidity, notably of -0.15% and -2.5%, respectively. The study recommends that commercial banks invest in higher-value domestic projects to improve their profitability over the long-run, thereby boosting financial stability. Furthermore, the central bank should make additional liquidity for banks contingent on the amount of credit they provide to the real economy.

scholarly journals The ECB, Between Conservatism and Pragmatism

2016 ◽  
Vol 5 (1) ◽  
pp. 25-52 ◽  
Author(s):  
Cécile Bastidon ◽  
Philippe Gilles ◽  
Nicolas Huchet
Keyword(s):  
Monetary Policy ◽  
Economic Activity ◽  
Financial Crises ◽  
Financial Stability ◽  
Banking Sector ◽  
Private Funding ◽  
European Central ◽  
Forward Guidance ◽  
Policy Transmission ◽  
Theoretical Construction

Abstract The 2008 and 2011 crises have durably affected the conditions of monetary policy transmission, particularly in the euro area. However, it is generally considered that the European Central Bank’s (ECB) monetary policy truly became unconventional only at a late stage. Our contribution is threefold. We first show that the notion of “conventional” monetary policy, which is the reference of this assessment, is a recent theoretical construction. Secondly, the mandate of the ECB, which is its institutional expression, may raise specific difficulties in managing major financial crises, particularly with regards to the forward guidance of expectations and the commitment to an accommodative policy. Finally, the resulting policies have, at this stage, paradoxically achieved acceptable levels of macroeconomic and overall financial stability, but failed to restore a private funding supply to the banking sector enabling it to play its normal role in financing economic activity.

scholarly journals Role of actuarial accounting in enhancing banks performance

2020 ◽  
Vol 9 (2) ◽  
pp. 452-457
Author(s):  
Waleed Eltayeb Omer Khalid
Keyword(s):  
Financial Reporting ◽  
Financial Crises ◽  
Financial Stability ◽  
Banking Sector ◽  
Local Economy ◽  
Added Value ◽  
Economic Fluctuations ◽  
Actuarial Science ◽  
Actuarial Methods

This study aims to shed light on the significance of actuarial science in the banking sector from an accounting point of, And try to find out of the role he plays of actuarial accountant in the Sudanese banking sector and added value that he can add especially In light of a local economy which suffers from violent economic fluctuations that cast a shadow over on. financial stability, and the extent of its ability and contribution to the effectiveness of performance. The study found that Actuaries are active in banking roles despite the weakness of the actuaries who work in the banking sectors in sudan, The study also showed there's a direct relationship between economic fluctuation risks and financial crises need to adopt actuarial accounting methods, also, they have a major role to play to supports the improvement of the quality of financial reporting. The Study recommended necessity of educating decision- makers in the banking sector on the importance of actuarial science and actuarial accountants, who play a key role through actuarial methods that effectively contribute to the bank's ability to overcome economic fluctuations and financial crises.

scholarly journals Thailand

2019 ◽  
Vol 19 (309) ◽  
Author(s):  
Keyword(s):  
Financial Stability ◽  
Banking Sector ◽  
Financial Sector ◽  
Policy Framework ◽  
Medium Term ◽  
External Imbalances ◽  
Assessment Program ◽  
Fiscal Management

Thailand’s robust policy framework and ample buffers continue to underpin its resilience to external headwinds. The authorities have taken measures to strengthen medium-term fiscal management and financial stability. The recent Financial Sector Assessment Program (FSAP) concluded that financial vulnerabilities appear to be contained and that the banking sector is resilient to severe shocks. At the same time, long-standing domestic and external imbalances persist, leaving the economy vulnerable to the global slowdown and trade tensions.

scholarly journals 5.5. ФИНАНСОВАЯ УСТОЙЧИВОСТЬ БАНКОВ: ЗАРУБЕЖНЫЕ И РОССИЙСКИЕ ПОДХОДЫ К ОЦЕНКЕ

2020 ◽  
Author(s):  
A.V. Morozov ◽  
A.V. Morozov ◽  
A.V. Morozov ◽  
A.V. Morozov ◽  
A.V. Morozov
Keyword(s):  
Central Bank ◽  
Russian Federation ◽  
Financial Stability ◽  
Banking Sector ◽  
Financial Sector ◽  
International Experience ◽  
Comprehensive Assessment ◽  
Financial Indicators ◽  
Systemic Risks ◽  
The Russian Federation

В статье рассмотрены подходы международных и национальных надзорных органов к оценке финансовой устойчивости банков и банковского сектора. Автором показано, что подходы международных надзорных органов базируются на сочетании микропруденциального и макропруденциального анализа и включают комплексную оценку основных финансовых показателей и банковских рисков. Подходы Центрального банка РФ опираются на международный опыт и направлены на обеспечение устойчивости банков к системным рискам в финансовом секторе экономики.The article discusses the approaches of international and national supervisory authorities to assess the financial stability of banks and the banking sector. The author shows that the approaches of international supervisory authorities are based on a combination of microprudential and macroprudential analysis and include a comprehensive assessment of key financial indicators and banking risks. The approaches of the Central Bank of the Russian Federation are based on international experience and are aimed at ensuring the resilience of banks to systemic risks in the financial sector of the economy.

scholarly journals Impact of Macroeconomic Shocks on the Individual Banks: Case of Madagascar

2021 ◽  
Vol 7 (3) ◽  
pp. p99
Author(s):  
Prof. Jean Razafindravonon
Keyword(s):  
Financial Stability ◽  
Banking Sector ◽  
Assessment Tool ◽  
Stress Test ◽  
Banking System ◽  
Financial Sector ◽  
Capital Adequacy ◽  
Basel Iii ◽  
Macroeconomic Shocks ◽  
Dynamic Panel Model

The successive financial crises have highlighted the interdependence between the financial system and the real economy. Prudential measures to limit the negative repercussions of the financial crisis, through the Basel I and Basel II agreements, have shown their limits and the Basel III agreements have consequently integrated the macro-prudential component which aims to ensure the stability of the financial sector as a whole within the economy. The financial stability assessment tool known as the “stress test” has also been developed in various forms and its application to the financial sector, particularly the banking sector, is strongly recommended by the Bank for International Settlements. Indeed, the purpose of this study is to assess the resilience of the Malagasy banking sector to macroeconomic shocks and to evaluate its impact on the capitalization of the banking system through the macroeconomic stress test tool. To do so, we used a dynamic panel model. Non-performing loan forecasts are used to obtain capital projections at both the banking system and bank levels under adverse scenarios. The results show that most banks were able to hold capital above the minimum regulatory threshold of 8% under Basel III standards. However, only one bank fails to meet the minimum capital adequacy threshold. Non-performing loan forecasts are used to obtain capital projections at both the banking system and bank levels under adverse scenarios.

Sign in / Sign up

Export Citation Format

Share Document