scholarly journals The impact of the Bank of Russia’s macroprudential policy on the risk exposure of banks’ consumer loan portfolios

2021 ◽  
Vol 80 (3) ◽  
pp. 73-93
Author(s):  
Dmitry Miroshnichenko ◽  
Keyword(s):  
Time Frame ◽  
Risk Profile ◽  
Capital Adequacy ◽  
Risk Exposure ◽  
Macroprudential Policy ◽  
Debt Burden ◽  
Loan Portfolios ◽  
Consumer Lending ◽  
The Impact ◽  
Reporting Data

In this paper, the author examines the efficiency of risk weight add-ons introduced by the Bank of Russia depending on borrowers’ debt burden in terms of discouraging high-risk unsecured rouble consumer lending and the effect of these add-ons on banks’ capital adequacy. The analysis is based on open bank reporting data for the period from October 2019 through August 2020. We show that in this time frame, most banks increased their capital. At the same time, the results obtained do not enable us to confirm the hypothesis that this measure has a pronounced effect on the reduction of the risk profile of consumer loan portfolios. We demonstrate that one of the factors that influenced the efficiency of measures introduced by the regulator is the substantially higher profitability of retail lending as compared to corporate lending.

scholarly journals INTERNALISASI SEKTOR PERBANKAN DALAM MODEL DSGE

2014 ◽  
Vol 17 (1) ◽  
pp. 23-60
Author(s):  
Harmanta Harmanta ◽  
Nur M. Adhi Purwanto ◽  
Fajar Oktiyanto Oktiyanto
Keyword(s):  
Monetary Policy ◽  
Open Economy ◽  
Banking Sector ◽  
Small Open Economy ◽  
Jel Classification ◽  
Capital Adequacy ◽  
Macroprudential Policy ◽  
Financial Friction ◽  
Policy Bank ◽  
The Impact

We build DSGE model for small open economy with financial friction in the form of collateral constrain on banking sector, designed for Indonesian economy. The constructed model is capable to simulate the monetary policy (Bank Indonesia rate) and macroprudential policy (reserve requirement, capital adequacy ratio – CAR, and loan to value – LTV). By internalizing banking sector into the model, this model also enable us to simulate the impact of any shock originated from banking sector.  Keywords: monetary policy, DSGE with banking sector, macroprudential policy JEL Classification: E32, E44, E52, E58 

Changes in the consumer credit market in conditions of tightening of the Bank of Russia's macroprudential measures in 2019

2020 ◽  
Vol 26 (4) ◽  
pp. 874-897
Author(s):  
K.A. Evstaf'ev
Keyword(s):  
Statistical Analysis ◽  
Interest Rate ◽  
Consumer Credit ◽  
Credit Market ◽  
Capital Requirements ◽  
Capital Adequacy ◽  
Analytical Determination ◽  
Debt Burden ◽  
Consumer Loans ◽  
The Impact

Subject. In 2019, the Bank of Russia updated and toughened regulatory approaches by increasing the capital requirements depending on borrowers’ debt burden. The disclosed bank statements have significantly changed and become more complicated. This enabled a comprehensive statistical analysis of the consumer credit market structure in 2019, based on effective interest rate and payment-to-income (PTI). Objectives. The purpose of the study is to assess how the strengthened capital adequacy requirements influence the change in the effective interest rate on consumer loans and how banks consider debt burden of borrowers when issuing such loans. Methods. The study draws on methods of statistical analysis of reporting forms presented by credit organizations in open databases of the Bank of Russia. A dynamic model is used for analytical determination of average maturity of consumer loans based on their effective interest rate. Results. I estimated trends in outstanding consumer loans in all ranges of their full cost (effective interest rate), analyzed the impact of the new requirements of the Bank of Russia with respect to risk cover on consumer loans by banks’ own funds on the capital adequacy of banks in the medium term. Conclusions. In 2019, loans with low effective interest rate (less than 20%) demonstrated the lowest growth rates; the volume of consumer loans to borrowers with high debt burden did not reduce; only a small number of banks incurred risk to capital adequacy due to strengthened requirements. Thus, the Bank of Russia’s macroprudential measures for consumer lending regulation cannot be regarded as effective.

scholarly journals Economic and Statistical Analysis of Sustainability Indicators of Banking Sectors of the Leading Countries

2020 ◽  
Vol 27 (4) ◽  
pp. 97-113
Author(s):  
S. Yu. Khasyanova
Keyword(s):  
Developing Countries ◽  
Statistical Analysis ◽  
Developed Countries ◽  
Capital Adequacy ◽  
Bank Loan ◽  
Loan Portfolios ◽  
Financial Soundness ◽  
The Developed Countries ◽  
The Impact

The last decade was characterized by the improvement of the financial systems’ monitoring mechanism at the national and international levels aimed at making effective decisions on financial stabilisation. The purpose of this study is to assess the sustainability of banking sectors of the leading economically developed and developing countries for the period 2009-2018, taking into account the processes occurring in the global economy and international financial markets.The research applied the International Monetary Fund methodology for assessing the stability of depository institutions and used the IMF database containing financial soundness indicators of the banking sectors in the studied countries. The economic and statistical analysis of financial soundness indicators of the banking sectors made it possible to explain the influence of economic conditions on the level and dynamics of the banks’ performance indicators as well as to identify the strengths and problems of the banking systems.The results of the study indicate an increase in the sustainability of the developed countries’ banking sectors, which is confirmed by the growing trends of capital adequacy and the quality of bank loan portfolios. The main problem of the developed countries is stably low profitability which, in the long term, could lead to a decrease in the banks’ capitalisation and their inability to maintain economic growth.A positive trend in the banking sectors of the developing countries is the recovery of capital adequacy, whereas the negative trend is a decrease in the quality of loan portfolios and profitability indicators. High credit risks and insufficient capitalisation represent the vulnerabilities of the developing countries’ banking sectors, while the increased volatility of financial soundness indicators, especially liquidity, is caused by the impact of the external trade and financial conditions.The results of this research could be used by analysts and regulators in macroeconomic calculations and when developing supervisory stress testing models, as well as by bank managers for performing internal stress tests and strategic business planning.

scholarly journals Bank Risk Profile, Good Corporate Governance And Company Values in Banking Companies Go Public in Indonesia

2017 ◽  
Vol 20 (1) ◽  
pp. 41
Author(s):  
Susi Retna Cahyaningtyas ◽  
Elin Erlina Sasanti ◽  
Wahidatul Husnaini
Keyword(s):  
Good Alternative ◽  
Positive Influence ◽  
Risk Profile ◽  
Capital Adequacy ◽  
Moderate Risk ◽  
Minimum Capital ◽  
Inherent Risk ◽  
Company Value ◽  
Alternative Means ◽  
The Impact

The latest Bank Indonesia Regulation No.14/18/PBI/2012 requires bank to have minimum capital of 8%-14% depends on the risk profile of each bank. Therefore, the main objective of this research is to assess whether the total of inherent risk profile of each bank meets the terms of this regulation. In addition, this study aims to examine the impact of inherent risk profile and GCG on the banking company value. The sample in this study is determined by purposive sampling method and resulted in 24 banks or 72 observations during 2011-2013. The results showed that 23 banks had low risk and low to moderate risk, and only one bank had moderate risk. The results also showed that inherent risk profile rating is equivalent to capital adequacy. In other words, inherent risk profile of these banks have complied with Bank Indonesia Regulation No.14/18/PBI/2012. Furthermore, this study indicated that GCG has significant and positive influence on the company value, while the inherent risk has no influence on the company value. Overall, this study suggest that go public banks in Indonesia are one of good alternative means of investment for its soundness as reflected by the fulfillment of minimum capital ratio required by the regulator.

What does affect profitability of banks in Croatia?

2018 ◽  
Vol 28 (4) ◽  
pp. 338-367 ◽  
Author(s):  
Filip Fidanoski ◽  
Moorad Choudhry ◽  
Milivoje Davidović ◽  
Bruno S. Sergi
Keyword(s):  
Empirical Analysis ◽  
Economies Of Scale ◽  
Positive Impact ◽  
Management Practice ◽  
Capital Adequacy ◽  
Risk Exposure ◽  
Bank Profitability ◽  
Content Type ◽  
Dependent Variables ◽  
The Impact

Purpose The paper aims to determine the impact of bank-specific, industry-specific and macro-specific determinants on the profitability indicators – return on assets (ROA) and ratio net-interest margin (RNIM). Design/methodology/approach This research sample includes selected Croatian banks, and the empirical analysis covers the period 2007-2014. Based on the reliable and robust econometric tests, dynamic estimation technique (DOLS) was run to estimate the profitability models, by using of ROA and RNIM as dependent variables, which also include lagged dependent variables to capture the speed of mean reversion in terms of profitability, respectively. Findings The results proved the crucial positive impact of assets size (economies of scale), loan portfolio and GDP growth on the banks’ profitability. Further, the negative impacts on profitability have risks and administrative costs. This paper shows the positive impact of capital adequacy ratio (CAR) and leverage on ROA and RNIM, as well as the correlation between market concentration and banks’ profitability. Practical implications Basically, Croatian banks should improve operative efficiency and risk management practice to increase their profitability. In addition, banks should carefully balance between capital base and risk exposure on the one hand and take advantage of using relative cheaper deposits and borrowed funds instead of using more expensive equity. This conclusion is reasonable, keeping in mind that the Croatian financial market does not punish banks for an extra risk exposure caused by market imperfections. Finally, the regulatory authority in Croatia should impose some additional antitrust measures to increase competition in the banking market. Originality/value Although a bunch of existing studies explain the determinants of bank profitability from different perspectives, this paper conducts a specific empirical analysis about the determinants of bank profitability in Croatia. In addition, this paper provides a good synthesis of the relevant empirical and theoretical studies from this domain.

SQUEEZING THE ASIAN ENTREPRENEURIAL ENGINE: THE IMPACT OF THE CREDIT SQUEEZE ON SUSTAINABLE ENTREPRENEURIAL JOB CREATION IN ASIA

2000 ◽  
Vol 08 (02) ◽  
pp. 141-167 ◽  
Author(s):  
CHRIS HALL
Keyword(s):  
Small Proportion ◽  
Job Creation ◽  
Capital Adequacy ◽  
Risk Exposure ◽  
Large Firms ◽  
Infrastructure Projects ◽  
Fast Growing ◽  
Job Growth ◽  
The Impact ◽  
New Jobs

Firms in Japan, China, Indonesia, Korea, and most of the rest of Asia, are now facing a prolonged period of very tight credit. Because many banks in the region need to increase their capital adequacy ratios and reduce their risk exposure, most are now unwilling to lend to small, fast growing firms. However, mounting evidence from OECD suggests that the bulk of net job creation comes from a relatively small proportion of fast growing SMEs. The ability to create new jobs will be especially important in Asia in the coming years, and it is unlikely that government infrastructure projects and large firms will be able to provide the job growth required.

Coming-of-Age Cinema in New Zealand

2017 ◽  
Author(s):  
Alistair Fox
Keyword(s):  
Coming Of Age ◽  
Belief Systems ◽  
Time Frame ◽  
New Wave ◽  
Art Cinema ◽  
Literary Sources ◽  
French New Wave ◽  
Significant Phenomenon ◽  
The Impact ◽  
New Zealanders

This book investigates the coming-of-age genre as a significant phenomenon in New Zealand’s national cinema, tracing its development from the 1970s to the present day. A preliminary chapter identifies the characteristics of the coming-of-age film as a genre, tracing its evolution and the influence of the French New Wave and European Art Cinema, and speculating on the role of the genre in the output of national cinemas. Through case studies of fifteen significant films, including The God Boy, Sleeping Dogs, The Scarecrow, Vigil, Mauri, An Angel at My Table, Heavenly Creatures, Once Were Warriors, Rain, Whale Rider, In My Father’s Den, 50 Ways of Saying Fabulous, Boy, Mahana, and Hunt for the Wilderpeople, subsequent chapters examine thematic preoccupations of filmmakers such as the impact of repressive belief systems and social codes, the experience of cultural dislocation, the expression of a Māori perspective through an indigenous “Fourth Cinema,” bicultural relationships, and issues of sexual identity, arguing that these films provide a unique insight into the cultural formation of New Zealanders. Given that the majority of films are adaptations of literary sources, the book also explores the dialogue each film conducts with the nation’s literature, showing how the time frame of each film is updated in a way that allows these films to be considered as a register of important cultural shifts that have occurred as New Zealanders have sought to discover their emerging national identity.

scholarly journals Financial Institutions’ Risk Profile and Contribution to the Sustainable Development Goals

2021 ◽  
Vol 13 (14) ◽  
pp. 7738
Author(s):  
Nicolás Gambetta ◽  
Fernando Azcárate-Llanes ◽  
Laura Sierra-García ◽  
María Antonia García-Benau
Keyword(s):  
Sustainable Development ◽  
Financial Institutions ◽  
Sustainable Development Goals ◽  
Sustainability Reporting ◽  
Risk Profile ◽  
The Sustainable Development ◽  
Corporate Reporting ◽  
2030 Agenda ◽  
Development Goals ◽  
The Impact

This study analyses the impact of Spanish financial institutions’ risk profile on their contribution to the 2030 Agenda. Financial institutions play a significant role in ensuring financial inclusion and sustainable economic growth and usually incorporate environmental and social considerations into their risk management systems. The results show that financial institutions with less capital risk, with lower management efficiency and with higher market risk usually make higher contributions to the Sustainable Development Goals (SDGs), according to their sustainability reports. The novel aspect of the present study is that it identifies the risk profile of financial institutions that incorporate sustainability into their business operations and measure the impact generated in the environment and in society. The study findings have important implications for shareholders, investors and analysts, according to the view that sustainability reporting is a vehicle that financial institutions use to express their commitment to the 2030 Agenda and to higher quality corporate reporting.

scholarly journals Does the target market affect bank performance? Evidence from the geographic diversification of city commercial banks in China

2021 ◽  
Vol 15 (1) ◽  
Author(s):  
Xiaonan Li ◽  
Chang Song
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Capital Adequacy ◽  
Bank Performance ◽  
Chinese Government ◽  
Target Market ◽  
Geographic Diversification ◽  
Cross Sectional ◽  
The Impact ◽  
Geographical Diversification

AbstractAfter the opening up of the banking sector to domestic and foreign capitals which is approved by the Chinese government, the China Banking Regulatory Commission (CBRC) has permitted city commercial banks to diversify geographically. Since this deregulation in 2006, city commercial banks began to geographically diversify to occupy the market and acquire more financial resources. To examine the causal relationship between geographical diversification and bank performance, we construct an exogenous geographical diversification instrument using the gravity-deregulation model and a policy shock. We find that bank geographical diversification negatively affects bank performance. Moreover, we conduct some mechanism tests in the Chinese context. We find that the target market with several large- and medium-sized banks and a high level of local protectionism in the target market decreases the performance of city commercial banks. Finally, cross-sectional analyses show that the impact of geographical diversification on banks’ performance is more notable among city commercial banks that are younger, and have a lower capital adequacy ratio and a higher non-performing loan ratio.

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