scholarly journals THE PROSPECTS OF INCREASING OF BANK’S RESOURCES POTENTIAL AT THE EXPENSE OF ACTIVATION OF INVOLVING HOUSEHOLD SAVINGS

2021 ◽  
Author(s):  
Olekii Yermolenko ◽  
Oleksandra Kokovikhina ◽  
Nataliia Lysonkova
Keyword(s):  
Interest Rates ◽  
Banking Sector ◽  
Foreign Currency ◽  
Household Savings ◽  
Monetary Aggregate ◽  
Bank Deposits ◽  
Level Of Economic Development ◽  
Potential Resource ◽  
Methodological Principles ◽  
To Receive

At present, the economy of Ukraine needs to attract significant financial resources and the Ukrainian financial system has them, but in a frozen state. This is the household savings in the cash form. The problem is to convert unorganized household savings into bank resources, which will meet the needs of economic entities in borrowed funds and at the same time allow citizens to receive additional income, which will lead to increased consumer demand. The purpose of this article is the development of theoretical and methodological principles and practical proposals for the transformation of household savings into banking resources. However, it is necessary to identify the factors of the formation of household savings, the main of which is undoubtedly the level of income. Certainly, the income of the population plays a significant role in the development of the whole country. And it is the level of economic development of the country that determines the motivation of households in the creation of savings. In addition, the amount of savings is also influenced by other factors, such as the level of income taxation, deposit and credit interest rates, the age structure of the population, etc. The article has analyzed the dynamics of incomes and savings of the population from 2005 to 2019, as well as the monetary aggregate M0 as a potential resource of commercial banks. It was determined that the amount of monetary aggregate M0 in 2005 amounted to UAH 60.2 billion, and by the end of 2019, this figure exceeded the mark of UAH 384.4 billion. The monetary aggregate M0 includes cash in circulation outside deposit-taking corporations, which includes funds of the population, which under certain conditions may become a banking resource. At the same time, the ratio of the monetary aggregate M0 and M3 in Ukraine during 2005-2019 remains consistently high - at 27%. Interestingly, that only about 50% of the population's savings become resources of banks. While businesses are looking for affordable sources of financing their investments, much of the savings are accumulated in the form of national and foreign currency. This is due to the low attractiveness of alternative investment options for the population (in private pension funds, life insurance, mutual investment institutions, real estate, etc.) bank deposits will remain the main means of investment soon. However, the formation of the resource potential of banks based on household savings should be based on a combination of tools at all levels of the hierarchy, such as the influence of the NBU, the banking sector, and individual banks.

Lending to the real sector of the region’s economy: state, problems, prospects

2020 ◽  
pp. 42-49
Author(s):  
Iryna Pasinovych ◽  
Viktoriya Dmytruk
Keyword(s):  
Interest Rates ◽  
Capital Investment ◽  
Banking Sector ◽  
Foreign Currency ◽  
Point Of View ◽  
Real Sector ◽  
Real Economy ◽  
Labor Costs ◽  
The Real

Approaches to the essence and constituent elements of the real economy sector are analyzed, its optimal structure is determined. It is focused on servicing and infrastructural role of banks in relation to the entities of the real sector. The dynamics of the lending to the real sector of the economy and the level of its penetration is analyzed. The paper reveals that the growth of lending in this sector was restored only last year, but the level of penetration continues to decline. The banking sector is analyzed. The paper argues that it has become profitable for the first time since the crisis, but mainly due to reduction of deductions to reserves. The financial situation of enterprises of the real sector of the Ukrainian economy is estimated. After an increase in profitability, it was again observed to have fallen due to the growth of competition and labor costs. Production are found to have increased in the real sector, but the role of loans in its development is insignificant. The emphasis is placed on the leading role of banks in the region for business development. The regional features of lending to the real economy sector in the Lviv region are outlined. The paper determines that in this region the growth of industrial products is much higher than the average in Ukraine, while the share of balances on loans granted is one of the lowest. There are the tendencies towards the decrease of the number of banks in the given region, increase of balances of banks' claims on loans in absolute value, prevalence of long-term loans and foreign currency loans. By the share of received loans the processing industry is in second place, agriculture is in the third place. Low level of the share of unemployed loans, higher than the average in Ukraine indicator of the proportion of loans in capital investment, as well as higher interest rates on loans are the features of regional lending in the Lviv region. The factors limiting the obtaining of loans from the point of view of management entities of the studied region are outlined. Certain NBU branches are dominant in the Lviv region as for lending. The changes in the regulatory environment at the macroeconomic level that are directly related to lending are analyzed. The regulator's policy to revive lending to the real sector should be extremely cautious and systematic, aimed at limiting the concentration of risks, preventing excessive lending growth, increasing the stability of financial infrastructure and reducing the dollarization of the banking sector. Measures to increase lending in the Lviv region are outlined. The involvement of banks in the Lviv educational-industrial hub is proposed.

scholarly journals The Role of Bank Loans and Deposits in the Monetary Transmission Mechanism In Malaysia

2009 ◽  
Author(s):  
Salina Kassim ◽  
M. Shabri A. Majid
Keyword(s):  
Interest Rates ◽  
Banking Sector ◽  
Banking System ◽  
Decomposition Analysis ◽  
Bank Loans ◽  
Monetary Transmission ◽  
Impulse Response Functions ◽  
Crisis Period ◽  
Transmission Process ◽  
Bank Deposits

This study attempts to determine the importance of the banking sector in the monetary transmission process in a developing economy. The study analyzes the Malaysian data focusing on three sample periods: the entire sample period (1989:01-2006:12); the pre-crisis period (1989:01-1996:12); and the post-crisis period (1999:01-2006:12). To achieve this objective, the study relies on two tests: first, the auto-regressive distributed lag (ARDL) model for the long-run relationship among the variables and second, the impulse response functions and variance decomposition analysis for the short-run relationship among the variables. The finding shows that both bank deposits and loans play crucial roles in the monetary transmission process in the economy, suggesting evidence for the money endogeneity theory of post-Keynesian economists. In particular, bank deposits and loans are shown to provide an important link from monetary policy to output. This underscores the importance of ensuring the soundness of banking system as a pre-requisite to economic stability in the absence of such market based tools as market-based actions on exchange rate or interest rates as monetary stabilisation tools.  

scholarly journals DOES BANKING SECTOR DEVELOPMENT HAVE ANY ASSOCIATION WITH ECONOMIC GROWTH AND INTEREST RATES IN PAKISTAN?

2019 ◽  
Vol IV (I) ◽  
pp. 100-107
Author(s):  
Muhammad Yusuf Amin ◽  
Syed Imran Khan ◽  
Noor Hassan
Keyword(s):  
Economic Growth ◽  
Interest Rates ◽  
Granger Causality ◽  
Banking Sector ◽  
Real Exchange Rates ◽  
Discount Rates ◽  
Causality Test ◽  
Bank Deposits ◽  
Long Run ◽  
Banking Sector Development

The study aims to examine the association between banking sector development, real exchange rates, inflation rates, federal discount rates, economic growth and bank deposits in Pakistan. The study employs Johansen co-integration method and Granger causality test. The empirical results confirm for the existence of a long run relationship between banking sector development and inflation, economic growth and federal discount rates. The results of Granger causality indicate that US interest rates affect the development of the Pakistani banking sector. This confirms the existence of spillover impact.

scholarly journals Financial dollarization: Trojan horse for Ukraine?

Ekonomika ◽  
2015 ◽  
Vol 94 (3) ◽  
pp. 21-45
Author(s):  
Nataliia Versal ◽  
Andriy Stavytskyy
Keyword(s):  
Exchange Rate ◽  
Interest Rates ◽  
Foreign Currency ◽  
Banking System ◽  
Inflation Expectations ◽  
Domestic Currency ◽  
Currency Exchange ◽  
Bank Deposits ◽  
The Exchange Rate ◽  
Financial Dollarization

The paper revisits the causes and consequences of financial dollarization in Ukraine during the past decade (monthly data). Dollarization in emerging markets plays a dual role: positive and negative. This study of financial dollarization is in the context of resident household holdings of foreign currency-denominated bank deposits and loans. If exchange rates are stable, deposit dollarization allows the withdrawal of money from the shadow economy, and loan dollarization allows the lending of long-term money, which is not possible with domestic currency due to inflation expectations. At the same time, the instability and lack of supply of foreign currencies in the market result in the collapse of household and bank finances, leading to currency risk, credit risk, and liquidity risk. Therefore, the study uses estimate indicators, the deposit dollarization index (DDI), household foreign currency deposits and loans, loan to deposit ratio (LTD), and inflation to find out the tendencies in the context of a changing domestic currency exchange rate. We present three models to reveal the influence of financial dollarization on banking stability. The first one explains the real value of domestic currency deposits through indicators such as M2 (positive), exchange rate (negative), domestic currency deposits (positive), and panic effects (negative). The second one describes the influence of the exchange rate (negative) and panic effects (negative) on foreign currency deposits. The third one explains the DDI through such the exchange rate, M2, and interest rates. The combined models provide an insight about the time necessary to stabilize the Ukrainian banking system.

scholarly journals FACTORS FOR ATTRACTING HOUSEHOLD SAVINGS TO THE BANK DEPOSIT MARKET OF UKRAINE: REGIONAL DIMENSION

2020 ◽  
Author(s):  
Marianna Kichurchak ◽  
Keyword(s):  
Factor Analysis ◽  
Interest Rates ◽  
Principal Components ◽  
Methodological Approach ◽  
Banking System ◽  
Economic Conditions ◽  
Household Savings ◽  
Labour Market Situation ◽  
Independent Variables ◽  
Bank Deposits

It is important to specify the major conditions that influence the decision of households to deposit their temporarily free funds in the banking system by regions of the country. The purpose of the article is to identify the most important factors in attracting household savings to the bank deposits market in Ukraine taking into account its regions. The following scientific methods are used in the research, such as: induction and deduction, analysis and synthesis, comparison, factor analysis by the principal components method, econometric modelling. The author has substantiated that the structuring of factors of depositing households’ savings in the regional bank deposits market involves the use of such scientific and methodological approach as: determining dependent (volumes of households’ bank deposits by regions in total, national and foreign currencies) and independent variables which characterize main social and economic conditions of household activity, interest rates on deposits by types of currencies by regions; conducting factor analysis by the method of principal components in order to classify and rank factors which affect the dynamics of household bank deposits at the regional level; specifying sample regression functions as to define the types of relationships between dependent and independent variables. It is identifying that the decisions of households to deposit their savings in the bank deposits regional market in Ukraine have multifactorial origin; a special place belongs to the perception of potential depositors of the current economic situation, assessment of their welfare and labour market situation, focus on interest rates on deposits offered by banking institutions and its terms. The author has found out that the activation of attracting household savings to the bank deposits market is associated with the stabilization of social and economic conditions of development for the Ukrainian regions, positive expectations of depositors and the formation of proper deposit policy of commercial banks. It is outlined that the prospects for further research are related to the evaluation of the level of concentration of the household bank deposits market by regions of Ukraine.

Interaction between wealth management products and bank deposits: evidence from China's shadow banking

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Syed Mehmood Raza Shah ◽  
Yan Lu ◽  
Qiang Fu ◽  
Muhammad Ishfaq ◽  
Ghulam Abbas
Keyword(s):  
Interest Rates ◽  
Banking Sector ◽  
Balance Sheet ◽  
Shadow Banking ◽  
Cross Sectional ◽  
Content Type ◽  
Wealth Management ◽  
Panel Ardl ◽  
Bank Deposits ◽  
Long Run

PurposeShadow banking has been evolving rapidly in China, with banks actively using wealth management products (WMPs) to evade regulatory restrictions. These products are the largest constituent of China's shadow banking sector. A large number of these products are off-balance-sheet and considered a substitute for bank deposits. China's banking sector, especially the small and medium-sized banks (SMBs), uses these products to avoid regulatory restrictions and sustainability risk in the deposit market.Design/methodology/approachThis study empirically examined how banks in China, specifically SMBs, utilize these products on a short and long-run basis to manage and control their deposit levels. This study utilized a quarterly panel dataset from 2010 to 2019 for the top 30 Chinese banks, by first implementing a Panel ARDL-PMG model. For cross-sectional dependence, this study further executed a cross-sectional augmented autoregressive distributive lag model (CS-ARDL).FindingsUnder regulations avoidance theory, the findings revealed that WMPs and deposits have a stable long-run substitute relationship. Furthermore, the WMP–Deposit substitute relationship was only significant and consistent for SMBs, but not for large four banks. The findings further revealed that the WMP–Deposit substitute relationship existed, even after the removal of the deposit rate limit imposed by the People's Bank of China (PBOC) to control the deposit rates.Research limitations/implicationsThe individual bank-issued WMPs' amount data is not available in any database. Therefore, this study utilized the number of WMPs as a proxy for China's banking sector's exposure to the wealth management business.Practical implicationsThis research helps policymakers to understand the Deposit–WMP relationship from the off-balance-sheet perspective. During the various stages of interest rate liberalization, banks were given more control to establish their deposit and loan interest rates. However, the deposit rates are still way below the WMP returns, making WMPs more competitive. This research suggests that policymakers should formulate a more balanced strategy regarding deposit rates and WMPs returns.Originality/valueThis study contributes to the existing literature on China's shadow banking by concentrating on the WMPs. This research represents one of the few studies that analyze regulatory arbitrage in terms of the WMP–Deposit relationship. Moreover, the implementation of CS-ARDL panel data models and multiple data sources makes this study's findings more reliable and significant.

CURRENT TRENDS IN THE BANKING CREDIT MARKET OF UKRAINE

InterConf ◽  
2021 ◽  
pp. 29-36
Author(s):  
Lidiia Avramchuk ◽  
Oleksii Muravskyi
Keyword(s):  
Interest Rates ◽  
Banking Sector ◽  
Foreign Currency ◽  
Credit Market ◽  
Current Trends ◽  
Loan Portfolios ◽  
Banking Institutions ◽  
Banking Credit

In recent years, the banking sector of Ukraine has witnessed low lending standards and insufficient protection of creditors' rights. In addition, there were two crises in the country and, as a result, borrowers were unable to repay funds in time. At the same time the quality of loan portfolios deteriorated, therefore more than 50% of all loans became "problematic". Due to the increase in interest rates, most borrowers began to take loans for up to 3 years and in the national currency, because they are less risky. According to statistics, only about 25% of all loans are long-term. In order to encourage borrowers to take long-term loans and borrowings in foreign currency, banking institutions have reduced interest rates on these types of loans, but these actions have given only a slight increase in such loans.

Bank profits rise despite credit slump in Argentina

2019 ◽  
Keyword(s):  
Interest Rates ◽  
Banking Sector ◽  
Foreign Currency ◽  
High Interest Rate ◽  
Content Type ◽  
Balance Sheets ◽  
The Public ◽  
High Interest ◽  
Sector Performance ◽  
Economic Outlook

Subject Banking sector performance. Significance Banks were one of the few sectors that performed well in 2018, aided by monetary tightening and the subsequent high interest rate on Central Bank (BCRA) securities. Peso depreciation also yielded windfall gains, owing to banks’ holdings of foreign currency-denominated assets. By contrast, credit to the private sector declined in real terms, as high interest rates, falling real incomes, rising unemployment and a poor economic outlook discouraged borrowing. Impacts Monetary tightening and IMF-agreed fiscal targets agreed will delay economic recovery. The persistence of the recession could drive a further deterioration of banks’ balance sheets. Given banks’ growing exposure to the public sector, fears of a debt restructuring could drive widespread withdrawals of deposits.

Long-run and Short-run Monetary Policy Transmission Channels in Lebanon

2018 ◽  
Vol 14 (1) ◽  
Author(s):  
Ali Awdeh
Keyword(s):  
Monetary Policy ◽  
Private Sector ◽  
Interest Rates ◽  
Banking Sector ◽  
Foreign Currency ◽  
Monetary Policy Transmission ◽  
Long Run ◽  
Policy Transmission ◽  
Short Run ◽  
Pass Through

Abstract This research detects the existence of monetary policy transmission mechanisms in Lebanon through which the actions of the central bank propagate. By adopting co-integration analysis and VECM frameworks, and by exploiting monthly data between January 1994 and December 2016, the research revealed the existence of a long-run interest rate channel, affecting both resident private sector deposits and credit to the private sector. Another short-run capital channel was revealed, affecting total credit provided by the banking sector. Additionally, the empirical results show that (1) deposit inflows are not attracted by high interest rates, but stimulated by confidence provided by large foreign currency reserves held by the central banks; (2) non-residents deposit inflows could represent a substitute for local credit; (3) banks pass-through any increase in funding cost to borrowers; and (4) an increase in external interest rates may trigger deposit outflows.

The limit of the contemporary financial system in Russia

2020 ◽  
Vol 16 (7) ◽  
pp. 1223-1245
Author(s):  
V.V. Smirnov
Keyword(s):  
Cluster Analysis ◽  
Foreign Currency ◽  
Financial System ◽  
Descriptive Statistics ◽  
High Tech ◽  
Monetary Aggregate ◽  
Internal System ◽  
Monetary Relations ◽  
And Cluster Analysis ◽  
Structural Preservation

Subject. The article focuses on the modern financial system of Russia. Objectives. I determine the limit of the contemporary financial system in Russia. Methods. The study is based on methods of descriptive statistics, statistical and cluster analysis. Results. The article shows the possibility of determining the scope of the contemporary financial system in Russia by establishing monetary relations as the order of the internal system and concerted operation of subsystems, preserving the structure of the financial system, maintaining the operational regime, implementing the program and achieving the goal. I found that the Russian financial system correlated with the Angolan one, and the real scope of the contemporary financial system in Russia. Conclusions and Relevance. As an attempt to effectively establish monetary relations and manage them, the limit of the contemporary financial system is related to the possibility of using Monetary Aggregate M0 to maintain the balance of the Central Bank of Russia. To overcome the scope of Russia’s financial system, the economy should have changed its specialization, refocusing it on high-tech export and increasing the foreign currency reserves. This can be done if amendments to Russia’s Constitution are adopted. The findings expand the scope of knowledge and create new competence in the establishment of monetary relations, order of the internal system and concerted interaction of subsystems, structural preservation of the financial system and maintenance of its operational regime.

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