scholarly journals Debt-Sale Securities as a Monetary Policy Instrument in the Islamic Banking System of Iran

2021 ◽  
pp. 31-40
Author(s):  
Hossein Meisamy
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Financial Market ◽  
Banking System ◽  
Financial System ◽  
Policy Instrument ◽  
Islamic Banking ◽  
Private Banks ◽  
The Government ◽  
First Time

This paper discusses the legitimacy of securitizing the central bank receivables from the government and banking system in the Iranian financial market and making use of this instrument to conduct monetary policy. Ijtihad or independent jurisprudential reasoning based on Imamiah Fiqh (prevailing in the Iranian Islamic banking system), is used as paper methodology. The results show that considering the jurisprudential ‘ownership unity’ between the central bank, the government, and governmental banks in the Iranian banking system, securitizing the central bank receivables from the government or the governmental banks is not legitimate and not Shariah-compliant. Nevertheless, it is possible to issue debt-sale securities based on the debts of private banks to the central bank. Therefore, issuing debt-sale securities based on central bank receivables from the private banks can be considered a suitable instrument for conducting Shariah-compliant monetary policy in the Islamic banking system of Iran. This paper discusses for the first time the idea of issuing debt-sale securities as a monetary policy instrument in the Iranian financial system. Besides, the analysis is based on the Imamiah School of Fiqh, which is also new.

scholarly journals Monetary policy change of the Central bank of Poland

2015 ◽  
Vol 15 (3) ◽  
pp. 246-259
Author(s):  
Ireneusz Kraś
Keyword(s):  
Monetary Policy ◽  
Economic Policy ◽  
Central Bank ◽  
Policy Change ◽  
Financial System ◽  
Financial Statements ◽  
Democratic Character ◽  
National Bank ◽  
The Republic ◽  
The Government

Abstract The National Bank of Poland is an institution which, in conjunction with the government is responsible for the implementation of country’s economic policy reinforces its democratic character. Provisions of its operation are governed by the Constitution of The Republic of Poland and by the Act on the National Bank of Poland. To this end, the objective of the present research is to analyse the proposed amendments in the Act on the NBP. The latter concerns the amendment procedures, term of office and the rotations and numbers of Monetary Policy Council. The remaining part of the analyses is dedicated to the issue of dismissal of a MPC’s member in conjunction with the prohibition of occupying other positions, the adoption of the NBP’s financial statements and the separation of instruments of monetary policy’s instruments for stability of domestic financial system. Introduced changes in the proposed draft reduce the independence of the NBP while making it more subject to the Cabinet. Following the result of further consultations on the draft of Act on the NBP, provisions which reduce the independence of the NBP shall be partially removed.

scholarly journals QUARTERLY OUTLOOK ON MONETARY, BANKING, AND PAYMENT SYSTEM IN INDONESIA: QUARTER I, 2016

2016 ◽  
Vol 18 (4) ◽  
pp. 357-378
Author(s):  
TM Arief Machmud ◽  
Syachman Perdymer ◽  
Muslimin Anwar ◽  
Nurkholisoh Ibnu Aman ◽  
Tri Kurnia Ayu K ◽  
...  
Keyword(s):  
Financial Market ◽  
Government Spending ◽  
Banking System ◽  
Financial System ◽  
Private Investment ◽  
System Stability ◽  
Domestic Economy ◽  
Limited Growth ◽  
The Government ◽  
The Stability

The growth of domestic economy in Indonesia is lower than forecasted in first quarter of 2016.However, the economy is expected to revive and will grow higher in the next quarter, with a well maintained financial system stability. The limited growth of government consumption as well as private investment are the main reason for the slower growth in this quarter, eventhough the government spending on capital goods accelerates. The growth of private consumption remains high with reasonable price movement. With the increase of several commodities’ export, the external performance of export in aggregate also increased. On the other hand, the financial system stability was stable due to viable banking system and better financial market performance. The stability of Rupiah was well maintained, supported by positive expectation on domestic economy and the lower risk of the global financial market.

scholarly journals Theoretical aspects of mechanism of interaction between money and credit

2019 ◽  
Vol 2019 (4) ◽  
pp. 83-93
Author(s):  
Oleg Usherovich Avis
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Commercial Banks ◽  
Banking System ◽  
Financial System ◽  
Bank Lending ◽  
National Bank ◽  
Weak Points ◽  
The Stability

The paper describes the central bank monetary policy that has been heavily criticized, largely due to the banks’ inability to identify emerging risks in a timely manner and to prevent threats to the stability of the entire global financial and banking system. A more rigorous expert-theoretical and public assessment is typical for analyzing the role of commercial banks in these processes, whereby they are recognized as the main culprits of recurrent crises. The excursion into the evolution of theoretical views on the problem under study allows to conclude that it is related to the credit nature of money, in which the activities of commercial banks are of great importance. This idea was shared by many foreign and Russian scientists, who at one time offered their recipes for improving the monetary mechanism, but remained not taken into account in practice. The initial positions of bank lending processes and money making on their basis in volumes and quality, often unregulated, have been analyzed. Much attention is paid to the role of the Central Bank, the bank customers and the state in shaping the credit nature of money. As an alternative to modern methods of monetary regulation, the idea of full-value money has been described. As an example, the phenomenon of the Swiss full-value money initiative in 2018 has been given. It is noted that the initiative demanded to ban issuing electronic (non-cash) money from the commercial banks in order to stabilize the financial system. The weak points of the reform include a threat to the stability of the money value, the low degree of independence of the National Bank of Switzerland. It has been inferred that the events taking place in the modern financial system may indicate significant transformations of the design and toolkit of the modern monetary policy

scholarly journals Public lending to private hedge funds is inefficient, unstable, unconstitutional and unanimously disagreeable

2016 ◽  
Vol 5 (2) ◽  
pp. 40-49
Author(s):  
Sankarshan Acharya
Keyword(s):  
Moral Hazard ◽  
Central Bank ◽  
Hedge Funds ◽  
Banking System ◽  
Central Banking ◽  
Bank Loans ◽  
Public Funds ◽  
Private Banks ◽  
The Government ◽  
Private Banking

Public funds include federally insured deposits held under the custody of private banks, central bank loans and taxpayer funds. The principal finding of this paper is that lending such public funds through a private banking system to private hedge funds allied with the banks is inefficient, unstable, fundamentally unfair (unconstitutional) and unanimously disagreeable. This finding is akin to the unanimously agreeable safe central banking policy (Acharya, 1991-2016) which, in dynamic general equilibrium, (a) eliminates federal guarantee of bank deposits, (b) offers every business enterprise and household an option to keep in the central bank any part of its deposits it wants to be held absolutely safely, (c) completely deregulates all private banks without any privilege to rob public or private wealth like too-big-to-fail or too-big-to-be-jailed status or the power of market making and clearing. Safe central banking is the only way to make private banks responsible to hold sufficient capital to attract uninsured private deposits like the trading houses currently do. The private banks will then have complete freedom to lend their uninsured deposits to private hedge funds. The Volker Rule (NYT, January 30, 2010), incorporated in the Dodd-Frank Act of 2010, is an infeasible and unworkable band-aid for the moral-hazard driven systemic robbery of wealth creators wrought by the government-ordained private banking custody of public funds. The established systemic moral-hazard problem can be efficiently and constitutionally resolved only through unanimously agreeable safe central banking. Current proposals on overhauling of Fannie and Freddie made by various pundits of systemic robbery amount to a gargantuan amount of public lending to private hedge funds and, hence, inefficient, unstable, unconstitutional and unanimously disagreeable.

scholarly journals The Reserve Equation and the Analytics of Pakistan’s Monetary Policy

2011 ◽  
Vol 16 (1) ◽  
pp. 111-142 ◽  
Author(s):  
Rubina Hassan
Keyword(s):  
Monetary Policy ◽  
Average Rate ◽  
Balance Sheet ◽  
Banking System ◽  
Policy Instrument ◽  
Data Series ◽  
Open Market ◽  
Strong Negative Correlation ◽  
The Government ◽  
Time Inconsistent

This paper deals with the computation and analysis of some fundamental reserve aggregates and associated monetary statistics, which impart important information regarding the design and conduct of monetary policy at the State Bank of Pakistan (SBP). Specifically, we compute the data series for borrowed, unborrowed, free, and drainable reserves using balance sheet data published by the SBP for the period 1985-2009. Results show that Pakistan’s monetary policy revolves around managing the exchange rate while using the t-bill rate as a key policy instrument. However, the value of the t-bill rate is both incorrectly and sub-optimally related to macroeconomic fundamentals rendering monetary policy time inconsistent. This hinges on the finding that, since 2000/01, the SBP has targeted the net free reserves of the banking system at 4 percent of total private deposits. Among other observations, we find that the scope of open market operations as a tool of monetary policy remains limited and that this limited role of open market defenses derives from the concern of the central bank to sterilize its own foreign exchange reserves. Furthermore, the growth rate of unborrowed plus drainable reserves bears a strong negative correlation with the annual average rate of inflation, which, on account of the former being consistently negative since 2005, implies that neither the government nor the SBP have an overriding concern for controlling inflation.

scholarly journals Impact of Monetary Policy on Bank’s Profitability: A Study on Listed Commercial Banks in Bangladesh

2020 ◽  
Vol 5 (2) ◽  
pp. 72-79
Author(s):  
Md. Ariful Hoque ◽  
Afzal Ahmad ◽  
Mustafa Manir Chowdhury ◽  
Mohammad Shahidullah
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Commercial Banks ◽  
Banking System ◽  
Open Market ◽  
Return On Equity ◽  
Time Deposits ◽  
The Government ◽  
The Impact ◽  
Reserve Ratio

Monetary policy is the policy by which the government of a country control supplies of money in an economy which is announced by the central bank for every six months. Central Bank carries out monetary policy by the banking system of a country.  Central Bank uses Bank rate; Cash reserve ratio and open market operation to control the availability of funds in an economy. Within these three instruments, the cash reserve ratio is directly linked to the commercial bank's profitability. Every commercial bank maintains a cash reserve ratio against their demand & time deposits. Being changes in the cash reserve ratio banks profit level may increase or decrease. The prime intention here is to show the impact of monetary policy, especially Cash Reserve Ratio on the commercial bank's profitability. This study covers only listed commercial banks in Bangladesh. As sample researcher purposively selected 15 listed commercial banks that have available information. Results revealed that CRR negatively related to Return On Assets (-0.1133), Return On Equity (-0.0577) as well as Return On Investment (-0.0504). This means the bank's profitability declined due to the increase in cash reserve ratio (CRR). Again regression analysis outlined that the cash reserve ratio negatively impacts on the profitability of studied commercial banks in Bangladesh, which is statistically significant at the 10% level. Researchers proposed that Bangladeshi commercial banks will design their profitability plan by considering monetary policy tools, particularly the Cash reserve ratio.

Financial Safety Indicators under Financial Crises and their Impact on Banking Finance: An Applied Study in Iraqi Banks

2021 ◽  
Vol 39 (11) ◽  
Author(s):  
Mazen Dawood Salman ◽  
Amr Hisham Mohammed ◽  
Hakeem Hammood Flayyih
Keyword(s):  
Central Bank ◽  
Banking System ◽  
International Standards ◽  
Capital Adequacy ◽  
Financial Systems ◽  
Applied Study ◽  
Global Standards ◽  
Private Banks ◽  
The Government ◽  
The One

The ability to monitor the integrity of the financial sector assumes that there are valid indicators for detecting the integrity and stability of financial systems, including partial indicators and indicators of macro-prudence; and pressure tests to measure the resilience of financial systems to shocks. The research aims to review the most important financial safety indicators applied by the Central Bank of Iraq, focusing on applying some indicators to both the banking system on the one hand and a sample of Iraqi banks. The research reached several conclusions, the most important of which is the commitment of the Central Bank of Iraq to international standards such as Basel II, which requires some Iraqi banks to develop their banking methods to pursue banking developments and global standards. Capital adequacy ratios in the Iraqi banking system as a whole and private banks, unlike the government, have also increased, although the latter has achieved relatively high and acceptable levels of more than 12% according to this standard.

scholarly journals THE RESILIENCE OF INDONESIAN BANKING SYSTEM AND MACROECONOMIC FLUCTUATION: ISLAMIC VIS-À-VIS CONVENTIONAL

2020 ◽  
Vol 6 (2) ◽  
Author(s):  
Muhammad Rudi Nugroho ◽  
Ahmad Syakir Kurnia ◽  
Abdul Qoyum ◽  
Fitrotul Fardila
Keyword(s):  
Stress Test ◽  
Banking System ◽  
Financial System ◽  
Mapping Method ◽  
Test Method ◽  
Default Probability ◽  
Macroeconomic Fluctuations ◽  
Islamic Banking ◽  
The Government ◽  
High Level

This study aims to analyze the challenges of the dual banking system during macroeconomic fluctuations. By using the default probability mapping method and macroeconomic stress testing, we can measure the stability of the financial system through credit calculation. In addition, by using the stress test method, we can find information about the characteristics of the financial system in crises and its financial-related assistance in the financial system. Considering if a financial system can detect it early, the government can take preventative measures to minimize the consequences. The results of the study show that Islamic banking has a higher default probability than conventional banking. So it can be concluded that the current stability of Islamic banking is not better than conventional banking. Our findings suggest that inflation is only a macroeconomic variable that has a high level of sensitivity to the default probability of banks. Moreover, Islamic and conventional banking have different responses to the sensitivity of inflationary interventions.

Arah Kebijakan Pengawasan terhadap Perbankan Syariah dalam Sistem Perbankan Nasional di Indonesia

2020 ◽  
Vol 3 (1) ◽  
pp. 41-52
Author(s):  
Andrew Shandy Utama
Keyword(s):  
Central Bank ◽  
Financial Services ◽  
Banking System ◽  
Islamic Banking ◽  
Legal Research ◽  
Islamic Bank ◽  
Independent Direction ◽  
National Banking System

This research aims to explain the direction of policy regarding supervision of Islamic banking in the banking system in Indonesia. The method used in this research is normative legal research using the statutory approach. The results of this research explain that the policy regarding supervision of Islamic banking in the national banking system in Indonesia is headed toward an independent direction. In Law Number 7 of 1992 and Law Number 10 of 1998, it is stated that supervision of Islamic banking is done by Bank Indonesia as the central bank. Based on Law Number 21 of 2008, supervision of Islamic banking is strengthened by not only being supervised by Bank Indonesia, but also by the National Sharia Council of the Majelis Ulama Indonesia by placing Sharia Supervisory Councils in each Islamic bank. After the ratification of Law Number 21 of 2011, supervision of Islamic banking moved from Bank Indonesia to an independent institution called the Financial Services Authority.

scholarly journals Unconventional monetary policy of the European Central Bank: A brief recapitulation

2019 ◽  
Vol 53 (3) ◽  
pp. 43
Author(s):  
Ilona Skibińska-Fabrowska
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Central Bank ◽  
Economic Crisis ◽  
Financial Market ◽  
European Central Bank ◽  
Central Banks ◽  
Unconventional Monetary Policy ◽  
European Central ◽  
National Bank

<p>The financial and economic crisis that has hit many economies in recent years has significantly increased the activity of central banks. After using the standard instruments of conducting monetary policy, in view of the obstruction of monetary impulse transmission channels, they reached for non-standard instruments. Among them, asset purchase programs played a signifciant role. The European Central Bank (ECB) launched the largest asset purchase programme (APP) of this type in 2014 and expired in December 2018. The aim of the undertaken activities was to improve the situation on the financial market and stimulate economic growth. The article reviews the literature and results of research on the effects of the program and indicates the possibility of using the ECB’s experience in conducting monetary policy by the National Bank of Poland.</p>

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