scholarly journals Rynek pożyczek pozabankowych w Polsce w świetle polityki niskich stóp procentowych banku centralnego

2015 ◽  
Vol 1 (3) ◽  
pp. 119-135 ◽  
Author(s):  
Anna Szelągowska
Keyword(s):  
Interest Rates ◽  
Social Life ◽  
Banking Sector ◽  
Payday Lending ◽  
Short Term ◽  
Payday Loans ◽  
Research Hypothesis ◽  
Alternative Sources

A large part of the society is still financially excluded from social life despitethe era of low or zero interest rates. Banks are not interested in rendering servicesto customers of limited means. In consequence, citizens excluded from the bankingsector are searching for the alternative sources to satisfy their financial needs.Money is supplied by payday loan providers which offer usurious short term loansat prices many times higher than bank prices. The article answers the followingresearch question: Is the payday lending market winning the competition withthe banking sector in Poland and if so, what is the reason in era of historic lowbasic interest rates and incomparably higher total costs of payday loans? Thefollowing research hypothesis was verified in the study: the lack of supervisionover payday loan companies in Poland contributes to usurious exploitation ofthe people excluded by banks, which results in a debt spiral for a considerablesegment of customers.

Protecting the Desperate: The Regulation of Payday Lending

2015 ◽  
Vol 43 (1) ◽  
pp. 147-176
Author(s):  
Andrew J Serpell
Keyword(s):  
Consumer Credit ◽  
Law Reform ◽  
Payday Lending ◽  
Short Term ◽  
Payday Loans ◽  
The Law ◽  
The Right ◽  
Credit Contracts ◽  
The Cost

Payday loans are small-amount, short-term, unsecured, high-cost credit contracts provided by non-mainstream credit providers. Payday loans are usually taken out to help the consumer pay for essential items, such as food, rent, electricity, petrol, broken-down appliances or car registration or repairs. These consumers take out payday loans because they cannot — or believe that they cannot — obtain a loan from a mainstream credit provider such as a bank. In recent years there has been a protracted debate in Australia — and in several overseas jurisdictions — about how to regulate the industry. Recent amendments to the National Consumer Credit Protection Act 2009 (Cth) — referred to in this article as the 2013 reforms — are designed to better protect payday loan consumers. While the 2013 reforms provide substantially improved protection for payday loan consumers, further changes to the law may be warranted. This article raises several law reform issues which should be considered as part of the 2015 review into small amount credit contracts, including whether the caps on the cost of credit are set at the right level, whether the required content and presentation of the consumer warnings needs to be altered, whether more needs to be done to protect consumers who are particularly disadvantaged or vulnerable and whether a general anti-avoidance provision should be included in the credit legislation.

scholarly journals Bank lending in Ukraine and simulation of credit activity by methods of system dynamics

2021 ◽  
Vol 2021 (2) ◽  
pp. 89-109
Author(s):  
Hlushchenko Svitlana ◽  
◽  
Ivakhnenkov Sergiy ◽  
Demkiv Sofiia ◽  
◽  
...  
Keyword(s):  
System Dynamics ◽  
Interest Rates ◽  
Growth Rates ◽  
Commercial Banks ◽  
Banking Sector ◽  
Supply And Demand ◽  
Bank Lending ◽  
Bank Loans ◽  
Short Term ◽  
Loan Portfolio

The trends of bank crediting of businesses and households in Ukraine are determined and credit interrelations between subjects of economy by means of methods of system dynamics simulated. The article shows that by end 2020 the main trends in the Ukrainian banking sector are: 1) increasing the dynamics of return on capital, consistently high interest rates on loans until 2019 and their declining dynamics in 2020; 2) declining trends in the dynamics of the share of loans in the assets of commercial banks and the indicator of the financial depth of lending to the Ukrainian economy; 3) predominance of the share of loans to businesses in comparison with the share of loans to households in the loan banking portfolio; 4) faster growth rates of bank loans to households compared to the growth rates of lending to businesses; 5) in the sectoral context, the largest share in lending to business units is accounted for by trade and in lending to households – by consumer lending; 6) half of the loan portfolio of commercial banks are short-term loans for up to one year; 7) the share of non-performing loans in the loan portfolio remains high; 8) gradual reduction of non-deposit sources among the liabilities of commercial banks and their transition to almost full financing at the expense of customer deposits; 9) increase in the share of short-term and decrease in the share of long-term deposit financing of commercial banks. Based on the methods of system dynamics, the authors created a model that allows to trace the relationship between commercial banks-businesses-households, as well as to calculate the forecast volumes of bank loans in accordance with the demand for loans from businesses and households (weighted by the maximum value credit load) and supply of credit resources by commercial banks. From a practical point of view, determining the characteristic trends of bank lending, modeling the interaction of its main participants and determining the volume of bank loans using system dynamics helps to identify key factors influencing the supply and demand of bank credit resources at the present stage of Ukraine’s development and predict future lending dynamics.

scholarly journals Basis Risk and Net Interest Income of Banks

2016 ◽  
Vol 16 (2) ◽  
pp. 40-59
Author(s):  
Piotr Mielus ◽  
Tomasz Mironczuk ◽  
Anna Zamojska
Keyword(s):  
Interest Rates ◽  
Banking Sector ◽  
Balance Sheet ◽  
Actual Cost ◽  
Short Term ◽  
Basis Risk ◽  
Interest Income ◽  
The Difference

Abstract The results of the banking sector are shaped primarily by commissions and net interest income. Net interest income is determined by the difference between the profitability of bank assets and liabilities. In the case when a different method is used to determine interest for each side of the balance sheet, there occurs a basis risk that may lead to the deterioration in the net interest income of the sector. This is the situation in the Polish banking sector, which is characterized by the presence of variable interest rates for long-term assets and fixed interest rates for short-term liabilities. The study aims to verify the following thesis: in an environment of falling interest rates we can observe the deterioration in net interest income of the banking sector, as a result of the materialization of the basis risk. The authors of the article state that the source of the basis risk is the mismatch between the reference rate used to define the interest flow of loans and the actual cost of financing the balance through term deposits collected from non-financial entities.

scholarly journals Steadiness of expectation theory measured by swaption curve

2021 ◽  
Vol 3 (2.1) ◽  
pp. 6-26
Author(s):  
Antonio Ruben Santillan Pashma
Keyword(s):  
Interest Rate ◽  
Financial Crisis ◽  
Interest Rates ◽  
Banking Sector ◽  
Fixed Income ◽  
Short Term ◽  
High Volatility ◽  
Expectation Theory ◽  
One Year ◽  
Premium Risk

The financial crisis that broke out in mid-2007 has spread in the existing financial system with great instability favoring the devaluation of currencies with the fall in market interest rates. This has caused potential investors to become more risk-averse and therefore, look for financial products, although lower profitability, also poses less risk. Following this line, it is the Fixed Income assets that have acquired greater prominence in these times of crisis.  This article highlights the strength of the expectation theory in different tranches, using EURIBOR rate to determine implicit forwards, and estimate the price of a one-year swap contract with 3 months of maturity,  and comparing in every moment with the real prices of swap as a benchmark. SWAP is the bigger derivative inside of the group of Fixed Income Assets.  After the quantitative analyst, it has been observed how the theory prevails of sceneries of low volatility but falls on sceneries when the volatility starts to increase. Introduction.  One of the basic assumptions about financial theory is talking about the expectations theory. Since the middle of the eighties, this theory has been used as the unbiased estimator to calculate the swap interest rate in the base of the spot bank interest rate. Aim. Quantitativa analyst of the steadiness of expectations theory in differents economical cycles, using the European Central bank as the source to get hold of the EURIBOR spot rates for 3 months, 6 months, 9 months, and 12months from 2004 to 2016. Results. During the periods before the crisis 2007, the prices of the IRSWAP are almost adjusted between the market and what the financial theory says. The situation starts to change after the financial crisis when the volatility of the market starts to increase due to the instability of the banking sector and traders started with speculations strategies forgetting the aim of hedging, operating, new positions the majority in the short term. Conclusion. Whether for speculative reason or interventions actions of the monetary authority, the theory e “EXPECTATIONS THEORY”, it is not an efficient predictor with out using a premium risk, during the periods of high volatility.

scholarly journals Payday Lending

2007 ◽  
Vol 21 (1) ◽  
pp. 169-190 ◽  
Author(s):  
Michael A Stegman
Keyword(s):  
Interest Rate ◽  
The State ◽  
Payday Lending ◽  
Short Term ◽  
Payday Loans ◽  
Ready Access

A “payday loan” is a short-term loan made for seven to 30 days for a small amount. Fees charged on payday loans generally range from $15 to $30 on each $100 advanced. A typical example would be that in exchange for a $300 advance until the next payday, the borrower writes a post-dated check for $300 and receives $255 in cash—the lender taking a $45 fee off the top. The lender then holds on to the check until the following payday, before depositing it in its own account. When the fee for a short-term payday loan is translated into an annual percentage rate, the implied annual interest rate ranges between 400 and 1000 percent. Virtually no payday loan outlets existed 15 years ago; today, there are more payday loan and check cashing stores nationwide than there are McDonald's, Burger King, Sears, J.C. Penney, and Target stores combined. For economists, several interesting issues arise in the study of payday loans: Is this just a situation in which willing customers and firms interact in the market for ready access to high-cost, short-term credit? Or does the payday loan industry encourage habitual borrowing and the snowballing of unaffordable debt in such a way that the state has a role to play in limiting consumers from their own excesses? Would a ban or overly restrictive regulations on payday lending just revive the market for loan-sharking? And what of a similar practice by mainstream banks, who regularly allow their customers to overdraw their checking accounts if they pay a fee comparable in size to a payday loan charge?

scholarly journals The Optimum Leverage Level of the Banking Sector

Risks ◽  
2019 ◽  
Vol 7 (2) ◽  
pp. 51 ◽  
Author(s):  
Sagara Dewasurendra ◽  
Pedro Judice ◽  
Qiji Zhu
Keyword(s):  
Sensitivity Analysis ◽  
Interest Rates ◽  
Banking Sector ◽  
Interest Rate Risk ◽  
Investment Horizon ◽  
Short Term ◽  
Optimal Point ◽  
Practical Applications ◽  
Loan Rate

Banks make profits from the difference between short-term and long-term loan interest rates. To issue loans, banks raise funds from capital markets. Since the long-term loan rate is relatively stable, but short-term interest is usually variable, there is an interest rate risk. Therefore, banks need information about the optimal leverage strategies based on the current economic situation. Recent studies on the economic crisis by many economists showed that the crisis was due to too much leveraging by “big banks”. This leveraging turns out to be close to Kelly’s optimal point. It is known that Kelly’s strategy does not address risk adequately. We used the return–drawdown ratio and inflection point of Kelly’s cumulative return curve in a finite investment horizon to derive more conservative leverage levels. Moreover, we carried out a sensitivity analysis to determine strategies during a period of interest rates increase, which is the most important and risky period to leverage. Thus, we brought theoretical results closer to practical applications. Furthermore, by using the sensitivity analysis method, banks can change the allocation sizes to loans with different maturities to mediate the risks corresponding to different monetary policy environments. This provides bank managers flexible tools in mitigating risk.

scholarly journals BANK LENDING IN UKRAINE AND SIMULATION OF CREDIT ACTIVITY BY METHODS OF SYSTEM DYNAMICS

2021 ◽  
Vol 2021 (2) ◽  
pp. 101-127
Author(s):  
Svitlana Hlushchenko ◽  
◽  
Sergiy Ivakhnenkov ◽  
Sofiia Demkiv ◽  
◽  
...  
Keyword(s):  
System Dynamics ◽  
Interest Rates ◽  
Commercial Banks ◽  
Banking Sector ◽  
Bank Lending ◽  
Bank Loans ◽  
Bank Loan ◽  
Short Term ◽  
Loan Portfolio ◽  
Stage Of Development

The article identifies trends in bank lending to companies and households in Ukraine and considers modeling and integrated mapping of demand and supply of bank loans using the methods of system dynamics. The article shows that by 2020 the main trends in the Ukrainian banking sector are: a) increased dynamics of return on capital (29.7%) and reduced dynamics of interest rates on deposits (6.6%) and loans (14.8%); b) growth of the dynamics of bank loans in general, including the following characteristics: the largest share of the bank loan portfolio is accounted for by loans to economic entities, while loans to households account for 21.9%; loans to households are growing faster compared to the growth rate of loans to businesses; in the sectoral context, the largest share in lending is accounted for by the trade sector; short-term consumer loans predominate in household lending (82%); half of the loan portfolio of commercial banks consists of short-term loans; the share of non-performing loans in the total volume of issued loans remains high (48.75%); c) the deposit portfolio is dominated by household deposits, but in the dynamics there is a tendency to decrease in their share. Based on the methods of system dynamics, the authors present a model that allows to trace the relationship between commercial banks and legal entities and individuals, as well as to forecast the amounts of bank loans in accordance with the demand for loans from businesses and households (weighted by the maximum value credit load) and supply of credit resources by commercial banks. From a practical point of view, characterization of trends in banking, modeling the interaction of major participants in bank lending and determining the volume of bank loans using methods of system dynamics will help identify the main factors influencing the supply and demand of bank credit resources at the current stage of development of Ukraine and predict future dynamics of lending.

Perspectives on inflation Targeting Regime in Russia

2014 ◽  
pp. 107-121 ◽  
Author(s):  
S. Andryushin
Keyword(s):  
Monetary Policy ◽  
Financial Markets ◽  
Interest Rates ◽  
Inflation Targeting ◽  
Short Term ◽  
Indirect Control ◽  
Financial Account ◽  
Domestic Prices ◽  
Macroeconomic Indicators ◽  
Private And Public

The paper analyzes monetary policy of the Bank of Russia from 2008 to 2014. It presents the dynamics of macroeconomic indicators testifying to inability of the Bank of Russia to transit to inflation targeting regime. It is shown that the presence of short-term interest rates in the top borders of the percentage corridor does not allow to consider the key rate as a basic tool of monetary policy. The article justifies that stability of domestic prices is impossible with-out exchange rate stability. It is proved that to decrease excessive volatility on national consumer and financial markets it is reasonable to apply a policy of managing financial account, actively using for this purpose direct and indirect control tools for the cross-border flows of the private and public capital.

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