scholarly journals Information Disclosure in China’s Rising Securitization Market

2021 ◽  
Vol 9 (4) ◽  
pp. 66
Author(s):  
Xueer Chen ◽  
Chao Wang
Keyword(s):  
Moral Hazard ◽  
Adverse Selection ◽  
Financial Institutions ◽  
Information Disclosure ◽  
Financial Stability ◽  
Banking Sector ◽  
Information Transparency ◽  
Internet Finance ◽  
The Government ◽  
Market Needs

E-commerce and FinTech are currently booming in China. The growing consumer market is accompanied by internet finance, by which consumers can easily borrow money from financial institutions online. As a result, the growing risks of financial institutions are of concern to the government and regulatory bodies. Consequently, the securitization market in China is seeing rapid growth that could affect financial stability. Applying FinTech and emerging technologies in securitization might be an effective way to protect against these risks. This paper studies the question of whether China needs a higher standard of information transparency in order to protect against its risks against the background of digital transformation. We analyzed the determinants of securitization in the Chinese banking sector, relying on data on banks for two periods: pre-2017Q4 and post-2017Q4. The main findings of the paper demonstrate that the application of FinTech in China’s banking industry resulted in less information asymmetry. The risk exposure was the most significant determinant in general. Higher risk exposures increased securitization transaction volumes, which reflects securitization with adverse selection problems between the originator and investors. Liquidity and profitability, as important determinants indicating the moral hazard problem, also affected securitization pre-2017Q4, but liquidity and profitability were found to be unimportant determinants after the application of FinTech (the post-2017Q4 period). Moreover, this study finds that the effects of the adverse selection and moral hazard problems varied in different types of banks. Overall, our findings suggest that the Chinese securitization market needs a higher standard of information transparency.

Fast growth may avert foreign banks' exit from Hungary

2015 ◽  
Keyword(s):  
Financial Institutions ◽  
Banking Sector ◽  
Prime Minister ◽  
Foreign Banks ◽  
Content Type ◽  
Balance Sheets ◽  
Government Relations ◽  
Local Currency ◽  
Wait And See ◽  
The Government

Subject Prospects for the banking sector. Significance The government is buying a 30% stake in the Austrian lender Erste Bank under a memorandum of understanding (MoU) with the European Bank for Reconstruction and Development (EBRD). The MoU signifies a volte-face by Prime Minister Viktor Orban, whose relationship with foreign-owned banks has been fraught with difficulties since the imposition of a levy on financial institutions in 2010 that drove down earnings and achieved notoriety as one of the highest taxes of its kind in Europe. The government has pledged to reduce the bank tax during 2016-19. Impacts The MoU may not redefine government relations with foreign banks, but could mean more activity on the market by institutional investors. Banks will clean up balance sheets, adopting a 'wait and see' strategy until FX debt relief peters out and the bank tax starts to fall. A return to profitability is unlikely before 2016; much depends on an uptake in corporate and household loans denominated in local currency.

scholarly journals THE POLICY OF FOREIGN PORTOFOLIO INVESTMENT LIBERALIZATION AND ITS IMPLICATIONS TOWARD THE NATIONAL BANKING POLICY ON GIVING THE CREDIT TO THE SMALL AND MEDIUM ENTERPRISES

2018 ◽  
Vol 1 (02) ◽  
pp. 121
Author(s):  
Sugeng Ribowo
Keyword(s):  
Developing Countries ◽  
Financial Stability ◽  
Banking Sector ◽  
Financial Institution ◽  
Small And Medium Enterprises ◽  
Financial Globalization ◽  
Investment Liberalization ◽  
The Government ◽  
Strong Control ◽  
Traditional Activity

Foreign Portofolio Investment is one of the parts of foreign investment policy,its existence has the important role to the economic development of a country,especially to the developing countries to prevent the deficit of a country.Indonesia is one of developing countries that has implemented the policyrapidly by liberating foreign portofolio investment. This makes the foreignfund flood Indonesia without any control. Its legally caused legislationproduct regulating the kinds of this investment subtancially do not regulatelegal precision between two countries. Therefore, it gives overborrowingimpacts that have to be guaranted by a country in a certain time. Its differentfrom other developing countries determined foreign portofolio investment withthe strong control and given tax disincentive to the investors, such as China,Corea, Thailand and others.The behavior of this policy, is appereant and it cannot be separate fromforeign influence that suggested by International Monetary Fund (IMF) andWorld Bank (WB) as a financial international institution with the basicfinancial globalization. Financial globalization, directly and indirectly hassupported the government policy that is very kind to the foreign intervention.Its evidenced by the dominated legalize by the ownership of foreign stock inforeign right corporation or financial institution (banking) that has implicitlythrough laws. Therefore, foreign portofolio investment has caused themagnetic strength, especially banking institution to get the traget of big gainby buying and selling it to foreigner than distributing of credit to the smalland medium enterprises.This phenomenon, implicates to the change to the policy in the banking sector,banking experienced shifting of vital function that as to be able to allocate thefund source to the society efficienly and effectivetely. The shifting of vitalbanking function, from traditional activity to the non-traditional activity iscaused by the complicated problems like institution, regulation, andglobalization, especially financial globalization. Therefore, the strength of thestate about political economy is the main solution to solve these problems.This research, will be analyzed comprehensively about the Policy of Foreign Portofolio Investment Liberalization and its Implications toward the NationalBanking Policy on Giving the Credit to the Small and Medium Enterprises.Beside, this research will also be explained the relevant policy to solve thevital functions of banking as intermediation institution to the small andmedium enterprises, its influence can be hoped to the financial stability andeconomic development sustainability.Key words: liberalization, foreign portofolio investment, financial globalization, politicaleconomy, national banking

scholarly journals Determinants of Non-Performing Loans for the EEC Region. A Financial Stability Perspective

2020 ◽  
Vol 15 (4) ◽  
pp. 621-642
Author(s):  
Luminita Roxana Tatarici ◽  
Matei Nicolae Kubinschi ◽  
Dinu Barnea
Keyword(s):  
Financial Stability ◽  
Fixed Effects ◽  
Banking Sector ◽  
Real Economy ◽  
Macroeconomic Factors ◽  
The Real ◽  
Macroeconomic Conditions ◽  
Governance Indicators ◽  
Credit Cycle ◽  
The Government

AbstractThis article investigates the determinants of non-performing loans for a panel of EEC countries and the implications for the real economy, covering the period 2005-2017. Among the determinants, the paper proposes macroeconomic factors, banking sector variables, and cost and governance indicators. Additionally, the paper explores the extensive use of macroprudential measures in these countries. Using a panel with fixed effects and a dynamic GMM estimator, the results support the existing findings that adverse macroeconomic developments are generally associated with higher non-performing loans, while increases in NPLs have a rather transitory effect on the real economy and credit. NPL ratios increase if macroeconomic conditions deteriorate, while an improvement in the government effectiveness reduces them. A more profitable and better capitalized banking sector generally leads to lower NPLs. Moreover, countries with higher past credit growth rates witnessed higher NPLs in the periods that followed. These results support the use of macroprudential measures for increasing the resilience of borrowers, such as limits on the indebtedness level (such as debt service-to-income, DSTI or loan-to-value, LTV caps), as tools to temper the credit cycle.

Tajik remittance slump will weaken flawed banks

2016 ◽  
Keyword(s):  
Financial Institutions ◽  
Banking Sector ◽  
Banking System ◽  
International Financial Institutions ◽  
Content Type ◽  
Bank Deposits ◽  
The Rich ◽  
The Government ◽  
Main Banks ◽  
Poor Management

Subject Tajikistan's troubled banking sector. Significance Tajikistan's banking system has been in crisis since 2015, as problems in Russia feed through to this remittance-dependent economy. A decline in funds sent home by labour migrants has shrunk bank deposits, and the proportion of non-performing loans has risen sharply. The cash crisis is exacerbated by poor management and cronyism in financial institutions. The main banks, Tojiksodirotbank and Agroinvestbank, have restricted customer withdrawals. Impacts International financial institutions will condition assistance on reforms. However, the government will balk at any reform measures liable to hurt the rich and powerful. The government may seek Chinese support for the banking sector.

FINANCIAL LITERACY AND FINANCIAL INCLUSION EFFECTS ON STABILITY AND COMPETITIVENESS INDICATORS IN THE BANKING SECTOR: CROSS COUNTRY EVIDENCE FOR AFRICA AND THE WORLD

2021 ◽  
pp. 2150009
Author(s):  
JOÃO JUNGO ◽  
MARA MADALENO ◽  
ANABELA BOTELHO
Keyword(s):  
Credit Risk ◽  
Interest Rates ◽  
Financial Institutions ◽  
Financial Literacy ◽  
Financial Stability ◽  
Banking Sector ◽  
Financial Education ◽  
Financial Inclusion ◽  
The Stability ◽  
The Impact

Financial inclusion has allowed financial products with very high-interest rates and complex conditions to become increasingly affordable. Financial inclusion programs, which aim to reach all social strata, strongly expose financial institutions to risk and particularly credit risk. That said, additional interventions such as financial education of those included are needed. We aim to examine the impact of financial literacy and financial inclusion of households on bank performance. Specifically, we want to examine the impact of financial literacy on credit risk, competitiveness among banks and financial stability. The FGLS estimation results suggest that financial literacy and financial inclusion reduce credit risk and enhance the stability of banks, and regarding competitiveness, our results were inconclusive as they show different effects for each competitiveness indicator, although they point to improved competitiveness in some cases. This research allows policymakers to understand that individual financial attitudes can be reflected in the general welfare of financial institutions and encourages the intensification of programs aimed at improving household financial literacy.

scholarly journals Collective Moral Hazard and the Interbank Market

2020 ◽  
Vol 2020 (098) ◽  
pp. 1-60
Author(s):  
Levent Altinoglu ◽  
◽  
Joseph E. Stiglitz ◽  
Keyword(s):  
Moral Hazard ◽  
Financial Institutions ◽  
Portfolio Choice ◽  
Risk Taking ◽  
Financial System ◽  
Interbank Market ◽  
Constrained Efficiency ◽  
Macroprudential Regulation ◽  
Systemic Crisis ◽  
The Government

The concentration of risk within financial system is considered to be a source of systemic instability. We propose a theory to explain the structure of the financial system and show how it alters the risk taking incentives of financial institutions. We build a model of portfolio choice and endogenous contracts in which the government optimally intervenes during crises. By issuing financial claims to other institutions, relatively risky institutions endogenously become large and interconnected. This structure enables institutions to share the risk of systemic crisis in a privately optimal way, but channels funds to relatively risky investments and creates incentives even for smaller institutions to take excessive risks. Constrained efficiency can be implemented with macroprudential regulation designed to limit the interconnectedness of risky institutions.

scholarly journals Corporate governance and bank performance: Does ownership matter? Evidence from the Kenyan banking sector

2007 ◽  
Vol 4 (2) ◽  
pp. 133-142 ◽  
Author(s):  
Dulacha G. Barako ◽  
Greg Tower
Keyword(s):  
Corporate Governance ◽  
Financial Institutions ◽  
Ownership Structure ◽  
Financial Stability ◽  
Banking Sector ◽  
Bank Performance ◽  
Government Ownership ◽  
Statistical Justification ◽  
African Context ◽  
Institutional Shareholders

This paper provides an empirical analysis of banks performance in Kenya. The primary purpose of this study is to investigate the association between ownership structure characteristics and bank performance. Data utilised in the study is collected from the Financial Institutions Department of the Central Bank of Kenya, both on-site inspection reports and off-site surveillance records. Empirical results indicate that ownership structure of banks significantly influence their financial performance. In particular, board and government ownership are significantly and negatively associated with bank performance, whereas foreign ownership is strongly positively associated with bank performance, and institutional shareholders have no impact on the performance of financial institutions in Kenya. The study makes a significant contribution to financial research by extending examination of banks performance to a developing country context beyond the usual confines of the developed western economies, and adds to the small number of similar studies in the African context. The results are consistent with prior research findings, and more importantly, presents statistical justification for pursuing further corporate governance reforms with respect to banks’ ownership structure to enhance the financial stability of the sector

scholarly journals Material and technical base of the Chelyabinsk Region financial bodies during the Great Patriotic War

2018 ◽  
Vol 7 (4) ◽  
pp. 257-262
Author(s):  
Nikita Nikolayevich Ivlev
Keyword(s):  
Financial Institutions ◽  
Financial Stability ◽  
Radical Change ◽  
Technical Support ◽  
Difficult Situation ◽  
Important Indicator ◽  
Savings Banks ◽  
The Government ◽  
Qualitative Performance ◽  
Chelyabinsk Region

The paper describes the material and technical position of the financial bodies in the Chelyabinsk Region in 1941-1945. The author provides a structure of regional financial institutions, which included the financial departments (Financial Department of the region, city and districts), savings-banks and long-term lending banks. The paper also examines dynamics of changes in the material and technical support of the regional financial system during the war. The analysis of archival sources clearly shows that in the first years of the war the material and technical support of the regional system of financial institutions was in critical condition: there was not enough office space, transport, calculating machines and typewriters as well as other necessary equipment for the work. But with the beginning of a radical change in the lines the situation gradually began to improve. Both cash and food were increased, the situation with transport, office and accommodation space was stabilized, new equipment appeared. Despite the difficult situation, the material and technical support did not have a significant impact on the effectiveness of the regional financial bodies. Financial stability was maintained both at the nationwide and regional levels. The government targets of military loans distribution were not only performed but also beaten. In total, 1,6 billion rubles were collected in the Chelyabinsk Region, which is 2% of the nationwide funds received from the distribution of the government loan. The most important indicator of the work efficiency was the qualitative performance of regional budgets.

In Search of Financial Stability in Nigeria: From Legislation to Effective Regulation of Banks

2017 ◽  
Vol 25 (1) ◽  
pp. 20-46
Author(s):  
Nelson Ojukwu-Ogba
Keyword(s):  
Financial Institutions ◽  
Financial Stability ◽  
Banking Sector ◽  
Banking Regulation ◽  
First Century ◽  
Safety Level ◽  
Policy Shift ◽  
The Subject ◽  
Enforcement Mechanisms ◽  
Legislative Review

The systemic importance of banks in any economy brings to the fore the inevitability of exploring ways of keeping banks not only strong but also within the safety level desired by depositors and financial managers. This is underscored by the invaluable and fundamental roles of these financial institutions in the maintenance of financial stability. The state of banking regulation in Nigeria, especially before the introduction of reforms in the sector, had given serious cause for concern. This observation is in light of serious illiquidity and systemic distress that was synonymous with the banking sector in Nigeria in the 1990s and even into the opening years of the twenty-first century. This article examines in detail the legal and institutional frameworks for banking regulation in Nigeria. It finds that the challenge of ineffective regulation of the banks in the country may not necessarily be associated with the dearth or non-comprehensiveness of statutes on the subject but rather borders on uncoordinated and ineffective enforcement mechanisms, coupled with policy inconsistency on the part of banking regulators. This situation engenders confusion, uncertainty and instability because prospective investors tend to be more hesitant, depositors shy away from saving with banks and banks tend to have to grapple with persistent illiquidity when the system is unpredictable. The article therefore advocates a policy shift from legislative review to effective enforcement of the existing laws regulating banks in Nigeria in order to grow these financial institutions into transparent, efficient, strong and globally competitive institutions.

scholarly journals IMPACT OF SHADOW BANKING ACTIVITIES AS NON BANK INTERMEDIATION TOWARD REGULATORY DEVELOPMENTS IN FUNCTION CONTROL OF FINANCIAL SERVICES SECTOR IN INDONESIA

2016 ◽  
Vol 1 (1) ◽  
pp. 47
Author(s):  
Lastuti Abubakar ◽  
C. Sukmadilaga ◽  
Tri Handayani
Keyword(s):  
Financial Institutions ◽  
Financial Services ◽  
Financial Stability ◽  
Banking Sector ◽  
Banking Regulation ◽  
Shadow Banking ◽  
Services Sector ◽  
Financial Services Sector ◽  
Analytical Research ◽  
Global Financial System

Based on the Global Shadow Banking Monitory Report 2015 issued by the Financial Stability Board, global shadow banking activities manage 80% of global GDP and 90% of the global financial system assets. Hence, this study aimed to examine the regulation and supervision of shadow banking activities in Indonesia. The method used is normative juridical with descriptive analytical research specifications. Based on the research results as follows : regulation of shadow banking in Indonesia's financial services sector covers all financial institutions outside the banking sector or Non-Bank Financial Institutions that the regulations are scattered in various rules. Indonesia has developed an integrated surveillance system for the entire financial services sector, include NBFIs. Development of shadow banking regulation will be based on the strengthening of reporting, monitoring, supervision and regulation. Keywords : regulatory developments, shadow banking, and supervision

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