scholarly journals Development: Unconventional Monetary Policy on Bank Performance in Nigeria

2020 ◽  
Vol 16 ◽  
Keyword(s):  
Monetary Policy ◽  
Deposit Insurance ◽  
Developing Economies ◽  
Panel Data Analysis ◽  
Insurance Coverage ◽  
Random Effect ◽  
Banking System ◽  
Bank Performance ◽  
Unconventional Monetary Policy ◽  
Monetary Expansion

The banking system plays an important role in the Environment and Development. This literature explored the influence of unconventional monetary rule on bank financial efficiency, with a vision to analysis to what degree unorthodox monetary expansion would impact deposit money banks’ performance using Nigeria as a case study for the developing economies in Africa from (2007-2017). Unorthodox monetary expansion is evaluated via assets of the apex bank to GDP ratio and deposit insured during the period. Using the random effect regression panel data analysis, the findings indicate that unconventional monetary policy is of a negative effect on deposit money bank performance. Further analyses show a negatively expressive relation amid unconventional pecuniary rule and Credit Money Banks performance with regards to deposit insurance coverage. On this basis, this literature principally recommends the apex bank of Nigeria to enact monitory regulations aiming to examine the response of credit finance banks’ performance to unconventional measures of monetary policy. The Unconventional Monetary Policy plays an important role in Development.

Conclusions

2017 ◽  
Author(s):  
Yilmaz Akyüz
Keyword(s):  
Monetary Policy ◽  
Financial Crisis ◽  
Interest Rates ◽  
Global Financial Crisis ◽  
Developing Economies ◽  
Quantitative Easing ◽  
Unconventional Monetary Policy ◽  
Advanced Economies ◽  
The Global Financial Crisis ◽  
Zero Bound

The preceding chapters have examined the deepened integration of emerging and developing economies (EDEs) into the international financial system in the new millennium and their changing vulnerabilities to external financial shocks. They have discussed the role that policies in advanced economies played in this process, including those that culminated in the global financial crisis and the unconventional monetary policy of zero-bound interest rates and quantitative easing adopted in response to the crisis, as well as policies in EDEs themselves....

scholarly journals Sources Of Non-Performing Loans In Turkish Banking System

2011 ◽  
Vol 5 (10) ◽  
Author(s):  
Gokhan Karabulut ◽  
Mehmet Huseyin Bilgin
Keyword(s):  
Financial Stability ◽  
Deposit Insurance ◽  
Developing Economies ◽  
Banking System ◽  
Bank Loans ◽  
System Stability ◽  
Insurance System ◽  
Turkish Government ◽  
Deposit Insurance System ◽  
The Impact

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="font-family: Times New Roman; font-size: x-small;">The purpose of this paper is to examine the impact of the unlimited deposit insurance on non-performing loans and market discipline. Deposit insurance program play a crucial role in achieving financial stability. Governments in many advanced and developing economies established deposit insurance schemes for reducing the risk of systemic failure of banks. Deposit insurance has a beneficial effect of reducing the probability of a bank run.<span style="mso-spacerun: yes;">&nbsp; </span>However deposit insurance systems have its own set of problems. Deposit insurance systems create moral hazard incentives that encourage banks to take excessive risk. Turkey established an explicit deposit insurance system in 1960. Until 1994, the coverage determined by a flat rate but in that date, Turkey experienced a major economic crisis. In April 1994, Turkish government started to apply an unlimited deposit insurance scheme to restore banking system stability. Unlimited deposit insurance caused a remarkable increase at non-performing loans. This paper empirically estimates the impact of unlimited deposit insurance system on non-performing bank loans (NPLs) and analyses the other potential sources of NPLs. </span></p>

Marx’s Theory of Money: A Reappraisal in the Light of Unconventional Monetary Policy

2019 ◽  
Vol 52 (1) ◽  
pp. 137-151
Author(s):  
Maria N. Ivanova
Keyword(s):  
Monetary Policy ◽  
Financial Crises ◽  
Banking System ◽  
Jel Classification ◽  
Unconventional Monetary Policy ◽  
Money Income ◽  
Social Production ◽  
Economic Basis ◽  
Key Aspects ◽  
Private Banking

This paper analyzes key aspects of Marx’s theory of money in order to reassert its continued relevance for understanding monetary developments in contemporary capitalism. Unlike theorists who become preoccupied with particular functions and forms of money, Marx develops a comprehensive concept of money integrating its various functions and emphasizing the socio-economic basis of its existence. Money performs different functions including a measure of value, a means of purchase/exchange, a means of payment, and a means of hoarding, which are independent of money’s concrete forms. The functions of money as a means of purchase and means of payment relate to each other as money (income) and credit (money), which are fundamentally different. The quantity and availability of credit (money) may be influenced by the activities of the central bank and the private banking system. Credit (money), however, can only become money (income) if and when it enters the domain of social production as an embodiment of the value of social labor and social purchasing power. This inextricable link between money and social production sets natural limits to the ability of monetary policy to influence both monetary and non-monetary developments in contemporary capitalism. An analysis grounded in Marx’s theory of money can provide insights into a range of contemporary monetary phenomena including hoarding, the rush to liquidity during financial crises, the scramble for government debt as a source of ultimate liquidity, and the limits to conventional and unconventional monetary policy. JEL Classification: E4, E5, B51, E6

scholarly journals UNCONVENTIONAL MEASURES OF MONETARY POLICY: EXPERIENCE OF THE FEDERAL RESERVE SYSTEM OF THE UNITED STATES

2017 ◽  
Vol 16 (3 (2017)) ◽  
pp. 341-364
Author(s):  
Oleksandr Dzyublyuk
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Federal Reserve ◽  
Large Scale ◽  
Banking System ◽  
The United States ◽  
Sustainable Growth ◽  
Unconventional Monetary Policy ◽  
Wide Range ◽  
Strategic Goals

The preconditions, causes and peculiarities of the global financial and economic crisis created the basis for the withdrawal of central banks from their traditional limited range of instruments of monetary influence on the economy and the transition to the active use of unconventional monetary policy measures. The Federal Reserve was the first central bank which used the unconventional measures of monetary policy as a key factor in overcoming the recession and bringing the US economy to a sustainable growth path. The traditional instruments of monetary regulation during the period of aggravation of financial crisis on the money markets turned out complete ineffective, that had the destructive consequences for the economy. That is why so important is the analysis of the reasons for this ineffectiveness and the necessity of use of unconventional instruments. The practical mechanism of using such unconventional instruments of the Fed includes such as large-scale asset purchases and FOMC’s forward guidance about intentions. And it is hard to underestimate the role of these tools in the withdrawal of the American economy from the state of recession. Also important are innovative credit policy programs that have been used by the Federal Reserve during the period of growing crisis, in terms of increasing the effective ness of its impact on the financial stabilization of the banking system, providing markets with liquidity and stimulating domestic demand. The use of unconventional monetary policy instruments aims to achieve a wide range of strategic goals that include not only price stability but also economic growth and low unemployment. Thus, based on the powerful influence of the Fed’s monetary policy on the dynamics of the main economic parameters, it is expedient to apply a dual mandate in formulating the strategic goals of the central bank.

scholarly journals Response of Deposit Money Banks to Monetary Policy Dynamics in Nigeria

2020 ◽  
Vol 7 (4) ◽  
pp. 33
Author(s):  
Ejem, Chukwu Agwu ◽  
Ogbonna, Udochukwu Godfrey
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Deposit Insurance ◽  
Policy Instruments ◽  
Bank Performance ◽  
Long Run ◽  
Policy Dynamics ◽  
Short Run ◽  
Saving Deposit ◽  
Reserve Ratio

This study examined how banks react to the monetary policies transmission mechanisms of the central bank of Nigeria. The data employed were collected from Nigerian Deposit Insurance Cooperation and Central Bank of Nigeria and subjected to various finametric techniques. The major findings are that cash reserve ratio negatively and significantly affects the performance of deposit money banks in Nigeria, while other monetary policy variables exert insignificantly to the performance of deposit money banks. It was also found that apart from banks own shock; banks respond negatively to shocks from major monetary policy instruments. It was observed that Monetary Policy Rate causes bank performance in both in the short run and long run. While, Cash Reserve Ratio, Liquidity Ratio and Saving Deposit Rate do not cause bank performance in the short run but in the long run. It was also found that monetary policy instruments jointly cause bank performance in the short and long run as opposed by individual instruments in Nigeria. The researchers therefore suggest among others that central bank of Nigeria reduce the cash reserve ratio to enable deposit money banks extend more loans to their potential customers, thereby enhance performance.

The Role of Macroeconomic and Financial Factors in Bond Market Development in Selected Countries

2020 ◽  
pp. 097215092090720
Author(s):  
Ameenullah Aman ◽  
Mohamad Yazid Isa ◽  
Asmadi Mohamed Naim
Keyword(s):  
Recurrent Events ◽  
Developing Economies ◽  
Panel Data Analysis ◽  
Banking System ◽  
Financial System ◽  
Bond Market ◽  
Market Development ◽  
Bond Markets ◽  
Primary Role ◽  
Macroeconomic Factors

Both developed and developing economies have showed serious interest in the development of domestic and regional bond markets. This interest was motivated by the recurrent events of economic crises, due to the over-reliance on the banking system. Therefore, this study investigates the macroeconomic and financial determinants of a bond market development, since the economic and financial environments play a primary role in the development of any financial market. Panel data analysis is employed to investigate the potential relationships. Results identify that financial system and most of the macroeconomic factors are positively associated with a bond market development. However, the stage of economic development is negatively related to bonds. Hence, policymakers need to strengthen and use existing financial system and economic variables to provide reasonable support to the development of bond markets. This study empirically analyses some unexplored theoretical relationships with respect to a bond market.

scholarly journals Financialization and unconventional monetary policy: a financial-network analysis

2020 ◽  
Vol 30 (5) ◽  
pp. 1385-1428
Author(s):  
Chiara Perillo ◽  
Stefano Battiston
Keyword(s):  
Monetary Policy ◽  
Euro Area ◽  
Financial Stability ◽  
Banking System ◽  
Real Economy ◽  
Unconventional Monetary Policy ◽  
The Real ◽  
Recent Debate ◽  
Policy Measures ◽  
Net Flows

Abstract Over the last decades, both advanced and emerging economies have experienced the emergence of the phenomenon known as financialization, that, until some time ago, was generally considered beneficial for the economy. The 2007-2008 crisis and the severe post-crisis recession called into question the assumptions underlying the positive perception of the role played by financialization in the economy. In particular, the effects of financialization on financial stability and inequality are now widely recognized. A recent debate focused on the effectiveness of unconventional monetary policy tools in transferring their effects on the financial sphere to the economic sphere (e.g., via stimulating the transmission of resources from the banking system to the real economy). Among these unconventional policy measures, Quantitative Easing (QE) has been recently implemented by the European Central Bank (ECB). In this context, two questions deserve more attention in the literature. First, to what extent QE may generate net flows of additional resources to the real economy. Second, to what extent QE may also alter the pattern of intra-financial exposures among financial actors and what are the implications in terms of financialization. Here, we address these two questions by mapping and analyzing the euro area multilayer macro-network of financial exposures among institutional sectors across financial instruments (i.e., loans, bonds, equity, and insurance and pension schemes) and we illustrate our approach on recently available data. We then test the effect of the implementation of ECB’s QE on some novel measures of financialization that we derive from the time evolution of the financial linkages in the multilayer macro-network of the euro area.

Bank Governance, Risk and Bank Insolvency: Evidence from Tunisian Banks

2017 ◽  
Vol 7 (2) ◽  
pp. 451
Author(s):  
Nesrine Djebali ◽  
Khemais Zaghdoudi
Keyword(s):  
Panel Data Analysis ◽  
Random Effect ◽  
Banking System ◽  
Bank Risk ◽  
Return On Assets ◽  
Bank Governance ◽  
Econometric Approach ◽  
Governance Risk ◽  
The Relationship ◽  
Random Effect Models

The aim of this paper is twofold. Firstly, it investigates the effect of bank governance on bank risk measured by the standard deviation of the return on assets (SDROA). Secondly, it tests the relationship between bank governance mechanisms and bank insolvency proxied by the Zscore (ROA). To achieve this goal, we used a sample of 11 Tunisian banks observed during the period 2006-2015. These 11 banks are considered as the most dynamic banks in the Tunisian banking system. The econometric approach used in this study is based on panel data analysis especially fixed and random effect models. Empirical results indicate that the presence of Supervisory Committee and monitoring of risks (COR), the executive compensation (REMB) and the board size (BDSIZE) increases significantly Tunisian bank risk and insolvency. However, the presence of independent directors (INDD) and the proportion of institutional investors decrease bank risk and bank insolvency. With regard to the effect on macroeconomic condition, only inflation rate exerts a significant effect. However, this effect is negative when the dependent variable is SDROA and positive for Z-score. The effect of GDPG is not significant for both bank risk and bank stability. 

scholarly journals CONVENTIONAL AND UNCONVENTIONAL MONETARY POLICY. THE CASE OF ROMANIA

2016 ◽  
Author(s):  
Ioana Plescau
Keyword(s):  
Monetary Policy ◽  
Financial Crisis ◽  
Credit Risk ◽  
Interest Rates ◽  
Banking System ◽  
Central Banks ◽  
Unconventional Monetary Policy ◽  
National Bank ◽  
Recent Financial Crisis ◽  
The Relationship

The aim of our paper is to analyze the conventional and unconventional monetary policy in Romania, in the context of the recent financial crisis. We study the relationship between interest rates and credit risk, but also the non-standard monetary measures that were adopted by the National Bank of Romania and their impact on the banking system. Our results point to a decrease of interest rates in the years after the crisis, which is in line with the majority of central banks that have reduced monetary rates in order to sustain the economy and the credit activity.

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