scholarly journals Lost diversity: Business lending in the centralised banking system of the UK

2018 ◽  
Vol 87 (4) ◽  
pp. 67-85
Author(s):  
Franz Flögel ◽  
Stefan Gärtner
Keyword(s):  
Interest Rates ◽  
Short Distance ◽  
Banking System ◽  
Expert Interviews ◽  
Bottom Line ◽  
Low Interest Rates ◽  
The Uk ◽  
Regional Banks ◽  
Desk Research

Zusammenfassung: Aufbauend auf der Klassifikation vom dezentralen und zentralen Banking untersucht dieser Beitrag die Diversität in der Unternehmenskreditvergabe des Vereinigten Königreichs. Anhand von Experteninterviews und Literaturrecherche wurde die Distanz in den Kreditvergabeentscheidungen an KMU für verschiedene Typen von Banken und anderen Finanzintermediären klassifiziert. Aufgrund des frühen Ausscheidens von regionalen und nicht rein profitorientierten Banken (Sparkassen und Genossenschaftsbanken) existieren heute kaum noch Finanzintermediäre, die Kredite dezentral, das heißt in räumlicher Nähe zum KMU-Kunden, vergeben. Drei unterschiedliche Ansätze wurden identifiziert, wie dezentrale Kreditvergabe auf der Insel wiedereingeführt werden kann. Aufgrund der Niedrigzinsphase und der verschärften Bankenregulierung ist es jedoch gegenwärtig herausfordernd, regionale Banken wirtschaftlich zu betreiben. Summary: Based on the classification of decentralised and centralised banking, this paper investigates diversity in business lending in the UK. Using expert interviews and desk research, the distance between lenders and SMEs in credit decisions for the identified types of lenders is classified. Due to the early disappearance of regional and dual bottom-line banks, today hardly any short-distance lender remains in the UK. Three different approaches have been identified to re-introduce decentralised lending to the island, though running regional banks is challenging in times of low interest rates and tightened bank regulation.

scholarly journals A Literature Review of Non-Performing Loan

2021 ◽  
Vol 2 (5) ◽  
pp. 366-373
Author(s):  
Ardhi Khairi ◽  
Bahri Bahri ◽  
Bhenu Artha
Keyword(s):  
Financial Crisis ◽  
Literature Review ◽  
Interest Rates ◽  
Banking System ◽  
Retail Banking ◽  
Literature Study ◽  
Bank Profitability ◽  
Loan Portfolios ◽  
Low Interest Rates ◽  
Asset Quality

Lending is the primary business of retail banking and non-performing loans (NPLs) have been the focus of attention in recent years. In the wake of the 2008–2010 financial crisis, non-performing loans (NPLs) had increased everywhere, but in some countries they had reached unprecedented heights. Several banks have experienced a particularly challenging period over recent years and the Great Financial Crisis has highlighted the weakness of the banking system and the need to further investigate banks’ asset quality and transparency from both a regulatory and an accounting perspective, which pressure by different institutions for a more accurate assessment of loan portfolios led to the general need for higher provisioning in a period characterised by extremely low interest rates and low bank profitability. The objective of this research is to determine the factors associated with non-performing loans. We presented a literature study using systematic literature review of relevant publications and as a result of this process, we included 21 articles and then examined the bibliographical references to check the validity of the inquiry and to avoid any potential omissions. We identified several variables that affect NPLs and those that are influenced by NPLs. We found no variables that associate with policies, and strongly suggest research for variables that associate with policies.

scholarly journals What future for the European banking system?

2018 ◽  
Vol 87 (4) ◽  
pp. 141-151
Author(s):  
Lorenzo Bini Smaghi
Keyword(s):  
Interest Rates ◽  
Capital Market ◽  
Banking Sector ◽  
Banking System ◽  
The Us ◽  
Low Interest Rates ◽  
European Banking ◽  
European Banks ◽  
Main Factors

Zusammenfassung: Das Papier beleuchtet die Hauptgründe, die der sinkenden Rentabilität des europäischen Bankensektors im Vergleich zum US-amerikanischen zugrunde liegen. Sie unterstreicht insbesondere die Rolle niedriger Zinsen, geringerer Konzentration, strengerer Regulierung und des Fehlens eines tiefen und liquiden Kapitalmarktes. Ein stärkeres europäisches Bankensystem erfordert echte gesamteuropäische Banken und eine echte Kapitalmarktunion. Summary: The paper assesses the main factors underlying the decreasing profitability in the European banking sector, in comparison with the US. It underscores in particular the role of low interest rates, lower concentration,tighter regulation and the absence of a deep and liquid capital market. A stronger European banking system requires true pan-European banks and a true capital market union.

scholarly journals Financial Crisis and Regulatory Challenges

2009 ◽  
Vol 2 (2) ◽  
Author(s):  
Michel Prada
Keyword(s):  
Financial Crisis ◽  
Interest Rates ◽  
Financial Services ◽  
Financial Stability ◽  
Emerging Countries ◽  
Regulatory Strategy ◽  
Low Interest Rates ◽  
The Uk ◽  
The International Monetary Fund ◽  
Regulatory Challenges

A number of reports have established a diagnosis of the financial crisis. The first was produced by the Financial Stability Forum, in April 2008 and was the basis for the preparation of the first G 20 meetings in 2008. The International Monetary Fund (IMF) and the G 30 produced updated analysis in 2008 and 2009. More recently, the Larosière Group, although mainly focused on E.U. issues, also addressed global concerns , as well as the Adair Turner report which presented the new regulatory strategy of the UK Financial Services Authority (FSA). The main features of this unprecedented financial crisis are linked to immense and growing global imbalances between the Asian and US economies which provided the world with abundant liquidity, low interest rates together with low inflation (due to low wages in emerging countries) and a geographic mismatch between savings and investment needs and opportunities.

scholarly journals Trends of Regional Banking System Develoment (Illustrated by entities of the North-West Federal Area)

2021 ◽  
Vol 18 (1) ◽  
pp. 47-58
Author(s):  
M. A. Pechenskaya-Polishchuk ◽  
A. A. Volkov
Keyword(s):  
Interest Rates ◽  
System Analysis ◽  
Banking System ◽  
Regional Level ◽  
Synthesis System ◽  
North West ◽  
The North ◽  
Total Profit ◽  
Regional Banks ◽  
Legal Entities

The article studies the lines in the development of banking system in regions of the North-West Federal Area. By analyzing the banking system on the regional level within the period being researched the authors identified such key trends as a decline in the number of regional banks, a growth in the total profit of the banking system in the federal area, a rise in the volume of credits granted to individuals, legal entities and individual entrepreneurs, a drop in credits given to entities of small and medium entrepreneurship, a cut in interest rates of credits to legal entities and a sharp increase in overdue debt under credit on mortgage. On the basis of the analysis the key figures of the banking system on the regional level (illustrated by regions of the North-West federal area) the authors identified negative and positive trends, which allowed them to substantiate the key lines in the development of regional banking system. The principle findings of the research can be useful for management of regional banks and state authorities. Such methods as comparative analysis, longitude, synthesis, system analysis and economic-statistic methods were used in the research.

scholarly journals Austria

2020 ◽  
Vol 20 (35) ◽  
Author(s):  
Keyword(s):  
Interest Rates ◽  
Eastern Europe ◽  
Housing Market ◽  
Banking System ◽  
Coverage Ratio ◽  
Ownership Structures ◽  
South Eastern ◽  
Low Interest Rates ◽  
South Eastern Europe ◽  
Insurance Firms

Growth in Austria has been strong, but the outlook has moderated, and financial vulnerabilities are building up. Structural vulnerabilities include a large and tiered banking system, complex ownership structures and financial interlinkages, and a focus on Central, Eastern, and South Eastern Europe (CESEE) markets. Banks are exposed to cyclical risks from volatility in the CESEE, and rising vulnerabilities in the housing market. The solvency coverage ratio of insurance firms is high, but the sector suffers from low growth, low interest rates, and future profitability risk.

scholarly journals Finland

2016 ◽  
Vol 2016 (370) ◽  
Author(s):  
Keyword(s):  
Interest Rates ◽  
Banking System ◽  
Financial System ◽  
System Stability ◽  
Stability Assessment ◽  
Nonperforming Loans ◽  
Interest Income ◽  
Low Interest Rates

This paper discusses key findings of the Financial System Stability Assessment concerning Finland. It reveals that Finland’s banking system remains well capitalized and profitable. Although low interest rates have squeezed net interest income, banks have increased income from trading and insurance and reduced cost-income ratios, helping to maintain profitability. Nonperforming loans have remained low and capitalization ratios are well above requirements, though buffers may be exaggerated by the aggressive use of risk weights. The Net Stable Funding Ratio suggests that vulnerabilities from maturity mismatches are limited in aggregate. Nevertheless, previously identified vulnerabilities remain, and some have increased.

4. The central bank and the conduct of monetary policy

2016 ◽  
pp. 54-71
Author(s):  
John Goddard ◽  
John O. S. Wilson
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Central Bank ◽  
Interest Rates ◽  
Banking Industry ◽  
Banking System ◽  
Central Banks ◽  
National Currency ◽  
The Uk ◽  
The International Monetary Fund

In most countries, the central bank manages the country’s money supply and interest rates. Most central banks hold a monopoly over printing the national currency and have supervisory or regulatory responsibilities for overseeing the banking industry. The central bank typically performs a dual role, operating as the government’s banker, and as banker to the rest of the banking system. ‘The central bank and the conduct of monetary policy’ explains the central bank’s role and describes the central banks of the UK, EU, and US, as well as the International Monetary Fund. It also outlines the central bank’s responsibility for implementing monetary policy and explains the deposit expansion multiplier, interest rate targeting, and quantitative easing.

scholarly journals Virtual Currencies Like Bitcoin As A Paradigm Shift In The Field Of Transactions

2015 ◽  
Vol 14 (4) ◽  
pp. 575 ◽  
Author(s):  
Chris Richter ◽  
Sascha Kraus ◽  
Ricarda B. Bouncken
Keyword(s):  
Interest Rates ◽  
Paradigm Shift ◽  
Banking Sector ◽  
Banking System ◽  
Virtual Currency ◽  
High Transparency ◽  
Advantages And Disadvantages ◽  
The World ◽  
Money Flows ◽  
Low Interest Rates

Virtual currencies have been well-cited and well-discussed in the near past. Due to the loss of trust in the banking sector and the fear of loss of capital, low interest rates and uncertainty of existing currencies, the ground for a virtual currency was given. Virtual currencies and the money flows are controlled only online by the anonymous group of volunteers (also called peer); every single transaction is documented. Approximately 10,000 businesses worldwide accept payments with virtual currencies already, and the number is increasing steadily. This article analyzes the advantages and disadvantages of virtual currencies in comparison to real money and gives an outlook to a new banking system with high transparency and the chance to lead to a paradigm shift in the world of transactions and banking.

scholarly journals The trade union cycle

2021 ◽  
pp. 255-273
Author(s):  
Philipp Bagus
Keyword(s):  
Interest Rates ◽  
Trade Unions ◽  
Consumer Preferences ◽  
Banking System ◽  
Credit Expansion ◽  
Investment Projects ◽  
Low Interest Rates ◽  
Factor Markets ◽  
Factors Of Production ◽  
Capital Intensive

The current economic crisis has shaken the positions of labour unions within the EU. The underlying trend of globalization that also weakens Western trade unions was reinforced by the recession. The power of trade unions typically tends to grow during eco-nomic booms and to fall during economic recessions. In order to explain this trend we first have to understand the phenomenon of the business cycle.1 Artificial booms are triggered by the credit expansion of the banking system. Artificially low interest rates induce entrepreneurs to start more and longer investment projects than cannot be sustained by the available amount of real savings. There is a distortion between the behaviour of savers and that of investors. Entrepreneurs start more projects than savers are willing to sustain. Particularly, capital-intensive sectors are expanded during the boom due to the artificially low interest rates. Resources are shifted into these expanding sectors. At some point it becomes obvious that the boom is only financed by newly created money and is not sustained by real savings. The erroneously started investment projects have to be liquidated or restructured. Factors of production have to be shifted into the sectors where consumers really want them. In the recent cycle there was an overexpansion of highly capital-intensive sectors such as the construction sector and the automotive sector that attracted factors of production including workers. Workers are employed in jobs that produce goods that consumers do not want as urgently as other goods. Thus, the workers must be transferred into sectors that are in line with consumer preferences for the economy to recover. In order to achieve this, it is of the utmost importance for factor markets to be flexible. If factor markets are not flexible, factors of production such as labour will remain unemployed. Thereby, consumption is reduced, harming other companies that have to reduce costs and release workers, making the recession longer and harder than necessary.

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