Financialization, premature deindustrialization, and instability in Latin America

2021 ◽  
Vol 9 (4) ◽  
pp. 493-511
Author(s):  
Esteban Pérez Caldentey ◽  
Matías Vernengo
Keyword(s):  
Latin America ◽  
Social Development ◽  
Economic Activity ◽  
Financial Stability ◽  
Financial Sector ◽  
Developed Countries ◽  
Advanced Stage ◽  
Investment Growth

The paper analyses the relation between premature deindustrialization in Latin America and what is termed premature financialization. Premature financialization is defined as a turn to finance, organized as an industrial concern, which is a vehicle for accumulation before the process of industrialization has reached maturity. This contrasts with developed countries where financialization occurs after an advanced stage of economic and social development has been reached, and where the growth of the financial sector, beyond a certain threshold, can be detrimental to economic activity. The paper examines the consequences of premature financialization for investment, growth, and financial stability.

scholarly journals THE NUMBER OF FINANCIAL REGULATORY AUTHORITIES AND FINANCIAL STABILITY: CROSS-COUNTRY EXPERIENCES

2014 ◽  
Vol 17 (1) ◽  
pp. 129-145
Author(s):  
Wahyoe Soedarmono ◽  
Romora Edward Sitorus
Keyword(s):  
Central Bank ◽  
Financial Stability ◽  
Financial Sector ◽  
Developed Countries ◽  
Jel Classification ◽  
Less Developed Countries ◽  
Empirical Results ◽  
Different Types ◽  
Cross Country ◽  
Financial Regulatory

This paper attempts to provide evidence whether or not the unification of regulatory institutions for different types of financial sector creates challenges for financial stability. From a sample of 91 countries that provide data on the financial unification index and the central bank involvement index, the empirical results reveal that higher financial unification index or the convergence toward a single supervisory institution outside the central bank, in order to control three different sectors (banking, insurance, and securities), is detrimental for financial stability. However, this finding only holds for developed countries, but dissapears for less developed countries. In parallel, the central bank involvement in financial sector supervision has no impact on financial stability in both developed and less developed countries.  Keywords: Supervisory Regimes, Financial Sectors, Financial Stability  JEL Classification: G18, G21, G28

scholarly journals The Impact of Financial Sector Sustainability Guidelines and Regulations on the Financial Stability of South American Banks

2021 ◽  
Vol 10 (1) ◽  
pp. 111-127
Author(s):  
Pedro Ildemaro Alguindigue Ruiz ◽  
Olaf Weber
Keyword(s):  
Latin America ◽  
Financial Stability ◽  
Banking Industry ◽  
Financial Sector ◽  
South American ◽  
Panel Regression ◽  
Z Score ◽  
Sustainable Finance ◽  
The Impact

Sustainability risks represent a significant concern for the banking industry. Consequently, financial regulators created financial sector sustainability guidelines and regulations. However, the effect of these policies on banks’ financial stability is unclear. Hence, this study analyzes 149 banks in 17 countries in Latin America to explore the impact of financial sector sustainability guidelines and regulations on the banking industry. We use the Z-Score to measure the financial stability of banks in countries with and without financial sector sustainability guidelines and regulations. Based on panel regression, our results suggest significant differences between banks in countries with and without financial sector sustainability guidelines and regulations. We conclude that sustainable finance regulations promote financial stability as well as sustainable banking practices.

Advertising in a Developing Economy; Opportunity and Responsibility

1975 ◽  
Vol 9 (3) ◽  
pp. 215-223 ◽  
Author(s):  
Malcolm Harper
Keyword(s):  
Social Development ◽  
Economic Activity ◽  
Life Style ◽  
Development Process ◽  
National Income ◽  
Developed Countries ◽  
Less Developed Countries ◽  
Developing Economy ◽  
Positive Potential

Suggests that advertising has a greater influence on spending habits and life style in lesser‐developed areas than in wealthier ones – this potential imposes certain responsibilities on marketers as well as offering opportunities for balanced economic and social development of the countries concerned. Stresses that production has always been considered more respectable than distribution, and the role of the ‘middlemen’ has drawn more suspicion. States that neglecting positive potential of marketing has prevented any analysis of the possible dysfunctional effects of commercial marketing – attempts to suggest the extent of the power that lies with marketers in less‐developed countries. Concludes that if marketing techniques are viewed as valuable tools to be used in accelerating the development process, economic activity will be stimulated rather than stifled, and the increase in national income will help to contribute to a better future for all.

Reducing the Risks of the Financial Sector to Ensure Sustainable Growth of the Russian Еconomy

2019 ◽  
Vol 12 (3) ◽  
pp. 86-92
Author(s):  
T. I. Minina ◽  
V. V. Skalkin
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Financial Sector ◽  
Developed Countries ◽  
Sustainable Growth ◽  
Necessary Condition ◽  
Real Sector ◽  
Financial Instruments ◽  
The Real ◽  
The Impact

Russia’s entry into the top five economies of the world depends, among other things, on the development of the financial sector, being a necessary condition for the economic growth of a developed macroeconomic and macro-financial system. The financial sector represents a system of relationships for the effective collection and distribution of economic resources, their deployment according to public demand, reducing the risk of overproduction and overheating of the economy.Therefore, the subject of the research is the financial sector of the Russian economy.The purpose of the research was to formulate an approach to alleviating the risks of increasing financial costs in the real sector of the economy by reducing the impact of endogenous risks expressed as financial asset “bubbles” using the experience of developed countries in the monetary policy.The paper analyzes a macroeconomic model applied to the financial sector. It is established that the economic growth is determined by the growth and, more important, the qualitative development of the financial sector, which leads to two phenomena: overproduction in the real sector and an increase in asset prices in the financial sector, with a debt load in both the real and financial sectors. This results in decreasing the interest rate of the mega-regulator to near-zero values. In this case, since the mechanisms of the conventional monetary policy do not work, the unconventional monetary policy is used when the mega-regulator buys out derivative financial instruments from systemically important institutions. As a conclusion, given deflationally low rates, it is proposed that the megaregulator should issue its own derivative financial instruments and place them in the financial market.

Growth and Social Capital: Empirical Analysis of the Relationship

2019 ◽  
pp. 128-134
Author(s):  
Ksenia V. Bagmet
Keyword(s):  
Economic Growth ◽  
Social Capital ◽  
Economic Development ◽  
Social Development ◽  
Empirical Analysis ◽  
Panel Data Analysis ◽  
Well Being ◽  
Developed Countries ◽  
International Institute ◽  
Level Of Economic Development

The article provides an empirical test of the hypothesis of the influence of the level of economic development of the country on the level of development of its social capital based on panel data analysis. In this study, the Indices of Social Development elaborated by the International Institute of Social Studies under World Bank support are used as an indicators of social capital development as they best meet the requirements for complexity (include six integrated indicators of Civic Activism, Clubs and Associations, Intergroup Cohesion, Interpersonal Safety and Trust, Gender Equality, Inclusion of Minorities), comprehensiveness of measurement, sustainability. In order to provide an empirical analysis, we built a panel that includes data for 20 countries divided into four groups according to the level of economic development. The first G7 countries (France, Germany, Italy, United Kingdom); the second group is the economically developed countries, EU members and Turkey, the third group is the new EU member states (Estonia, Latvia, Lithuania, Romania); to the fourth group – post-Soviet republics (Armenia, Georgia, Russian Federation, Ukraine). The analysis shows that the parameters of economic development of countries cannot be completely excluded from the determinants of social capital. Indicators show that the slowdown in economic growth leads to greater cohesion among people in communities, social control over the efficiency of distribution and use of funds, and enforcement of property rights. The level of tolerance to racial diversity and the likelihood of negative externalities will depend on the change in the rate of economic growth. Also, increasing the well-being of people will have a positive impact on the level of citizens’ personal safety, reducing the level of crime, increasing trust. Key words: social capital, economic growth, determinant, indice of social development.

scholarly journals The contribution of telco data to fight the COVID-19 pandemic: Experience of Telefonica throughout its footprint

Data & Policy ◽  
2021 ◽  
Vol 3 ◽  
Author(s):  
Pedro A. de Alarcon ◽  
Alejandro Salevsky ◽  
Daniel Gheti-Kao ◽  
Willian Rosalen ◽  
Marby C. Duarte ◽  
...  
Keyword(s):  
Latin America ◽  
Economic Activity ◽  
Public Institutions ◽  
Security And Privacy ◽  
Strong Impact ◽  
Global Challenge

Abstract The COVID-19 pandemic is a global challenge for humanity, in which a large number of resources are invested to develop effective vaccines and treatments. At the same time, governments try to manage the spread of the disease while alleviating the strong impact derived from the slowdown in economic activity. Governments were forced to impose strict lockdown measures to tackle the pandemic. This significantly changed people’s mobility and habits, subsequently impacting the economy. In this context, the availability of tools to effectively monitor and quantify mobility was key for public institutions to decide which policies to implement and for how long. Telefonica has promoted different initiatives to offer governments mobility insights throughout many of the countries where it operates in Europe and Latin America. Mobility indicators with high spatial granularity and frequency of updates were successfully deployed in different formats. However, Telefonica faced many challenges (not only technical) to put these tools into service in a short timing: from reducing latency in insights to ensuring the security and privacy of information. In this article, we provide details on how Telefonica engaged with governments and other stakeholders in different countries as a response to the pandemic. We also cover the challenges faced and the shared learnings from Telefonica’s experience in those countries.

scholarly journals Fiscal-Monetary-Financial Stability Interactions in a Data-Rich Environment

2018 ◽  
Vol 18 (3) ◽  
pp. 195-224 ◽  
Author(s):  
Martin Hodula ◽  
Lukáš Pfeifer
Keyword(s):  
Monetary Policy ◽  
Systemic Risk ◽  
Financial Stability ◽  
House Prices ◽  
Empirical Support ◽  
Financial Sector ◽  
Economic Policies ◽  
Real Economy ◽  
Monetary Policies ◽  
Fiscal And Monetary Policy

Abstract In this paper, we shed some light on the mutual interplay of economic policy and the financial stability objective. We contribute to the intense discussion regarding the influence of fiscal and monetary policy measures on the real economy and the financial sector. We apply a factor-augmented vector autoregression model to Czech macroeconomic data and model the policy interactions in a data-rich environment. Our findings can be summarized in three main points: First, loose economic policies (especially monetary policy) may translate into a more stable financial sector, albeit only in the short term. In the medium term, an expansion-focused mix of monetary and fiscal policy may contribute to systemic risk accumulation, by substantially increasing credit dynamics and house prices. Second, we find that fiscal and monetary policy impact the financial sector in differential magnitudes and time horizons. And third, we confirm that systemic risk materialization might cause significant output losses and deterioration of public finances, trigger deflationary pressures, and increase the debt service ratio. Overall, our findings provide some empirical support for countercyclical fiscal and monetary policies.

scholarly journals The Effect of Credit Derivatives on Financial Stability

2016 ◽  
Vol 1 (1) ◽  
pp. 22 ◽  
Author(s):  
Richard Van Ofwegen ◽  
Willem F.C. Verschoor ◽  
Remco C.J. Zwinkels
Keyword(s):  
Financial Stability ◽  
Credit Derivatives ◽  
Financial Sector ◽  
Financial Products ◽  
The Stability ◽  
The Impact

Due to the recent financial turmoil, questions have been raised about the impact ofcomplex financial products, like credit derivatives, on financial stability. The academicliterature however does not provide a clear answer to this question. This paper empiricallylinks the stability of the financial sector to the use of credit derivatives for the main constituentsof the European financial sector. We find that the use of credit derivatives increases theprobability of default and thus reduces the overall financial sector stability. In addition,we find evidence that this relationship is progressive and economically meaningful.

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