Offshore Markets for the Domestic Currency: Monetary and Financial Stability Issues

2012 ◽  
Keyword(s):  
Financial Stability ◽  
Domestic Currency ◽  
Stability Issues

scholarly journals Indonesian Banking Efficiency: Transmission to the Financial Stability Confronting ASEAN Economic Community

2017 ◽  
Vol 18 (2) ◽  
pp. 183
Author(s):  
Shochrul Rohmatul Ajija ◽  
Mohammad Zeqi Yasin ◽  
Reno Albra
Keyword(s):  
Financial Stability ◽  
Malmquist Index ◽  
Economic Community ◽  
Transmission Scheme ◽  
Banking Efficiency ◽  
Technological Index ◽  
Asean Economic Community ◽  
Conventional Banks ◽  
Stability Issues ◽  
Type Of Institution

Banks are a particular type of institution within the financial system that have influence on financial stability. Their readiness will determine the government’s policy, notably in an economic era of integration. In the case of South East Asia, there is the ASEAN Economic Community (AEC) which facilitates economic integration to strengthen allthe member countries. This study aims to measure bank efficiency (conventional and shariah) in Indonesia, and also establish the transmission scheme based on the estimated result through financial stability issues confronting the AEC. Data Envelopment Analysis (DEA) is used to estimate banking efficiency statically and dynamically (Malmquist Index). The result showed that technical efficiency of conventional banks is statically better than shariah banks. Meanwhile, dynamically, considering technological index, both types of banks have good results. The optimizing effort by each bank in order to increase their input utilization can be maintained through intensification of the financial program and making it more comprehensive. Subsequently, this effort hopefully can increase the number of financial participants. Eventually, increasing the number of participants will strengthen the financial stability of Indonesia.

Household micro-data, regulation and financial stability: the case of Denmark in the 1950s

2016 ◽  
Vol 33 (2) ◽  
pp. 320-335 ◽  
Author(s):  
Kim Abildgren
Keyword(s):  
Financial Stability ◽  
Banking Sector ◽  
Micro Data ◽  
Content Type ◽  
Household Level ◽  
Household Sector ◽  
Level Data ◽  
The 1950S ◽  
The Stability ◽  
Stability Issues

Purpose The 1950s was characterised by pronounced stability of the banking sector in many countries, which the existing literature has attributed to tight regulation. However, other factors than regulation are important for financial stability. The purpose of this paper is to consider the case of Denmark and investigate whether the absence of banking crises was due to robustness of the banking sector’s customers rather than tight regulation. Design/methodology/approach The paper analyses the resilience of Danish wage and salary earners to adverse economic shocks in the 1950s based on household-level data on income, consumption, savings and wealth from the Danish Expenditure and Saving Survey of 1955. Findings The paper finds that the Danish household sector in the 1950s had a high debt payment ability and was very robust to even large income shocks. The results indicate that the stability of the Danish financial sector was not only due to tight regulation but also reflected a high credit quality of the banking sector’s loan portfolio. Originality/value During the past decade or so, a micro-data-based framework has become the “state of the art” approach among central banks to analyse the financial robustness of the household sector. However, such an approach has so far not been applied in studies on historical financial-stability issues. The paper adds to the literature by using granular household-level data to assess the financial resilience of the Danish household sector in the 1950s.

scholarly journals Destabilizing Stability? Exchange Rate Arrangements and Foreign Currency Debt

2020 ◽  
Vol 20 (173) ◽  
Author(s):  
Balazs Csonto ◽  
Tryggvi Gudmundsson
Keyword(s):  
Exchange Rate ◽  
Risk Taking ◽  
Financial Stability ◽  
Foreign Currency ◽  
Exchange Rate Flexibility ◽  
Macroprudential Policies ◽  
Increase Risk ◽  
Exchange Rate Arrangements ◽  
Stability Issues ◽  
Foreign Currency Debt

Emerging markets (EMs) often respond to shocks by intervening in foreign exchange (FX) markets and thus preventing full exchange rate adjustment. This response can serve to dampen the effect of shocks and increase monetary policy space but may also incentivize economic participants to increase risk taking and take on more FX debt. This paper empirically analyzes the role of exchange rate flexibility in affecting such risk taking, by using rolling correlations and difference-in-difference estimations. The results suggest that a shift towards greater exchange rate flexibility often coincides with a decline in external FX debt. The findings also highlight the importance of using complementary policies to deal with financial stability issues related to the exchange rate, such as FX-specific macroprudential policies and policies aimed at promoting financial development.

scholarly journals Consideration on the price stability – financial stability relationship in the context of financial globalization

2010 ◽  
Author(s):  
Marius Apostoaie
Keyword(s):  
Monetary Policy ◽  
Financial Stability ◽  
Central Banks ◽  
Point Of View ◽  
Price Stability ◽  
Theoretical Point ◽  
Ongoing Debate ◽  
Key Concepts ◽  
In The Beginning ◽  
Stability Issues

This study is focused upon the involvement of the central banks regarding the fulfillment of the two main objectives: price  stability and financial stability. These two key concepts are part of an old and ongoing debate that the current turmoil has revived, and that is whether monetary policy should aim, or not, at ensuring financial stability in parallel to its main objective of price stability. On both sides there are solid and well known arguments. In the beginning of the study I have  considered a literature review with regard to price and financial stability issues. After that I have tried to shed some light (from a theoretical point of view) on the nature and dynamics of the fundamental interlinkages between the two aspects and there implications on the central banks and the economy. Finally I outline some general conclusions that have emerged in the present study.

scholarly journals Central Bank Independence and Financial Stability: Orthodox and Heterodox Approaches

2017 ◽  
pp. 6-27 ◽  
Author(s):  
Viktor Koziuk
Keyword(s):  
Central Bank ◽  
Financial Stability ◽  
Institutional Environment ◽  
Central Banks ◽  
Central Bank Independence ◽  
Price Stability ◽  
Regulatory Regime ◽  
Financial Cycle ◽  
Stability Issues

This study argues that post-crisis discussions on central bank independence are less about a choice of a level of independence but more about a relation between the independence and the central bank mandate in financial stability. An offered hypothesis states that an increasing role of financial factors in the macroeconomic policy agenda has led to emerging of two approaches to the central bank independence. Within the orthodox approach, responsibility for the financial stability is a challenge to the accepted model: one mandate – one goal – one instrument. Interference into the financial cycle impairs transparency and distorts responsibility, while deflation bias risks get in conflict with price stability principles, adherence to which is exactly what central banks are granted independence for. In terms of the heterodox approach, a wider responsibility of central banks for financial stability requires more independence to protect the legitimacy of interference into the financial cycle and implementation of a more prudent regulatory regime. Orthodox view is contradictory in its nature, while the vulnerability of the second approach lies in quality of institutional environment. Price stability mandate is argued to remain the first priority, while the financial stability issues should be institutionalized in a clearer way to secure independence.

scholarly journals Garry J. Schinasi. Safeguarding Financial Stability: Theory and Practice. Washington, D. C.: IMF. 2006. xv+311 pages. $28.00.

2005 ◽  
Vol 44 (2) ◽  
pp. 223-225
Author(s):  
Kalbe Abbas
Keyword(s):  
Economic Growth ◽  
Stability Theory ◽  
Financial Stability ◽  
Analytical Framework ◽  
Theory And Practice ◽  
Sustained Development ◽  
Stability Issues ◽  
Policy Function

Financial stability plays an important role in economic growth and leads to sustained development. As such, financial stability is gradually emerging as a distinct policy function. Safeguarding Financial Stability, by Garry Schinasi, explains why financial stability matters, what it means, and what challenges are involved in securing it. The book is divided into three parts and contains twelve chapters. Chapter 1 gives the outline of the book and provides answers to various related questions. It highlights the increasing importance of financial stability issues, pinpoints the need for an analytical framework, and describes the specific objectives and organisation of the book.

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