Credit Rating Agencies and Their Effects: An Analysis on Balkan Countries

The financial structure in the world has become more complex with the increase in global capital movements. For this reason, credit rating agencies have emerged as an important component of the financial structure. Standard and Poors, Moody's and Fitch are the three most important companies in this market. The grades given by these institutions highly affect the economic situation of the countries. In this study, information is given about credit rating agencies and it is aimed to measure the effect of the points given to countries by Standard and Poors, Moody's and Fitch, which are the most important of these institutions, on the economy. For this purpose, the effect of credit scores on the economic growth of Balkan countries except Kosovo was analyzed using panel data analysis method. In addition, unemployment, inflation, current account balance and budget balance data were included in the analysis. The findings obtained show that credit scores have an effect on the economic growth of countries.

The Ethics of Global Capital Mobility

Global capital mobility is a crucial determinant of economic, political, and social life. While much has been written about the ethics of human movement, political theory has remained nearly silent on the ethics of capital movement. In this article, we intend to develop a general account of the ethics of global capital mobility—identifying both the forms of mobility that merit protection and those that merit restriction. By integrating normative theorizing with an economic analysis of global investment, we argue that the movement of capital, with important exceptions, should be much more restricted than it is today. We make the case, on both grounds of global justice and international assistance, for imposing coercive limits on cross-border inflows and outflows of capital. To enable them, we also propose a radical reform of the international monetary system—a new global currency—that would simultaneously facilitate beneficial capital movements.

Is De-Risking one of the Indications for an Emerging Competition between the Free Movement of Capital and the Anti-Money Laundering Regulations?

The report is dedicated to analysing the phenomenon of de-risking which may be considered as another indication for the arising competition between the regulatory effect of the anti-money laundering regulation and the deregulatory effect of the liberalization of capital movements within the European Union. The author’s attention is focused on the triggering events for both liberalization of capital movements and de-risking, definition of the phenomenon de-risking and its impact on the free movement of capital and payments.

Removing Obstacles to Integration

European integration played an important role in liberalizing banking and financial markets. Based on archival material from central banks, commercial banks, and bankers’ association in France and the United Kingdom, this chapter sheds light on the role of the European Economic Community in three areas: the realization of a common market in banking, the liberalization of capital movements, and the broader financial integration in the EEC. It argues that in the EEC, financial liberalization had two motives: the deepening of the Common Market, and consolidation of European monetary cooperation/integration. Removing obstacles to integration was the main way used to achieve these goals. The chapter further challenges the work of Rawi Abdelal, which overstates the role of France and downplays the role of the United Kingdom in the liberalization of the financial sector.

Impact of Capital Movements on Sterilization and Monetary Policies in Pakistan: Evidence from Multiple Specifications

This paper aims at evaluating the effectiveness of central bank of Pakistan’s sterilization policy to neutralize the impact of capital movements on domestic monetary conditions. We also estimate how the sterilization efforts are frustrated/offset by fresh capital inflows. Sterilization coefficient and offset coefficients are estimated through Monetary Policy Reaction Function and Capital Flow Equation respectively. To check robustness of our results, we apply three different econometric techniques including Vector Error Correction Method, Two Staged Least Squares and Generalized Method of Moments. Using monthly data, we use one full sample: from 1982M1 to 2018M12 and two subsamples: i.e. from 1982M1 to 2001M09 and from 2001M10 to 2018M12. The results from the two equations from all specifications show that sterilization coefficients are relatively smaller than the offset coefficients implying that it is difficult for Pakistan to sterilize the impact of foreign capital inflows on domestic money base. Larger offset coefficients, on the other hand, particularly for the second subsample, indicate that Pakistan cannot conduct independent monetary policy under the free float exchange rate regime adopted in 2000. Our results from both equations are robust to all specifications and for all samples and subsamples. Major implication of our finding is that Pakistan cannot conduct independent monetary policy in after resorting to free float exchange rate regime.

Credit rating agencies and their effects: An analysis on Balkan countries

The financial structure in the world has become more complex with the increase in global capital movements. For this reason, credit rating agencies have emerged as an important component of the financial structure. Standard and Poors, Moody's and Fitch are the three most important companies in this market. The grades given by these institutions highly affect the economic situation of the countries. In this study, information is given about credit rating agencies and it is aimed to measure the effect of the points given to countries by Standard and Poors, Moody's and Fitch, which are the most important of these institutions, on the economy. For this purpose, the effect of credit scores on the economic growth of Balkan countries except Kosovo was analyzed using panel data analysis method. In addition, unemployment, inflation, current account balance and budget balance data were included in the analysis. The findings obtained show that credit scores have an effect on the economic growth of countries.