Banking and Finance in South Africa

The importance of the financial sector is widely recognized by the public––who use and benefit from the products and services of the different financial industries––bank loans, insurance products, investments, and the payments system (to name a few). This chapter describes the different financial intermediaries, financial auxiliaries, and financial market infrastructure that comprise the sophisticated South African financial sector. Emphasis is placed on the banks whose liabilities (deposits) are uniquely the means of payment (money) and whose assets are loans to businesses, households, and the government. The role of banks is straightforward, but their basic fragility and risks they face in an uncertain world are complex. Failure of a major financial intermediary within the context of a deeply integrated system will have significant costs for the rest of the economy. For this reason, regulation tends to err on the side of caution, where stability is prioritized. This leads to a system where conservativism rules and profitability for the systemically important institutions is virtually assured. The chapter argues for greater awareness of the regulatory compromises given that the success of the sector is not costless to society.

PENERAPAN PRINSIP KEHATI-HATIAN BANK DALAM PENCAIRAN DANA NASABAH DIHUBUNGKAN DENGAN UNDANG-UNDANG TENTANG PERBANKAN

Banks, especially commercial banks, are not only financial intermediaries from those with surplus funds to those with deficit funds, but are also the financial foundation of every country engaged in business activities and the various services provided. Banks serve and launch payment system mechanisms for all sectors of the economy. As a financial institution, bank activities are based on the trust of customers who can be accounted for by the bank. The Bank as an Intermediary institution carries out its business activities based on banking principles and rules, one of which is the Prudential Principle which must be applied. Themethodology used in this research is a normative juridical approach, namely by collecting library data by examining library materials or secondary legal materials. In this case, by examining the legal issues contained in Court Decision Number 38/Pdt.G/2017/PN.Idm and Act Number 10, 1998. The precautionary principle as a form of legal protection forcustomers indirectly to anticipate losses to customers. Which should be implemented properly to maintain customer trust, but in its implementation the precautionary principle has not been applied optimally. This has been encountered in one of the cases where the bank was deemed not to have maximally implemented the prudential principles. Proof (validation) of the system, the Bank should apply the precautionary principle but in its implementation the Bank causes losses to customers and the loss of customer trust in the Bank.

Financial Architecture and Financial Stability

This article studies the links between financial stability and the architecture of financial systems. We review the existing literature and provide organizing frameworks for analyzing three empirically important aspects of financial architecture: the rise of nonbank financial intermediaries, the regulatory response to these structural changes, and the emergence of complex interbank networks. One of our main new results is a necessary and sufficient condition for whether nonbank intermediaries are immune to runs in an extended version of the Diamond–Dybvig model. Expected final online publication date for the Annual Review of Financial Economics, Volume 13 is November 2021. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.

An Exploration into People’s Perception and Intention on using Cryptocurrencies

The cryptocurrency market has been described as revolutionary due to the constant technological evolution and innovation that the blockchain technology provides. Leading many to believe that this could be the next step for the human race, just like how fiat currency replaced gold. Cryptocurrencies were originally created to be a form of savings or income for the unbanked, reduce costs and energy consumption, for a means of data transparency and to remove financial intermediaries. It is undeniable that the cryptocurrency market has created a divide of opinions, as some look to explore the market further while others reject the thought of adopting this innovative technology completely. This study focuses on the perception and intention to use cryptocurrencies. Diving into previous literature about the adoption of cryptocurrencies and new technologies. Highlighting key factors that can affect an individual’s perception and gaps in the literature that need to be explored further. A quantitative approach was used to gather data from 102 participants. The findings indicated that performance and effort expectancy as the most influential variables for cryptocurrency adoption, as people seek understanding as what benefits cryptocurrencies can provide for them when they feel incapable of using the innovative technology.

A Systematic Review of Financial Intermediaries Research

The purpose of this study is to conduct a systematic review on Financial Intermediaries (FI) with a view to review extant discourses, identify gaps and provide directions for future research in this area. The Systematic Assessment Quantitative Technique (SQAT) developed by Australian researchers Catherine Pickering and Jason Anthony Bryn in (2013), was used to identify and review 43 peer- reviewed Financial Intermediaries (FI) articles from ten high quality academic databases. The primary focus of FI articles in this review were on nine themes and two theories were predominant. The various themes developed from literatures were discussed. The findings of this study would look to guide policy planners and managers on the integral role of financial intermediaries in their daily activities stressing how its overarching function cuts across all facets our financial lives

Determinants of Bank Profitability

Banks are the most vital financial intermediaries in economy, which has a profitable banking industry; in order to survive undesirable shock as well as subsidize the constancy under the whole economy. However, the main purpose of this research is in the direction of analyzing factors affecting banks’ effectiveness all over Pakistan by means of sets of targeted facts and figures of twenty panels from 2005 to 2015. This study is developed with the help of AOLS technique which is used to examine the effect of different factors such as resources, debts, justice, securities, economic growth, price increases, price decreases, and market capitalization on major profitability signs such as (ROA), (ROE), (ROCE) and (NIM). The experimental consequences analyzed solid facts which stated the following conclusion, i.e., internal factors and external factors create an adverse impact on the level of profitability. An outcome by this research is important to different researchers. This research study proposed that by the concentration & reengineering the internal drivers the banks can improve its profitability and performance.

Determinant Factors of Non-Performing Loan among Non-Bank Financial Intermediaries in Malaysia

This study aimed to investigate the determinants of non-performing loans (NPLs) using a case of the Non-Bank Financial Intermediaries (NBFIs) in Malaysia during the period from 2009 to 2018. The study revealed that the level of NPLs can be attributed to both NBFI-specific factors (internal factors) and macroeconomic factors. The assessments on panel data analysis were done using STATA software. The results show that NBFI size, Profit (ROA), Lending Interest Rate (IR), and Inflation (INF) have a significant positive relationship with NPLs. The findings reveal that NPLs tend to increase with the deteriorating bank’s efficiency. The larger the NBFI size, higher profit, and high interest contribute to the increment of NPLs. Meanwhile, NPL also increases due to the change in economic condition, particularly with a rise in inflation rate. Hence, for NBFIs to decrease their NPLs, they should consider these factors during the lending process.