Motivation and Framework

This chapter introduces the concept and a definition of the “formalization” of banking supervision that is examined in this book and outlines the aim and scope of the book. In addition to providing the reader with an overview of the history of banking supervision in eight developed countries (the US, Japan, Sweden, Germany, Switzerland, Belgium, France, and the UK), the book presents information regarding the formalization process itself. That process is assessed based on three criteria—bank regulation, supervisory authority, and supervisory activity. This approach is intended to provide more detail than a simple assessment based on banking acts that is common in financial regulation research. The aim of the analysis undertaken in this book is to identify why the history of banking supervision in various countries shares many similarities and yet also displays many differences. In Sect. 1.5, we provide an overview of the historiography of the formalization of banking supervision with a special emphasis on comparative and internationally oriented literature, while the growing body of literature on each of the national cases is discussed in subsequent chapters.

Assessing effects of Interest Rates Spread on Non-Performing Loans: A Case of Commercial Banks in Trans-Nzoia County, Kenya

In the spike of increasing occurrences of non-performing loans among commercial banks in Trans-Nzoia County, Kenya, interest rate spread should be given serious consideration through more empirical research. This study therefore sought establish the relationship between the interest rate spread and occurrence of non-performing loans among commercial banks in Trans-Nzoia County. It specifically; looked into the credit risk management impacts non-performing loans, bank regulation impacts non-performing loans, and the capital sufficiency impacts non-performing loans. Adopting descriptive research design, the study used the 78 employees of commercial banks in Trans-Nzoia County as its targeted. The entire population participated in the study as respondents. Data, which was gathered using a questionnaire, was using quantitative approach to yield descriptive and inferential statistics. Multiple regression analysis was used to draw inferences from the findings. All factors were found to be statistically significant (p,0.05). Thus, credit risk management, bank regulation impacts, and the capital sufficiency have a positive significant effect on non-performing loans among commercial banks in Trans-Nzoia. The study recommended for; credit staff training programmes, applying strict interest rate rules and strict lending advances policies. In the spike of increasing occurrences of non-performing loans among commercial banks in Trans-Nzoia County, Kenya, interest rate spread should be given serious consideration through more empirical research. This study therefore sought establish the relationship between the interest rate spread and occurrence of non-performing loans among commercial banks in Trans-Nzoia County. It specifically; looked into the credit risk management impacts non-performing loans, bank regulation impacts non-performing loans, and the capital sufficiency impacts non-performing loans. Adopting descriptive research design, the study used the 78 employees of commercial banks in Trans-Nzoia County as its targeted. The entire population participated in the study as respondents. Data, which was gathered using a questionnaire, was using quantitative approach to yield descriptive and inferential statistics. Multiple regression analysis was used to draw inferences from the findings. All factors were found to be statistically significant (p,0.05). Thus, credit risk management, bank regulation impacts, and the capital sufficiency have a positive significant effect on non-performing loans among commercial banks in Trans-Nzoia. The study recommended for; credit staff training programmes, applying strict interest rate rules and strict lending advances policies.

Reflections on Central Banking

This chapter seeks to code the milestones on the epic journey of central banking from the initial conditions, through the transition, to modern policy and practice today, in a global context and Kenyan perspective. It is argued that although developments in economic theory, evidence, and policy have entrenched the robustness of central banking today, some unresolved issues persist: the issue of central bank independence; exchange rate regime outcomes in natural resource rich countries; bank regulation is still at the crossroads; the challenges presented by globalization and convergence of banking systems are real. The chapter concludes with a futurology of central banking: the future of bank regulation cannot ignore peer monitoring and market discipline; the primary mandate of central banks should be price stability but with some flexibility to respond to extraordinary circumstances; and central bank independence (personnel, financial, and policy independence) is critical for modern central banks.

Bitcoin As A Means of Transaction and Investment In The Perspective of Islam

The emergence of bitcoin as a means of transaction and investment in the virtual world is intriguing to be studied. Many countries in the world have different perspectives upon the law of bitcoin itself. In Indonesia, the regulation on electronic money is in Indonesian Bank Regulation Number 20/6/PBI/2018 and MUI Fatwa Number 116/DSN-MUI/IX/2017. However, both have not specifically regulated bitcoin. As something new, bitcoin is necessary to be studied in the perspective of Islamic law. The research is a literature study utilizing content analysis to approach the data. The findings of the results are that bitcoin as a means of transaction is permissible (mubah) since there is a similar handover (taqabudh)--that there is a bitcoin to handover, there is no gambling (maisir), speculation (gharar), haram, riba, and false, and that the transactions is on a willingness basis (antharodin) of the both parties. Second, bitcoin as a means of transaction is haram if there is an uncertainty which is close to gharah and maisir, bitcoin as an investment tool has more damages than benefits.