Regional economic structure and heterogeneous effects of monetary policy: evidence from Indonesian provinces

We analyze how regional economic structures affect the impact of monetary policy on rates of inflation across 34 Indonesian provinces. The paper first applies structural factor augmented vector autoregressive model (SFAVAR) to all the 34 provinces based on monthly provincial data in order to measure the length and magnitude of responses of regional inflation to monetary policy shock, derived from the consequential impulse response functions of 34 provinces. In the second step, we analyze the impact of economic structures on the length and magnitude of regional inflationary responses of 34 provinces. We find that the impacts of monetary policy across regions are significantly influenced by economic structural variables such as manufacturing sector share to GDP, mining sector share to GDP, bank lending share to GDP and export share to GDP. In addition, we found the spatial lag, rate of inflation of neighboring provinces, is also statistically significant. In a similar fashion, economic structural variables such as manufacturing sector share to GDP, construction sector share to GDP and investment share to GDP are found statistically significant in explaining regional differences of monetary policy efficiency. Our findings imply economic structures of provinces have to be incorporated to designing monetary policy in Indonesia.

Evidence from Supervisory Measures for Bank Lending and Npls Control During COVID 19 Crisis

The highest impact of Covid-19 crisis on banks is related to their loan portfolios where many borrowers are facing sharp collapse in their income, and difficulty in repaying their obligations. Regulatory and supervisory authorities have issued statements or guidelines to banks on how to deal with the impact of the outbreak, including relation to easing loan terms and conditions for impacted borrowers. This paper aims to provide some policy views on the appropriate response to Covid-19. Supervisors and regulators should play an integral part contributing to public policy responses to the pandemic. Consistent with their mandate of ensuring safety and soundness, supervisors’ action requires a balancing act where banks are encouraged to restructure loans and use the flexibility embedded in the prudential framework by financing viable firms. This paper presents the state of arts and some considerations about the future banks’ conditions facing NPLs increase and their earnings reduction.

Do risk attitude and trust moderate bank managers' risk perceptions in lending to micro, small, medium enterprises?

PurposeThe purpose of this research is to study the antecedents of risk perceptions of bank managers towards micro, small, medium enterprise (MSME) lending, in the situation of information asymmetry, where cognitive factors assume significance over organisational norms of lending.Design/methodology/approachThis study proposed and tested a conceptual model based on the factors identified from literature review and exploratory and quantitative study. Multinomial logistic regression technique is used for quantitative analysis.FindingsThe research postulates that information asymmetry, risk attitude, perceived trust and organizational norms have a significant relationship with branch managers' perceived risk in lending to MSMEs. The research emphasized that the risk attitude of managers and perceived trust moderate the relationship between information asymmetry and perceived risk. The findings and discussions enrich the knowledge about the alleviators of constraints to MSME funding in developing nations despite information asymmetry.Originality/valueAuthors have given holistic view on the risk perception in the financial decision-making process of bank lending. The research highlights the importance of cognitive factors in decreasing the negative impact of information asymmetry on risk perception.

Leasing as a source of enterprises financing In Kazakhstan: analysis and problems

The article reflects the importance of leasing in the search for the most attractive sources of innovative and investment development of the economy of Kazakhstan. In conditions of limited own funds, the role of borrowed sources of financing of investment projects for achieving effective goals of enterprises increases. Such sources of financing are bank lending, leasing, factoring, and issuing promissory notes. Leasing is considered as part of a reasonable strategic financial management, the use of which allows you to update the main production assets of the enterprise, as well as provides additional opportunities to improve the effectiveness of the financial management of a commercial enterprise. Deep changes in the economic conditions of management dictate the need to find and implement methods for updating the material base and modifying fixed assets for our economy. The analysis of the main trends of development of the leasing market of Kazakhstan and its innovative development: a large number of leasing companies and the products offered on the market of leasing services allows to choose the funding strategy of the enterprise. In economically developed countries, leasing solves the problem of stimulating economic growth by accelerating the renewal of fixed capital, reducing the duration of the technological cycle.Therefore, the specifics of leasing as an instrument of economic policy aimed at accelerating the development of production potential is as follows: leasing leads to an increase in the high rate of renewal of fixed capital. The expansion of the leasing market largely depended on the active participation of the state in the development of leasing in many sectors of the economy.

Development of the bank lending system of agricultural business

A factor in ensuring reproduction in agriculture is the development of a bank lending system. Currently, the need for credit resources in agriculture requires further development of a specialized system that would meet the requirements and conditions of a modern market economy. Issues of formation and development of the credit system in agriculture are considered both by domestic economic theory and practice and by countries with developed market relations, which are based on the development of the infrastructure of modern credit relations, forms and methods of lending. The sphere of agricultural lending is in the process of formation due to imperfect legislative provision, underdevelopment of the credit products market, and the absence of the vast majority of market infrastructure entities. Solving these problems will help expand the availability of agricultural producers to credit resources, as well as ensure the stabilization and development of the industry. Agricultural production is a strategically important sector of the national economy, the development of which depends on the level of food and national security of the country. The development of the modern agricultural sector as the most important component of the national economy largely depends on external sources of financing, the main of which is bank lending. State support for lending to farmers is an objective necessity. At the same time, limited access of farmers to credit resources of banks makes it impossible to increase production efficiency. Increasing the availability of farmers to credit resources is one of the priority areas for ensuring the dynamic development of agriculture, their functioning on self-financing and self-sufficiency. A well-established lending system plays an important role in lending to agricultural producers. Studies on the development of the bank lending system for agricultural producers indicate the lack of a developed legal framework for providing farmers with bank loans for both operating and investment activities. Preferential lending regime introduced in the practice of lending to farmers in modern conditions does not work due to lack of budget funds.

Global incidence proportion of intraventricular haemorrhage of prematurity: a meta-analysis of studies published 2010–2020

ObjectiveTo investigate differences and calculate pooled incidence of any intraventricular haemorrhage (IVH), severe IVH (Grade III/IV, sIVH) and ventriculoperitoneal shunt (VPS) placement in preterm infants across geographical, health and economic regions stratified by gestational age (GA).DesignMEDLINE, Embase, CINAHL and Web of Science were searched between 2010 and 2020. Studies reporting rates of preterm infants with any IVH, sIVH and VPS by GA subgroup were included. Meta-regression was performed to determine subgroup differences between study designs and across United Nations geographical regions, WHO mortality strata and World Bank lending regions. Incidence of any IVH, sIVH and VPS by GA subgroups<25, <28, 28–31, 32–33 and 34–36 weeks were calculated using random-effects meta-analysis.ResultsOf 6273 publications, 97 met inclusion criteria. Incidence of any IVH (37 studies 87 993 patients) was: 44.7% (95% CI 40.9% to 48.5%) for GA <25 weeks, 34.3% (95% CI 31.2% to 37.6%) for GA <28 weeks, 17.4% (95% CI 13.8% to 21.6%) for GA 28–31 weeks, 11.3% (95% CI 7.3% to 17.0%) for GA32–33 weeks and 4.9% (95% CI 1.4% to 15.2%) for GA 34–36 weeks. Incidence of sIVH (49 studies 328 562 patients) was 23.7% (95% CI 20.9% to 26.7%) for GA <25 weeks, 15.0% (95% CI 13.1% to 17.2%) for GA <28 weeks, 4.6% (95% CI 3.5% to 6.1%) for GA 28–31 weeks, 3.3% (95% CI 2.1% to 5.1%) for GA 32–33 weeks and 1.8% (95% CI 1.2% to 2.8%) for GA 34–36 weeks. Europe had lower reported incidence of any IVH and sIVH relative to North America (p<0.05). Proportion of VPS across all GA groups was 8.4% (95% CI 4.7% to 14.7%) for any IVH and 17.2% (95% CI 12.2% to 26.2%) for sIVH. Heterogeneity was high (I2 >90%) but 64%–85% of the variance was explained by GA and study inclusion criteria.ConclusionsWe report the first pooled estimates of IVH of prematurity by GA subgroup. There was high heterogeneity across studies suggesting a need for standardised incidence reporting guidelines.