Majority-Minority Boards of Directors and Decision Making: The Effects of Homophily on Lending Decisions

In this study, I examine the role racial minorities in the boardroom can play in reducing social injustice by promoting more equal access to mortgage credit to minority households. I develop a simple theoretical model that posits directors who are racial minorities provide the credit unions they govern with a perspective that shapes lenders’ trust of minority applicants. This trust is shaped by homophily and the tendency of individuals to prefer interactions with similar individuals. Using mortgage loan data from a cross-section of credit unions in the United States from 185,446 applications, I find that credit unions where the majority of board members are minorities are less likely to reject a similarly qualified minority applicant than their counterparts. Governance by minority directors significantly reduces the effects of discrimination faced by minority applicants. The board’s effect is strongest in minority neighborhoods and where the homophily is stronger between directors and applicants.

Development of Tools for Synergy of Social Functions of the State and Housing Mortgage Loans in Russia: Regional Analysis of the Central, Southern and Volga Federal Districts

The article researches the features of the synergy of the social functions of the state and the housing mortgage loan (HML) in order to develop a tool that allows determining guidelines and directions for strengthening the effectiveness of collaboration between the state and the private sector represented by commercial banks in solving the most important social problem—providing housing to the population. The authors show that the use of the proposed assessment tool by state structures and commercial banks increases the effectiveness of solutions to the housing problem in the country and enhances the synergetic effect of a comprehensive increase in the standard of living of the population when synchronizing actions. The main purpose of the research was to develop an algorithm that determines the key factors influencing the number of issued HML. The object of the study is the Russian HML market on the example of three federal districts. The developed algorithm is based on the use of statistical analysis methods ANOVA, mutual regression and recursive feature elimination. The approbation of the results obtained on three subjects of the Russian Federation allowed us to obtain a set of significant factors of influence, taking into account regional peculiarities.

Mathematical Models for Calculation of the Parameters of the Bank and the Borrower in the Mortgage Lending

The article covers the consideration of the issues of analysis and development of mathematical models to improve the efficiency of the mortgage lending system. The relevance of the study is due to the fact that the current mechanisms of mortgage lending in Russia do not correspond to global trends: by interest rates level; in terms of the volume of loans issued and other conditions. However, it is one of the main tools that allows to improve the population’s living conditions and, as a result, to release the socio-economic tension caused by this factor, as well as to attract additional input in the investment and construction sector, which in modern conditions is one of the most important problems. As a result of the research carried out, the article offers a mathematical model for calculating the parameters of the bank and the borrower, in order to form the most acceptable conditions for the loan. In the mathematical model, such parameters of the borrower and the lender as the price of the apartment, the percentage of the down payment from its price, the mortgage loan rate, the total debt and the loan term, as well as the share of the borrower's income allocated to monthly payments are interconnected. This model will allow the bank to determine the most suitable loan conditions regarding the payment amount, term, and available credit limit, and the borrower to calculate the parameters of the loan in order to make an informed decision on attracting it. All this, in the end, will allow banks to reduce the level of risk on issued mortgage loans, and the borrower — confidence in the ability to pay off the mortgage loan.

Incorporating ‘Mortgage-Loan’ Contracts into an Agricultural Supply Chain Model under Stochastic Output

This paper constructs an internal financing model in which the purchaser acts as the core leading enterprise to provide loans when the farmer has fixed assets as collateral. Numerical results show that the existence of fixed assets will increase the expected profit of the farmer, redistributing the risk and profit between the purchaser and the farmer. At the same time, the purchaser and the government are encouraged to provide more funds to the farmer with low value of its fixed assets, which will aid the overall return of the supply chain and the development of supply chain finance. In addition, under the framework of this model, the increase of agricultural production is beneficial to the farmer, not the purchaser. In the case of the same output level, we can alleviate this problem by selecting high-end agricultural products with high price elasticity of demand and high choking price so as to improve the profits of both purchaser and farmer.

Mortgage volume and macroeconomic factors: Evidence from Turkey

This paper investigates the impacts of several macroeconomic variables on Turkey's volume of mortgage loans. Johansen cointegration test, vector error correction model, Granger causality tests, variance decomposition, and impulse-response analysis is employed for the econometric analysis to show short and long-run relationships between the variables using time series monthly data from January 2010 to March 2020. Paper results demonstrate that growth of housing credit size negatively correlates with mortgage interest rates, US Dollar/Turkish Lira exchange rate and level of real estate supply. At the same time, there is a positive correlation with house prices. Causal relationships between mortgage volume and macroeconomic indicators are bidirectional for all variables, except for mortgage interest rates. There is a one-way causality relationship from mortgage rates to mortgage loan volume. Econometric analyses show that the recent steep depreciation in the Turkish Lira hurts the Turkish mortgage market. In conclusion, a stable economic environment is essential to build a robust mortgage market.

DETERMINANTS OF MORTGAGE LOAN REPAYMENT IN GHANA

The housing deficit in Ghana is an issue of concern for all. This study sought to analyse the determinants of the repayment of mortgage loans in Ghana. The study used both secondary and primary data. The mixed-method approach was used for the study. The data collection instruments were interviews, focus group discussions and questionnaires. The study revealed that socio-demographic characteristics of respondents, sex distribution of respondents, educational level of respondents, marital status of respondents, occupational status of respondents, household size of respondents, the income of respondents are some of the factors that affect the repayment of mortgage loans in Ghana. The study revealed that borrowers who earned higher income had a better repayment performance as compared to low income earning borrowers. In addition, higher household sizes have lower repayment capacity and lower household sizes have higher repayment capacity. The study recommends that the government of Ghana should institute state bodies responsible for providing liquidity to mortgages and mortgage properties and buying mortgages during periods of rising interest rates is a way of creating a secondary mortgage market for the Ghanaian mortgage industry. Keywords: Determinants, Mortgage, Repayment, Ghana.

An Applying Colored Petri Net for Computerized Accounting System and Ledger Accounts Instruction

Many learners who are not familiar with the accounting terms find blended learning very complex to understand with respect to the computerized accounting system, the journal entries process, and tracing the accounting transaction flows of accounting system. A simulation-based model is a viable option to help instructors and learners make understanding the accounting system components and monitoring the accounting transactions easier. This paper proposes a [Chanon]CPNcolored Petri net (CPN)-based model for the instruction of an accounting system focused on the journal entries processes, accounting modules, and accounting transaction flows. The CPN-based language and the model checking tool named CPN are used to represent the accounting system components: a chart of accounts, an account mapping profile, the journal and ledgers system, and the financial report creations. We evaluated the designed CPN models by creating the simulation cases from ground truth data of the retail department store system and the mortgage loan system, using the decision-table-based testing technique. The results show that the designed CPN model and provided simulation cases help the learners to animate, verify, trace back accounting [chanon]transaction flowstransactions and data flows, and increase the learner’s understanding.

Ludwik Wołowski and His Contribution to the French Credit Revolution of the 19th Century

Ludwik Wołowski was a Polish November emigrant in France. There, he gained recognition as an outstanding economist, banker and republican politician. The article focuses on the issue of mortgage loan, which is extremely important for Wołowski. It presents both the theoretical concepts of the Pole from 1834, his political activity in the years 1848–1851 aimed at changing the provisions of the mortgage law in France, and finally the moment of co-creation by Wołowski Crédit Foncier, the first modern mortgage bank in France, and the further history of the bank managed by Wołowski, in the board of which he sat until his death in 1876. In the first part, the text presents not only the criticism of the French mortgage system by Wołowski (primarily the so-called secret mortgages), but also his draft changes and the loan and mortgage model proposed by him and the companies that may grant it. In the second, it shows the parliamentary activity of Wołowski, an attempt to force through appropriate changes in the banking law and the reasons for its defeat. In the third, the most extensive, the article describes not only the very moment of establishing Crédit Foncier and the two-year period of management by Wołowski, but also the further, controversial operation of the bank until the second half of the 1870s. All this against the backdrop of the changing French Monarchy of July, the Second Republic and the Second Empire.

BANK LENDING DURING THE COVID-19 CRISIS: EVIDENCE FROM SWITZERLAND

This paper is devoted to the analysis of the influence of bank lending on the economy in Switzerland during COVID-19 pandemic. Analysis of the main economic indicators (GDP and its components, inflation, monetary supply) before and during corona-crisis proves that the impact of corona-crisis is stronger than that of the 2008—2009 financial crisis. A sharp decline of GDP, exports and imports is underlined. The components of GDP that were most stable over the last 12 years and did not decrease during the 2008—2009 financial crisis, namely «Households Consumption Expenditures» and «Total Consumption Expenditures», had a negative trend in 2020. It outlines the non-economic nature of the crisis. The pandemic period is characterized by growth of inflation and changes of the money supply structure, such as a reduction of deposits in transaction accounts by half. The most vulnerable economic entity was the population, whose solvency decreased significantly. It led to the consumption and transactions reduction. It is underlined that in such conditions bank lending can be used to boost consumption, consumer demand, stimulate economic growth. The authors’ analysis demonstrates that the amounts of credit lines and utilisation were higher in 2020 during ongoing pandemic compared to the previous year. Loans to individuals remain the most significant in banks credit portfolio, its share was 66 % at the end of 2020. At the same time corporate loans grow faster during the crisis, which indicates businesses have higher demand for credit and use it as a crisis management tool. Contrary to the existing opinion on the negative impact of bank lending on inflation, the article proves that the increase of bank lending as part of fiscal and monetary policy measures has a positive impact on economic recovery during and after the crisis. The analysed Swiss experience can be used in Ukrainian realities. Keywords: bank loan, mortgage loan, corporate loan, lending, Switzerland, COVID-19. JEL Classification Е42, Е50, F29, G21 Formulas: 0; fig.: 7; tabl.: 2; bibl.: 17.