Academic literature on the topic 'Banking intermediation'
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Journal articles on the topic "Banking intermediation"
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Ayeni, Akintunde, Oloruntoba David, and Arandong Jamok. "INTERNET BANKING AND FINANCIAL INTERMEDIATION IN THE NIGERIAN BANKING INDUSTRY." International Journal of Operational Research in Management, Social Sciences, and Education 8, no. 1 (2022): 45–62. http://dx.doi.org/10.48028/iiprds/ijormsse.v8.i1.04.
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The acceptance and deployment of internet banking service is expected to improve financial intermediation banking system by reducing cost of transactions, enhancing liquidity and increased financial intermediation. However, this is a far cry to what is being experienced in the Nigerian banking industry, as credit flow from banks have been on the decline. It has been revealed that the total credit from banks to the economy recorded a decline of #135.8bn from #15.74tn at the end of the fourth quarter of last year to #15.6tn in the first three months of 2020. These revelations suggest that Nigeria’s economic growth trajectory has been diminutive, as individuals have found it difficult to have access for either start-up or expansion of their businesses from banks. On this premise, this study was carried out to investigate the effect of internet banking on financial intermediation. In a clear departure from existing literature, the study factored in the moderating effects of interest rate and cash reserve ratio, which hitherto has been identified as key impediments to bank intermediation. Data was collected from 2009 to 2020 on monthly bases from the Central Bank of Nigeria (CBN) for the variables; financial intermediation (measured as ratio of currency outside banks to broad money supply), interest rate, cash reserve ratio and internet banking service for all commercial banks in Nigeria. Linear Regression models were formulated to achieve the stated objectives. Findings revealed that internet banking service has a negative insignificant effect on financial intermediation, the interaction between internet banking and interest rate has a positive insignificant effect on financial intermediation while the interaction between internet banking and cash reserve ratio has a negative insignificant effect on financial intermediation. It was recommended among others that the Central bank of Nigeria should make efforts to alleviate the cost of internet banking borne by banks. This will certainly reduce the burden on banks and make more money available for intermediation.
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Evlakhova, Yu S., and N. A. Amosova. "Nonbank Financial Intermediation in Times of Crisis: Identifying Leadership in the G20 Countries." Journal of Applied Economic Research 21, no. 3 (2022): 426–53. http://dx.doi.org/10.15826/vestnik.2022.21.3.015.
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Non-banking financial intermediation, which means the conduct of credit operations by financial institutions that do not have a license for this and was previously interpreted as “shadow banking”, has become a long-term trend in the development of the global financial market. The purpose of the study is to determine the changes in non-banking financial intermediation during periods of crises and the inter-crisis period, as well as to identify the leading countries in the development of non-banking financial intermediation in a long-term retrospective. A hypothesis is formulated that during periods of crises, not only does the volume of non-banking financial intermediation decrease (on a global scale and within national markets), but its structure also changes. To test the hypothesis, a cross-country comparative analysis of the level of development of non-banking financial intermediation based on the corresponding index was carried out, as well as clustering using the FOREL method to identify changes in the structure of global non-banking financial intermediation. As data sources, data from the Financial Stability Board Monitoring Dataset on Non-Bank Financial Intermediation and OECD. Stat data were used. The results of the study confirmed the correctness of the formulated hypothesis. On their basis, the directions for the development of non-banking financial intermediaries in the current conditions of the approaching recession of the world economy are determined: (1) maintaining the index of non-banking financial intermediation in the current range of values; (2) preservation of the polycluster structure of non-banking financial intermediation, since the decrease in the number of clusters occurs during periods of relative stability of the world economy; (3) increased heterogeneity of countries in terms of the level of non-banking financial intermediation. It is shown that the crisis caused by the pandemic had a stronger negative impact on non-banking financial intermediation than the global financial crisis. The theoretical significance of the results obtained is to identify the structure of global non-banking financial intermediation, as well as to propose a criterion for countries' leadership in terms of its level. The practical significance lies in the possibility of using the results obtained in the development of measures to ensure the stability of financial markets both at the global and national levels.
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Andolfatto, David, and Ed Nosal. "Money, intermediation, and banking." Journal of Monetary Economics 56, no. 3 (April 2009): 289–94. http://dx.doi.org/10.1016/j.jmoneco.2008.12.005.
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Tirole, Jean. "On banking and intermediation." European Economic Review 38, no. 3-4 (April 1994): 469–87. http://dx.doi.org/10.1016/0014-2921(94)90085-x.
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Chiu, Jonathan, and Césaire A. Meh. "FINANCIAL INTERMEDIATION, LIQUIDITY, AND INFLATION." Macroeconomic Dynamics 15, S1 (January 6, 2011): 83–118. http://dx.doi.org/10.1017/s1365100510000568.
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This paper develops a search-theoretic model to study the interaction between banking and monetary policy and how this interaction affects allocation and welfare. Regarding how banking affects the welfare costs of inflation, we find that, with banking, inflation generates lower welfare costs. We also find that lowering inflation improves welfare not just by reducing consumption/production distortions, but also by avoiding financial intermediation costs. Therefore, understanding the nature of financial intermediation is critical for accurately assessing the welfare gain from lowering the inflation rate. Regarding how monetary policy affects the welfare effects of banking, we find that, when the inflation is low, banking is not active in channeling liquidity; when inflation is high, banking is active and improves welfare; and when inflation is moderate, banking is active but reduces welfare. Owing to general-equilibrium feedback, banking is supported in equilibrium even though welfare is higher without banking.
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Siringoringo, Renniwaty. "INTERMEDIATION CHARACTERISTICS AND FUNCTIONS OF BANKING IN INDONESIA." Buletin Ekonomi Moneter dan Perbankan 15, no. 1 (October 3, 2012): 63–82. http://dx.doi.org/10.21098/bemp.v15i1.416.
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This paper analyzes the influence of ownership and specific characteristic of banks on the capital structure and the intermediation function of commercial banks in Indonesia. Using multivariate regression on bank level data of 2006-2009, the result shows the ownership structure, profitability, size, and management expense affect the bank capital structure, with a total effect of 50.14%. Towards the bank intermediation, with a total effect of 27.01%, the ownership structure, profitability, bank size, credit risk, expense management and capital structure influence the banks intermediation function. Keywords : Ownership structure, specific characteristic of bank, capital structure and bank intermediation functionJEL Classification: G21, G32
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Austin, Dr (Mrs) Zukbee Sira. "Banking Sector Reforms and Financial Intermediation in Nigeria." IIARD INTERNATIONAL JOURNAL OF BANKING AND FINANCE RESEARCH 9, no. 3 (October 11, 2023): 229–64. http://dx.doi.org/10.56201/ijbfr.v9.no3.2023.pg229.264.
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This study examined the effect of banking sector reforms on financial intermediation of commercial banks in Nigeria. Panel data were sourced from Central Bank of Nigeria Statistical Bulletin and financial statement of the commercial banks in the pre consolidation and post consolidation reforms. Multiple regression models were formulated to examined and compare the effect of the pre-consolidation reforms and post consolidation reforms on financial intermediation. Nine commercial banks that bear the same name in the pre and post consolidation reforms were used as sample size. Supply side and demand side financial intermediation were proxies for dependent variables while capital reforms, interest rate reforms, Central bank policy reforms, bank competition, management quality, assets quality, market risk and liquidity reforms were proxies for independent variables. The study employed panel data regression models of pooled effect, fixed effect and random effect models. After cross examination of the models using the Hausman test, the fixed effect models were used. The study found that 97.7 percent variation in demand side financial intermediation of the pre consolidation reforms was explained by variations in banking sector reforms and interest rate reforms and capital reforms have positive but no significant effect, bank competition have negative and significant effect while Central bank reforms have positive but no significant effect on demand side financial intermediation in the pre-consolidation reforms. 67 percent variation in demand side financial intermediation of the post consolidation reform was explained by variation in banking sector reforms and interest rate reforms, central bank reforms and bank competition have positive but no significant effect on the demand side financial intermediation while capital reforms have negative and no significant effect on demand side financial intermediation in the post consolidation reforms. 97.7 percent v
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Önen, Ferda Keskin, Hasan Eken, and Suleyman Kale. "Total Factor Productivity Change in Turkish Banking Sector During The Crisis Periods." International Journal of Research in Business and Social Science (2147-4478) 5, no. 5 (September 20, 2016): 1–18. http://dx.doi.org/10.20525/ijrbs.v5i5.472.
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The precondition of the increase in the efficiency of the banks depends on their ability to compete. Through the banking sector with high competitive power, economic dynamism is promoted, and economic stability is ensured. The alteration in macroeconomic conditions affects the performance of the banking sector and financial stability. This study was used the malmquist productivity index to analyze the efficiency of 19 commercial banks operating in Turkey during the period of 1990 - 2012 for intermediation and profit approach. Banks have experienced productivity loss according to both approaches in times of crisis. The efficiency of intermediation function in the banking sector have increased owing to the regulations made under the restructuring program of the Turkish banking sector and the disinflation process. The regression analysis results reveals that the impact of credit / deposit ratio, ROA, ROE and inflation rate is positive on bank’s total factor productivity. As ROE increases, banks' total factor productivity has decreased under the intermediation approach. Increase in GDP has led to increase in bank’s technical efficiency for intermediation and profit approach.
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COLEMAN, WILLIAM D. "Banking, interest intermediation and political power." European Journal of Political Research 26, no. 1 (July 1994): 31–58. http://dx.doi.org/10.1111/j.1475-6765.1994.tb01204.x.
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Stavrova, Elena Velkova. "CONVENTIONAL AND SHADOW BANKING SECTOR – COMPARATIVE ASPECTS OF THE POST-CRISIS PERIOD IN TAIM OF THE CURRENCY BOARD - BULGARIA’ CASE." CBU International Conference Proceedings 5 (September 23, 2017): 453–57. http://dx.doi.org/10.12955/cbup.v5.965.
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The shadow banking or financial institutions specializing in lending who take an increasingly larger share of today's markets and channels for the movement of financial resources in the markets of resources between economic agents or households.The main scientific question of this paper is to analyze the reasons of dynamic trends of development of the shadow financial system, and how that contrasts with the conventional model of financial intermediation of commercial banking: “The chains for value creation through credit intermediation that move free financial resources in economic systems for realizing more efficient operations with fewer risks; In non-banking credit intermediation chain trades that take place on weighted average price - and exchange rates in the markets for short-term securities; yield creation in the shadow banking industry are intensively secured strongly which personally are guaranteed both, from individuals and the firms; value chains in the alternative banking system have carried out extensive conventional financial transformation outside the banking system. This means that this type of intermediation converts illiquid, risky fixed assets in "safe" and liquid short-term liabilities.”The used methods are: content analysis, and econometrics analysis of empirical databases of the years 2012 – 2016 by two financial sectors from BNB.The finding based on the econometrics analyses supports the scientific hypothesis about relations between the process of the increasing role of the informal banking sector, which pushes conventional bank financing due to high credit standards of banking institutions and limited access to finance for individuals who receive their income in the area of the gray economy.
Dissertations / Theses on the topic "Banking intermediation"
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Foote, Elizabeth Ellen. "Essays in financial intermediation and banking." Thesis, London School of Economics and Political Science (University of London), 2011. http://etheses.lse.ac.uk/396/.
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Banks' role as intermediaries between short term investors and long term borrow- ers has dominated the literature. Whilst this is an important feature, there are many other characteristics of banks. Each chapter in this PhD explores a different aspect of banking, from other forms of lending to banks' role in payment services. The first, and principal, chapter considers credit lines: `commitments' to lend if required. These remain off the bank's balance sheet until drawn upon. As off-balance sheet items, unused commitments face low capital charges under existing capital regulation. I ex- plore how this regulatory feature incentivises banks to build up exposure to these lines. This may lead to a suboptimal allocation of credit, ex post, following a market shock, as high drawdowns cause the balance sheet to balloon and the capital requirement to bind. In the second chapter, I consider banks as agents in large-value payment systems. In choosing the optimal time to settle a payment, banks trade off delay costs against the risk of having insuffcient liquidity to make future payments. With banks participating in multiple systems, I show how default in one system may spill over into another, through the strategic behaviour of multi-system participants. I explore how this risk varies with the degree of information asymmetry between agents in different systems. The third chapter focuses on retail banking. In joint work, we examine how the provision of consumer credit, either through current account overdrafts, or through credit card credit lines, affects the way in which debit and credit card networks com- pete. We find that, even when debit and credit cards compete, there are elements of complementarity between them. Banks providing debit cards and current accounts benefit when the consumer delays withdrawal of funds from her current account by using a credit card. This leads to surprisingly high debit merchant fees.
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Asaftei, Gabriel. "Essays on financial intermediation." Diss., Online access via UMI:, 2004. http://wwwlib.umi.com/dissertations/fullcit/3153766.
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Ray, Chaudhuri Ranajoy. "Three Essays on Financial Intermediation and Growth." The Ohio State University, 2012. http://rave.ohiolink.edu/etdc/view?acc_num=osu1338394730.
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Booth, di Giovanni Heather. "External financial intermediation and the composition of the money stock." Thesis, University of Bristol, 1991. http://hdl.handle.net/1983/583ef499-1217-4b7e-865c-a3ce8562f1f1.
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This thesis is intended as a contribution to the literature referred to as the "optimum currency area literature". The purpose of the analysis developed in the thesis is to gain an understanding of the monetary and financial implications of the actual currency area structure of the international economy. The analysis can then be used for the purpose of assessing whether changes in this currency area structure might be desirable. The theoretical material falls into three parts. Cross-country data are used in the theoretical chapters to assess the explanatory value of the ideas. The theoretical analysis is then applied to the historical experience of an individual country, Argentina. Time series data are offered for the application to the Argentine case. The first theoretical section of the thesis is concerned with the structure of the money supply in an economy as between its imported and domestic components. A central tenet of the thesis is that there are cross-country differences in the size of the imported share of the money supply which is required for monetary and exchange rate stability, and that these cross-country differences can be related to structural characteristics of an economy. It is shown that the structure of incremental money demand has important balance of payments implications. A theoretical framework for the analysis of the structure of the money supply is developed. This framework is then used to argue that an economy which makes more extensive use of external financial intermediation will require a larger share of foreign exchange reserves in the monetary base. The second part of the theoretical analysis studies some relationships between the currency area structure of the international economy and patterns of international financial intermediation. It is argued that we can identify certain structural features of a currency area which would give rise to a tendency for residents to make use offoreign financial centres. The theoretical considerations lead to an explanation, in terms of currency area structure, of certain crosscountry differences in financial development. In the third theoretical section, the analytical framework which was developed in previous chapters is used to address three specific questions. These questions serve to bring out some answers to the more general question of what are the implications for an economy of using an imported money supply. The analysis yields some new perspectives on the monetary and financial implications of import substitution industrialization policies, as well as on other problems and policy issues
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Chirozva, Gift. "Financial intermediation and economic performance in Zimbabwe." Thesis, Edith Cowan University, Research Online, Perth, Western Australia, 2001. https://ro.ecu.edu.au/theses/1081.
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Financial literature is replete with theoretical and empirical evidence suggesting financial development has a causal effect on economic growth. Yet there is no consensus on the finance-growth nexus. The direction of causality is still controversial In fact, classical economists argue that financial factors are neutral and hence cannot have real effects. Critics argue the traditional methods of identifying long run economic relationships fail to address the methodological conflict between equilibrium implied by theory and the disequilibria in the data. The rise of new representation techniques such as the General Methods of Moments (GMM) and vector autoregression [VAR] brought with them empirical flexibility, which facilitates the re-examination of several theories. VAR characterization permits the economic system to determine the behavior of macroeconomic variables simultaneously. The endogenous growth theoretical literature gives credibility to system-wide V AR financial models. This research is both critical (in its search for a common framework to inform debate on Zimbabwe) and positive (to the extent it undertakes an empirical investigation.) Empirically, the study examines the nature and intensity of links between financial intermediation and economic performance in a small developing economy. A Vector Autoregressive [VAR] framework is applied to model and estimate the temporal and dynamic relationships between financial aggregates and economic activity. Cointegration among the variables is examined to determine the degree of heterogeneity and coevolution. The general impulse response function [GIRF] and variance decomposition [VDC] analytical techniques are applied to throw light on the speed and direction of the causal links and the persistence of shocks over time. Branches of financial theory, e.g. agency risk, corporate governance and information asymmetry have taught us economic activity does not take place in a vacuum or perfect market. To put this research into perspective, the study critically examines the evolution of Zimbabwean institutional structures in search of a new conceptual framework with potential to inform debate. The works of Levine (1997, 1998) LaPorta, Lopez-de-Silanes, Shleifer and Vishny (1997, 1998, 2000), Beck, Levine and Loayza (2000), Kane (1981, 1983, 2000) Jensen and Meckling (1976) and Stiglitz (1989) give considerable prominence to governance and institutional design. Allen and Gale(1994, p10) emphasized that institutional settings underlie the process of financial innovation. In fact, Schumpeter (1954, p12) exalts history, statistics and "theory" as the three pillars of economic analysis. Stiglitz (1989, p199) agrees that particular localized historical events could have permanent effects. More recently, Beck, Demirgüç-Kunt and Levine (2001) summarized the theory and provided an empirical examination of the links between laws, politics and finance.
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Rivero, Leiva David. "Three essays on financial intermediation." Doctoral thesis, Universitat Autònoma de Barcelona, 2017. http://hdl.handle.net/10803/454815.
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Esta tesis doctoral consiste en tres ensayos sobre intermediación financiera. La orientación principal de este trabajo es teórica. Los tres capítulos están conectados entre sí ya que tratan sobre aspectos relevantes relacionados con la literatura en banca.
El capítulo 1 desarrolla un modelo de intermediación financiera para evaluar el impacto de la política monetaria sobre la calidad crediticia de los préstamos extendidos en una economía bancaria. Una lección importante de la llamada Gran Recesión de 2007-2009 es que el estado de la política monetaria puede fomentar el apetito por el riesgo de la industria bancaria. Basado en el paradigma de “verificación costosa de estados”, se presenta un modelo teórico con prestatarios heterogéneos y adquisición de información en el que la actividad de intermediación está supeditada a un “trade-off” entre procesar información antes o después de la concesión del préstamo. A través de cambios en el cuidado con el que los estándares de crédito se determinan, los bancos influyen sobre la probabilidad del estado en bancarrota y la composición de riesgo del conjunto de prestatarios. Bajo este escenario, una política monetaria más laxa reduce la diligencia con la que los intermediarios verifican la capacidad de repago de los prestatarios, aumentado el apalancamiento del sector no financiero y la probabilidad de impago de la economía.
El capítulo 2 evalúa el rol de una mayor intermediación por parte del Banco Central en una crisis de solvencia para restaurar la localización eficiente del capital cuando el mercado interbancario no está operativo. Las tensiones originadas en los mercados financieros tras la quiebra de Lehman Brothers llevaron a una respuesta por parte de los Bancos Centrales que se alejaba de las medidas tradicionales. Para estudiar cómo las autoridades monetarias pueden reemplazar el rol del mercado para relocalizar eficientemente el capital durante una crisis sistémica, este capítulo explora la absorción del riesgo de crédito a través de una política de crédito. Cuando las tensiones en los mercados monetarios crecen debido a la incertidumbre sobre la solvencia bancaria de algunas entidades, la autoridad monetaria puede absorber el riesgo de crédito percibido en el mercado y subsidiar la asimetría en el coste marginal de financiación entre regiones.
Un modelo sobre liquidez y miedo sobre quiebra bancaria es presentado en el capítulo 3, escrito conjuntamente con Hugo Rodríguez. En él se estudian los pánicos bancarios en un sistema moderno en el que contratos de depósito nominales son diseñados como medios de pago. En una economía expuesta a riesgos de liquidez puros con creación endógena de dinero, mostramos que la idea clásica sobre quiebra bancaria debido a pánicos entre los depositantes no ocurre. Una discusión relevante sobre estabilidad financiera es si los fallos de las instituciones bancarias están creados por pánicos repentinos que fuerzan la caída de bancos solventes, o si bien están causados por el deterioro fundamental sobre variables bancarias específicas. Basado en el problema de liquidez tradicional de Diamond y Dybvig (1983), nuestro modelo incorpora tres elementos a la literatura teórica sobre quiebra bancaria. Primero, la cadena de intermediación comienza cuando los prestatarios necesitan pedir prestado dinero para realizar pagos. Segundo, para reducir el riesgo de liquidez, los bancos controlan una demanda de reservas obtenida del Banco Central. Tercero, el desajuste de vencimientos entre el active y pasivo bancario es inherente a la creación de nuevos préstamos. Sobre este enfoque existe un mecanismo de precios que ajusta la demanda de consumo en cada periodo, haciendo que el valor real de los depósitos sea contingente al número de retirada de depósitos.This Ph.D. thesis consists of three essays on financial intermediation. The main orientation of this dissertation is theoretical. All three essays are connected in that they deal with important features related to the literature on financial intermediation. Chapter 1 develops a model of financial intermediation to evaluate the impact of the monetary policy stance in the credit quality of loans extended in a bank-dependent economy. An important lesson from the Great Recession 2007-2009 is that the monetary policy stance may spur the risk appetite of the banking industry. Based on the costly state verification paradigm, I present a theoretical model with heterogeneous loan applicants and costly information acquisition in which financial intermediation activity is driven by a trade-off between processing information prior or after loan origination. Through changes in the diligence to determinate the credit standards, information processors shift the probability of the bankruptcy state and the riskiness in the composition of the pool of borrowers. Under this environment, a loose monetary policy decreases the diligence devoted by intermediaries to verify the creditworthiness of loan applicants, increasing the leverage of the non-financial sector. Moreover, it leads to a deterioration of the credit quality in the composition of the pool of borrowers which increases the likelihood of the bankruptcy state. Chapter 2 evaluates the role of Central Bank intermediation during solvency crises to restore the efficient allocation of capital in the economy when the interbank money market freezes. On the policy front, the tensions originated in financial markets after the bank run of Lehman Brothers required monetary authorities to go beyond conventional policy measures. To study how monetary authorities can replace the role of the extinguished interbank money market to allocate efficiently capital in the economy during systemic times, this chapter explores the subsidization of counterparty risk via credit policies. The basic idea is that Central Banks can intervene in the economy to reallocate savings to those banks with liquidity needs. When tensions in the money market arise due to the uncertainty about the solvency situation of specific counterparties, Central Banks can absorb the credit risk perceived in the market and subsidize the asymmetry in the marginal funding cost across regions. A model of liquidity and fears about bank runs is presented in chapter 3. In this chapter I, along with Hugo Rodríguez, study self-fulfilling panics in a modern banking system wherein nominal deposit arrangements are designed as means of payment. In an economy exposed to pure liquidity risk with endogeneous money creation, we show that classical bank runs caused by panics do not occur. A relevant discussion about financial instability is whether the failure of banking institutions is driven by sudden panics that force solvent banks to fail, or it is reflected by the fundamental deterioration in bank specific variables. Based on the traditional liquidity problem of Diamond and Dybvig (1983), our framework incorporates three elements into the theoretical literature of bank runs. First, the chain of intermediation starts when borrowers need money to make payments. Second, to offset liquidity risk, banks manage a demand for reserves from the central bank. Third, the maturity mismatch between banks assets and liabilities is inherent to the creation of new loans. Under such setting, there is a price mechanism that adjusts the demand for consumption each period, making the real value of deposit contracts contingent on the mass of withdrawals. This result does not support the self-fulfilling hypothesis of bank runs.
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Shirota, Ricardo. "Efficiency in Financial Intermediation: A Study of The Chilean Banking Industry /." The Ohio State University, 1996. http://catalog.hathitrust.org/api/volumes/oclc/38193785.html.
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Amidu, Mohammed. "Banking market structure and bank intermediation strategies in emerging markets : three essays." Thesis, University of Southampton, 2011. https://eprints.soton.ac.uk/188777/.
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This thesis focuses on bank market structure and the effect of changes to this structure on intermediation strategies using a dataset that covers many regions of the world. Employing different estimation techniques and methodologies, and using a novel approach to each line of research, this thesis provides the following robust results: first, increase banking competition weakens the effectiveness of monetary policy. This is because an increase in the degree of market power increases the response of bank lending to the monetary policy stance. Second, competition increases stability as banks diversify across and within their business activities. Third, the high net-interest margin and relatively low insolvency risk among banks in developing countries could be attributed to a high degree of market power and the use of internal capital financing. The thesis makes the following contributions to the literature: first, in order to gain new insights and provide new dimensions to the existing literature, each of the three core chapters employs an estimation strategy that is new in the literature and which offers more scope for investigation. For instance, the positive influence of revenue diversification on the competition-stability nexus is new in the literature. Second, this thesis is first in considering how various measures of market power and a variety of bank funding strategies impact on banks performance. Furthermore, considering the banking structure-risk-lending channel hypothesis in assessing banks’ response to monetary shocks is also new in the monetary policy transmission literature. In conclusion, this thesis gives rise to important public policy recommendations. First, the strong link between market imperfections and the effectiveness of monetary policy indicators requires regulation that can resolve and offset the adverse effects of further increases in the degree of bank market power on the effectiveness of monetary transmission. Second, given the results of the role of diversification on the competition-stability relationship, there is no evidence to support regulatory initiative that restricts banks diversification activities. The third and final recommendation is on the concept of market power: bank market power in itself is not detrimental to banking activities, but the level and the application of it could negatively affect bankinsolvency risk. Therefore, supervisory, regulatory and competition authorities should coordinate to put in place a comprehensive framework that allows banks to have a considerable amount of market power that is robust and consistent with any competition policy
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Rawat, Umang. "Essays on macroeconomic dynamics, credit intermediation and financial stability." Thesis, University of Cambridge, 2018. https://www.repository.cam.ac.uk/handle/1810/275970.
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This dissertation consists of three chapters. In the first chapter, we study the role of financial frictions on the demand side of the economy. In particular, we study the interaction between firm and household credit constraints over the business cycle. We construct a real business cycle model with explicit modeling of price and quantity side of housing. This allows us to include both firm and household financing frictions. The model is estimated for the U.S economy using quarterly data on key macroeconomic variables over the period 1970 - 2006. Household and firm financial accelerators operate primarily through movement in house and capital prices respectively. We find clear evidence of the operation of a financial accelerator mechanism, whereby shocks to the economy are amplified most in the presence of both types of frictions, as opposed to just firm or household frictions. Over the business cycle, total factor productivity shocks in the non-housing sector explain about half of the volatility of GDP and consumption. However, cyclical variations in housing investment and housing prices are predominantly explained by housing preference and housing technology shocks. Finally, spillovers from household financing frictions are mostly concentrated in consumption. However, they also affect business investment via its impact on the demand for capital and consequently its price. The second chapter focuses on financial frictions on the supply side. We study the role of bank capital in the transmission of shocks to the economy. Given the evolutionary change in the financial services industry and the growth of shadow banking in the decades prior to the global recession, we characterize credit intermediation with a heterogeneous banking sector comprised of traditional retail and shadow banking. We approach the shadow banking system from a regulation perspective wherein commercial banks have incentives to transfer loans from on- to off-balance sheet to gain regulatory relief. Since bank capital is costly, banks cover part of their funding needs by loan sale in the secondary market. Furthermore, these transferred loans are bundled together and converted into liquid asset backed securities. Commercial banks’ effective return is subject to their monitoring effort, which is unobservable and hence introduces a moral hazard problem in loan sale. This limits the amount of loan sold in the secondary market. We find that loan sale and securitization enhances credit intermediation in normal times and improves the resilience of the system to productivity shocks. However, it also exposes the economy to shocks emerging in the financial system. In response to financial market shocks, the government via its backstop program, can ameliorate its impact on the economy. Finally, we compare the model economy with Basel I and Basel II capital requirement and find that business cycle fluctuations are amplified under Basel II regime. Furthermore, in response to a negative productivity shock there is a transfer of loans from on to off balance sheet under Basel II rules with procyclical capital constraints. This points towards a need for countercyclical capital requirement as being implemented under Basel III accord. In the third chapter, we focus on the question of trade off between price and financial stability goals for the conduct of monetary policy. The recent crisis has generated renewed interest in Hayekian theory and Minsky’s instability hypothesis, which claims that accommodative monetary policy can be harmful for an economy by promoting excessive risk taking – the so called risk taking channel of monetary policy transmission. Risk Taking Channel has been documented for the U.S and Euro area and we investigate the presence of this in Asia. Using annual and quarterly data on publicly listed banks in Asia, we find that when interest rates are too low - lower than a benchmark - bank risk increases. Furthermore, there is also a case for greater supervision and capital stringency to alleviate risk taking.
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Kotak, Akshay. "Essays on financial intermediation, stability, and regulation." Thesis, University of Oxford, 2015. http://ora.ox.ac.uk/objects/uuid:112b32a7-fa60-4baa-a325-15e014798cea.
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Modern banking theories provide a host of explanations for the existence of intermediaries, highlight their important influence on economic growth, delineate the risks inherent in the services they provide, and illustrate the market failures and real costs of bank failures that precipitate the need for regulation and oversight of the sector. This thesis is a collection of three essays that looks at three of these key aspects of financial intermediaries - the development of financial intermediaries, the function of the lender of last resort that has emerged as an important part of the safety net afforded to financial intermediaries, and the occurrence of financial crises. The first chapter of this thesis provides an introduction to the academic literature on financial intermediation covering different theories put forward to explain their emergence, and highlighting the risks inherent in their operation. It emphasizes the crucial functions they perform in the economy and makes a case for regulation and oversight of the sector to reduce the incidence and alleviate the effects of financial crises. The second chapter seeks to determine the policy and institutional factors that influence the development of financial institutions as measured across three dimensions - depth, efficiency, and stability. Applying the concept of the financial possibility frontier, developed by Beck and Feyen (2013) and formalized by Barajas et al. (2013b), we determine key policy variables affecting the gap between actual levels of development and benchmarks predicted by structural variables. Our dynamic panel estimation shows that inflation, trade openness, institutional quality, and banking crises significantly affect financial development. We also assess the impact of the policy variables across the different dimensions of development thereby identifying complementarities and potential trade-offs for policy makers. The third chapter models the role of the lender of last resort (LoLR) in a general equilibrium framework. We allow for heterogeneous agents and a risk-averse banking sector, and incorporate the frictions of endogenous default, liquidity, and money. Adverse supply shocks in monetary endowments trigger default, leading to deterioration in the value of bank assets, and subsequent bank illiquidity in some states of the world. LoLR intervention is then assessed with regards to its economy-wide effect on welfare, bank profitability, and the level of default. The results provide a justification for constructive ambiguity. The fourth chapter aims to provide an explanation for the incidence of financial crises by combining insights from agency theory and Minsky's financial instability hypothesis (Minsky, 1992) in a model with endogenous default. Our theoretical model shows that the probability of a financial crisis increases as the quality of shareholder information decreases. We then develop a measure for the quality of shareholder information following Simon (1989) and show that the market-wide quality of shareholder information: i) is poor (with no trend) in the Pre-SEC period (1840 to 1934); ii) improves substantially following the SEC reforms; and iii) gradually declines starting in the 1960s/70s until it is now back to pre-SEC levels. This matches up with the standard list of US financial crises (as in Reinhart and Rogoff 2009; Reinhart 2010) and supports our hypothesis that the likelihood of a financial crisis increases with deterioration in the quality of shareholder information.
Books on the topic "Banking intermediation"
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Gary, Smith. Money, banking, and financial intermediation. Lexington, Mass: D.C. Heath, 1991.
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Gorton, Gary. Financial intermediation. Cambridge, MA: National Bureau of Economic Research, 2002.
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Felipe Anderson De Souza Netto. Essays on Banking and Financial Intermediation. [New York, N.Y.?]: [publisher not identified], 2022.
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Hu, Jiayin. Essays on Banking and Financial Intermediation. [New York, N.Y.?]: [publisher not identified], 2019.
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Samartin, Margarita. Financial intermediation and public intervention. Louvain-la-Neuve: CIACO, 1996.
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Samartin, Margarita. Financial intermediation and public intervention. Louvain-la-Neuve: CIACO, 1996.
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McAndrews, James J. Payment intermediation and the origins of banking. [New York, N.Y.]: Federal Reserve Bank of New York, 1999.
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Keane, M. J. Technology and intermediation: The case of banking. Galway: Department of Economics, University College Galway, 1998.
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Vittas, Dimitri. The impact of regulation on financial intermediation. Washington, D.C. (1818 H St., NW, Washington 20433): Country Economics Dept., World Bank, 1991.
Find full textBook chapters on the topic "Banking intermediation"
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Cousin, Violaine. "Financial Intermediation." In Banking in China, 79–91. London: Palgrave Macmillan UK, 2011. http://dx.doi.org/10.1057/9780230306967_6.
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Cousin, Violaine. "Financial Intermediation." In Banking in China, 67–80. London: Palgrave Macmillan UK, 2007. http://dx.doi.org/10.1057/9780230595842_6.
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Freeman, Harry L. "Implications of Global Financial Intermediation." In International Banking, 73–84. London: Palgrave Macmillan UK, 1988. http://dx.doi.org/10.1007/978-1-349-09706-7_8.
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Spajić, Luke Drago. "Banking under EU Integration." In Financial Intermediation in Europe, 17–59. Boston, MA: Springer US, 2002. http://dx.doi.org/10.1007/978-1-4615-1013-0_2.
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Girasa, Roy. "Shadow Banking (Non-Bank Financial Intermediation)." In Shadow Banking, 47–79. Cham: Springer International Publishing, 2016. http://dx.doi.org/10.1007/978-3-319-33026-6_2.
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Cousin, Violaine. "New Forms of Financial Intermediation." In Banking in China, 92–104. London: Palgrave Macmillan UK, 2011. http://dx.doi.org/10.1057/9780230306967_7.
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Molyneux, Philip. "Claims, Financial Intermediation and the Development of Financial Systems." In Banking, 31–40. London: Macmillan Education UK, 1990. http://dx.doi.org/10.1007/978-1-349-21153-1_3.
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Kuczynski, Michael. "Contributions to the Theory of Banking Competition." In Financial Intermediation in Europe, 127–57. Boston, MA: Springer US, 2002. http://dx.doi.org/10.1007/978-1-4615-1013-0_5.
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Kuczynski, Michael. "European Banking Responses to Yield Curve Impulses." In Financial Intermediation in Europe, 159–208. Boston, MA: Springer US, 2002. http://dx.doi.org/10.1007/978-1-4615-1013-0_6.
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Spajić, Luke Drago. "The Analysis of Competition and Applications to Banking." In Financial Intermediation in Europe, 93–126. Boston, MA: Springer US, 2002. http://dx.doi.org/10.1007/978-1-4615-1013-0_4.
Full textConference papers on the topic "Banking intermediation"
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Buchory, Herry A. "Capital, Operational Efficiency And Credit Risk In The Banking Intermediation." In International Conference on Economics and Banking. Paris, France: Atlantis Press, 2015. http://dx.doi.org/10.2991/iceb-15.2015.27.
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Freimanis, Kristaps, and Maija Šenfelde. "Credit creation theory and financial intermediation theory: different insights on banks’ operations." In Contemporary Issues in Business, Management and Economics Engineering. Vilnius Gediminas Technical University, 2019. http://dx.doi.org/10.3846/cibmee.2019.033.
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Purpose – already for more than one hundred years there is an ongoing discussion about the role and function of banks, which subsequently has affected banking regulation. Three theories of banking were dominant in different periods of the 20th century: Credit creation theory (the oldest), Fractional reserve theory, Financial intermediation theory. Authors are contributing to the theoretical discussion with research showing that Credit creation theory and Financial intermediation theory reflect different insights on banks’ operations. Research methodology – literature review (regarding theories), financial ratio calculations (Loans-to-Deposits ratio); Findings – using Loans-to-Deposits ratio calculations for several banks researchers have found that banks’ lending process can be explained by Credit creation theory however banks’ Strategic Asset-Lability Management can be explained by Financial intermediation theory. Research limitations – (a) only domestic banks were selected as in this research it is important to get the needed relationship between deposits and lending. Subsidiaries of foreign banks could have not balanced balance sheet from Loansto-Deposits ratio perspective as their funding could come from abroad if the business model in Baltics is primarily lending oriented, (b) Baltic market was taken because of know-how of researchers about banks operations here and history of their transformation, (c) audited financial reports were used as they gave a sufficient picture of banks Loansto-Deposits ratio. Practical implications – theoretical discussion in this paper enlightens the role and function of the banks thereby improving understanding of better banking regulation. Authors propose to adjust the current banking regulatory framework which is focused on capital requirements. Originality/Value – current research provides some link between existing banking theories (Credit creation theory and Financial intermediation theory) shaping a new hybrid concept and proposing an adjusted regulatory framework based on this hybrid concept
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"Banking Reform and Financial Intermediation of Some Selected Deposit Money Banks in Nigeria." In International Conference on Business, Sociology and Applied Sciences. International Centre of Economics, Humanities and Management, 2014. http://dx.doi.org/10.15242/icehm.ed0314518.
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Palecková, Iveta. "Cost efficiency of the Czech and Slovak banking sectors: an application of the data envelopment analysis." In Business and Management 2016. VGTU Technika, 2016. http://dx.doi.org/10.3846/bm.2016.14.
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The aim of the paper is to estimate the cost efficiency of the Czech and Slovak commercial banks within the period 2010-2014. For empirical analysis the Data Envelopment Analysis input-oriented model with variable returns to scale is applied on the data of the commercial banks. The intermediation approach is adopted to define the inputs and outputs. The Czech commercial banks are more cost efficient than Slovak commercial banks. The development of average cost efficiency is similar in the Czech and Slovak banking industry. The most efficient Czech banks are Ceská sporitelna and Sberbank in the Czech banking sector, the most efficient Slovak bank is Privatbanka with 100% efficiency.
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Aseinov, Dastan. "Factors Affecting Cost Efficiency in the Banking Sector of Kyrgyzstan." In International Conference on Eurasian Economies. Eurasian Economists Association, 2017. http://dx.doi.org/10.36880/c08.01907.
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Instabilities in the banking sector have had an adverse effect on the economy as a whole, since the largest share in the financial system and financial intermediation in Kyrgyzstan have been captured by banking sector. Economic efficiency in banking can be viewed as a source of financial stability of banking system. Economic efficiency of the banking is more important challenge not only for shareholders and managers of banks, and also for regulation and supervision authorities, and public and potential investors.
The aim of this study is to examine factors affecting the banking cost efficiency for Kyrgyz banks. It is also important to choose the appropriate approach in measurement of banking cost efficiency, since there are many different methods. In this study preferred stochastic frontier approach which assumes random error term which captures sampling, measurement and specification errors. We adopted stochastic cost frontier model proposed by Battese ve Coelli (1995) which also allow to examine investigate the impact of variables on efficiency.
We used unbalanced panel data set captured 17-23 Kyrgyz commercial banks for period of 2000-2013. Obtained results suggest that capitalization, foreign ownership, credit risk, liquidity risk and currency risk have most influence on cost efficiency scores of banks calculated averagely at level of 0,766. Overall results indicate that domestic banks more cost efficient than domestic private and foreign banks. Average cost efficiency scores of domestic banks, foreign and separately public banks are 0,848; 0,649 and 0,875, respectively.
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Donev, Blagica. "MACROECONOMIC AND MACRO-FINANCIAL FACTORS OF THE STABILITY OF THE BANKING SECTOR - THE CASE OF THE REPUBLIC OF NORTH MACEDONIA." In Economic and Business Trends Shaping the Future. Ss Cyril and Methodius University, Faculty of Economics-Skopje, 2021. http://dx.doi.org/10.47063/ebtsf.2021.0022.
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Banks, as financial institutions, play a vital role in achieving financial stability and economic growth, with their expected contribution through mobilization and allocation of financial resources throughout the economy. Only a reliable and stable banking system that enjoys the trust of economic entities can be an effective intermediary of the resources of the national economy in order to intensify economic development. The role of banks is even more important for developing economies with underdeveloped capital markets. The banking sector is still the primary form of financial intermediation in the Republic of North Macedonia. The study examine the stability of the banking sector in North Macedonia, and explores the macroeconomic, macro financial factors behind stability indicators of banking sector functioning in North Macedonia over the 1996- 2017 period by employing correlations and multiple linear regression model. Results of the analysis showed that macroeconomic factors are not affecting selected bank stability indicators: NPL and capital adequacy. In addition, macro-financial factors (that include the specific determinants of the banking sector that relate to the size, structure, efficiency of the banking sector, competition) are affecting indicators and can be shown to be reliable early warning indicators. There is a broad consensus that strong and effective micro- and macroprudential policies are needed to assure a robust and resilient financial system. Author’s recommendation is implementation regulatory framework and construction of legal, institutional, regulatory landscape for macro-prudential regulation and policies, that act complementing to microprudential and macroeconomic policies, that have an impact on systemic financial stability.
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Ciobu, Stela, and Victoria Iordachi. "Implementing corporate governance good practices in the banking system of the Republic of Moldova." In International Scientific Conference “30 Years of Economic Reforms in the Republic of Moldova: Economic Progress via Innovation and Competitiveness”. Academy of Economic Studies of Moldova, 2022. http://dx.doi.org/10.53486/9789975155663.50.
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Corruption in the lending activity, financial fraud or reduced banking efficiency may be the result of a weak and deficient corporate governance mechanism. An eloquent example is given by the frauds uncovered in 2014 in the domestic banking system, namely the governance gaps that allowed the robbery of three banks and the misappropriation of funds of billions of lei by malicious factors. Subsequent investigations revealed a number of serious shortcomings in the management process at several banks, including decision-making in the board of directors, the work of the executive body or reduced transparency of shareholders. The important role of financial intermediation of banking institutions in the economy, their high sensitivity to the potential difficulties arising from inefficient corporate governance and the need to protect the interests of depositors and investors, require that corporate governance for these institutions be of particular interest to maintain the stability of the financial sector. Despite progress in addressing IMF recommendations and the satisfactory performance of banks, there are several governance issues at several banks, including the largest ones. Deficiencies in corporate governance at banks still pose a major risk to systemic financial stability in the Republic of Moldova, and the ability of regulators to act remains restricted. The purpose of this research is to analyse the constraints that caused the banking crisis in the Republic of Moldova and develop recommendations to eliminate the major systemic deficiencies of the Moldovan banking system based on corporate governance good practices.
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Sirait, Rika Angelia, and Rofikoh Rokhim. "Capital Adequacy Requirement, The Cost of Financial Intermediation and Risk Taking Behavior of The Indonesia Banking Sector." In Proceedings of the 12th International Conference on Business and Management Research (ICBMR 2018). Paris, France: Atlantis Press, 2019. http://dx.doi.org/10.2991/icbmr-18.2019.17.
Full textReports on the topic "Banking intermediation"
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Farhi, Emmanuel, and Jean Tirole. Shadow Banking and the Four Pillars of Traditional Financial Intermediation. Cambridge, MA: National Bureau of Economic Research, October 2017. http://dx.doi.org/10.3386/w23930.
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Buch, Claudia M., and Linda S. Goldberg. International Banking and Nonbank Financial Intermediation: Global Liquidity, Regulation, and Implications. Federal Reserve Bank of New York, March 2024. http://dx.doi.org/10.59576/sr.1091.
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Global liquidity flows are largely channeled through banks and nonbank financial institutions. The common drivers of global liquidity flows include monetary policy in advanced economies and risk conditions. At the same time, the sensitivities of liquidity flows to changes in these drivers differ across institutions and have been evolving over time. Microprudential regulation of banks plays a role, influencing leverage and capitalization, changing sensitivities to shocks, and also driving risk migration from banks to nonbank financial institutions. Risk sensitivities and flightiness of global liquidity are now strongest in more leveraged nonbank financial institutions, raising challenges in stress episodes. Current policy initiatives target linkages across different types of financial institutions and associated risks. Meanwhile, significant gaps remain. This paper concludes by discussing policy options for addressing systemic risk in banks and nonbanks.
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Durante, Juan José, and Paul Moreno. Financial Market Development: Support from the Inter-American Development Bank Group 1990-2002. Inter-American Development Bank, February 2003. http://dx.doi.org/10.18235/0008607.
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IDB Group involvement and support in the reform, modernization and deepening of financial markets in Latin America and the Caribbean targets banking intermediation, capital markets, insurance markets, pension systems, housing finance, and debt reduction.
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Carrera-Marquis, Daniela. Banking on Global Sustainability: A Sustainable Downscaling Strategy in Latin America and the Caribbean. Inter-American Development Bank, September 2014. http://dx.doi.org/10.18235/0008448.
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Adequate financial markets are fundamental to sustainable development. Accurate capital allocation requires return on investment incorporates the social and environmental variables impacting, negatively or positively, such investment. Values-based capital allocation relies on sound corporate governance structures guiding the decision-making process towards sustainability objectives, not shortterm returns. One where the use of natural capital preserves the stock of capital, assuring that all generations live-off the income-flow. Concurrently financial markets, especially in emerging markets, should further engage in growth and redistribution models to create wealth for and inclusion of SMEs. Long-term financial sustainability is then aligned with environmental sustainability and social inclusion. Enhancing the potential of formal and informal SMEs requires strengthening credit channels. With the implementation of downscaling strategies, financial institutions (FIs) contribute to address existing levels of inequality while supporting the sustainable development path. At the same time FIs have the opportunity to impact the public policy dialogue regarding SMEs formalization. Formalized SMEs are in a better position to grow, to have higher labor and capital demand and productivity. For FIs this implies a market expansion. For society, higher productivity and more equitable growth contribute to a better income distribution and closing the inequality gap. Redefining the financial sector¿s role is relevant for all stakeholders. Is not a choice, is the ethical response. FIs have to acknowledge their impact on society and the environment carries greatresponsibility and that their legitimacy as agents of social change, depends on the realization that their role goes beyond the traditional financial intermediation.