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Journal articles on the topic 'Banking intermediation'
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1
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.
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Buchory, Herry Achmad. "Banking Profitability: How do the banking intermediary, secondary reserve, operational efficiency, and credit risk effect?" GATR Journal of Finance and Banking Review Vol. 8 (2) July - September 2023 8, no. 2 (September 29, 2023): 85–96. http://dx.doi.org/10.35609/jfbr.2023.8.2(1).
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Objective – A Bank is a financial institution that collects and distributes funds to the public to obtain Profitability. The Covid-19 pandemic has affected the economic sector, especially the banking sector. The intermediation function needs to run optimally, increasing investment in secondary reserves, decreasing operational efficiency, increasing credit risk, and reducing bank profitability. The research aimed to determine the effect of Banking Intermediation, Secondary Reserves, Operational Efficiency, and Credit Risk on Profitability at Regional Development Banks in Indonesia for the 2019 – 2022 period, partially and simultaneously. Banking Intermediation is measured by the ratio of credit to total third-party funds (Loan to Deposit Ratio/LDR), Secondary Reserve is measured by the percentage of securities held to third-party funds (TPF), Operational Efficiency is measured by the ratio of operating expenses to operating income (OEOI), Credit Risk is measured by Non-performing Loans (NPLs), and Profitability is measured by Return on Assets (ROA). Methodology – Descriptive and verification methods with a quantitative approach will be used in this study with secondary data from published financial reports from 22 Regional Development Banks in Indonesia. The data analysis technique used is multiple linear regression. Findings – The study's findings show that partially LDR has a positive and significant effect on ROA; Secondary reserve has a positive but not significant impact on ROA; OEOI and NPLs ratios have a negative and significant effect on ROA. While simultaneously, LDR, Secondary Reserve, OEOI Ratio, and NPLs substantially impact ROA. Novelty – Compared to previous studies, bank profitability is not only influenced by banking intermediation, operational efficiency, and credit risk but also by secondary reserves, although not significantly. Type of Paper: Empirical JEL Classification: G21, G32 Keywords: Banking Intermediation, Banking Profitability, Credit Risk, Operational Efficiency, Secondary Reserve. Reference to this paper should be made as follows: Buchory, H.A. (2023). Banking Profitability: How do the banking intermediary, secondary reserve, operational efficiency, and credit risk effect?, J. Fin. Bank. Review, 8(2), 85 – 96. https://doi.org/10.35609/jfbr.2023.8.2(1)
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Chukwunulu, J. I., and S. N. O. Ibenta. "Financial Innovation and Efficiency of Financial Intermediation in Nigeria." African Journal of Accounting and Financial Research 4, no. 2 (June 7, 2021): 77–87. http://dx.doi.org/10.52589/ajafr-mfzizeeq.
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This study investigated the effect of financial innovation on efficiency of financial intermediation of commercial banks in Nigerian between 2008 and 2018. The study used secondary data obtained from the Annual reports and Accounts of the Central Bank of Nigeria (CBN). The explanatory variables of the study are the product innovations in the banking sector namely: volume of automated teller machine transactions (ATM), volume of point-of-sale transactions (PoS), volume of Internet banking transactions (IBT) and volume of Mobile banking transactions (MBT). The dependent variable is the financial intermediation efficiency proxied by interest rate spread, which is measured by the difference between maximum lending rate and savings rate. A multiple regression model developed for the study was analysed with the help of Ordinary Least Square (OLS) regression technique. The result from the descriptive statistics indicated that financial intermediation in Nigeria is inefficient. The results showed that ATM, IBT and MBT have insignificant positive effects on financial intermediation while PoS has negative effects on financial intermediation efficiency. Further results indicated that the 57% change in financial intermediation efficiency explained by financial innovation is not statistically significant. The study therefore concluded that financial innovation in itself is not a determinant of the efficiency of the intermediation process in Nigeria. It is then recommended that the regulatory authority among others should make policies to increase the savings rate, so that the surplus unit will be encouraged to make their funds available to the banks for lending.
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BURLACHKOV, Vladimir K. "Non-banking financial intermediation and phenomena of shadow money in modern economy." Finance and Credit 27, no. 8 (August 30, 2021): 1694–709. http://dx.doi.org/10.24891/fc.27.8.1694.
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Subject. The article addresses the non-banking financial intermediation (shadow banking system) as it is successfully expanding nowadays both in developed countries and emerging economics. Objectives. The study aims at conducting a comprehensive analysis of the specifics of non-banking financial intermediation, revealing its impact on economic agents’ activities, causes and consequences, and elaborating the methodological framework for effectiveness of modern monetary policy. Methods. I employ methods of scientific abstraction, induction, deduction, synthesis, and comparative analysis. Results. In the modern national economy, along with the money, created by the central bank and commercial banks, there are highly liquid financial instruments called shadow money. The scope of its application is shadow banking (financial intermediation) outside the banking system. The use of shadow money is caused by high demand for credit resources. Conclusions. The high activity of shadow banking and increased turnover of shadow money resulted from a transfer to Basel standards of banking regulation in the 1990s, which affected the lending activity of commercial banks. Under these conditions, the demand for loans provided by non-bank credit and financial institutions increased. The market of non-bank credit products was formed. However, the process of lending in the shadow banking is associated with high risks and non-stability of shadow money, widely used in this sphere.
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Eflinda, Eva, and Prihantoro. "FAKTOR DETERMINASI FUNGSI INTERMEDIASI PERBANKAN SYARIAH DI INDONESIA." Journal of Business Economics 23, no. 2 (2018): 159–70. http://dx.doi.org/10.35760/eb.2018.v23i2.1826.
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The condition of national economic growth has not had a significant impact on improving the community economy. One of the indications can be seen from the high level of open unemployment in 2009. This happened because of complaints from businessmen who felt the difficulty to obtain capital injection from the bank as an important source for increasing their production capacity. So, the intermediation function of Indonesian banking still needs to be questioned. Especially in Syariah banking, the role of intermediation function can be seen from the Financing to Deposit Ratio (FDR) indicator. FDR of Syariah banking in 2009 showed a degradation from previous years. It indicates a further gap between collected and channeled funds through financing in Syariah banking. So it is possible to make a study about the analysis of factors that can affect the banking intermediation function, especially Syariah banking. This study aims to identify the factors that influence the intermediation function of Syariah banking in Indonesia. The analytical tool used in this study is the "distributed-lag model" model. In this model, the analysis carried out multiple linear regression analysis, multiple correlations, calculation of determination coefficient value, and hypothesis check with T-test and F-test. The conclusion is about the existence of a significant relationship between NPF, SBIS, GDP, and CSPI in cooperation with FDR. Partially, NPF has a significantly positive relationship with FDR, meanwhile, SBIS and IHSG have a significantly negative relationship with FDR, and for GDP there is no significant relationship with FDR. Keywords: FDR, NPF, SBIS, GDP, and CSPI
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Baszyński, Adam. "Transformacja sektora bankowego w krajach Europy Środkowej, Wschodniej i Południowo-Wschodniej." Wiadomości Statystyczne. The Polish Statistician 2013, no. 7 (July 29, 2013): 80–98. http://dx.doi.org/10.59139/ws.2013.07.6.
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This article attempts to assess the development of banking sectors in the transition countries of Central, Eastern and Southeastern Europe (CESEE) in years 1990–2011. There are evaluated the recommendations of international financial institutions with regard to the reform of the banking sector and a range of banking intermediation measured by the ratio of internal credit provided by the banking system related to GDP. The results of the evaluation of banking reforms allow positively assess the transformation of banking in the CESEE. Countries that consistently implement the adopted bank reform program, consisting of banking market liberalization and privatization of the commercial banking, have developed a secure, two-tier market oriented banking sectors. The depth of banking intermediation is still lower than it is in developed industrialized market economies, however, the distance between the CESEE countries and the adopted pattern in the second decade of reforms has decreased.
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Hardianto, Dimas Satria, and Permata Wulandari. "Islamic bank vs conventional bank: intermediation, fee based service activity and efficiency." International Journal of Islamic and Middle Eastern Finance and Management 9, no. 2 (June 20, 2016): 296–311. http://dx.doi.org/10.1108/imefm-01-2015-0003.
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Purpose The aim of this research is to compare the differences of intermediation, fee-based service activity and efficiency of conventional banks vs Islamic banks in Indonesia for the 2011-2013 period. Moreover, this study also includes some control variables to find their effect on the dependent variables. Design/methodology/approach This research uses two methods, namely, stochastic frontier approach and panel data regression. Findings The result indicates that Islamic banks have a higher intermediation ratio, have higher proportion on fee income-to-total operating income and are less efficient. The control variable that has a positively significant effect on intermediation ratio is size; meanwhile, inefficiency and non–loan-earning asset are negatively affecting the intermediation ratio. The control variable that show a positively significant effect on the proportion of fee income-to-total operating income is size; meanwhile, the credit risk variable has no significant effect on the proportion of fee income-to-total operating income. Size and credit risk are the control variables that have a negative relation to efficiency. Originality/value This study has significantly contributed to Indonesian Islamic banking based on which the Islamic banking manager should recognize that the intermediation level, fee-based service activity and efficiency are crucially important in establishing competition and maintaining sustainable Islamic banking.
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Schackmann-Fallis, Karl-Peter, Horst Gischer, and Mirko Weiß. "A Case for Boring Banking and Re-Intermediation." Applied Economics Quarterly: Volume 64, Issue 3 64, no. 3 (July 1, 2018): 199–238. http://dx.doi.org/10.3790/aeq.64.3.199.
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Abstract Experience from the recent financial crisis quite clearly revealed the limits of deregulation. Instead of trusting in perfect financial markets, re-intermediation or “boring banking” seems to be a more promising alternative. In our discussion of the steps towards a European Banking Union that have been implemented so far, we seek to expose its shortcomings. Against this backdrop, we discuss whether boring banking is an economically and socio-politically appropriate goal at all. Outlining the economical functions of banks, we investigate whether a widely disintermediated financial system can work without frictions. Additionally, we evaluate the concepts of bank-based and capital-market-based financial systems from the perspective small and medium-sized enterprises. By way of example, the structure of the German banking industry as well as different business models are analyzed in the light of boring banking. We conclude with economic policy recommendations deemed necessary to promote – or at least preserve – traditional loan-making by banks. JEL classifications: G18; G21; L52 Keywords: banking industry, financial intermediation, business models, European Banking Union
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Buchory, Herry Achmad. "Anomalies of Banking Intermediation and Profit Growth (Study on the 10 Largest Banks in Indonesia)." GATR Journal of Finance and Banking Review 5, no. 1 (June 30, 2020): 14–22. http://dx.doi.org/10.35609/jfbr.2020.5.1(2).
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Objective – One of the bank's main goals is to obtain profit mainly from the intermediation process. The implementation of the Indonesian banking intermediary function in the year 2017 is not optimal, as indicated by credit growth in the year 2017 which only reached 8,35%. This phenomenon also occurs in the 10 largest banks in Indonesia. In 2017 the intermediation function has decreased but profits have increased. The aim of this study is to analyze the influence of banking intermediation on profit growth and whether credit quality and operational efficiency affect profit growth. An indicator of banking intermediation is a loan to deposits ratio (LDR), credit quality with non-performing loans (NPLs), the operating efficiency with the ratio of operating expense to operating income (OEOI) and profit growth is measured by the amount of profit. Methodology – Descriptive and verification methods will be used in this study, with data from the 10 largest banks financial statements in Indonesia for the period 2016-2017 while data analysis uses multiple linear regression. Findings – The findings of this study show that partially LDR has a positive effect although the effect is not significant on Profit; NPLs have a negative effect on Profit and the effect is significant; OEOI has a negative effect even though the effect is not significant on Profit; Simultaneously, the variable LDR, NPLs, OEOI have a significant effect on profit. Novelty – Compared to previous studies, bank profit growth is not only influenced by banking intermediation, but if banks can maintain credit quality and improve operational efficiency, bank profits will grow Type of Paper: Empirical Keywords: loan to deposit ratio, non-performing loans, the ratio of operating expenses to operating income, profit growth. Reference to this paper should be made as follows: Buchory; H.A. 2020. Anomalies of Banking Intermediation and Profit Growth (Study on the 10 Largest Banks in Indonesia), J. Fin. Bank. Review, 5 (1): pp. 14 – 22 https://doi.org/10.35609/jfbr.2020.5.1(2) JEL Classification: G21, G32.
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Ameraldo, Fedi, Saiful Saiful, and Husaini Husaini. "Islamic Banking Strategies In Rural Area: Developing Halal Tourism and Enhancing The Local Welfare." IKONOMIKA 4, no. 1 (July 4, 2019): 109–36. http://dx.doi.org/10.24042/febi.v4i1.4211.
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ABSTRACTThe purpose of this study is to analyze the potential contribution of Islamic banking to development of Halal tourism and the enhancement of local community welfare in rural area.The present study employs a critical analytic approach based on extensive review and discussing the possible contribution of Islamic banking to development of Halal tourism and the local communities in rural area.As discussed in the paper there are some strategies for Islamic banking in the rural area. First, Islamic banking can establish special purpose vehicle to run the microfinance scheme in the rural area in order to minimize the potential risks. Second, some financing mechanisms also can be run by the Islamic banks both sources from internal and external resources, such as participatory model – musyarakah and mudharabah and third parties fund – zakah, infaq, sadaqah and waqf.Last, the branchless banking strategy is also proposed but with a certain intermediations should be firstly done by the Islamic banks, such as social and financial intermediation. Keywords Indonesia, Islamic Banking, Halal tourism, Local Welfare
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Merz, Markus. "Contemporaneous financial intermediation." Digital Finance 3, no. 1 (March 2021): 25–44. http://dx.doi.org/10.1007/s42521-021-00029-3.
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AbstractDigital innovations in banking and payments recently have garnered a great deal of attention. Specifically, distributed ledger technology (DLT) has the potential to fundamentally change the roles and responsibilities of stakeholders in the financial sector. DLT is a novel and fast-evolving approach to record and share data, e.g., payment transactions, among members of a decentralized network. Using transaction cost theory, the paper examines how DLT will change the cross-border payment infrastructure. DLT can reduce the overall transaction costs potentially resulting in the disappearance of correspondent banks.
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Manzilati, Asfi. "Profit and Loss Sharing System - Solution for Trade-offs between Banking Profitability and Economic Efficiency of Intermediation." Journal of Finance and Banking Review Vol.2(1) Jan-Mar 2017 2, no. 1 (March 14, 2017): 17–24. http://dx.doi.org/10.35609/jfbr.2017.2.1(3).
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Objective - The higher the difference between the loan interest and the deposit interest is, the better it is for a bank. This reflects a higher margin/profitability. However, it also shows less efficiency of the intermediation mechanism. Using literature research, this study aims to understand how the mechanism of Profit and Loss Sharing System (Islamic Banking System) can become the solution for the trade-off. Methodology/Technique - This study uses literature search and review as the method to gain an understanding of the fundamental concept as well as to offer critique by noting the trade-offs associated with the micro and macro objectives of banking. Findings - In the profit and loss sharing system made accessible through partnership, the returns that will be earned by one part depends on the other part. This requires each part to behave professionally and responsibly. Depositors' returns depend on banks' returns and banks' returns depend on mudharib's return. Therefore, there is no difference between banking profitability and efficiency of the intermediation. Novelty - With the same implications noted between the micro objective of banks (advantage as a business entity) and the efficiency of intermediation as well as the implications for the affordability and social justice, there is no trade-off between profitability and economic efficiency of intermediation. In addition, the profit and loss sharing system can also be a solution for the trade-off itself. Type of Paper: Review Keywords: Profit and Loss Sharing System, Micro-macro Trade-off, Banking Profitability, and the Economic Efficiency of Intermediation
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Amalo, Fitriningsih. "ANALISIS PERKEMBANGAN FUNGSI INTERMEDIASI PERBANKAN SYARIAH DI PROVINSI JAWA TIMUR PERIODE TRIWULAN III 2008 – TRIWULAN III 2009." Jurnal Ekonomi Pembangunan 8, no. 2 (December 1, 2010): 367. http://dx.doi.org/10.22219/jep.v8i2.3611.
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The research purpose are to find out intermediation function development of Syariah Banking in East Java Province (Three Months Period III 2008 – Three Months Period III 2009) and projecting or finding the intermediation function development trend of Syariah Banking in East Java Province (Three Months Period III 2008 – Three Months Period III 2009). The research kind was descriptive statistic. From the fund data to economic sector in East Java, Syariah Banking have not given special attention in funding the largest four sector in East Java, they were PHR, hotel and restaurant, farm, industry, and transportation-communication. For projection or intermediation function development, in each three months period it was developed, and some of them decreasing, that was funding from economic sector. The sectors were industry, construction, trading, and transportation. But it was only projection since everything could be changed in time according to the economic flow happened
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Jayasekara, S. G. Sisira Dharmasri, K. L. Wasantha Perera, and A. Roshan Ajward. "Fair Value Accounting Practices and Efficiency of Banks: A Theoretical Perspective." Accounting and Finance Research 7, no. 4 (September 27, 2018): 66. http://dx.doi.org/10.5430/afr.v7n4p66.
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This conceptual paper discusses the impact of fair value accounting practices on performance of commercial banks in relation to the established banking theories i.e. Credit creation, fractional reserve and financial intermediation theory. These theories are discussed in view of historical cost accounting principles and fair valued accounting principles considering the performance in terms of efficiency during different stages of economic conditions. The analysis shows that fair value accounting practices in banks create reserves in economic booms improving efficiency and deteriorate created reserves in economic downturns causing financial crises. Enhanced financial performance in terms of unrealized gains improves the overall efficiency of banks in view of the intermediation approach of the financial intermediation theory. Therefore, it can be interpreted that external factors such as accounting, infrastructure, and technology can influence efficiency of the financial intermediation process. This is the first study to discuss the implications of fair value accounting on banking theory in view of performance of banks and stability of financial system.
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R.C., Ejinkonye, and Okonkwo I.V. "Nexus Between Financial Innovation and Financial Intermediation in Nigeria’s Banking Sector." African Journal of Accounting and Financial Research 4, no. 3 (December 13, 2021): 162–79. http://dx.doi.org/10.52589/ajafr-vn7jrc1z.
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This study evaluated the relationship between financial innovation and financial intermediation in Nigeria. It seems that banks in Nigeria may have a problem of deposit-loan mismatch and losing customers to start-ups given increasing cost of deposits attributable to disruptive practice arising from financial innovations. The specific objectives of this study were to examine the relationship between financial innovation (value of the automated teller machine, internet banking, mobile banking, point of sale transactions) and financial intermediation (commercial banks deposit mobilization) in Nigeria for the period 2009–2018. This study was anchored on the financial innovation theory of Joseph Schumpeter, which states that technology creates opportunities for new profits and super profits as a result of increased investment by banks or financial institutions on products of innovation. The ordinary least square was used to estimate the parameters. The data used were extracted from the Central Bank of Nigeria statistical bulletin. The results showed that there is a positive and significant relationship between financial innovation (value of Automated Teller Machine) and financial intermediation (commercial banks deposit mobilization) in Nigeria; there is a positive but no significant relationship between financial innovation (internet banking) and financial intermediation (commercial banks deposit mobilization) in Nigeria; there is a positive but no significant relationship between financial innovation (mobile banking) and financial intermediation (commercial banks deposit mobilization) in Nigeria; and there is no positive and significant relationship between financial innovation (point of sale transactions) and financial intermediation (commercial banks deposit mobilization) in Nigeria. The f-test result showed that financial innovations proxies jointly related significantly to commercial banks’ deposits. The work concludes that financial innovations contributed to commercial banks’ deposits in Nigeria. The researchers recommended among others that banks should improve on the security of transactions done on their platforms, continue to improve and partner with start-ups in technological infrastructure, improve on power and network stability, deploy more innovative products, and improve on the efficiency of bank staff by regular training.
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Hidayati, Nadiah, Hermanto Siregar, and Syamsul Hidayat Pasaribu. "DETERMINANT OF EFFICIENCY OF THE ISLAMIC BANKING IN INDONESIA." Buletin Ekonomi Moneter dan Perbankan 20, no. 1 (September 28, 2017): 29–48. http://dx.doi.org/10.21098/bemp.v20i1.723.
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Dual banking system in Indonesia provides an excellent opportunity for the growth of Islamic banking industry in Indonesia. Islamic banking industry in Indonesia has improved in number of banks and branches but the performance of Islamic banks has decreased in recent years. This paper measures the efficiency of Islamic banking in Indonesia using the intermediation approach and the Data Envelopment Analysis (DEA) on quarterly reports of 10 Islamic Banks (BUS) and 15 Islamic Business Units (UUS). The results showed that Islamic Banks (BUS) and Islamic Business Units (UUS) in Indonesia has not been operating efficiently in its intermediation function. The estimation results of data panel regression model showed total financing and CAR have positive and significant impact, whereas the deposits have negative and significant impact to the efficiency of BUS and UUS in Indonesia.
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Barros, Manuela Gonçalves, Marcelo Botelho da Costa Moraes, Alexandre Pereira Salgado Junior, and Marco Antonio Alves de Souza Junior. "Efficiency of credit unions in Brazil: an analysis of the evolution in financial intermediation and banking service." RAUSP Management Journal 55, no. 3 (May 15, 2020): 289–308. http://dx.doi.org/10.1108/rausp-06-2018-0029.
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Purpose The purpose of this paper is to evaluate the efficiency in financial intermediation and the cost efficiency in banking service of credit unions in Brazil, based on essentially accounting variables, and to analyze the temporal evolution of the efficiency of these cooperatives. Design/methodology/approach With a sample of 315 cooperatives over the period from 2007 to 2014, this research uses a two-stage process: application of regression models with panel data to verify which variables are related to the defined outputs, with the reduction of 31 variables to 8 variables in both models; and application of the data envelopment analysis method to obtain an analysis of credit unions’ efficiency. Findings The results demonstrate a high level of efficiency in financial intermediation, with low variation over time, associated with a low efficiency in the banking service, in which few cooperatives have remained efficient over time. In addition, the cooperatives with highest efficiency in financial intermediation were also the most efficient in providing services. Research limitations/implications This research has some limitations about the capacity of the proxies used to capture the real effect of the variables and assumptions of economic relations resulting in restrictions to generalize the results. Practical implications Cooperatives are usually analyzed under just one dimension. By separating the analysis into financial intermediation and banking services, cooperatives that are more efficient in each dimension can be identified, in addition to analyzing the evolution over time. The authors found that efficiency tends to be lower in banking services, and few cooperatives remain at the highest level of efficiency over time in both models. Social implications Credit unions provide an important service in the banking and credit market. Therefore, understanding its operation and the characteristics that influence its efficiency allows a better management of the cooperatives themselves and a greater understanding of this important segment of the financial market.
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Díaz Tavera, Germán. "Tasas de Interés Activas Anuales vs. Tasas de Interés Pasivas Anuales en el Sistema Financiero en el Perú." REVISTA XAUXA AÑO II, NÚMERO 5 – 2021 II, no. 05 (December 20, 2021): 61–67. http://dx.doi.org/10.56374/xau.02.05.21.08.
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This study analyzes the Annual Active Interest Rates Versus Annual Passive Interest Rates in the Financial System in Peru, since a bank is an institution that is responsible for managing and lending money. Banking or the banking system is the set of Entities or Institutions that, within a given economy, provide the financial intermediation service. The banking business consists of financial intermediary, that is, placing your own capital, adding the public’s money, and then lending it at an interest rate that is currently free. For the loans that the bank makes, it receives an interest rate (active operations or placement interest rate) that is its profit against the interest rate that it pays for the savings or deposits (passive operations or interest rate of deposit) that is much less. The answer to this is that placement interest rates are higher in most countries than interest rates. Bone banks charge more to give resources than they pay to capture them. The subtraction between the placement interest rate and the deposit interest rate is called the intermediation margin. Banks, therefore, obtain more profits when the intermediation margin is larger.
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Anwer, Zaheer. "Shariah Compliant Financial Intermediation in Dual Banking System." Turkish Journal of Islamic Economics 7, no. 1 (February 15, 2020): 67–80. http://dx.doi.org/10.26414/a073.
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Leonov, Mikhail Vitalyevich. "Monetary policy and banking intermediation in CBDC economy." Independent Journal of Management & Production 13, no. 4 (June 1, 2022): s452—s461. http://dx.doi.org/10.14807/ijmp.v13i4.1928.
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Increased dissemination of information and communication technologies in the economy has led many central bankers around the world to consider the introduction of money in the digital form. In academic literature, various central bank digital currency (CBDC) issues from technical design to political influence are discussed, although until now it has not been fully implemented in any country except the Bahamas. The central bank digital currency (CBDC) is an additional form of national currency that combines the properties of cash and bank accounts. This study mainly aims to provide a comprehensive analysis of monetary policy in the CBDC economy. to meet the aim of the study, the study applies an agent-based model that has six types of economic agents and complicated interaction algorithms. The various design parameters are employed to study the dynamics of endogenous variables. Model simulations suggest that CBDC introduction leads to reduced macroeconomic volatility and price stability. Furthermore, the study provides evidence of the increased efficiency of the interest rate channel of the monetary policy transmission mechanism and the negative consequences of possible banking disintermediation. Based on the results obtained, the study concludes that the CBDC impact the economy through changes in the monetary base, strengthening the structural liquidity deficit, banking disintermediation, and increasing the fiscal policy capabilities. The proposed agent-based model provides a theoretical foundation for the further study of monetary policy and banking intermediation in the CBDC economy.
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Kiemo, Samuel, and Anne Kamau. "Banking sector competition and intermediation efficiency in Kenya." African Development Review 33, no. 4 (November 6, 2021): 648–61. http://dx.doi.org/10.1111/1467-8268.12609.
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Sakarombe, Upenyu, and Lloyd Badze. "Financial Intermediation and Fixed Capital Formation in Zimbabwe." Eurasian Journal of Economic and Business Studies 67, no. 4 (December 30, 2023): 89–100. http://dx.doi.org/10.47703/ejebs.v67i4.278.
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Business sustainability is heavily constrained by the shortage of affordable finance of adequate duration and quality. This affects producers and traders' capacity to reorganize their production and exchange systems to attain dynamic competitiveness. Ensuring sufficient and cost-effective high-quality finance in the nation facilitates financial intermediation. The traditional method of channelling and allocating financial resources in an economy has predominantly been carried out by the banking sector. Notably, the level of intermediation had been largely lower than the expected especially during the Covid-19 era implicating as serious problem of disintermediation. This study analyses the impact of financial intermediation on capital formation in Zimbabwe using Autoregressive Distributive Lag (ARDL) model from the first quarter of 2011 to the fourth quarter of 2020. The study finds that the financial intermediation process in the country remains largely weak to enable gross fixed capital formation which facilitates business sustainability. Financial disintermediation by banks is also reducing business sustainability. Several initiatives are suggested to alleviate financial restrictions within the country. One significant proposal involves enhancing competition in the banking sector by further liberalizing it. This is aimed at reducing the cost of credit, fostering financial innovation, and promoting increased credit circulation.
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Sufian, Fadzlan, and Muzafar Shah Habibullah. "FINANCIAL CRISIS, IMF, AND BANK EFFICIENCY: EMPIRICAL EVIDENCE FROM THE ASEAN-4 BANKING SECTORS." Buletin Ekonomi Moneter dan Perbankan 12, no. 2 (October 29, 2010): 133–59. http://dx.doi.org/10.21098/bemp.v12i2.353.
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Despite its severity and deep influence on both the real and financial sectors, empirical evidence on the evolution of the performance of the ASEAN-4 banking sectors since the 1997-1998 Asian financial crisis is relatively scarce. By employing the Data Envelopment Analysis (DEA) approach the present study examines for the first time the impact of the Asian financial crisis on the efficiency of the ASEAN-4 countries banking sectors. This study focuses on two major approaches vis. intermediation and revenue approaches. The empirical findings suggest that the estimates of technical efficiency are consistently higher under the revenue approach. We find that banks are relatively inefficient in a more concentrated banking market. However, when we control for countries that participate in IMF program, the concentration ratio exhibits a positive relationship with bank efficiency levels, implying that the more concentrated banking system which participates in IMF program is relatively more efficient in their intermediation function during the post crisis period.Keywords: Bank, Efficiency, DEA, ASEAN.JEL Classification: G21; G28
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Sufian, Fadzlan, and Muzafar Shah Habibullah. "FINANCIAL CRISIS, IMF, AND BANK EFFICIENCY: EMPIRICAL EVIDENCE FROM THE ASEAN-4 BANKING SECTORS." Buletin Ekonomi Moneter dan Perbankan 12, no. 2 (October 29, 2010): 123–50. http://dx.doi.org/10.21098/bemp.v12i2.369.
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Despite its severity and deep influence on both the real and financial sectors, empirical evidence on the evolution of the performance of the ASEAN-4 banking sectors since the 1997-1998 Asian financial crisis is relatively scarce. By employing the Data Envelopment Analysis (DEA) approach the present study examines for the first time the impact of the Asian financial crisis on the efficiency of the ASEAN-4 countries banking sectors. This study focuses on two major approaches vis. intermediation and revenue approaches. The empirical findings suggest that the estimates of technical efficiency are consistently higher under the revenue approach. We find that banks are relatively inefficient in a more concentrated banking market. However, when we control for countries that participate in IMF program, the concentration ratio exhibits a positive relationship with bank efficiency levels, implying that the more concentrated banking system which participates in IMF program is relatively more efficient in their intermediation function during the post crisis period. Keywords: Efficiency, DEA, ASEAN, Regression.JEL Classification: G21; G28
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Yoon, Jong Hee. "The Historical Evolution of Financial Intermediation: From Traditional Banking to Shadow Banking." Society and History 124 (December 30, 2019): 391–420. http://dx.doi.org/10.37743/sah.124.10.
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Dressler, Scott J., and Erasmus K. Kersting. "ECONOMIES OF SCALE IN BANKING, CONFIDENCE SHOCKS, AND BUSINESS CYCLES." Macroeconomic Dynamics 18, no. 5 (April 3, 2013): 1069–90. http://dx.doi.org/10.1017/s1365100512000831.
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Equilibrium indeterminacy due to economies of scale (ES) in financial intermediation is quantitatively examined in a monetary business-cycle environment. Financial intermediation provides deposits that serve as a substitute for currency to purchase consumption, and depositing decisions are susceptible to nonfundamental shocks to confidence. The analysis considers various assumptions on nominal rigidities and the timing of deposit decisions. The results suggest that indeterminacy arises for small ES, and the resulting confidence shocks qualitatively mimic monetary shocks. A calibration exercise concludes that U.S. economic volatility from this nonfundamental source has increased over time while volatility from fundamental sources has decreased.
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Fariska, Putri, Ajeng Luthfiyatul Farida, and Mochamad Malik Akbar Rohandi. "Macroprudential Intermediation Instruments Policy on Mitigating Risk Management Sharia Bank in Indonesia." Jurnal Manajemen dan Bisnis Performa 20, no. 1 (May 20, 2023): 85–96. http://dx.doi.org/10.29313/performa.v20i1.11852.
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Sharia banks must face various operational risks, including shifting from macroeconomic, regulatory factors. The central bank has set minimum policies that must be met by sharia banking in managing risk management so that bank operations can run consistently and prudently under sharia principles. During the pandemic, the central bank has issued stimuli to maintain stability in the financial services sector through a financing restructuring policy for the increase in defaults in the economic recession in Indonesia. And also issued a policy to regulate the Macroprudential Intermediation Ratio to mitigate the impact of increasing risks on the domestic economy. Previous studies stated that macroprudential policies could reduce banks' risk level, but lack of research on Islamic banks. So this study aims to examine the Effectiveness Macroprudential Intermediation Instruments Policy on Mitigating Risk Management Sharia Bank. Using Vector Autoregression and Impulse Response to capture short and long-term impacts along with a causal relationship from 2015 to 2021. This study indicates that the Macroprudential Intermediation Policy effectiveness affects financing and liquidity risks. There's a causal relationship between the Macroprudential Intermediation Policy and financing risk and vice versa, but not in liquidity risk. The response due to shocks between the Macroprudential Intermediation Policy, financing risk, and liquidity risk are not convergent except in the short-term mismatch ratio. So, managing Effectiveness Macroprudential Intermediation Instruments Policy on Mitigating Risk Management Sharia Bank is vital for Islamic banking, because if a shock occurs in this process, the impact will occur in the long term and can lead to bankruptcy.
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Abdullah, Khaled Mohamad, and Ahmad Wifaq Mokhtar. "Islamic Financial Intermediation in Kuwait Finance House Malaysia: A Fiqh Maqasid Study." Ulum Islamiyyah 12 (September 15, 2014): 176–204. http://dx.doi.org/10.33102/uij.vol12no.223.
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This article aims to study the financial intermediation in Islamic banks, in term of the degree of extent and achievement according to Islamic rules and Maqasid of Shariah. The objectives of this study has been done theoretically and practically through the study of some applications on the light of Maqasid. This study shows that the financial intermediation achieving the Magasid of Shariah without contradiction if it is applied correctly. Practically, this study was applied on the Kuwait Finance House Malaysia. Results show that Islamic intermediation implementing the Maqasid of Shariah in some aspects, however the study also highlights that the practice of some types of fictitious contracts like Tawaruq, Mudarabah with Tawaruq, lease and sublease, seem to contradict the Islamic rules of the Shariah and its Maqasid. This study recommends the avoidance of fictitious contracts, and to replace them with direct investment according to the comprehensive Islamic banking model of the Islamic banking system.
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Buchory, Herry Achmad, and Jadi Kusmaryadi. "The Effect of Banking Intermediation, Secondary Reserve, Operational Efficiency, and Credit Risk on Banking Profitability (Study at Regional Development Banks in Indonesia Period 2019 – 2022)." 15TH GLOBAL CONFERENCE ON BUSINESS AND SOCIAL SCIENCES ON 14 - 15 SEPTEMBER 2023, NOVOTEL BANGKOK PLATINUM PRATUNAM, THAILAND 15, no. 1 (September 14, 2023): 58. http://dx.doi.org/10.35609/gcbssproceeding.2023.1(58).
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Banks are intermediary financial institutions that collect and distribute funds to the public with the aim of obtaining profitability. The occurrence of the Covid-19 pandemic has affected the economic sector, especially the banking sector. The intermediation function is not running optimally, increasing investment in the form of secondary reserves, decreasing operational efficiency, increasing credit risk, and decreasing bank profitability. This research was conducted with the aim of knowing the effect of Banking Intermediation, Secondary Reserves, Operational Efficiency, and Credit Risk on Profitability at Regional Development Banks in Indonesia for the 2019 – 2022 period both partially and simultaneously. Banking Intermediation is measured by the ratio of credit to total third-party funds (Loan to Deposit Ratio/LDR), Secondary Reserve is measured by the ratio of securities held to third-party funds (TPF), Operational Efficiency is measured by the ratio of operating expenses to operating income (OEOI), Credit Risk is measured by Non-performing Loans (NPLs) and Profitability is measured by Return on Assets (ROA). The research method used is a descriptive method and a verification method with a quantitative approach with secondary data types sourced from published financial reports from 22 Regional Development Banks in Indonesia. The data analysis technique used is multiple linear regression with the classical assumption test first. As for testing the hypothesis used by T-Test and F-Test. The results of the study show that partially LDR has a positive and significant effect on ROA; Secondary reserve has a positive but not significant effect on ROA; OEOI and NPLs ratios have a negative and significant effect on ROA. While simultaneously LDR, Secondary Reserve, OEOI Ratio, and NPLs have a significant effect on ROA. Keywords: Banking Intermediation, Credit Risk, Operational Efficiency, Return on Assets, Secondary Reserve.
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I. Motelle, Sephooko, and Nicholas Biekpe. "Financial intermediation spread and stability of the banking system in the Southern Africa Customs Union." Managerial Finance 40, no. 3 (March 4, 2014): 276–99. http://dx.doi.org/10.1108/mf-06-2013-0147.
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Purpose – Asymmetric information impedes the efficiency of financial intermediation by widening the gap between lending and deposit rates. The cost of information gathering is high and often translates into high borrowing costs. Consequently, high borrowing costs may make it hard for borrowers to repay loans and increase the volume of non-performing loans – a recipe for financial instability. This study first compares the application of the simple GARCH (1,1) and BGARCH (1,1,1) models in the estimation of macroeconomic volatility and finds that the latter is more suitable for this purpose. Moreover, the choice of BGARCH (1,1,1) over the simple GARCH (1,1) implies different outcomes for Granger causality tests. This finding implies that the BGARCH (1,1,1) model minimises loss of important information when estimating macroeconomic volatility in developing countries. Second, the study uses bootstrap panel Granger causality to test the hypothesis that there is a causal relationship between financial instability and the financial intermediation spread in Southern African Customs Union (SACU). The findings support this hypothesis and underscore the importance of implementing sound macroeconomic policies for high and stable growth as well as effective monetary policy to attain and maintain low and stable prices in order to narrow the financial intermediation spread in SACU. The paper aims to discuss these issues. Design/methodology/approach – This study uses bootstrap panel Granger causality to test the hypothesis that there is a causal relationship between financial instability and the financial intermediation spread in SACU. Findings – The findings support this hypothesis and underscore the importance of implementing sound macroeconomic policies for high and stable growth as well as effective monetary policy to attain and maintain low and stable prices in order to narrow the financial intermediation spread in SACU. Originality/value – Application of panel bootstrap Granger causality test to test for a casual relationship between financial intermediation spread and financial stability in the context of SACU.
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Gentar, Muhamad, Intan Permatasari, and Wildan Kautsar. "Dinamika Pertumbuhan Ekonomi di Provinsi Banten: Analisis Data Triwulanan 2018-2022." Business Economic, Communication, and Social Sciences Journal (BECOSS) 6, no. 1 (January 31, 2024): 55–63. http://dx.doi.org/10.21512/becossjournal.v6i1.10943.
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This research aims to examine the dynamics of economic growth in Banten Province in the period of 2020-2023, using quarterly data obtained from the Economic Report of Banten Province published by Bank Indonesia. This research uses a descriptive-analytical method with a quantitative approach. The variables used are economic growth, inflation, banking intermediation, and regional budget expenditure. The results show that economic growth in Banten province tends to increase and is higher than national and regional economic growth in Java, although it is still influenced by factors such as inflation, banking intermediation, and regional budget expenditure. This research contributes to the development of the economy in Indonesia, especially in Banten province.
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Ibrahim, Mansor H., and Siong Hook Law. "FINANCIAL INTERMEDIATION COSTS IN A DUAL BANKING SYSTEM: THE ROLE OF ISLAMIC BANKING." Buletin Ekonomi Moneter dan Perbankan 22, no. 4 (January 17, 2020): 531–52. http://dx.doi.org/10.21098/bemp.v22i4.1236.
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This paper empirically analyses the role of Islamic banking in financial intermediation costs as measured by net interest margins for a leading dual banking country, Malaysia. Controlling for theoretically motivated determinants of the margins, the paper compares the interest/financing margins of conventional and Islamic banks and examines the impacts of Islamic banking presence on bank margins. The analysis provides evidence of the higher margins of Islamic banks compared to those of conventional banks. Further, the difference in bank margins between the two types of banks can be attributed to differences in market power, operating costs, and diversification. Finally, Islamic banking presence or penetration, as represented by the ratio of Islamic financing to aggregate bank credit/financing and, alternatively, the share of Islamic banking assets, is robustly associated with lower bank margins, on average. These results bear important implications for the development of the Islamic banking industry and in fostering the efficient allocation of financial resources by the banking system.
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Ipandang, Ipandang, and Andi Novita Mudriani Djaoe. "SOCIAL INTERMEDIATION OF SHARIA BANKING FROM THE ISLAMIC LAW PERSPECTIVE: A Case Study at Bank Negara Indonesia (BNI) Syari’ah." ULUL ALBAB Jurnal Studi Islam 23, no. 1 (June 29, 2022): 70–93. http://dx.doi.org/10.18860/ua.v23i1.15491.
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This research focuses on the dynamics of social intermediation implemented by BNI Syari’ah in Kendari City, South Sulawesi, Indonesia based on the Islamic law perspective and its impact on social life. In developing and realizing the social intermediation function of Islamic banks that arise from administrative-structural and cultural dimensions, the interpretation and meaning of a conceptual perspective are present. Therefore, this research applies a qualitative approach with a case study type through a one-site design. Data collection is done through in-depth interviews, participatory observation, and documentation study. The data were analyzed with the principle of on-going analysis using Miles and Huberman's analysis method. The research found that social intermediation implemented by BSK (BNI Syari’ah Kendari) really determines the potential and mentality of the poor society. This social intermediation is in the form of institutions such as the bayt al-mâl. This way, the poor can receive zakât, infâq, alms, grants, and other social funds. Furthermore, the social intermediation even has a positive impact on the community, because it integratively puts forward the concept of mas}lah}ah (according to the principles of maqâsid al-sharî‘ah).
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Fikri, Reza Jamilah. "MONETARY TRANSMISSION MECHANISM UNDER DUAL FINANCIAL SYSTEM IN INDONESIA: CREDIT-FINANCING CHANNEL." Journal of Islamic Monetary Economics and Finance 4, no. 2 (February 9, 2019): 251–78. http://dx.doi.org/10.21098/jimf.v4i2.1001.
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The presence of Islamic and conventional banking in the dual financial system of Indonesia equally hold the role as financial intermediator which theoretically banks collect fund from the debitors to be distributed to creditors. However, along with the changing of time there has been a development in the financial industry, when financial deregulation occurs, where the role of providing credit is not only owned by the banks but also other financial institutions. As the result, banks are no longer considered as the center of financial intermediation but could be replaced by other financial instruments. This study aims to reconsider the role of banking as financial intermediation in the monetary transmission mechanism using three methodoligal approaches which are Vector Autoregression and Vector Error Correction Model (VAR-VECM), Error Correction Model (ECM), and Autoregressive Distributed Lag (ARDL). The long-term results of ECM and VECM estimations both show that credit and finacing channel are still relevant to be employed in the monetary transmission mechanism after the development of financial sector and the change of monetary policy, yet only have an impact to economy and do not give effect to inflation. While the result of ARDL estimation indicates that none of the variables affect the monetary policy objectives which means that credit and financing channel are considered to be getting weaker in the monetary transmission mechanism.
Keywords : Monetary Transmission Mechanism, Credit Channel, Dual Financial System
JEL Classification: E51, E52, E58
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Sidak, Volodymyr, and Yana Koval. "ANTI-CRISIS MANAGEMENT ECONOMIC SAFETY OF BANKING INSTITUTIONS ON THE STATE LEVEL: PROBLEMS AND WAYS OF THEIR SOLUTION." Європейський науковий журнал Економічних та Фінансових інновацій, no. 2 (December 10, 2018): 20–28. http://dx.doi.org/10.32750/2018-0203.
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The development of the economy directly depends on the state of the banking system, financing and servicing of enterprises by banking institutions. A prerequisite for this is to ensure a stable financial position of banks, which is the main task of both their owners and the regulator of the banking sector. In transition economies with poorly developed financial markets, in most cases, banks are the only institutions that form the necessary information for financial intermediation, provide diversification of financial resources, reduce the level of risk of financial activity, and promote the implementation of leading standards of corporate governance. Even in economically developed countries, banks remain centers of financial and economic activity, while taking a special place among financial institutions as instruments of making credit investments, creating savings and ensuring payments. In addition, stability is extremely important given the functions of financial intermediation, the provision of cash flow, customer satisfaction in financial services, the efficient allocation of credit resources and the maintenance of financial discipline among borrowers. In transition economies with poorly developed financial markets, in most cases, banks are the only institutions that form the necessary information for financial intermediation, provide diversification of financial resources, reduce the level of risk of financial activity, and promote the implementation of leading standards of corporate governance. Even in economically developed countries, banks remain centers of financial and economic activity, while taking a special place among financial institutions as instruments of making credit investments, creating savings and ensuring payments. In the article, the directions of improvement of the mechanism of state regulation of anti-crisis management by the economic security of banking institutions of Ukraine are systematized by systematizing the main measures, which are united in the main directions, in particular such as: the period of implementation; by the entities that implement them; on the mechanisms of implementation; by types of banking activity.
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Broll, Udo, Bernhard Eckwert, and Andreas Eickhoff. "Financial intermediation and endogenous risk in the banking sector." Economic Modelling 29, no. 5 (September 2012): 1618–22. http://dx.doi.org/10.1016/j.econmod.2012.05.015.
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Park, Albert, and Kaja Sehrt. "Tests of Financial Intermediation and Banking Reform in China." Journal of Comparative Economics 29, no. 4 (December 2001): 608–44. http://dx.doi.org/10.1006/jcec.2001.1740.
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Nath, Samapti, and Ram Chandra Das. "Does credit diversification drive banks’ cost of intermediation? An empirical exploration." Corporate and Business Strategy Review 4, no. 4, special issue (2023): 324–34. http://dx.doi.org/10.22495/cbsrv4i4siart13.
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The disparity between the interest rates on loans and deposits is a widely used indicator of how expensive financial intermediation is for a community. The nations which reflect lower intermediation costs have higher levels of banking penetration and financial development (Gupta et al., 2021). This research examines the impact of credit diversification strategy on cost of intermediation of the Indian commercial banks. Additionally, our study shows the moderating role of bank ownership in this nexus. The static and dynamic estimation of panel data of the banks during the period 2014 to 2020 are carried out to analyse this relationship. Our baseline results refute the findings of Bustaman et al. (2016) and Huynh and Dang (2021) and indicate that the more diversified a bank’s credit portfolio, the higher its cost of intermediation. Besides, the results reflect the effect of credit diversification in inflating the cost of intermediation is less severe for the banks with public ownership. Thus, this research emphasizes while promoting a diversified strategy, regulators and bank managers should carefully evaluate the positive impact of credit diversification on banks’ cost of intermediation with a caution that the positive impact is more severe for private sector banks.
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Adriyanto, Adriyanto. "KETAHANAN SEKTOR KEUANGAN DAN SHADOWBANKING: ANALISA TERHADAP INDUSTRI PEMBIAYAAN DI INDONESIA." Kajian Ekonomi dan Keuangan 16, no. 3 (November 1, 2016): 27–54. http://dx.doi.org/10.31685/kek.v16i3.57.
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The failure of supervision instrument on shadow banking practice in the US has triggered financial collapse and spread accross sovereignities. The G20 has asked FSB to undertake in depth analysis of shadow banking progress along with needed recommendations to overcome the weaknesses. This paper attempts to analyze the shadow banking practice in Indonesia particularly in the consumer finance industry by using the flow of fund analysis recommended by FSB and several relevant financial ratios. The size of credit intermediation in this industry only accounts for 3% of GDP compared to bank credit accounting for 30% of GDP in 2011, however the credit growth in finance industry has superseded banking sector. The consumer finance industry are dominantly reliant on bank lending and bond which reduces the susceptibility of market shock. The asset securitization is not common in this industry. The financial sector authority has imposed strick regulation on this industry to ensure industry's financial health. Despite industry's ability to meet those requirements, the high dependency on debt for operation has raised concern for stronger equity increase. Further, the expansive credit intermediation in this industry can bring liquidity problem which requires further regulation.
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Toci, Valentin, and Iraj Hashi. "Intermediation Efficiency of Banks in South-East Europe." International Journal of Finance & Banking Studies (2147-4486) 2, no. 3 (July 21, 2013): 1–20. http://dx.doi.org/10.20525/ijfbs.v2i3.151.
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By employing non-parametric methods, namely Data Envelopment Analysis and Malmquist Index, this paper investigates efficiency of banks using a database of almost all banks in four countries in South-East Europe. The superior efficiency of foreignowned banks in intermediation is supported. It is argued that the improvement in efficiency of banks originated from the change in technology rather than scale and technical efficiency, and banks on average have not been able to catch-up with best-performers, thus widening the efficiency gap. The largest sources of inefficiency are found to be cost and scale inefficiencies and lending shortfalls. Because of its peculiarities, Kosovo banking sector is assessed relative to other economies. Findings suggest that despite some improvements, the banking system in Kosovo remained less efficient. A number of policy implications emanate from the findings, aiming at enhancing the intermediation efficiency of banks in the context of South-East European transition.
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Qayyum, Abdul, and Sajawal Khan. "X-efficiency, Scale Economies, Technological Progress, and Competition: The Banking Sector in Pakistan." Pakistan Development Review 45, no. 4II (December 1, 2006): 733–48. http://dx.doi.org/10.30541/v45i4iipp.733-748.
Full textAbstract:
The financial sector plays an important role in economic growth, and the banking sector as a part of the financial sector facilitates the economic activities in the capacity of an intermediary between lender and borrowers. That is why the researchers as well as the policy-makers have been concerned with the issue of banking sector efficiency. The banks transform their various inputs into multiple financial products, and the efficient way the banking sector transform these input into financial products may followed by macroeconomic stability [Ngalande (2003)]. It has also important role in effective execution of monetary policy [Hartman (2004)], furthermore, efficient allocation by banks play a central role in economic growth [Galbis (1977)]. There is a strong empirical support for positive link between financial intermediation and economic growth. A wide acceptance of this link also exists and financial development used as a determinant in growth model over the past several decades [Gurley and Shaw (1955) and Goldsmith (1969)]. The positive relationship could be either through factor accumulation or through increase in efficiency [Collins (2002)]. It is the efficiency which is more important because mere factor accumulation could not stimulate economic growth [Slutz (2001)]. The efficient financial intermediation mechanism allocates the credit to more productive sectors in optimal way. In addition, this efficient financial intermediation mechanism also promotes innovations, because of high return on investment, with positive implications for economic growth [Luccheti (2000)].