Academic literature on the topic 'Financial stability of banks system'
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Journal articles on the topic "Financial stability of banks system"
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ACHARYA, VIRAL V., and STEPHEN G. RYAN. "Banks’ Financial Reporting and Financial System Stability." Journal of Accounting Research 54, no. 2 (April 13, 2016): 277–340. http://dx.doi.org/10.1111/1475-679x.12114.
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Hossain, Md Enayet, and Mahmood Osman Imam. "FINANCIAL STABILITY OF ISLAMIC AND CONVENTIONAL BANKS IN BANGLADESH: REVISITING STABILITY MEASURES AND ANALYZING STABILITY BEHAVIOR." Journal of Islamic Monetary Economics and Finance 3, no. 2 (March 28, 2018): 293–314. http://dx.doi.org/10.21098/jimf.v3i2.893.
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This study intends to assess the relative financial stability of Islamic banks in Bangladesh using three different Z-Scores as financial stability measures, based on a sample of 29 listed commercial banks (23 conventional and 6 Islamic) in Bangladesh over the period 2005-2016. Apart from the existing measure of financial stability, Z-Score, the paper contributes to the literature by developing an alternative Z-Score based on bank’s loan portfolio infection ratio. We first use pair-wise comparison and find that Islamic banks are financially more stable in two stability measures i.e. Z-Score (based on Capital Adequacy Ratio) and Z-Score (based on Infection Ratio). We then perform static (random effects) and dynamic (GMM) panel data analysis. By controlling for bank-specific, industry-specific and macroeconomic variables in the regressions, we find that Islamic banks are financially more stable in 2 panel regressions of Z-Score (based on Infection Ratio). We also find that the presence of Islamic banks increases the stability of all banks in the system including their conventional peers.
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Samorodov, Borys, Galyna Azarenkova, Olena Golovko, Kateryna Oryekhova, and Maksym Babenko. "Financial stability management in banks: strategy maps." Banks and Bank Systems 14, no. 4 (November 20, 2019): 10–21. http://dx.doi.org/10.21511/bbs.14(4).2019.02.
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To prevent crises in the economy, it is necessary to ensure the financial stability of banks, which is one of the main tasks facing the banking system.The purpose of this article is to develop tools for improving the efficiency of financial stability management in a bank based on strategy maps.Using UkrSibbank (Ukraine) as an example, two strategy maps are developed: a general management map and a local map – for the international payments division of the operational payments department. Structural elements of the designed strategy maps are: finances, clients, internal processes, training and development.Implementing the developed general strategy map in the bank’s practical activities involves the following measures: increasing financial stability; avoiding credit risk and optimizing the credit process; increase in profit; cost reduction; introducing new banking products; increase in the number of satisfied consumers; involvement and retention strategic clients.The developed strategy map for the international payments division of the operational payments department provides for the following measures: ensuring sufficient liquidity level of the bank’s balance sheet; introducing an effective system of analysis of origin of individuals’ and legal entities’ funds; direct correlation between employees of the international payments division and bank customers; timely informing customers regarding requirements updated.
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Kuznyetsova, Anzhela, and Nataliya Pogorelenko. "Assessment of the banking system financial stability based on the differential approach." Banks and Bank Systems 13, no. 3 (October 2, 2018): 120–33. http://dx.doi.org/10.21511/bbs.13(3).2018.12.
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In this paper, the banking system financial stability is assessed based on the differential approach. The differential approach provides for taking into account the specificity of the banking system structural organization (from the standpoint of the central bank and the second-level banks) and the sets of financial stability indicators, different in terms of their structure, and their volatility measures, according to this approach.The banking system financial stability is assessed based on the two groups of indicators: the first one characterizes the central bank financial stability (indicators of gross international reserves, effectiveness of monetary policy and foreign exchange regulation, ability to create favorable conditions in order to ensure the effectiveness of the banking sector); the second one defines the financial stability level for state banks, banks with private and foreign capital (indicators of the capital adequacy, liquidity, structure of assets and liabilities, effectiveness of the activity, financial risks). The differences between the sets of financial stability indicators for different groups of banks and the expediency of taking them into account during the assessment are revealed and substantiated according to the results of using the principal components method.The developed procedure of assessing the banking system financial stability provides for: constructing the banking system financial stability index (by multiplicative convolution of central bank financial stability subindex and three banks’ financial stability subindices); defining its high, medium and low level according to its quantitative values (according to interval scales, developed according to the rule “3σ”; interpreting the assessment results based on the scenario analysis, which is based on taking into account the dynamic change of the financial stability index during the analyzed period and allows to identify the state of the banking system (stable, conventionally stable or critical).
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Ramskyi, Andrii, and Inna Budnichenko. "FINANCIAL STABILITY OF A BANK - FACTOR OF STABILITY OF BANKING SYSTEM." Європейський науковий журнал Економічних та Фінансових інновацій, no. 2 (November 6, 2018): 5–11. http://dx.doi.org/10.32750/2018-0201.
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The article is devoted to the analysis of the financial stability of Ukrainian banks at the present stage of development and the identification of the main factors of influence that are associated with it. The main tendencies of development of the banking system of Ukraine are considered. The present state of the banking system of Ukraine is determined. Financial stability plays a significant role in planning the activities of commercial banks. In general, its indicators reflect the level of riskiness of the functioning of the entity of the banking system. Managing financial sustainability has a significant impact on the functioning of banks. That is why it is necessary to create special control departments in banking institutions. The research of financial stability of banks is based on financial sustainability indicators developed and used by the IMF and the World Bank as the basis for the "Integrated Financial Sector Development Program until 2020". The necessity of applying different methods for evaluating the financial stability of commercial banks has been established in order to identify a wider range of problems related to the efficiency of the functioning of the banking system. The description of two main groups of factors, under the influence of which the financial stability of banks undergoes changes, is presented. It was revealed that external factors have a more significant impact on the financial stability of a bank. In particular, the factors of mega environment have become more important when banks enter the international financial space. Internal factors lie mostly in the management plane, and it is just the inefficient management of the bank that leads to the disruption of its stable financial condition. Specific features of management of financial stability and methods of its evaluation are considered. The analysis of economic standards of the banking system of Ukraine is carried out. The measures are proposed to minimize the risks and maintain the stability of banking institutions at the required level for normal functioning in modern conditions. It has been proved that providing, supporting, analyzing and evaluating the financial stability of commercial banks is a driving force in the development of the banking system, and hence the entire Ukrainian economy.
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Nugroho, Muh Rudi, and Ibnu Qizam. "Financial System Stability in Indonesia during The Global Financial Crisis 2007/2008: Conventional vis-à-vis Islamic." Global Review of Islamic Economics and Business 2, no. 2 (September 7, 2015): 136. http://dx.doi.org/10.14421/grieb.2014.022-05.
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This research aims to analyze the financial stability especially in dual banking system in Indonesia and discusses the role of Islamic banks in the financial stability of national banks. In addition, this study also focuses on the analysis of the determinants of financial stability namely on the national banking Industry. This research uses panel data in which combined data between time series and cross section with an observation periods are 2005:1 - 2009:1 by using an internal variable of banks and macroeconomic data. Z-score analysis will be used as main tool analysis regressed with internal variable. Empirical results obtained from this research shows that during the period of 2005:1 - 2009:1 banking financial stability, for both conventional and Islamic and categorized based on an asset scale, the movement of the Z-score value is different. From the Z-score values analysis shows that Islamic banks are the most stable bank with a trend increased sharply when compared with other banks, namely conventional couterparts. If viewed from each category, small conventional banks more stable than small Islamic banks, and there are declining trend in 2005:1 to 2009:1. Whereas for large and middle conventional banks the trend of the Z-score movement are in the same patterns. This study also founds that the determinant of the banking stability can be seen from two sides namely bank's internal factors and macroeconomic factors. Internal factors consist of: Income Diversity (ID), Credit or Financing (Loan), Total Assets (TA), Operational Cost (Cost), Cost Income (CI), Loan Asset (LA), Current Liability (CL), Cash to Current Liabilities (CCL), Capital Bank (MDL). While macroeconomic factors consist of: inflation, BI Rate, Exchange Rate, Composite Index (JCI), the Gross Domestic Product (GDP). This research also examined the extent to which the role of Islamic banks and the global financial crisis to the financial stability of national banking. This analysis shows that the global financial crisis and Islamic banks affect significantly to the financial stability of banking industries in Indonesia.
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Khasawneh, Ahmad Y. "Vulnerability and profitability of MENA banking system: Islamic versus commercial banks." International Journal of Islamic and Middle Eastern Finance and Management 9, no. 4 (November 14, 2016): 454–73. http://dx.doi.org/10.1108/imefm-09-2015-0106.
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Purpose This paper aims to compare Islamic and commercial banks in the region of Middle East and North Africa (MENA) in terms of profitability and stability. Design/methodology/approach The study combines both the descriptive and analytical approaches. It considers panel data sets and adopts panel data econometric techniques. Findings The determinants of banks profitability and stability are different according to bank’s type. The results show that Islamic banks are more profitable than commercial banks, while on the other hand, commercial banks are more stable than Islamic banks. It is also concluded that banks profitability and stability are determined through some bank’s characteristics variables and macroeconomic variables in addition to the financial crises. MENA commercial and Islamic banking was affected by the financial crises in terms of profitability and stability. Additionally, larger banks are more stable than smaller banks, and off-balance sheet activities increase banks’ vulnerability for both commercial and Islamic MENA banks. Research limitations/implications The most prominent limitation is the lack of data, as we had to exclude some variables because of missing observations. As a result, the authors could not use data envelopment approach and stochastic frontier approach to evaluate banks efficiency in MENA countries rather than the financial ratios. Practical implications Commercial banks need to enhance their capitalization to improve their profitability. Additionally, Islamic banks need to improve the risk assessment and adopt some of the available risk management tools. Moreover, the banking system should take advantage of relatively higher Islamic banks profitability and use the unexploited profit opportunities through spreading into those countries with limited availability, such as the North African countries. Originality/value This study address both banks profitability and stability in an emerging region that includes banks of different types (Islamic and commercial) which are located in different counties that allows accounting for operational and institutional differences.
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Karcheva, Ganna, and Iryna Karcheva. "THEORETICAL AND PRACTICAL ASPECTS OF MANAGING THE FINANCIAL AND ECONOMIC SECURITY OF BANKS." Economic Analysis, no. 32(1) (2022): 188–98. http://dx.doi.org/10.35774/econa2022.01.188.
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Introduction. Existing economic and managing ways to ensure the financial and economic security of banks in Ukraine are not always reliable tools, because its mostly relate to certain aspects of the bank's activities, rather than the bank as a whole open dynamic dynamic system. According to the system approach, the basis of security of such systems is the bank's compliance with stability and dynamic balance. In this case, the stability should be considered in three aspects – the stability of the trajectory of development, the stability of the attractor and structural stability. The purpose of the study is the theoretical justification and development of practical recommendations for the building an effective system of financial and economic security management of banks considering the risks in its activities. Method (methodology). The methodological basis of the study is a systematic approach, methods of analysis and synthesis, theoretical and logical generalisations and hypotheses, economic and mathematical methods. Results. It was justified the expediency of using an integrated model of financial and economic security management of banks, which is based on an effective risk management system and provides a systematic process of risk identification, measurement, monitoring, control, reporting and appropriate regulation at all organizational levels. The proposed integrated model should include such basic components as: assessment of the existing security potential of the bank; adaptive (stabilizing) mechanism; obtaining a synergistic effect. The building of an effective system for managing the financial and economic security of banks is impossible without high-quality diagnostics and constant monitoring of the security potential of banks. A summary indicator has been developed to assess the potential of financial security of banks assessment, which is calculated on the basis of risk and the available potential of the bank's strength. It is proposed to use early warning signals that consider the dynamics and variability of liquidity and performance of banks. Experimental testing of the proposed instruments was carried out according to the financial statements of banks. The article reveals the essence of financial and economic security of banks and identifies components of the mechanism of bank security management. Developed conceptual approaches involve the use of preventive methods to prevent threats to the security of banks.
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Mohamed Mohamed Hafez, Hassan. "Does the efficiency of banks adversely affect financial stability? A comparative study between traditional and Islamic banks: Evidence from Egypt." Banks and Bank Systems 17, no. 2 (April 25, 2022): 13–26. http://dx.doi.org/10.21511/bbs.17(2).2022.02.
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The efficiency of banks is an important factor that effectively contributes to the stability of the world financial system, thus reducing financial failure rates of banks and international financial crises that leads to the stability of the global financial system. This study aims to investigate whether the efficiency of Egyptian banks adversely affects financial stability. A sample of 30 banks operating in Egypt was selected to answer this question using the data envelopment analysis (DEA) approach and financial ratios. This study enables the Central Bank of Egypt to identify which banking system (Islamic banks or traditional banks) is more efficient and contributes significantly to boost economic growth. Results revealed that the efficiency of banks is a core factor to affect financial stability. The statically explanatory power of this effect is significant but weak at 14.1% for all Egyptian banks, 6.3% for traditional banks, strong for traditional banks with Islamic window at 22%, and stronger for Islamic banks at 55%. Consequently, the Islamic banking system in Egypt is more efficient compared to traditional banks and has a greater impact on financial stability as one of the pillars of financial inclusion to boost economic growth in Egypt.
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Reddy, Dr P. Srinivas. "Financial (Il) Literacy And Stability Of The Financial System." GIS Business 14, no. 4 (July 12, 2019): 163–69. http://dx.doi.org/10.26643/gis.v14i4.5751.
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The aim of the author of this paper is to show the relationship between the levels of financial
Literacy of individuals and company’s managers and the stability of financial markets, asset
Markets and the stability of the financial system as a whole. In post-conflict Bosnia and Herzegovina (BiH) economy was ''struck'' by foreign banks and financial capital that has swept the local public ''hungry'' for loans but also under-educated in the financial sense to borrow and use borrowed funds more effectively and accept tolerable burden of debt. Financial illiteracy and the willingness to accept the conditions imposed by banks have led to difficulties in servicing obligations and deteriorating loan portfolio of banks. In such circumstances, the onset of the financial crisis has brought something positive. The trend of rapid borrowing of citizens and companies in BiH was abruptly cut, but on the other hand problems with servicing the loan already taken simultaneously arose. The problems are still not dramatic but it should be noted that problems in the banking sector come to the surface only after one and a half to two years after the crisis. The author believes that a more serious approach to the financial literacy of citizens and managers and owners of small businesses is crucial, not only for the economy as a whole but also for the health of the banking system or financial system of the country.
Dissertations / Theses on the topic "Financial stability of banks system"
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Sasraku, Francis M. "Regulatory Structures and Bank –Level Risk Management in Ghanaian Banks." Thesis, University of Bradford, 2015. http://hdl.handle.net/10454/15021.
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This research examines the impact of certain bank-specific variables on bank stability in Ghana, in the context of the existing regulatory structures. The thesis examines this issue along two main themes. The first part of this study examines whether two of the commonly used measures of banking stability, the CAMELS and the Z-Score, provide similar or different results in assessing the stability of banks in Ghana. The results of this study show that the use of the CAMELS and the Z-score measures could lead to different outcomes in terms of bank stability in Ghana. This suggests that the traditional micro-prudential CAMELS framework should be complemented with the Z-score which inherently has both micro and macro-prudential characteristics of signaling weaknesses in bank stability, and to enhance the management of bank stability. The second part of the study examines the impact of some bank-specific variables on bank stability. Using the panel data approach, the results show that while bank size, regulatory governance, regulatory independence and origin impact significantly on the stability score, there was no significant impact in terms of interbank borrowing and non-performing loans. Further analysis using the Blinder –Oaxaca decomposition also suggests that foreign banks in Ghana exhibit relatively higher levels of stability compared to local banks. The policy implications of these findings suggest that the liberalisation of the banking sector should be accompanied by an effective micro- and macro-prudential supervisory regime in order to manage the stability of the constituent banks and the banking sector as a whole.
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Рекуненко, Ігор Іванович, Игорь Иванович Рекуненко, and Ihor Ivanovych Rekunenko. "Impact of infrastructure on the stability of the financial market." Thesis, Українська академія банківської справи Національного банку України, 2012. http://essuir.sumdu.edu.ua/handle/123456789/63249.
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In this paper determined the impact of infrastructure on development of financial markets. Provided description of the current state of the main components of the financial market – monetary and stock market of UkraineВ даній роботі визначається вплив інфраструктури на розвиток фінансового ринку. Зокрема, розглянуто дві основні його складові - грошовий та фондовий ринок України.
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Кубах, Тетяна Григорівна, Татьяна Григорьевна Кубах, Tetiana Hryhorivna Kubakh, and Є. Руденко. "Bank profitability as a basis for financial stability of the country." Thesis, Sumy State University, 2021. https://essuir.sumdu.edu.ua/handle/123456789/83973.
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Невід’ємною частиною діяльності банківської установи є її стійкість до внутрішніх та зовнішніх шоків. Безперечно, його своєчасності сприяє своєчасність розрахунків між суб’єктами господарювання, зважена політика управління фінансовою установою та НБУ, як головного регулятора, що забезпечує довіру до банківської системи. Оцінка фінансової стійкості - це складний процес, який передбачає розрахунок великої кількості показників. Одним із важливих факторів, що впливають на стабільність банківської системи, є віддача активів та капіталу.Неотъемлемой частью деятельности банковского учреждения является его устойчивость к внутренним и внешним шокам. Несомненно, его своевременности способствуют своевременность расчетов между хозяйствующими субъектами, взвешенная политика управления финансовым институтом и НБУ как основным регулятором, обеспечивающим доверие к банковской системе. Оценка финансовой устойчивости - сложный процесс, предполагающий расчет большого количества показателей. Одним из важных факторов, влияющих на стабильность банковской системы, является доходность активов и капитала.
An integral part of the banking institution's activity is its resistance to internal and external shocks. Undoubtedly, its timeliness is facilitated by the timeliness of settlements between business entities, a balanced management policy of the financial institution and the NBU, as the main regulator that ensures confidence in the banking system. Assessment of financial stability is a complex process that involves the calculation of a large number of indicators. One of the important factors influencing the stability of the banking system is the return on assets and capital.
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Naef, Alain. "Sterling and the stability of the International Monetary System, 1944-1971." Thesis, University of Cambridge, 2019. https://www.repository.cam.ac.uk/handle/1810/285170.
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This dissertation studies the role of sterling during the Bretton Woods period (1944-1971). The Bretton Woods system has often been described as a dollar system with sterling having lost its relevance as reserve currency. However, despite being a secondary reserve currency and having lost importance, sterling was the 'first line of defence for the dollar' as contemporaries put it. They frequently stressed the fact that a sterling crisis would have consequences on the stability of the Bretton Woods system but economic historians have never tested this empirically. This dissertation argues that sterling played an important role in the stability of the international monetary system. Foreign exchange market participants globally monitored sterling and US policymaker stepped in to avoid devaluation of the British currency. US support to sterling was mainly due to the fear of a British devaluation, which could trigger a run on the dollar. When the UK finally devalued the pound in 1967, it marked the beginning of an instable period for the international monetary system. The Gold Pool, a syndicate to defend the US gold parity, collapsed in 1968 and this prefigured the end of the Bretton Woods system. This dissertation presents new data along with novel archival material from seven archives across continents to demonstrate how contagion from sterling to the dollar occurred. Modern econometric methods are used to analyse a new dataset with over 80,000 observations of offshore exchange rates, central bank intervention and reserves. This evidence shows that a secondary reserve currency can still play a key role in the stability of the international monetary system.
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Krėpšta, Simonas. "ES nacionalinių centrinių bankų vaidmuo, užtikrinant šalių finansų sistemų stabilumą. Galimybės ir sprendimai." Master's thesis, Lithuanian Academic Libraries Network (LABT), 2008. http://vddb.library.lt/obj/LT-eLABa-0001:E.02~2008~D_20080818_144816-36525.
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Šiame rašto darbe analizuojami Europos Sąjungos šalių narių nacionaliniai centriniai bankai ir jų vaidmuo vykdant finansinio stabilumo užtikrinimo funkciją. Šios, vienos iš pagrindinių funkcijų vykdymas, atliekamas naudojant įvairius finansinio stabilumo užtikrinimo instrumentus, kurių įvairiapusiškas tyrimas yra pagrindinė diplominio darbo ašis. Darbo pagrindinis tikslas yra apibendrinti nacionalinių centrinių bankų teisinį savarankiškumą ES erdvėje, ištirti naudojamų finansinio stabilumo užtikrinimo instrumentų rinkinius ir įvertinti naudojamų rinkinių veiksmingumą. Diplominį darbą sudaro trys pagrindinės dalys. Pirmoje dalyje atliekama finansinio stabilumo sampratos ir centrinių bankų veiksmų, siekiant finansinio stabilumo užtikrinimo, mokslinės literatūros analizė. Antroje dalyje pristatoma atliekamo tyrimo problema, pateikiama tyrimo logika bei metodologija. Trečioje dalyje apibendrinami tyrimo rezultatai, pateikiamos išvados ir autoriaus rekomendacijos nustatytose probleminėse srityse. Darbe atliktas tyrimas patvirtina pakankamai didelį ES nacionalinių centrinių bankų teisinį savarankiškumą bei jų disponuojamų finansinio stabilumo užtikrinimo instrumentų skaičių. Taip pat tyrimo rezultatai leidžia daryti išvadą, jog centrinių bankų finansinio stabilumo užtikrinimo efektyvumas priklauso nuo disponuojamų instrumentų skaičiaus ir jų pobūdžio.This paper work analyses EU national central banks and their role performing financial stability maintenance function. Implementation of one of central banks’ key functions is exercised through special financial stability instruments which are the hinge in accomplished research in this paper. The main objective in this diploma work is to measure national central banks’ legal independence in EU area, examine different usable sets of financial stability instruments in member countries and estimate efficiency of these sets. This paper work consists of three main parts. Theoretical analysis of financial stability and central banks’ actions in maintaining it, is presented in the first part. Second part covers the main problem and methodology of fulfilled research. All results of the research, their evaluation and authors proposals in the situation are presented in the third part. Accomplished research confirms that nation central banks in EU have considerable legal independence and dispose major part of possible financial stability instruments. The research also affirms that there is a quantitative dependence between disposed financial stability instruments number and their complexion.
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Заруцька, О. П. "Науково-методологічні засади банківського нагляду з використанням структурно-функціонального аналізу." Thesis, Українська академія банківської справи Національного банку України, 2013. http://essuir.sumdu.edu.ua/handle/123456789/51741.
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Дисертаційне дослідження присвячено розробці теоретико-методологічних засад та практичного інструментарію організації наглядової діяльності в Україні в умовах переходу від мікро- до макропруденційного банківського нагляду. У роботі розвинуто підходи до формування в Україні системи медіопруденційного нагляду, визначено зміст та призначення агрегованого, компаративного та специфікованого нагляду; виокремлено структурно-функціональні групи банків як об’єкти нагляду, формалізовано їх ідентифікаційні ознаки, досліджено тенденції та динаміку їх розвитку в Україні; обґрунтовано сутність ризику незбалансованих відхилень як орієнтира при здійсненні наглядових процедур та розроблено алгоритм розрахунку очікуваних збитків банку внаслідок його реалізації; розроблено методичні засади рейтингування банків; удосконалено критерії виокремлення етапів розвитку банківської системи; запропоновано підходи до ранньої діагностики загроз втрати фінансової стійкості банків, диференціації на-глядових заходів залежно від специфіки груп банків; розроблено систему оціночних контрольних показників діяльності банків як доповнення до обов’язкових економічних нормативів.Dissertation research is dedicated to the elaboration of the theoretical and methodological principles and practical tools of the supervision activities’ organization in Ukraine in the transition conditions from micro to macroprudential bank supervision. In the work we developed approaches to the forming in Ukraine medioprudential supervision system, picking out homogeneous structural and functional groups of banks as the objects for supervision, determined maintenance and purpose of the aggregated, comparative and specified bank supervision, elaborated criterion basis for the picking up groups of banks, formalized their identifiable characteristics, investigated tendencies and dynamics of their development in Ukraine, grounded the essence of the unbalanced deflections’ risk as the orienting point in the time of the supervision procedures realizing and elaborated calculations algorithm of the ex-pected bank’s losses in the case of its realization; elaborated methodological principles of the banks’ ranking , grounded possibilities of the using these ratings for the bank supervision tasks realization; improved criteria of the picking up stages of the banking system developing; suggested approaches to the early diagnostics of the banks’ financial stability loss threats, supervision activities differentiation according to the specification of the groups of banks, system of the evaluating control indexes of the banks activities as addition to the obligatory economic standards.
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Довгаль, Ю. С., and О. М. Гребінь. "Проблеми забезпечення фінансової стійкості комерційних банків України." Thesis, Українська академія банківської справи Національного банку України, 2011. http://essuir.sumdu.edu.ua/handle/123456789/62227.
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Питання забезпечення фінансової стійкості комерційного банку є досить
актуальним не лише на території України, але й за її межами. Адже
сьогодні ситуація вимагає прийняття ефективних управлінських рішень,
впровадження яких дозволить не допустити зниження рівня стійкості й
забезпечити стабільність розвитку фінансових установ.
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Kreutzer, Jasmin, and Friedrich Thießen. "Banken mit 30 % Eigenkapital." Universitätsbibliothek Chemnitz, 2017. http://nbn-resolving.de/urn:nbn:de:bsz:ch1-qucosa-220567.
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Admati und Hellwig erklärten 2013, dass sie nie eine kohärente Antwort auf die Frage bekommen hätten, warum Banken nicht 20 oder 30 % ihres Assetwertes an EK halten sollten. Dies war Anlass der vorliegenden Studie, die untersucht, wie man eine Quote von 30 % harten Kernkapitals ganz praktisch realisieren könnte. Wir haben fünf Gruppen von Lösungen für das 30 %-Problem gefunden, die man einsetzen könnte. Die fünf Gruppen sind: I. Stammaktien. Aktienkapital einer Aktiengattung. II. Gattungsaktien. Mehrere Gattungen von Aktien. III. Bail-in. Aktienkapital und nachrangige Verbindlichkeiten, die zusammen zu haftendem Eigenkapital im regulatorischen Sinne erklärt werden („Bail-in-Lösung“). IV. Innen-Außenverhältnis. Aktienkapital im Außenverhältnis und Zusatzvereinbarungen der Aktionäre im Innenverhältnis mit Tranchenbildung und Wasserfallprinzip. V. Zweckgesellschaft. Aktienkapital einer Gattung bereitgestellt durch eine Zweckgesellschaft, die sich mit diversen Schuldtiteln nach dem Wasserfallprinzip refinanziert. Persönlich glauben wir, dass bereits Konzept I (Stammaktien) gute Chancen hätte, realisiert werden zu können: 30 % Stammaktien sind zwar auf den ersten Blick ein wenig attraktiver, langweiliger, rendite- und risikoarmer Kapitalblock. Aber in den Core-Portfolien großer Fonds können sie trotzdem einen attraktiven Baustein darstellen – viel attraktiver als die heute oft verwendeten Staatsanleihen sicherer Länder. Mehr Variabilität der Finanzierungsformen wird möglich, wenn der Gesetzgeber vielfältigere Aktienkategorien (Konzept II) erlaubt. Hier glauben wir, dass ein solcher Ansatz zu starr ist und der Entwicklung der Finanzmärkte zu unflexibel folgen kann. Als Konzept III haben wir das vom Gesetzgeber/Regulator derzeit verfolgte Vorgehen, nämlich Bail-in-Instrumente zu nutzen, diskutiert. Dieses Konzept halten wir für weniger geeignet, weil die betroffenen Kapitalgeber Eigenkaptalrisiken tragen, dafür aber kein Stimmrecht bekommen und dazu noch den nicht marktmäßigen Entscheidungen der Aufsichtsorgane ausgesetzt sind. Das Konzept IV erfordert es, zwischen dem Innen- und dem Außenverhältnis der Gruppe der Aktionäre zu unterscheiden. Durch spezielle Regelungen im Innenverhältnis kann man die Vielfalt der Finanzierungsformen stark erhöhen und im Außenverhältnis trotzdem hartes Kernkapital bereitstellen. Und wenn man schließlich zur Finanzierung des Banken-Eigenkapitals mittels Zweckgesellschaft übergeht (Konzept V), kann man sich von allen Restriktionen befreienAdmati and Hellwig stated in 2013 that they never received a consistent answer why banks should not have 20 or 30 % core or tier one capital of their asset value. This was the motivation to begin an assessment how to realize 30 % core capital in practice. We found five groups of solutions: (i) ordinary shares, (ii) shares of several categories or classes, (iii) bail-in-capital, (iv) shares with different relations among shareholders internally and with the outer world, (v) special purpose vehicle. Financing all equity with ordinary shares (i) seems not be appealing to investors at first sight. It appears to be a large boring block of homogeneous shares. However, we believe that this would be ideal for the core portfolios of large mutual funds. The second alternative would be to define a variety of different classes of shares as they already exist in many countries. In Germany ordinary and preference shares exist. Creating a wider variety of share classes could meet investors’ preferences better. The third alternative would be the bail-in-system which supervisory bodies are trying to install. However, we believe that this solution would be the least favorable of all because investors in bail-in-capital would bear risk like shareholders but would have no voting rights and depend on the actions of supervisors. The fourth solution is based upon ordinary shares. However, subgroups of shares are created by the use of specific arrangements among shareholders internally. Thanks to the application of the waterfall principle, profits and losses can be distributed asymmetrically among shareholders to meet their preferences more closely. The fifth solution is a variant of the fourth. The bank creates a special purpose vehicle which acquires all bank shares and refinances itself with a variety of financial contracts
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Likovská, Veronika. "Přístup ke stresovému testování bank na úrovni EU." Master's thesis, Vysoká škola ekonomická v Praze, 2017. http://www.nusl.cz/ntk/nusl-359610.
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The diploma thesis deals with stress testing as a specific tool which is used by European Banking Association for banking sector financial stability assessment. The main aim is to provide reader with analysis of EBA stress testing. Both the EBA methodology and 2016 results are analyzed in second part. Due to high costs spend on stress testing process I consider practical usage from the bank point of view as very important. This issue is discussed in fourth part of this thesis.
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Москаленко, О. В. "Аналітичне забезпечення фінансової стійкості банку." Thesis, Українська академія банківської справи Національного банку України, 2013. http://essuir.sumdu.edu.ua/handle/123456789/59351.
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Банківська система забезпечує ефективний кругообіг грошової ма-
си через її консолідацію та координацію, виступаючи провідною скла-
довою економіки будь-якої країни світу. Від її якісного стану багато в
чому залежить розвиток суспільства. Вдале функціонування банківської
системи напряму залежить від фінансової стійкості кожного окремого
банку. Стійкість виступає не тільки гарантом своєчасності розрахунків,
але і чинником, що забезпечує довіру до всієї банківської системи.
Books on the topic "Financial stability of banks system"
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Das, Udaibir S. Does regulatory governance matter for financial system stability?: An empirical analysis. [Washington D.C.]: International Monetary Fund, Monetary and Financial Systems Dept., 2004.
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Federal Reserve Bank of Kansas City. Maintaining stability in a changing financial system: A symposium. [Kansas City, Mo.]: Federal Reserve Bank of Kansas City, 2009.
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Bank Directors' Seminar (10th 1994 Abuja, Federal Capital Territory, Nigeria). Restructuring the Nigerian financial system for stability and development: Papers and proceedings of the Bank Directors' Seminar, 1994. Yaba: Financial Institutions Training Centre, 1994.
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Reynoso, Alejandro. Can subsidiaries of foreign banks contribute to the stability of the forex market in emerging economies?: A look at some evidence from the Mexican financial system. Cambridge, MA: National Bureau of Economic Research, 2002.
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Reynoso, Alejandro. Can subsidiaries of foreign banks contribute to the stability of the forex market in emerging economies?: A look at some evidence from the Mexican financial system. Cambridge, MA: National Bureau of Economic Research, 2002.
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Vitor, Gaspar, Hartmann Philipp, Sleijpen Olaf, and European Central Bank, eds. The transformation of the European financial system: Second ECB Central Banking Conference, October 2002, Frankfurt, Germany. Frankfurt: European Central Bank, 2003.
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Hesse, Heiko. Cooperative banks and financial stability. Washington, D.C: International Monetary Fund, 2007.
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Sinclair, Peter. Financial Stability and Central Banks. London: Taylor & Francis Group Plc, 2004.
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Papadimitriou, Dimitri B., ed. Stability in the Financial System. London: Palgrave Macmillan UK, 1996. http://dx.doi.org/10.1007/978-1-349-24767-7.
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Carlson, Mark. Branch banking, bank competition, and financial stability. Cambridge, Mass: National Bureau of Economic Research, 2005.
Find full textBook chapters on the topic "Financial stability of banks system"
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Minsky, Hyman P., Dimitri B. Papadimitriou, Ronnie J. Phillips, and L. Randall Wray. "Community Development Banks." In Stability in the Financial System, 385–99. London: Palgrave Macmillan UK, 1996. http://dx.doi.org/10.1007/978-1-349-24767-7_16.
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Spong, Kenneth. "Narrow Banks: An Alternative Approach to Banking Reform." In Stability in the Financial System, 360–84. London: Palgrave Macmillan UK, 1996. http://dx.doi.org/10.1007/978-1-349-24767-7_15.
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Kregel, Jan. "The past and future of banks 1." In Financial Stability, Systems and Regulation, edited by Felipe C. Rezende, 3–78. 1 Edition. | New York : Routledge, 2019. | Series: Routledge critical studies in finance and stability: Routledge, 2018. http://dx.doi.org/10.4324/9781315438290-1.
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Thakor, Anjan V. "Leverage, System Risk and Financial System Health: How Do We Develop a Healthy Financial System?" In Governance, Regulation and Bank Stability, 9–19. London: Palgrave Macmillan UK, 2014. http://dx.doi.org/10.1057/9781137413543_2.
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Goodhart, C. A. E. "Price Stability and Financial Fragility (1995)." In The Central Bank and the Financial System, 263–302. London: Palgrave Macmillan UK, 1995. http://dx.doi.org/10.1057/9780230379152_14.
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Gualandri, Elisabetta. "Basel III, Pillar 2: The Role of Banks’ Internal Control Systems." In Crisis, Risk and Stability in Financial Markets, 71–95. London: Palgrave Macmillan UK, 2013. http://dx.doi.org/10.1057/9781137001832_5.
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Manger-Nestler, Cornelia. "Interaction for Monetary and Financial Stability: Central Banks as Main Actors in the Global Financial System." In European Yearbook of International Economic Law 2014, 33–65. Berlin, Heidelberg: Springer Berlin Heidelberg, 2013. http://dx.doi.org/10.1007/978-3-642-40913-4_3.
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Ferri, Giovanni, and Panu Kalmi. "Co-operative Banks: Their Contribution to the Stability and Diversity of the Financial System." In Co-operative Innovations in China and the West, 113–25. London: Palgrave Macmillan UK, 2014. http://dx.doi.org/10.1057/9781137277282_8.
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Rzayev, Ramin, Sevinj Babayeva, Rovshan Akbarov, and Emin Garibli. "Evaluation of Financial Stability of Azerbaijan Commercial Banks Using the Fuzzy Logic Methods." In Advances in Intelligent Systems and Computing, 266–74. Cham: Springer International Publishing, 2019. http://dx.doi.org/10.1007/978-3-030-35249-3_34.
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Acharya, Viral V., and Philipp Schnabl. "How Banks Played the Leverage Game." In Restoring Financial Stability, 83–100. Hoboken, NJ, USA: John Wiley & Sons, Inc., 2012. http://dx.doi.org/10.1002/9781118258163.ch2.
Full textConference papers on the topic "Financial stability of banks system"
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Titko, Jelena. "Bank Soundness in the Latvian Banking Market." In Contemporary Issues in Business, Management and Education. VGTU Technika, 2015. http://dx.doi.org/10.3846/cibme.2015.07.
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Bank soundness is crucially important for the stability of the whole financial system. The goal of the paper is to reveal the contributing factors to bank soundness in the Latvian banking market. Multifactor regression analysis was applied as a core research method. Bank soundness was proxied by Risk index calculated for Latvian banks. Profitability, liquidity and asset quality ratios of individual banks extracted from BankScope data warehouse were used as explanatory variables. Research period covers 2007–2014. The regression model was created, based on financials of Latvian banks as for 2013. The reliability of the model was tested, using the financials from 2014 reports.
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Polouček, Stanislav. "Credit Behaviour of Banks in the European Union in the Wake of Global Economic Crisis." In International Conference on Eurasian Economies. Eurasian Economists Association, 2010. http://dx.doi.org/10.36880/c01.00221.
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Recent financial crises hit many countries. The impact on Visegrad countries in credit area was not damaging. The main reason was stability and soundness of financial (banking) sectors in these countries and an adequate response of central banks as well as flexible management of commercial banks. Commercial banks, usually daughter companies of western banks, used above all domestic deposits for financing credits. This played a key role in credit area and helped to keep the financial system stable. It is important to underpin that responses to the crisis have been rather heterogeneous in central European countries and there are quite big disparities among Visegrad countries, too. In the paper developments and responses of the commercial banks to the crisis and their stability have been discussed on the basis of deposits, loans of monetary financial institutions to the non-financial sector, households, governments, lending for house purchase and credit for consumption in several EU countries. Net position of banks vis-á-vis foreign banks is taken into account, too.
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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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Yakovlev, Danila Andreevich. "THE IMPACT OF BASEL III ON THE RUSSIAN BANKING SYSTEM." In XIV Международная научно-практическая конференция «Научные междисциплинарные исследования». KDU, Moscow, 2021. http://dx.doi.org/10.31453/kdu.ru.978-5-7913-1195-5-2021-198-205.
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Currently, the issue of banking regulation is one of the most urgent due to the fact that the destabilization of this area can threaten the financial stability of the entire country. The Basel Agreements use common approaches to the capital of banks in different countries, they are formulated taking into account possible risks and the presence of systemically important banks. The article analyzes the impact of the Basel III standards on the banking system and assesses the impact of these standards on the development of the banking system.
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Rençber, Yağmur. "The Contribution of Macro Prudential Policies to Country Economies in the Financial Stability Process." In International Conference on Eurasian Economies. Eurasian Economists Association, 2021. http://dx.doi.org/10.36880/c13.02563.
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After the global financial crisis, in addition to providing price stability, which was the primary objective of the Central Banks, the goal of maintaining financial stability has taken its place among the basic monetary policies all over the world. Because, with the effect of globalization, the aim of monetary policy to provide price stability alone is not enough to ensure sustainable growth and welfare. In this sense, macro prudential policies have been developed within the framework of Basel III, the basis of which is formed by BIS. These macro prudential policies are basically defined as precautionary policy tools that limit the disruption of financial services that create serious problems in the real economy by preventing all financial risks, whether systematic or unsystematic. The definition and scope of macro prudential policies will be discussed in the first part of the article. In the second part of the study, annual data will be presented within the framework of BIS on the scope and development of macro prudential policies implemented worldwide between 2000-2020. On the other hand, it is aimed to present a detailed analysis on the macro-prudential policies implemented in Turkey, which will include Central Bank data based on its development over the years. In the last section, it is aimed to provide macro-prudential policies accompanied by data, as well as its high role in determining systemic risks, and to present optimum policy recommendations that include monetary policy, fiscal policy, micro-prudential policies, competition policy and, when applied together, support the aim of financial stability.
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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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Рамзаева, Екатерина Петровна, and Оксана Викторовна Кравченко. "THE ROLE OF DIGITALIZATION IN THE BANKING SECTOR IN INCREASING THE STABILITY OF THE FINANCIAL MARKET." In Социально-экономические и гуманитарные науки: сборник избранных статей по материалам Международной научной конференции (Санкт-Петербург, Октябрь 2021). Crossref, 2021. http://dx.doi.org/10.37539/seh299.2021.95.91.005.
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В статье рассмотрены основные аспекты развития коммерческих банков в условиях цифровизации экономики. Основной целью данной публикации является определение роли цифровизации как фактора повышения конкурентоспособности банковских систем. The article discusses the main aspects of the development of commercial banks in the digital economy. The main purpose of this publication is to determine the role of digital advertising as a strategy for the competitiveness of banking systems.
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Tatyannikov, V. A., T. V. Reshetnikova, and E. N. Prokofieva. "Impact of Financial Instruments of the Bank of Russia for the Stability of the Banking System." In International Conference on Economics, Management and Technologies 2020 (ICEMT 2020). Paris, France: Atlantis Press, 2020. http://dx.doi.org/10.2991/aebmr.k.200509.100.
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Syarifuddin, Ferry. "Governance Aspect of Foreign-Exchange Policy in Indonesia." In International Conference on Eurasian Economies. Eurasian Economists Association, 2015. http://dx.doi.org/10.36880/c06.01288.
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While most recent central bank’s foreign-exchange interventions have been directed at mitigating speculative currency pressures and reducing risks to price instability, as well as curbing volatility in capital flows, the good governance implementation plays significant role in making the foreign-exchange operations done in efficient and effective way. For Bank Indonesia, the implementation of foreign exchange policy strategy followed governance principle is essential and geared toward price and financial system stability. In practice, the objective is reached through foreign-exchange intervention policy combined with other monetary and macroprudential policy called policy mix.
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Gazioğlu, Şaziye. "Recent Monetary Policy in Turkey: Capital Flow, Reserves and Exchange Rate." In International Conference on Eurasian Economies. Eurasian Economists Association, 2011. http://dx.doi.org/10.36880/c02.00241.
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In this paper, we investigate the recent monetary policies and development of Turkish banking system during the post 2001 financial and banking crisis. We explore the effects of capital inflows and outflows to real exchange rates and the real stock market prices, before and after the financial crisis. We investigate the relationship between real exchange rate, real stock prices and capital flows. We decompose the foreign flows into real assets and liabilities, in order to investigate the possible long-term effect of inflows and outflows. Reversal of capital flow seems to create a possibility of exchange rate crisis. The Turkish Central Bank by taking lessons from this experience they formulate their recent policies accordingly.
Recent Monetary Policy mix in Turkey aims to have financial stability by increasing the reserve ratio in each component of capital flows in Turkey. The ratio increases shorter the period of the asset. The Central Bank work claims to have an effect similar to inflation targeting.
Reports on the topic "Financial stability of banks system"
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Diamond, Douglas, and Raghuram Rajan. Illiquid Banks, Financial Stability, and Interest Rate Policy. Cambridge, MA: National Bureau of Economic Research, April 2011. http://dx.doi.org/10.3386/w16994.
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Giavazzi, Francesco, and Alberto Giovannini. Central Banks and the Financial System. Cambridge, MA: National Bureau of Economic Research, July 2010. http://dx.doi.org/10.3386/w16228.
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Simantel, David. Federal Reserve lending to commercial banks; effects on financial market stability and monetary control. Portland State University Library, January 2000. http://dx.doi.org/10.15760/etd.1429.
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Khrushch, Nila, Pavlo Hryhoruk, Tetiana Hovorushchenko, Sergii Lysenko, Liudmyla Prystupa, and Liudmyla Vahanova. Assessment of bank's financial security levels based on a comprehensive index using information technology. [б. в.], October 2020. http://dx.doi.org/10.31812/123456789/4474.
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The article considers the issues of assessing the level of financial security of the bank. An analysis of existing approaches to solving this problem. A scientific and methodological approach based on the application of comprehensive assessment technology is proposed. The computational algorithm is presented in the form of a four-stage procedure, which contains the identification of the initial data set, their normalization, calculation of the partial composite indexes, and a comprehensive index of financial security. Results have interpretation. Determining the levels of financial security and the limits of the relevant integrated indicator is based on the analysis of the configuration of objects in the two-scale space of partial composite indexes, which is based on the division of the set of initial indicators by content characteristics. The results of the grouping generally coincided with the results of the banks ranking according to the rating assessment of their stability, presented in official statistics. The article presents the practical implementation of the proposed computational procedure. To automate calculations and the possibility of scenario modeling, an electronic form of a spreadsheet was created with the help of form controls. The obtained results allowed us to identify the number of levels of financial security and their boundaries.
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Andreasen, Eugenia, and Victoria Nuguer. Capital Flow Management Measures and Dollarization. Inter-American Development Bank, December 2020. http://dx.doi.org/10.18235/0002905.
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This paper studies from an empirical and theoretical perspective the systemic and bank-level effects of imposing reserve requirements (RR) in foreign currency in an economy with a heavily dollarized financial system. The paper empirically characterizes banks responses to the RR carried out by the Peruvian Central Bank since 2008 with the objective of stabilizing the financial market and meeting its policy targets. The results suggest that the RR is effective in reducing the overall level of credit in the economy and that banks response in terms of credit and deposits is very heterogeneous depending on their ex ante preference for foreign funding ratio, i.e., the ratio of deposits in dollars to total loans. Motivated by the empirical insights, the paper builds a DSGE small-open-economy model with financial frictions à la Gertler-Karadi-Kiyotaki, where bank heterogeneity and financial dollarization are introduced to evaluate the effectiveness of the differential RR in reducing financial dollarization and improving financial resilience.
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Financial Stability Report - Second Semester of 2020. Banco de la República de Colombia, March 2021. http://dx.doi.org/10.32468/rept-estab-fin.sem2.eng-2020.
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The Colombian financial system has not suffered major structural disruptions during these months of deep economic contraction and has continued to carry out its basic functions as usual, thus facilitating the economy's response to extreme conditions. This is the result of the soundness of financial institutions at the beginning of the crisis, which was reflected in high liquidity and capital adequacy indicators as well as in the timely response of various authorities. Banco de la República lowered its policy interest rates 250 points to 1.75%, the lowest level since the creation of the new independent bank in 1991, and provided ample temporary and permanent liquidity in both pesos and foreign currency. The Office of the Financial Superintendent of Colombia, in turn, adopted prudential measures to facilitate changes in the conditions for loans in effect and temporary rules for rating and loan-loss provisions. Finally, the national government expanded the transfers as well as the guaranteed credit programs for the economy. The supply of real credit (i.e. discounting inflation) in the economy is 4% higher today than it was 12 months ago with especially marked growth in the housing (5.6%) and commercial (4.7%) loan portfolios (2.3% in consumer and -0.1% in microloans), but there have been significant changes over time. During the first few months of the quarantine, firms increased their demands for liquidity sharply while consumers reduced theirs. Since then, the growth of credit to firms has tended to slow down, while consumer and housing credit has grown. The financial system has responded satisfactorily to the changes in the respective demands of each group or sector and loans may grow at high rates in 2021 if GDP grows at rates close to 4.6% as the technical staff at the Bank expects; but the forecasts are highly uncertain. After the strict quarantine implemented by authorities in Colombia, the turmoil seen in March and early April, which was evident in the sudden reddening of macroeconomic variables on the risk heatmap in Graph A,[1] and the drop in crude oil and coal prices (note the high volatility registered in market risk for the region on Graph A) the local financial markets stabilized relatively quickly. Banco de la República’s credible and sustained policy response played a decisive role in this stabilization in terms of liquidity provision through a sharp expansion of repo operations (and changes in amounts, terms, counterparties, and eligible instruments), the purchases of public and private debt, and the reduction in bank reserve requirements. In this respect, there is now abundant aggregate liquidity and significant improvements in the liquidity position of investment funds. In this context, the main vulnerability factor for financial stability in the short term is still the high degree of uncertainty surrounding loan quality. First, the future trajectory of the number of people infected and deceased by the virus and the possible need for additional health measures is uncertain. For that reason, there is also uncertainty about the path for economic recovery in the short and medium term. Second, the degree to which the current shock will be reflected in loan quality once the risk materializes in banks’ financial statements is uncertain. For the time being, the credit risk heatmap (Graph B) indicates that non-performing and risky loans have not shown major deterioration, but past experience indicates that periods of sharp economic slowdown eventually tend to coincide with rises in non-performing loans: the calculations included in this report suggest that the impact of the recession on credit quality could be significant in the short term. This is particularly worrying since the profitability of credit establishments has been declining in recent months, and this could affect their ability to provide credit to the real sector of the economy. In order to adopt a forward-looking approach to this vulnerability, this Report presents several stress tests that evaluate the resilience of the liquidity and capital adequacy of credit institutions and investment funds in the event of a hypothetical scenario that seeks to simulate an extreme version of current macroeconomic conditions. The results suggest that even though there could be strong impacts on the credit institutions’ volume of credit and profitability under such scenarios, aggregate indicators of total and core capital adequacy will probably remain at levels that are above the regulatory limits over the horizon of a year. At the same time, the exercises highlight the high capacity of the system's liquidity to face adverse scenarios. In compliance with its constitutional objectives and in coordination with the financial system's security network, Banco de la República will continue to closely monitor the outlook for financial stability at this juncture and will make the decisions that are necessary to ensure the proper functioning of the economy, facilitate the flow of sufficient credit and liquidity resources, and further the smooth operation of the payment systems. Juan José Echavarría Governor
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Financial Stability Report - First Semester of 2020. Banco de la República de Colombia, March 2021. http://dx.doi.org/10.32468/rept-estab-fin.1sem.eng-2020.
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In the face of the multiple shocks currently experienced by the domestic economy (resulting from the drop in oil prices and the appearance of a global pandemic), the Colombian financial system is in a position of sound solvency and adequate liquidity. At the same time, credit quality has been recovering and the exposure of credit institutions to firms with currency mismatches has declined relative to previous episodes of sudden drops in oil prices. These trends are reflected in the recent fading of red and blue tonalities in the performance and credit risk segments of the risk heatmaps in Graphs A and B.1 Naturally, the sudden, unanticipated change in macroeconomic conditions has caused the appearance of vulnerabilities for short-term financial stability. These vulnerabilities require close and continuous monitoring on the part of economic authorities. The main vulnerability is the response of credit and credit risk to a potential, temporarily extreme macroeconomic situation in the context of: (i) recently increased exposure of some banks to household sector, and (ii) reductions in net interest income that have led to a decline in the profitability of the banking business in the recent past. Furthermore, as a consequence of greater uncertainty and risk aversion, occasional problems may arise in the distribution of liquidity between agents and financial markets. With regards to local markets, spikes have been registered in the volatility of public and private fixed income securities in recent weeks that are consistent with the behavior of the international markets and have had a significant impact on the liquidity of those instruments (red portions in the most recent past of some market risk items on the map in Graph A). In order to adopt a forward-looking approach to those vulnerabilities, this Report presents a stress test that evaluates the resilience of credit institutions in the event of a hypothetical scenario thatseeks to simulate an extreme version of current macroeconomic conditions. The scenario assumes a hypothetical negative growth that is temporarily strong but recovers going into the middle of the coming year and has extreme effects on credit quality. The results suggest that credit institutions have the ability to withstand a significant deterioration in economic conditions in the short term. Even though there could be a strong impact on credit, liquidity, and profitability under the scenario being considered, aggregate capital ratios would probably remain at above their regulatory limits over the horizon of a year. In this context, the recent measures taken by both Banco de la República and the Office of the Financial Superintendent of Colombia that are intended to help preserve the financial stability of the Colombian economy become highly relevant. In compliance with its constitutional objectives and in coordination with the financial system’s security network, Banco de la República will continue to closely monitor the outlook for financial stability at this juncture and will make the decisions that are necessary to ensure the proper functioning of the economy, facilitate the flow of sufficient credit and liquidity resources, and further the smooth functioning of the payment system. Juan José Echavarría Governor
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Rethinking the global microscope for financial inclusion: 2021 key findings report. Inter-American Development Bank, December 2021. http://dx.doi.org/10.18235/0003957.
Full textAbstract:
The Global Microscope is a benchmarking index that has assessed the enabling environment for financial inclusion across 55 countries since 2007. This year, the Economist Impact team conducted an assessment of the index's existing data (2007-20) to understand the relationship between key financial inclusion enablers (i.e. policies, regulation and infrastructure) and financial inclusion outcomes. This report discusses the policies that have driven change, the priorities to keep in mind for the future, the tools that will help achieve these goals and the unique ways these priorities and tools apply across different parts of the financial system. Below we summarize our key findings: - A higher overall Global Microscope score showed a positive relationship with the number of accounts with formal financial institutions and mobile money providers among the population. - The Infrastructure domain had the strongest relation to account ownership, documenting the positive effects on inclusion from policies facilitating the expansion of payment systems, strong digital identification regimes, widespread connectivity, and robust credit information systems. The other four domains are Government and Policy Support, Stability and Integrity, Products and Outlets, and Consumer Protection. - Consumer Protection was also positively linked to the prevalence of bank accounts, underscoring the importance of measures to ensure that financial consumers are treated fairly across the range of distribution channels and products. - The magnitude and quality of regulatory implementation significantly impacts financial inclusion. Larger regulatory improvements were associated with increasingly larger gains in account ownership. * The opinions expressed in this work are those of the authors and do not necessarily reflect the views of the IDB, its Board of Directors or the countries they represent, nor of the MIF Donors Committee or the countries it represents.
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Payment Systems Report - June of 2020. Banco de la República de Colombia, February 2021. http://dx.doi.org/10.32468/rept-sist-pag.eng.2020.
Full textAbstract:
With its annual Payment Systems Report, Banco de la República offers a complete overview of the infrastructure of Colombia’s financial market. Each edition of the report has four objectives: 1) to publicize a consolidated account of how the figures for payment infrastructures have evolved with respect to both financial assets and goods and services; 2) to summarize the issues that are being debated internationally and are of interest to the industry that provides payment clearing and settlement services; 3) to offer the public an explanation of the ideas and concepts behind retail-value payment processes and the trends in retail payments within the circuit of individuals and companies; and 4) to familiarize the public, the industry, and all other financial authorities with the methodological progress that has been achieved through applied research to analyze the stability of payment systems. This edition introduces changes that have been made in the structure of the report, which are intended to make it easier and more enjoyable to read. The initial sections in this edition, which is the eleventh, contain an analysis of the statistics on the evolution and performance of financial market infrastructures. These are understood as multilateral systems wherein the participating entities clear, settle and register payments, securities, derivatives and other financial assets. The large-value payment system (CUD) saw less momentum in 2019 than it did the year before, mainly because of a decline in the amount of secondary market operations for government bonds, both in cash and sell/buy-backs, which was offset by an increase in operations with collective investment funds (CIFs) and Banco de la República’s operations to increase the money supply (repos). Consequently, the Central Securities Depository (DCV) registered less activity, due to fewer negotiations on the secondary market for public debt. This trend was also observed in the private debt market, as evidenced by the decline in the average amounts cleared and settled through the Central Securities Depository of Colombia (Deceval) and in the value of operations with financial derivatives cleared and settled through the Central Counterparty of Colombia (CRCC). Section three offers a comprehensive look at the market for retail-value payments; that is, transactions made by individuals and companies. During 2019, electronic transfers increased, and payments made with debit and credit cards continued to trend upward. In contrast, payments by check continued to decline, although the average daily value was almost four times the value of debit and credit card purchases. The same section contains the results of the fourth survey on how the use of retail-value payment instruments (for usual payments) is perceived. Conducted at the end of 2019, the main purpose of the survey was to identify the availability of these payment instruments, the public’s preferences for them, and their acceptance by merchants. It is worth noting that cash continues to be the instrument most used by the population for usual monthly payments (88.1% with respect to the number of payments and 87.4% in value). However, its use in terms of value has declined, having registered 89.6% in the 2017 survey. In turn, the level of acceptance by merchants of payment instruments other than cash is 14.1% for debit cards, 13.4% for credit cards, 8.2% for electronic transfers of funds and 1.8% for checks. The main reason for the use of cash is the absence of point-of-sale terminals at commercial establishments. Considering that the retail-payment market worldwide is influenced by constant innovation in payment services, by the modernization of clearing and settlement systems, and by the efforts of regulators to redefine the payment industry for the future, these trends are addressed in the fourth section of the report. There is an account of how innovations in technology-based financial payment services have developed, and it shows that while this topic is not new, it has evolved, particularly in terms of origin and vocation. One of the boxes that accompanies the fourth section deals with certain payment aspects of open banking and international experience in that regard, which has given the customers of a financial entity sovereignty over their data, allowing them, under transparent and secure conditions, to authorize a third party, other than their financial entity, to request information on their accounts with financial entities, thus enabling the third party to offer various financial services or initiate payments. Innovation also has sparked interest among international organizations, central banks, and research groups concerning the creation of digital currencies. Accordingly, the last box deals with the recent international debate on issuance of central bank digital currencies. In terms of the methodological progress that has been made, it is important to underscore the work that has been done on the role of central counterparties (CCPs) in mitigating liquidity and counterparty risk. The fifth section of the report offers an explanation of a document in which the work of CCPs in financial markets is analyzed and corroborated through an exercise that was built around the Central Counterparty of Colombia (CRCC) in the Colombian market for non-delivery peso-dollar forward exchange transactions, using the methodology of network topology. The results provide empirical support for the different theoretical models developed to study the effect of CCPs on financial markets. Finally, the results of research using artificial intelligence with information from the large-value payment system are presented. Based on the payments made among financial institutions in the large-value payment system, a methodology is used to compare different payment networks, as well as to determine which ones can be considered abnormal. The methodology shows signs that indicate when a network moves away from its historical trend, so it can be studied and monitored. A methodology similar to the one applied to classify images is used to make this comparison, the idea being to extract the main characteristics of the networks and use them as a parameter for comparison. Juan José Echavarría Governor
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Financial Stability Report - September 2015. Banco de la República, August 2021. http://dx.doi.org/10.32468/rept-estab-fin.sem2.eng-2015.
Full textAbstract:
From this edition, the Financial Stability Report will have fewer pages with some changes in its structure. The purpose of this change is to present the most relevant facts of the financial system and their implications on the financial stability. This allows displaying the analysis more concisely and clearly, as it will focus on describing the evolution of the variables that have the greatest impact on the performance of the financial system, for estimating then the effect of a possible materialization of these risks on the financial health of the institutions. The changing dynamics of the risks faced by the financial system implies that the content of the Report adopts this new structure; therefore, some analyses and series that were regularly included will not necessarily be in each issue. However, the statistical annex that accompanies the publication of the Report will continue to present the series that were traditionally included, regardless of whether or not they are part of the content of the Report. In this way we expect to contribute in a more comprehensive way to the study and analysis of the stability of the Colombian financial system. Executive Summary During the first half of 2015, the main advanced economies showed a slow recovery on their growth, while emerging economies continued with their slowdown trend. Domestic demand in the United States allowed for stabilization on its average growth for the first half of the year, while other developed economies such as the United Kingdom, the euro zone, and Japan showed a more gradual recovery. On the other hand, the Chinese economy exhibited the lowest growth rate in five years, which has resulted in lower global dynamism. This has led to a fall in prices of the main export goods of some Latin American economies, especially oil, whose price has also responded to a larger global supply. The decrease in the terms of trade of the Latin American economies has had an impact on national income, domestic demand, and growth. This scenario has been reflected in increases in sovereign risk spreads, devaluations of stock indices, and depreciation of the exchange rates of most countries in the region. For Colombia, the fall in oil prices has also led to a decline in the terms of trade, resulting in pressure on the dynamics of national income. Additionally, the lower demand for exports helped to widen the current account deficit. This affected the prospects and economic growth of the country during the first half of 2015. This economic context could have an impact on the payment capacity of debtors and on the valuation of investments, affecting the soundness of the financial system. However, the results of the analysis featured in this edition of the Report show that, facing an adverse scenario, the vulnerability of the financial system in terms of solvency and liquidity is low. The analysis of the current situation of credit institutions (CI) shows that growth of the gross loan portfolio remained relatively stable, as well as the loan portfolio quality indicators, except for microcredit, which showed a decrease in these indicators. Regarding liabilities, traditional sources of funding have lost market share versus non-traditional ones (bonds, money market operations and in the interbank market), but still represent more than 70%. Moreover, the solvency indicator remained relatively stable. As for non-banking financial institutions (NBFI), the slowdown observed during the first six months of 2015 in the real annual growth of the assets total, both in the proprietary and third party position, stands out. The analysis of the main debtors of the financial system shows that indebtedness of the private corporate sector has increased in the last year, mostly driven by an increase in the debt balance with domestic and foreign financial institutions. However, the increase in this latter source of funding has been influenced by the depreciation of the Colombian peso vis-à-vis the US dollar since mid-2014. The financial indicators reflected a favorable behavior with respect to the historical average, except for the profitability indicators; although they were below the average, they have shown improvement in the last year. By economic sector, it is noted that the firms focused on farming, mining and transportation activities recorded the highest levels of risk perception by credit institutions, and the largest increases in default levels with respect to those observed in December 2014. Meanwhile, households have shown an increase in the financial burden, mainly due to growth in the consumer loan portfolio, in which the modalities of credit card, payroll deductible loan, revolving and vehicle loan are those that have reported greater increases in risk indicators. On the side of investments that could be affected by the devaluation in the portfolio of credit institutions and non-banking financial institutions (NBFI), the largest share of public debt securities, variable-yield securities and domestic private debt securities is highlighted. The value of these portfolios fell between February and August 2015, driven by the devaluation in the market of these investments throughout the year. Furthermore, the analysis of the liquidity risk indicator (LRI) shows that all intermediaries showed adequate levels and exhibit a stable behavior. Likewise, the fragility analysis of the financial system associated with the increase in the use of non-traditional funding sources does not evidence a greater exposure to liquidity risk. Stress tests assess the impact of the possible joint materialization of credit and market risks, and reveal that neither the aggregate solvency indicator, nor the liquidity risk indicator (LRI) of the system would be below the established legal limits. The entities that result more individually affected have a low share in the total assets of the credit institutions; therefore, a risk to the financial system as a whole is not observed. José Darío Uribe Governor