Suchergebnisse

AbstractChina faces a number of important financial-stability risks. A persistent feature of the Chinese banking sector is the rapid formation of non-performing loans (NPLs) during each business cycle. Moreover, lending restrictions and interest-rate caps ("financial repression") have, in part, given rise to an ever-expanding shadow-banking sector. The article highlights five cardinal sins within the Chinese financial system: (1) bad lending practices by the regulated sector, (2) lax governance, (3) a shadow-banking system that is dominated by short-term claims with no liquidity backstop, (4) stark lack of transparency in the shadow sector, and (5) very high levels of interconnectedness between the shadow and the regulated sector. The article suggests that some of these problems will be alleviated through a regulatory big bang that would abolish the current silo approach to financial regulation streamlining financial stability and conduct/consumer-protection supervision. Furthermore, we recommend the introduction of a binding and all-encompassing leverage ratio that will require banks to hold much higher capital buffers as a means to boost bank resilience, reduce NPLs, and battle interconnectedness with the shadow sector.

This paper develops a conceptual framework to understand the importance of the most relevant macroeconomic factors that may affect the level of non-performing loans (NPLs) in conventional banks of Pakistan. The conceptual framework asserts that the energy gap, the bank credit to private sector with corruption and political stability should also be analyzed along with GDP, lending interest rate and the unemployment rate to encapsulate the overall impact of systematic risk in the changes in the level of conventional banking NPLs. In developing countries, the gap between the demand and supply of energy (energy gap), corruption and political stability have far reaching effect on the overall economy through hampered business activities. When bank credit creation is damaged due to pile up of the bad loans, better regulations and policy making can rescue the banking system and economy. The rationale behind considering these variables in the proposed model is to provide better insights of influential external factors and to devise better policies and regulations to cope up with these for the stability of the banking sector and economy.

Abstract
After the financial deregulation that marked the last two decades of the 20th century, banks lost their monopolistic position and faced a number of competitors on the financial market. Fighting for their market share, banks began to grant loans under more relaxed terms. This policy increased the share of non-performing loans (NPLs) and ultimately increased credit risk in the banking sector. The share of non-performing loans in total loans indicates the quality of bank assets, so their analysis and trend are an important parameter in assessing the stability of the banking and overall financial sector. The paper aims to analyze the NPL trend in the banking sector of the Republic of Serbia in the period from 2010-2019 and, thus, identify determinants that significantly affect the extent of credit risk. The research uses vector autoregressive model (VAR), and the results confirm that gross domestic product, inflation, unemployment, return on total assets (ROA), cost efficiency, capital adequacy ratio, and income diversification affect NPLs. The analysis shows that the level of non-performing loans depends on a number of factors, both macroeconomic and bank-specific, which regulatory authorities must keep in mind when assessing the credit risk that banks face.

International financial crisis of the last decade had a negative influence in almost all banking system of the world. The difficulties on managing problems brought into consideration that the balance of risk exposure versus return is very difficult to be controlled. Managers of the businesses are working hard to meet liquidity needs and to continue their business which is greatly supported by financial intermediaries. On the other side, banks and their regulators are following risk problems with increased management measures, as stability of financial system was undermined seriously from financial crisis and structural problems in all countries. There are several risks that all kind of businesses are exposed, but in this paper we are focused to credit risk in the banking system, which is counted as 60-70% of total risk exposure. Recently the Albanian economy is having low growth with the banking system suffering from the increase of non- performing loans (NPL). This reflects liquidity and performance problems for businesses with increased risk on financial stability. This paper deals with proof of macroeconomic factors that influence NPL rate for Albania. Verification of these factors can support the proper policies that reduce the NPL level. The analysis includes the comparison of Albanian and Italian data on the trends and factors that affect NPL rate. Albanian Central Bank and government are trying to apply prudent regulations based on analysis of factors driving bad performance. The analysis and findings of this paper is based on existing literature that is applied with a regression model. DOI:10.5901/mjss.2015.v6n1p391

Purpose
– This paper aims to understand Japan's financial regulatory responses after the global financial crisis and recession. Japan's post-crisis reactions show two seemingly opposing trends: collaboration with international organizations to strengthen the regulation to maintain financial stability, and regulatory forbearance for the banks with troubled small and medium enterprise [SME] borrowers. The paper evaluates the responses by the Japanese financial regulators in five areas (Basel III, stress tests, over-the-counter [OTC] derivatives regulation, recovery and resolution planning and banking policy for SME lending) and concludes that the effectiveness of the new regulations for financial stability critically depends on the willingness of the regulators to use the new tools.


Design/methodology/approach
– This report evaluates the post-crisis responses by the Japanese financial authorities in five dimensions (Basel III, stress tests, OTC derivatives regulations, recovery and resolution planning and bank supervision).


Findings
– The effectiveness of the new regulations for financial stability critically depends on the willingness of the regulators to use the new tools.


Originality/value
– The paper is the first attempt to evaluate the financial regulatory trends in Japan after the global financial crisis.

PurposeThe purpose of this paper is to empirically analyse the cross‐countries determinants of nonperforming loans (NPLs), the potential impact of supervisory devices, and institutional environment on credit risk exposure.Design/methodology/approachThe paper employs aggregate banking, financial, economic, and legal environment data for a panel of 59 countries over the period 2002‐2006. It develops a comprehensive model to explain differences in the level of NPLs between countries. To assess the role of regulatory supervision on credit risk, the paper uses several interactions between institutional features and regulatory devices.FindingsThe empirical results indicate that higher capital adequacy ratio (CAR) and prudent provisioning policy seems to reduce the level of problem loans. The paper also reports a desirable impact of private ownership, foreign participation, and bank concentration. However, the findings do not support the view that market discipline leads to better economic outcomes. All regulatory devices do not significantly reduce problem loans for countries with weak institutions, corrupt environment, and little democracy. Finally, the paper shows that the effective way to reduce bad loans is through strengthening the legal system and increasing transparency and democracy, rather than focusing on regulatory and supervisory issues.Practical implicationsFirst, higher CARs results in less credit exposures. Second, international regulators should continue their efforts to enhance financial development. The results suggest that foreign participation plays an important role in reducing credit exposure of financial institutions. However, in developed countries, foreign entry led to more problem loans. Finally, to reduce credit risk exposure in countries with weak institutions, the effective way to do it is through enhancing the legal system, strengthening institutions, and increasing transparency and democracy.Originality/valueThe paper contributes to the literature on banking regulation and supervision. It examines aggregated data which best reflect the level of NPL of the banks in a country as opposed to individual data included in databases that suffer from the problem of representativeness. It considers the impact of regulatory variables after controlling for bank industry factors that alter primarily problem loans. Finally, the paper examines the effectiveness of regulation through the inclusion of institutional factors.

Among various indicators of financial stability banks non-performing loan assumes critical importance since it reflects on the asset quality credit risk and efficiency in the allocation of resources to productive sectors. Non-performing loans has become a concerning issue for banking sector in recent times. Thusly this study examines the perception of Somali bankers regarding the determinants of NPLs of Somali banks using primary information collected from 180 bankers working in twelve Somali banks. The researcher applied multiple regression and correlation matrix analysis aiming to find out the factors that may have an effect on the non-performing loans of Somali banks. The bankers perceive that the selected variables of this study have an effect on the NPLs of Somali banks. The empirical results of the regression and correlation analysis established strong positive and significant relationship between NPLs of Somali banks and the three variables of unemployment rate interest rate and inflation rate. The findings also reveal that GDP has a weak but positive and significant relationship with the NPLs whilst credit monitoring political interference and bankers incompetence established a weak positive and insignificant relationship with the NPLs of Somali banks. The study suggests that the bank management should increase their expenditure for training and development programmes which would enhance the loan quality monitoring and debt collection management of the bankers. It is also suggested to the government and regulatory bodies that the countrys unemployment rate should be kept low extra care should be given to inflation rate and interest rate fluctuations political interference should be limited or reduced to zero and the countrys banking sector need to be revitalised by increasing the commercial banking services capacity of the Central Bank.

1. Challenges for Central Banking: An Introduction -- 2. Financial Stability, Regulation, Supervision, and Modern Central Banking -- 3. Regulation and the Evolution of the Financial Services Industry -- 4. Regulatory Capital and the Supervision of Financial Institutions: Some Basic Distinctions and Policy Choices -- 5. Central Bank Supervision in the Digital Age -- 6. Central Banks and Supervision with an Application to the EMU -- 7. Clearing and Settling Financial Transactions, Circa 2000 -- 8. Central Banks and the Payment System -- 9. Central Banking and the Economics of Information -- 10. Designing a Monetary Authority -- 11. Maintaining Low Inflation: Rationale and Reality -- 12. Monetary Transmission Lags and the Formulation of the Policy Decision on Interest Rates -- 13. Shrinking Money and the Effectiveness of Monetary Policy -- 14. Bank Credit versus Nonbank Credit and the Supply of Liquidity by the Central Bank.

Minsky's institutional analysis of the development of the economy and how financial regulation fits in it -- Recent proposals of change in financial regulation inspired by Minsky -- Basel III : the revised capital requirements, the leverage ratio, and total loss absorbing capacity -- Two additional regulatory metrics : the liquidity coverage ratio and the net stable funding ratio -- Main consequences of the interaction between new regulatory rules (risk weighted capital requirements, leverage ratio, liquidity ratio, net stable funding ratio) and the new mandatory resolution regime for banks -- Financial fragility in the European crisis : three episodes -- Deleveraging in European banking and financial stability 2010-13 -- Italy's banking crisis -- Index.

Resolving regimes of non-performing loans (NPLs) have raised concerns among supervisory authorities and banking regulators. NPLs play a central role in the linkages between poor lending and credit risks. This has implications for the management of asset quality and for the stability of the firm and the financial sector. A high stock of NPLs is undesirable to investors which can lead a decrease in the stock price, profitability loss and potentially to a distressed scenario. In the aftermath of the global crisis, the early resolution of NPLs requires coordinated insolvency proceedings and harmonised restructuring tools. The EU legislation introduced minimum loss coverage layers of capital for NPLs to address newly formed losses. Specifically, the supervisory toolkit implemented in the European Banking Union aims to improve the classification of loan quality and establish common practices to monitor non-performing exposures. This article argues that there is a need to enhance private arrangements within the resolution of distressed debts – alternative to public support such as asset management companies and securitisation mechanisms – which in turn would make it more manageable to reduce the NPL on banks' balance sheet.