The research investigates the determinants and impact of bank credit on output in the food crops and fisheries sub sectors; whether or not there is a significant difference in the risk on bank credit and output in the two sub sectors, and whether or not there is a relationship between risk obtaining in the two sub sectors. The results indicate the positive and significant influence of bank credit on food crops output, but a positive and insignificant influence on fisheries output, which unequivocally vindicates government intervention in credit disbursement to agriculture. The influence of banking deregulation on bank credit supply is shown to differ between the two sub sectors, for while it registers expected positive sign in the fisheries sub sector, it produces negative and insignificant influence in the food crops sub sector. Bank reserve requirements has a negative influence on bank credit extended to the fisheries sub sector, while it induces a positive and significant influence in the food crops sub sector. The 1997 economic crisis causes an autonomous contraction of bank credit to the food crops sub sector, but accentuates it in the fisheries sub sector. The food crops and fisheries sub sectors register significant influence of rate of interest rate on bank credit on bank credit supply. Obstacles to credit disbursement to the two sub sectors are presented, followed by policy implications deemed necessary to improve the credit situation in the agricultural sector.
Credit risk or default risk involves inability or unwillingness of a customer or counterparty to meet commitments in relation to lending, trading, hedging, settlement and other financial transactions. The Credit Risk is generally made up of transaction risk or default risk and portfolio risk. The portfolio risk in turn comprises intrinsic and concentration risk. The credit risk of a bank's portfolio depends on both external and internal factors. The external factors are the state of the economy, wide swings in commodity/equity prices, foreign exchange rates and interest rates, trade restrictions, economic sanctions, Government policies, etc. The internal factors are deficiencies in loan policies/administration, absence of prudential credit concentration limits, inadequately defined lending limits for Loan Officers/Credit Committees, deficiencies in appraisal of borrowers' financial position, excessive dependence on collaterals and inadequate risk pricing, absence of loan review mechanism and post sanction surveillance, etc. This paper points out the measurement, hedging and monitoring of the credit risk.
This paper examines how credit derivatives have changed the construction of an efficient portfolio. Credit derivatives provide a way of gaining exposure to credit risk alone, to the exclusion of interest rate risk. They also permit a relatively easy use of leverage. We examine two types of allocation: the first is a conventional investment in government bonds, corporate bonds (investment grade and high yield) and equities in the United States; the second replaces corporate bonds with credit derivatives, which may also be leveraged. We look at past data on returns, risk and correlations of these investments, and we show that the credit risk component seems to have a strongly diversifying effect relative to the traditional asset classes, i.e. equities and government bonds. We then compute efficient frontiers within a standard mean-variance framework. The results show the advantages of credit derivatives for portfolio diversification, and the usefulness of leveraging this investment to extend the limits of the efficient frontier. ; info:eu-repo/semantics/published
This report is based on the internship activities performed at Umbelino Monteiro SA, to finish my International Business Master. The internship allowed me to have contact with the business reality. I have developed tasks in a period of approximately six months in the financial and commercial areas. All the activities and procedures used will be explained is this report. One of the activities that consumes most of the time and in which I tried to support the company, is related with credit management. Credit management is not a new theme, but is still relevant to each firm as it allows to reduce their risk. At Umbelino this relevance is not an exception, due to the higher number of customers from different countries. With the crisis of 2007/2008, Umbelino, like many firms, began to experience great difficulties regarding the receipt of customer's credit. Several firms went bankrupt, leaving other companies in trouble and creating a snowball, which resulted in credit problems in most companies. For this reason, credit management theme is addressed in this paper. Moreover, the specific case of the company in question is analyzed, and some suggestions for improvement are presented. Umbelino uses monthly analyzes and credit insurance, in order to minimize the risk assumed. Although the firm lacks sufficient human resources to devote more to this issue and to use all the tools that the company already has available.
In this paper we investigate the impact of rapid credit growth on ex ante credit risk. We present micro-econometric evidence of the positive relationship between rapid credit growth and deterioration in lending portfolios: Loans granted during boom period
Added t.-p.: Ueber die natur und die ursachen des ȯffentlichen credits, staatsanlehen, die tilgung der ȯffentlichen schulden, den handel mit staatspapieren und die wechselwirkung zwischen den creditoperationen der staaten und dem ȯkonomischen und politischen zustande der lȧnder. ; Mode of access: Internet.
In this chapter, author Paul Spicker interrogates the government's introduction of Universal Credit, a controversial scheme designed to unify various means-tested benefits for people of working age. The scheme brings together six existing benefits: income-related Jobseeker's Allowance and Employment and Support Allowance, Working Tax Credit and Child Tax Credit, Housing Benefit and Income Support. Spicker argues that analysts of Universal Credit must drill down to the detail of the scheme and the benefits that it covers. He sees defects in 'the concept and design' of the Universal Credit agenda, as there were in previous grand schemes in social policy history. He also sees potential for the benefit system to break down if it cannot prove to be practically viable. Governments, Spicker contends, cannot easily meet the multiple objectives that must be typically met in 'simple' and 'unified' benefit programmes.
This paper studies the relation between the credit-to-GDP ratio and macroeconomic trends. We estimate a long run equation on a sample of EU countries; our findings suggest that the macroeconomic factors with which the credit ratio associates most strongly are economic development, the investment share in GDP, and inflation. We then obtain projections for past and future trends. First, we study the evolution of the credit ratio in the past. We find that most of the increase starting in 1985 is associated with economic development and falling inflation, while the decrease of investment may have slowed down this trend. Second, we offer a forward-looking estimate of the structural credit ratio, defined as the long run, or sustainable, component. We offer band estimates based on two alternative assumptions on future economic outcomes, which can be interpreted as a structural and a cyclical view of current macroeconomic dynamics. Estimates of structural credit ratios based on this method are useful to policy makers having to decide on the activation of the countercyclical capital buffer, especially when assessing the sustainability of credit growth.
v.1.The reconstruction finance corportation.--v.2.Consumer credit controls.--v.3.Guaranty of bank loans by Federal Reserve banks. ; Mode of access: Internet.
Agriculture sector is playing a significant role in the development of rural areas in our country. Agriculture is the main occupation and still is a strong means of livelihood and there is necessity for ensuring sustainability in these livelihoods. Agriculture and allied sectors contribute nearly 22% of GDP of India and further 9.93% contribution in total export of India. Rural indebtedness, agricultural distress, dependency on private money lenders, and farmers suicides are common features surrounding Indian Agriculture. For more than 100 years RBI and Central Government have been making efforts to enhance institutional credit in rural areas particularly to assist agricultural operations. But economic survey (GOI) 2010 shows that out of 27 public sector banks, only 14 sector banks achieved the agricultural credit target of 18% agricultural credit and in case of private sector banks only 8 achieved the target of 18% for lending to agriculture in 2009. In order to increase productivity a huge investment on agriculture is essential. Farmers need more capital in order to buy qualitative seeds, agricultural implements, power tiller, adoption of latest technology. But Indian agriculturist is not only capital scared but also faces natural vagaries in addition to unfavorable voltaile marketing conditions. Hence he needs credit for the agricultural expansion programmes. Credit enables the agriculturist to extend control over his ownership of resources. The much spoken debt relief and waiver only touched the rich agriculturist leaving small and marginal farmers not caring. Further debt waiver and relief a most ambitious programme did not succeeded as expected and programme could not be carried out successfully because of faulty implementation.
Agriculture sector is playing a significant role in the development of rural areas in our country. Agriculture is the main occupation and still is a strong means of livelihood and there is necessity for ensuring sustainability in these livelihoods. Agriculture and allied sectors contribute nearly 22% of GDP of India and further 9.93% contribution in total export of India. Rural indebtedness, agricultural distress, dependency on private money lenders, and farmers suicides are common features surrounding Indian Agriculture. For more than 100 years RBI and Central Government have been making efforts to enhance institutional credit in rural areas particularly to assist agricultural operations. But economic survey (GOI) 2010 shows that out of 27 public sector banks, only 14 sector banks achieved the agricultural credit target of 18% agricultural credit and in case of private sector banks only 8 achieved the target of 18% for lending to agriculture in 2009. In order to increase productivity a huge investment on agriculture is essential. Farmers need more capital in order to buy qualitative seeds, agricultural implements, power tiller, adoption of latest technology. But Indian agriculturist is not only capital scared but also faces natural vagaries in addition to unfavorable voltaile marketing conditions. Hence he needs credit for the agricultural expansion programmes. Credit enables the agriculturist to extend control over his ownership of resources. The much spoken debt relief and waiver only touched the rich agriculturist leaving small and marginal farmers not caring. Further debt waiver and relief a most ambitious programme did not succeeded as expected and programme could not be carried out successfully because of faulty implementation.
The sales of goods and services are exposed to a significant number of risks, many of which are not within the control of the supplier. The highest of these risks and one that can have a catastrophic impact on the viability of a supplier, is the failure of a buyer to pay for the goods or services it has purchased. In today's challenged domestic and global economic climate, recognizing and managing future risks has become a priority for businesses. Losses attributed to non-payment of a trade debt or bankruptcy can and do occur regularly. Default rates vary by industry and country from year-to-year, and no industry or company is immune from trade credit risk. The essential value of trade credit insurance is that it provides not only peace of mind to the supplier, who can be assured that their trade is protected, but also valuable market intelligence on the financial viability of the supplier's customers, and, in the case of buyers in foreign countries, on any trading risks peculiar to those countries. As well as providing an insurance policy that matches the client's patterns of business, trade credit insurers will establish the level of cover that can reasonably be provided to the supplier for trade with each individual buyer, by analyzing the buyer's financial status, profitability, liquidity, size, sector, payment behavior and location.
This paper describes sovereign credit ratings in emerging markets both for a specific year and over time, using quantitative explanatory variables. It turns out that rating adjustments have been worse than what economic fundamentals justify for some countries and also more frequently altered, questioning the long-term properties of sovereign ratings. The results support the view that rating changes during the Asian crisis have been procyclical rather than counter-cyclical. Omitted variables, such as soundness of banking sector, social and political factors, can be one reason for this misalignment but cannot explain all.
Life Cycles of both products and services significantly consume renewable and non-renewable resources across a worldwide scale. Thus, eliciting an enormous environmental impact, that is known to disproportionately instigate crises into the socio-economic and political domains of our civilization. Therefore, Creation of Shared Value and Corporate Social Responsibility (CSR) have been considered by Policy makers, Public and Private Institutions. In addition to Corporate Philanthropy, CSR practices also encompass a wide spectrum of activities, including Stakeholder safety/welfare, designing sustainable products and ecological restoration to name a few which are ascertained to capital and knowledge intensive in nature. Therefore, this paper primarily structures the scope of CSR and proposes a mechanism for trading Corporate Social Responsibility credits in order to incentivize stakeholder centered business practices. Furthermore, the CSR credits trading methodology would entail similar mechanisms used by its remotely successful predecessors namely, tax incentives, tradable credits/certificates and flexible mechanisms for implementing sustainable projects. The CSR credits trading methodology is envisioned to entail a more holistic approach towards overall Sustainability when compared to Carbon Offsets/Renewable Energy Certificates which are more focused towards reducing the environmental footprint. ; The author acknowledges the contribution of MIT Portugal Program, University of Minho and Fundação para a Ciência e Tecnologia (FCT), Portugal (Foundation Of Science and Technology, Portugal) for the scholarship grant SFRH / BD / 33794 / ...
Um Unternehmensanleihen korrekt bewerten zu können, ist die Bestimmung des Credit Spreads von großer Bedeutung. Der Credit Spread stellt eine Prämie dar, mit welcher das höhere eingegangene Risiko bei Unternehmensanleihen kompensiert wird. Die Risiken von Unternehmensanleihen bestimmen den Credit Spread in dessen Höhe und setzen sich aus Zinsrisiko, Spreadrisiko, Liquiditätsrisiko und insbesondere dem Kreditrisiko zusammensetzen. In der vorliegenden Masterarbeit werden diese Risiken und deren Einfluss auf den Credit Spread untersucht. Dabei spielt auch die Wahl des risikolosen Zinssatzes eine wesentliche Rolle. Dieser kann über unterschiedliche Produkte am Kapitalmarkt, wie Staatsanleihen oder Zinsswaps, ermittelt werden, wobei Unterschiede in der Höhe des risikolosen Zinssatzes auftreten. Das Kreditrisiko, welches sich in Migrations- und Ausfallsrisiko unterteilt, hat maßgeblichen Einfluss auf den Credit Spread. Zu diesem Zweck werden das Structural Model von Merton (1974), das KMV-Modell und das Reduced-Form Model von Jarrow und Turnbull (1995), sowie Erweiterungen dieser Modelle, einer näheren Betrachtung unterzogen. Mittels dieser Modelle kann das Ausfallrisiko bewertet werden, wovon der Credit Spread in der Folge abgeleitet wird. Es wird anhand von empirischen Studien untersucht, wie genau diese Modelle den Credit Spread abbilden können und welche Gründe es für Abweichungen zu den tatsächlich am Markt beobachteten Werten geben kann. ; To be able to correctly price corporate bonds, it is essential to determine the credit spread. The credit spread is a premium, which compensates the higher risk of a corporate bond. The risks of corporate bonds determine the credit spread level and consist of interest rate risk, spread risk, liquidity risk and in particular the credit risk. This masters thesis analyzes these risks and their influence on the credit spread. Moreover the choice of the appropriate risk-free interest rate is an important aspect. The risk-free interest rate can be derived from various products on the capital market, such as government bonds and interest rate swaps. By the derivation of the risk-free interest rate, there can be a mismatch between the different capital market products. The credit risk, which divides into migration risk and default risk, has significant influence on the credit spread. To this end, the Structural Model by Merton (1974), the KMV-Model and the Reduced-Form Model by Jarrow and Turnbull (1995) as well as extensions to these models, are examined closely. By means of these models, the default risk can be valued, whereof the credit spread can be derived subsequently. With the aid of empirical studies, it is examined how well these models can reproduce Credit Spreads observed on the market. In the existence of discrepancies from model results to market data, potential reasons relating thereto are examined. ; Hanfstingl Christoph, BSc ; Zusammenfassungen in Deutsch und Englisch ; Abweichender Titel laut Übersetzung des Verfassers/der Verfasserin ; Karl-Franzens-Universität Graz, Masterarbeit, 2017 ; (VLID)1752083
