A new lever for climate-consistent banking

This study aims to examine and analyze the effect of risk variables, governance, financial performance, capital structure, asset structure, intermediation and human capital functions on the social performance of sharia commercial banks and conventional commercial banks as well as to test and analyze the influence of risk variables, governance, financial performance, capital structure, asset structure, intermediation functions and human capital towards social differences in performance between conventional and sharia commercial banks. The type of research used in this study is explanatory research, roomates explains the influence of independent variables on the dependent variable and comparative research, the which is research that is used to explain variables that influence the differences in social performance of Islamic banks and conventional commercial banks. The Populations in this study are commercial banks (conventional) and Islamic public banks in Indonesia. The purposive sampling technique was used to Obtain samples items, namely commercial banks (conventional) and sharia commercial banks in Indonesia to publish audited financial reports, annual reports and Reviews those that corporate social responsibility reports submitted between 2013 - 2017. Technical Data analysis used multiple regression and discriminant analysis. The analysis in this study tested the hypothesis. Multiple regression is used to analyze variables that Affect the social performance of conventional commercial banks and Islamic commercial banks. While discriminant analysis is used to analyze what variables influence the social performance of conventional public commercial banks and Islamic banks in Indonesia. Based on the results of the analysis and discussion concluded that (a) the variables of governance, capital structure, asset structure of human capital, risk, intermediation function and financial performance have no significant effect on the social performance of sharia commercial banks; (B) risk and financial performance variables have a significant effect on the social performance of conventional commercial banks. While the variables of governance, capital structure, asset structure of human capital, and intermediation function have no significant effect on the social performance of conventional commercial banks and (c) the variables of risk and financial performance have a significant effect on the performance of social Distinguishing between commercial Islamic banks and conventional commercial banks. While the variables of governance, capital structure, asset structure of human capital, and intermediation function do not Significantly influence between social performance of commercial Islamic banks and conventional commercial banks.

This study examined the effect of monetary policy on assets quality indicator of Nigeria commercial bank soundness from 2009 to 2018. Cross sectional data were sourced from annual reports of commercial banks and Central Bank of Nigeria Statistical Bulletin. Assets quality indicator of commercial banks soundness was used as proxies for the dependent variables while cash reserve ratios, open market operation rates, monetary policy rates, treasury bills rates and money supply were used as proxies for the independent variables. Panel data methodology was employed while the fixed effects model was used as estimation technique at 5% level of significance. Fixed effects, random effects and pooled estimates were tested while the Hausman test was used to determine the best fit. Panel unit roots and panel cointegration analysis were conducted on the study. Findings of the study proved that cash reserve ratio, open market operations rates, monetary policy rates and treasury bills rates have no significant relationship with assets quality indicators of commercial banks in Nigeria. However, Money supply has significant relationship with assets quality indicators of commercial bank soundness in Nigeria. From the findings we recommend that Central Bank of Nigeria should intensify the use money supply as a veritable effective monetary policy tool to achieve bank soundness in Nigeria. Furthermore, CBN should redefine these monetary policy instruments such as open market operation and adjust the monetary policy rate by reducing the cash reserve ratio which will increase liquidity to enable the commercial banks to discharge their lending and investment duties effectively to the public. The cash reserve ratio should be used to complement the open market operations in ensuring that excess liquidity or lack of it in the banking system is minimized. It was further recommended that CBN should look beyond monetary policy in her regulatory governance of commercial banks as most monetary policy tools currently deployed do not have significant relationship with commercial bank soundness indicators within the periods covered in this study.

PurposeThis paper sets out to explore three areas in which the experience of the great depression might be relevant today: monetary policy, fiscal policy, and the systemic stability of banks.Design/methodology/approachA critical review of the US data for the 1920s and 1930s is presented and stylised facts for monetary, fiscal and banking policies during the noughties are shown and compared with those of the great depression.FindingsThe authors confirm the consensus on monetary policy: deflation and massive bank failures must be avoided. With regard to fiscal policy it is impossible to confirm a widespread opinion according to which fiscal policy did not work because it was not tried. The paper finds that fiscal policy went to the limit of what was possible under the conditions as they existed then. Policy reaction after 1932 was no less bold than that of today if one accounts for sustainability issues. Lastly, the investigation of the US banking system shows a surprising resilience of commercial banks that remained profitable, at least on average, even during the worst years.Originality/valueFirst, the paper presents a systematic comparison between the great depression and the great recession, highlighting similarities and differences. Second, it suggests a relevant policy implication. Findings on commercial bank sector resilience suggest that at present national authorities have little choice but to make up for the losses on “legacy” assets and wait for banks to earn back their capital. However, to prevent future crises, at least a partial separation of commercial and investment banking seems justified.

The study sought to determine the effect of bank regulation and level of nonperforming loans in commercial banks in Nakuru County Kenya. The specific objectives of the study were to explore the effect of capital adequacy on the level of nonperforming loans in commercial banks in Nakuru County Kenya, to find out the effect of asset quality on the level of nonperforming loans in commercial banks in Nakuru County Kenya, to evaluate the effect of liquidity management on the level of nonperforming loans in commercial banks in Nakuru County Kenya, to examine the effect of management efficiency on the level of nonperforming loans in commercial banks in Nakuru County Kenya and to determine the moderating effect of macroeconomic factors on the relationship between bank regulation and level of nonperforming loans. The literature review focused on portfolio theory of investment, capital asset pricing theory and the capital buffer theory of capital adequacy. The primary data was collected using structured questionnaires and secondary data was collected from the banking survey 2017 and central bank of Kenya annual supervisory reports. The study employed multiple linear regression analysis and the finding revealed that there exist a negative and statistically insignificant relationship between capital adequacy and non-performing loans. It was also observed that there exist a negative and statistically insignificant relationship between liquidity management and non-performing loans. On the other hand, there exist a positive and statistically significant relationship between asset quality and non-performing loans. Similarly, there exist a positive and statistically insignificant relationship between management efficiency and non-performing loans. Finally, the findings indicated that macroeconomic factors have moderating effect on the relationship between bank regulations and non-performing loans in commercial banks in Nakuru County. It was concluded that asset quality positively influences non-performing loans while management efficiency influence positively the non-performing loans. Similarly, liquidity management exerts a negative influence on non-performing loans. Finally, capital adequacy influence negatively on non-performing loans. The study recommends that Central Bank of Kenya should regularly access lending behavior to ensure compliance with banking regulations to avoid increasing incidences of non-performing loans. In addition, Central Bank of Kenya should closely monitor banks with deteriorating asset quality. Further, Central Bank of Kenya should strictly monitor the economic sector and ensure that banks provide adequate provisions for loans to mitigate risks of default. Furthermore, banks should maintain a good balance on deposits and lending out loans and adhere to regulators decisions about monetary policies. Finally, banks should increase the operational efficiency of operation weakness and improve corporate governance on the sanction of loans and Central Bank of Kenya should focus on managerial performance in order to detect banks with potential increases in non-performing loans.

The sources of liquidity in commercial and Islamic banks stem from current deposits and savings, which requires the bank to return this money upon request to its depositors, which requires banks to pay attention to studying liquidity because the ratio of deposits to total liabilities is very large, and also that part of these liabilities are short liabilities Term. The research aims to clarify banking liquidity and its importance in commercial and Islamic banks, and for the purpose of achieving this goal, banking liquidity indicators were used in analyzing the data of the annual reports of commercial and Islamic banks listed in the Iraq Stock Exchange for the period 2017-2021, and the data was measured and analyzed and results extracted using Program (Eviews version 13). One of the most important conclusions of the research is that Islamic banks were better than commercial banks in banking liquidity indicators (employment ratio, legal liquidity, legal reserve, cash balance), and accordingly several recommendations were formulated, the most important of which is. The importance of the contribution of Islamic and commercial banks in many investment fields, both locally and globally, which reflects positively on their profits and their banking position in the banking market, which is reflected in the economic growth of the country.

The determination of interest rate spread in commercial banks is influenced by various macroeconomic variables, market microstructure features and the policy environment. However, studies on factors that contribute to the interest rate spreads among commercial banks in Kenya have produced mixed results that calls for further research. This study aimed to assess the determinants of interest rate spread in commercial banks in Kenya. Specifically, the study sought to establish the effect of inflation rate, domestic borrowing, credit risk and exchange rate risk on the interest rate spreads among commercial banks in Kenya. The study was anchored on fisher hypothesis, classical theory of interest and loanable fund theories. Explanatory research design was adopted to establish the causal relationship between the study’s variables. Secondary data of the study for the period between 1970 -2022 was extracted from annual financial statements of commercial banks targeted by the study and Central bank of Kenya annual reports. Data was analyzed through descriptive and inferential statistics. The study adopted the regression model to obtain results. Based on the regression results, the study found that domestic borrowing had a significant positive effect on interest rate spreads among commercial banks in Kenya. Additionally, the study found that inflation rate, credit risk and exchange rate risk had a significant positive effect on interest rate spreads among commercial banks in Kenya. The study concluded that macroeconomic variables such as inflation rate, domestic borrowing, credit risk and exchange rate risks are key determinants of interest rate spread among commercial banks in Kenya. The study made the following recommendations to regulators and policy makers. First, ensure that the central bank's monetary policy actions effectively influence interest rates throughout the banking system and also Implement mechanisms to improve the transmission of changes in the central bank's policy rates to commercial banks' lending and deposit rates. Secondly, establish a framework for monitoring key macroeconomic indicators such as inflation, economic growth, exchange rates, and fiscal policies to identify potential factors impacting interest rate spreads and use the monitoring results to formulate timely and appropriate policy responses. The study recommends that future studies should conduct studies across different countries which could provide a more comprehensive understanding of the subject matter.

This study examines the impact of monetary policy instruments on the profitability of Nepalese commercial banks from 2013 to 2022. It analyzes the relationship between bank profitability and monetary policy tools such as money supply, treasury bill investments, interest rates, cash reserve ratio (CRR), statutory liquidity ratio (SLR), and bank rate. The study uses a descriptive and correlational research design based on secondary data from twenty Nepalese commercial banks. Data were collected from Nepal Rastra Bank reports and annual bank reports. Descriptive statistics, correlation analysis, and linear regression were employed to assess relationships between monetary policy variables and bank performance measured by return on assets (ROA) and return on equity (ROE). The results show that changes in monetary policy parameters significantly affect bank profitability. The cash reserve ratio had a negative impact on ROE, while the bank rate negatively influenced ROE as well. The money supply exhibited a negative correlation with both ROA and ROE. Effective management of monetary policy instruments can enhance commercial banks' profitability in Nepal. Recommendations include managing CRR levels, maintaining low bank rates, encouraging treasury bill investments, and minimizing SLR to improve financial performance. Keywords: monetary policy, profitability, commercial banks, cash reserve ratio, bank rate

Capital adequacy ratio and monetary policy are important control measures of financial supervisory authority and monetary authority, respectively. The effective coordination of the two has greatly affected the effectiveness of monetary policy. The article selects the annual data of 16 listed commercial banks in China from 2003 to 2018, and studies the impact of capital adequacy ratio on monetary policy transmission by constructor. listed commercial banks in China from 2003 to 2018, and studies the impact of capital adequacy ratio on monetary policy transmission by constructing a panel regression model. The results show that large state-owned commercial banks play a major role in bank credit channels for monetary policy, and banks with higher capital adequacy ratios are more likely to have a higher capital adequacy ratio. The results show that large state-owned commercial banks play a major role in bank credit channels for monetary policy, and banks with higher capital adequacy ratios are more vulnerable to monetary policy shocks. In addition, the external capital constraint of minimum capital adequacy will cause a multiplier effect when monetary policy is transmitted through credit channels. The multiplier effect produced by joint-stock commercial banks is much smaller than that of large state-owned banks. The multiplier effect produced by joint-stock commercial banks is much smaller than that of large state-owned banks. Therefore, financial supervisory departments must fully consider the interference caused by the capital adequacy ratio on monetary policy, strengthen policy coordination, and unblock the transmission mechanism of Therefore, financial supervision departments must fully consider the interference caused by the capital adequacy ratio on monetary policy, strengthen policy coordination, and unblock the transmission mechanism of monetary policy.

S team systems are a ubiquitous element in nearly every type of manufacturing plant. In the United States, steam systems are the single largest consumer of energy in the industrial sector, where they account for 37% of annual onsite energy use. Steam use is particularly prominent in the chemicals, paper, petroleum refining, and food and beverage industries, where it is used in a wide range of processes, including reforming, distillation, concentration, cooking, and drying. Together, these four industries comprise nearly 90% of U.S. industrial steam demand, with chemicals manufacturing (30%) and paper manufacturing (30%) holding the largest shares. At the national level, industrial steam systems account for around 6% of U.S. total primary energy use, or 5,900 trillion British thermal units (TBtu). As such, much attention has been paid to steam system energy efficiency improvements as part of corporate, utility, and government energy and air pollution initiatives. Key incentives include local utility rebates, tax incentives, and lowor no-cost steam system energy efficiency audits. Steam system energy efficiency not only makes sense from an environmental perspective, but also from an economic perspective. As of 2006, U.S. manufacturers spent $21 billion on externally purchased boiler fuels. The actual price tag of industrial steam is likely much higher; nearly one-half of U.S. boiler fuels are self-generated within plants in the form of waste gas, black liquor, wood wastes, and other byproducts. These byproduct fuels are not free, as they are generated from purchased materials and typically require further processing for efficient combustion. Reducing demand for boiler fuels can, therefore, help reduce operating costs and improve profit margins. While clearly justified, the historical focus on reducing energy use has overlooked an increasingly compelling benefit of steam system efficiency: namely, reduced water use. Compared to the many public and private incentives for industrial energy efficiency, there are surprisingly few external incentives for industrial water efficiency. One key barrier to such incentives is the lack of credible data on industrial water use, which, unlike data on energy use, are not compiled at the manufacturing industry or process level in regular national surveys. This dearth of data contributes to a general lack of awareness of the sources and scale of industrial water use within the engineering and policy communities, which limits broader attention to water efficiency beyond the plant floor. Another barrier to steam system water efficiency is that the cost of boiler water—and the associated chemicals required for its treatment—typically only represents a small fraction of boiler operating costs, which are dominated by the costs of fuel. However, as we discuss in this Perspective, U.S. industrial steam systems consume copious amount of water. It follows that steam systems are worth a closer look as a manufacturing water efficiency target. Several current trends suggest that water efficiency will play an increasingly prominent role in the financial and sustainability plans of U.S. manufacturers. Recent water stress due to droughts and rising water infrastructure costs have led to increased public water rates around the country. These conditions may worsen with a changing climate. An increasing number of manufacturers are reporting water use as an important environmental indicator in annual corporate sustainability reports, which raises both public awareness of and accountability for water efficiency. Many manufacturers are also being asked by their corporate customers for environmental “footprint” data as part of large-scale sustainable Correspondence concerning this article should be addressed to E. Masanet at eric.masanet@northwestern.edu; M.E. Walker at mwalker9@hawk.iit.edu.

Sound financial health of a bank is the guarantee not only to its depositors but is equally significant for the shareholders, employees and whole economy as well. As sequel to this maxim, efforts have been made from time to time to measure the financial position of each bank and manage it efficiently and effectively.Indian banking sector widely includes commercial, nationalized, co-operative, private and international banks in its fold. In the present study an attempt is made to evaluate the financial performance of three major commercial banks (IOB, Canara Bank and Syndicate Bank) using CAMELS Rating Model. CAMELS rating model is basically an approach widely used to measure the performance of banking unit inside and outside India. This model measures the performance of banks from all important parameters like Capital adequacy, Asset quality, Management efficiency, Earning quality, Liquidity and sensitivity to market. The study is based on secondary data drawn from the annual reports. For the purpose of evaluation the data’s of five years (2011-2016) before demonetization are analyzed by calculating the 17 ratios related to CAMELS rating model. It is found out that according to Basel Norm the overall state of capital adequacy of all the three banks are satisfactory. As far as loan portfolio is concern, the overall state of asset quality and management efficiency are satisfactory, whereas the earning capacity of the banks is not and the liquidity is also not satisfactory. The high level of NPAs and sluggishness in the domestic growth, slow recovery in the global economy and the continuing uncertainty in the global market leading to lower exports and imports are one of the main reasons for the low earning capacity of banks along with these reasons RBI’s new rules to make higher provisioning for substandard assets also affected the earning capacity of all the three banks. Based on the evaluations all the three commercial banks should improve its earning capacity and the liquidity position to perform efficiently and effectively.

This study explored the effect of monetary policy on the Nigeria agricultural sector growth, from 1980-2020. The objectives are to: ascertain the significant effect of the Central Bank of Nigeria's monetary policy rate (MPR), open market operations and cash reserve ratio implementation on commercial banks’ credit lending rate to Nigeria's agricultural sector, and examine the selective sectoral credit control policy of Central Bank of Nigeria and how it affects commercial banks’ credit lending rate to Nigeria agricultural sector. The study employed the following advanced econometric and statistical techniques; Augmented Dickey-Fuller (ADF) tests, Co-integration Test, Vector Error Correction Model (VEC) and Granger Causality. Based on the above econometric and statistical techniques conducted, it was observed that the CBN monetary policy rate (MPR), open market operations and cash reserve ratio implementation have a significant effect on commercial banks’ credit lending to the Nigeria agricultural sector. Our results indicated that there is a positive significant effect of the CBN selective sectoral credit control policy (Agricultural Credit Guarantee Scheme Fund (ACGSF) on commercial bank lending to Nigeria's agricultural sector within the period of the study 1980 to 2020. Based on the findings, the researcher recommends that; an increase in the cash reserves ratio and the monetary policy rate cannot be used to influence stabilized growth from commercial bank lending to the Nigerian agricultural sector especially in the short run. Changes in the structural changes effect can be used to stimulate growth in the commercial bank lending to Nigeria's agricultural sector. The positive controlled Liquidity ratio and volume of broad money stock/cash balances in the hands of the various economic units could be directly manipulated for a more effective monetary policy management than that of Open market operations as proxy and represented by Aggregate Central Bank of Nigeria Treasury Bill (CBNTB).

This study examined determinants of commercial banks credit to the domestic economy in Nigeria. The objective was to examine the extent to which banks variables, macroeconomic and monetary policy variables affects credit allocation of Nigerian Commercial Banks. Time series data was sourced from Central Bank of Nigeria Statistical bulletin and financial statement of commercial banks. Percentage of total commercial banks loans to gross domestic product was proxy for dependent variable while the banks specific variables are peroxide by operational efficiency, liquidity, number of commercial banks branches, Commercial Banks Deposit Liabilities and deposit rate. The independent variables in macroeconomic model comprises of real gross domestic product, public expenditure, openness of the economy, inflation rate and exchange rate while monetary policy variables comprises of treasury bills rate, real interest rate, monetary policy rate, growth of money supply and financial sector development. The study employed ordinary least square properties of augmented Dickey Fuller test, co-integration test, and granger causality test and vector error correction model. Findings from the study revealed that; banks specific variables shows that deposit liabilities and liquidity ratio have positive impact on total loans and advances while deposit rate, number of commercial banks branches and openness of the economy have negative impact. Model II found that; exchange rate, inflation rate and Real Gross Domestic Product have positive impact while public expenditure and openness of the economy have negative impact on total commercial bank loans and advances. Model III found that; financial sector development and monetary policy rate have negative impact while growth of money supply, real interest rate and Treasury bills rate have positive impact on total loans and advances of commercial banks. We conclude that monetary policy, bank specific variables or internal variables and macroeconomic variables are strong determinants of Nigerian commercial banks loans and advances. We therefore, recommend for the interplay and the strengthening of macroeconomic variables, monetary policy variables and banks specific variables (internal policies) in order to enhance commercial banks credit in Nigeria.

This paper investigates the effect of monetary policy on liquidity creation of commercial banks and if the effect is conditional on bank size. The paper uses a dataset covering 23 Vietnamese commercial banks during the period 2007–2017 collected from various sources including State Bank of Vietnam, International Monetary Fund, SNL Financial database (provided by SNL Company), Vietnam General Statistic Office and banks’ annual reports. Different econometric techniques are employed to analyse the data. Obtained results indicate that a contractionary monetary policy could lead to a decrease in bank liquidity creation. This result is less pronounced with larger banks. In particular, among three monetary policy instruments employed in Vietnam, an increase in the base rate is significantly associated with a contraction in bank liquidity creation; open market operations may have a marginal impact while required reserve ratio is ineffective because of its unchanged value throughout the period of the study. This paper is among the first, providing an insight into each monetary policy instrument's role in influencing bank liquidity creation in the context of an emerging economy.

PurposeOwing to the importance of the efficiency of commercial banks, the aim of this paper is to find the relationship between capital regulation, monetary policy and the asymmetric effects of the commercial banks' efficiency.Design/methodology/approachFirst, the paper makes a static profit model of commercial banks with double constraints and then makes a proposition with numeric simulation.FindingsIn this paper, the author finds it unreasonable to calculate the commercial banks' cost and profit efficiency by SFA (DEA) directly, as there is no evidence that indicates the linearity relationship among them. Hence, more complicated solutions should be introduced.Research limitations/implicationsThe rate of non‐performing loans (NPL) is inversely proportional to the commercial banks' cost and profit efficiency and capital adequacy ratio (CAR) and statutory reserve ratio (SRR) show a nonlinear relationship between commercial banks' cost and profit efficiency. Hence, the paper defines the different influences of commercial banks' efficiency imposed by CAR and SRR as the asymmetric effects of commercial banks' efficiency.Practical implicationsThe nonlinear relationship is found based on improved Kopecky and VanHoose, so excessive regulation has harmful effects on the commercial banks. The reasonable capital regulation and other prudential supervision measures should be emphasized.Originality/valueFirst, the paper gets its proposition through the improved KV model, which displays a new perception on analyzing this problem. Second, the nonlinear relationship is discovered by this new model and the empirical results show the nonlinear relationship further.

A bank is the prototypical financial institution; there are notable outward differences between the wealth invested by owners of financial institutions and that of other industries. The capital of a financial institution consists largely of financial assets and only to a small degree of the physical plant and equipment usually associated with capital in other industries. Moreover, these physical differences are associated with important functional differences. A financial institution, like any other firm, faces the problem of combining the inputs which it purchases to produce the outputs which it sells. In banking, the most important inputs are labor and deposits, and they produce liquidity services, brokerage services, accounting and information services, and the like. In this production process, bank capital has two roles: (1) It cooperates directly with the other inputs in the production of bank services, and (2) it is used to attract the deposit input by providing insurance to depositors against a decline in the value of a bank's assets; the more capital a bank has, the more the value of its assets can fall before depositors incur losses. The difference between banking (and financial institutions in general) and most other industries is in the relative importance of these two roles. The equity capital of any firm serves, in part, to guarantee the value of the firm's fixed obligations, but that function is usually subordinate to the provision of assets to the firm. However, in banking, equity capital (and equity is the form that almost all nondeposit ownership interest in bank assets has taken) typically accounts for only about a tenth of total bank resources, and most of the returns to equity capital derive from its insurance function. Bank owners invest capital primarily to attract deposits, which are then used to buy assets, and only secondarily to buy assets directly. Apart from these novel economic aspects, a study of investment in banking provides the opportunity to study the effects of government