Financial Regulation Research Articles

Harmonizing Virtual Currency Use in the EU: The Evolution and Impact of MiCA Regulation

Abstract This article analyses the regulatory framework for virtual currencies in the European Union, tracing the development from several national laws to the comprehensive Markets in Crypto-assets (MiCA) regulation. At first, EU member states had different methods for regulating virtual currencies, creating a fragmented regulatory landscape that posed difficulties for market integrity, consumer protection, and cross-border transactions. This article covers the many regulatory responses before MiCA, explores the reasons for regulatory harmonization, and delves into the legislative process that resulted in the creation and proposal of MiCA. We examine how MiCA tackles the deficiencies of past regulations and its impact on standardizing virtual currency processes throughout the EU. MiCA's importance rests in its ability to provide a cohesive legal structure that harmonizes innovation with the requirements of financial stability and consumer safeguarding. This article explores how MiCA will influence member states' laws and the virtual currency market, providing insight into the future of EU financial regulation in the digital era.

Basel framework for corporate governance of banks

The Basel framework for bank corporate governance is a set of international guidelines and standards established by the Basel Committee on Banking Supervision, which plays a crucial role in setting the corporate governance practices of banks around the world, actively contributing to improving stability, risk management and compliance with national and international regulations applicable to banks. This regulatory framework outlines the principles and requirements related to risk management, capital adequacy, internal controls, transparency of bank shareholders and customer relations, but there is a strong emphasis on board oversight, accountability and the alignment of incentives with long-term sustainability. Banks are currently implementing Basel IV - the continuation of Basel III standards, developed in response to the deficiencies in financial regulation revealed by the 2007 financial crisis, with the aim of strengthening bank capital requirements by increasing minimum capital requirements, holding high-quality liquidity and decrease in bank leverage.

Oil prices and developing stock markets: Evidence from East Asia

The COVID-19 pandemic has introduced unprecedented complexity in the relationship between oil prices and stock markets. This work employs a Threshold Auto-Regressive Distributed Lag (ARDL) framework to analyze this relationship, focusing on two distinct periods: pre-mid-June 2020 and post-mid-June 2020, marked by the onset of the second wave of the pandemic. By examining financial variables including stock and bond returns, exchange rates, and WTI crude oil prices, this research identifies significant differences in market dynamics across these periods. The results indicate that the statistical significance and behavior of the WTI index vary, which is particularly evident in China’s stock market. Impulse Response Functions (IRFs) reveal that Region 1 (pre-mid-June 2020) experienced more pronounced market fluctuations in response to shocks, while Region 2 (post-mid-June 2020) demonstrated increased resilience and adaptability. These findings show heightened stock market vulnerability to oil price shocks during periods of economic policy uncertainty. Consequently, policymakers are advised to put forward adaptive approaches to financial regulation and economic policy, emphasizing market flexibility in response to exogenous shocks and tailoring responses to the specific dynamics of each market.

Enhancing Fitness Evaluation in Genetic Algorithm-Based Architecture Search for AI-Aided Financial Regulation

Enhancing Fitness Evaluation in Genetic Algorithm-Based Architecture Search for AI-Aided Financial Regulation

The Economic Consequences of Hedge Fund Regulation: An Analysis of the Effect of the Dodd-Frank Act

The Economic Consequences of Hedge Fund Regulation: An Analysis of the Effect of the Dodd-Frank Act

Effective credit risk mitigation strategies: Solutions for reducing exposure in financial institutions

Credit risk remains a critical concern for financial institutions, especially in the context of economic uncertainties and volatile market conditions. This paper examines the importance of credit risk mitigation strategies and presents solutions for reducing exposure in financial institutions. The research focuses on various strategies employed by banks and other financial institutions to manage credit risk effectively. The paper begins with an overview of credit risk and its significance in the banking industry. It discusses the various types of credit risk faced by financial institutions, including default risk, concentration risk, and systemic risk. The paper then highlights the importance of credit risk mitigation strategies in reducing the impact of these risks on financial institutions' balance sheets and profitability. Next, the paper explores different credit risk mitigation strategies used by financial institutions. These strategies include diversification of credit portfolios, collateralization of loans, credit derivatives, and credit insurance. The paper discusses the advantages and disadvantages of each strategy and provides examples of how these strategies have been implemented successfully in the banking industry. Furthermore, the paper examines the role of regulatory authorities in overseeing credit risk management practices in financial institutions. It discusses the regulatory framework for credit risk management and highlights the importance of compliance with regulatory requirements in mitigating credit risk. Finally, the paper concludes with a discussion on the future of credit risk mitigation strategies in financial institutions. It emphasizes the need for continuous innovation and adaptation to new market conditions and regulatory requirements. The paper also stresses the importance of integrating credit risk management into overall risk management frameworks to ensure a comprehensive and effective approach to managing risk in financial institutions. Overall, this paper provides valuable insights into the importance of credit risk mitigation strategies in financial institutions and offers practical solutions for reducing exposure to credit risk. It serves as a useful resource for financial professionals, regulators, and policymakers seeking to enhance their understanding of credit risk management practices in the banking industry.

Mapping private party funding regulation. Deregulation in sight?

Mapping private party funding regulation. Deregulation in sight?

Financial Technology Services, Government Regulations and Financial Inclusion of Small-Scale Fish Farmers in Homa Bay County, Kenya

This study explored the impact of FinTech and Government Policies on Financial Inclusion for small-scale fish farmers in Homa Bay County, Kenya. The study focused on how access to finance has been widened through agency banking, mobile money and online banking services among these people who had low incomes or were marginalized. The research also examined whether government regulations affect the relationship between fintech channels and financial inclusion. The study was underpinned by Innovation Diffusion Theory, Financial Intermediation Theory, Technology Acceptance Theory and Public Interest Regulation Theory. This study employed causal research design with a sample size of 495 small scale fish farmers using stratified random sampling technique that yielded 144 respondents. Data analysis involved multiple regression, correlation analysis and diagnostic tests that utilized SPSS 26.0 for data analysis. The results showed that agency banking; mobile money services and online banking together explained 58.1% of variation in financial inclusion among the farmers indicated by R squared of 0.581.The findings revealed that Agency Banking had significant effect on financial inclusion (β = .231, p = .001 < .05), as well as Mobile Money Services (β = .196, p = .019 < .05) and Online Banking Services (β = .410, p = .000 < .05). Therefore, the study concludes that Agency Banking; Mobile Money and Online Banking play important role in enhancing financial autonomy among small scale fish farming communities through increased access to bank accounts, secured transactions processes and agent incomes respectively. In view of the findings, the study recommends that financial institutions together with fintech companies should invest in platforms which are user-friendly safe secure meant for use by small holder dairy farmers themselves. Keywords: Agency banking, Mobile money services, Online banking services, Government regulations, Financial technology services, Financial inclusion

Studi Implementasi Hibah Dalam Perspektif Hukum Islam : Analisis Pelaksanaan Pemberian Hibah Dalam Kerangka Islam

Law is a regulation or social norm that cannot be separated from the values ​​that apply in society. One of the important roles in social life that makes good education possible is the family. One of the most frequent problems is the transfer of assets from parents to children, usually in the form of gifts. In practice, many grants that are given are then canceled unilaterally by the grantor for various reasons, including wrong behavior and waste committed by the grantee. This usually happens when giving grants. Usually, the person initially displays good behavior and then changes personality over time. In the legal field, there are funding regulations that regulate requirements, procedures and legal implications. A gift is money, property, or other assets given in good faith for the benefit of the recipient. It is important to have a clear understanding of the regulatory and legal implications related to grants so that the process of granting and receiving grants is transparent and implemented in accordance with applicable regulations. This research investigates the application of funding concepts based on Islamic legal advice.

Adapting to Democratic Norms: Party Financing Regulations in Indonesia and Germany Compared

Adapting to Democratic Norms: Party Financing Regulations in Indonesia and Germany Compared

The Enlightenment that Archegos Defaults Event to Our Country Finance Supervises

At the end of March 2021, the default of Archegos, an American hedge fund, led to a total loss of more than 10 billion dollars for a number of investment banks, which exposed the absence of supervision in the United States financial regulators. Based on the publicly disclosed information in the market, this paper analyzes the main process and key links of the incident in detail, summarizes and summarizes the defects and problems in the supervision of family office as a financial subject and derivatives trading in the United States, and puts forward opinions and suggestions on the supervision of family office and derivatives for financial institutions and regulatory departments in China.

International Experience and Reference of China's Financial Regulatory System Reform

Since the 1970s, in order to reduce financial risks in the context of fast-paced growing financial industry, China has been implementing reforms to its financial regulatory structure. In 2023, the State Administration for Financial Supervision and Administration was officially established, bringing China closer to mixed industry regulation. Currently, there are multiple types of financial regulation on a global scale, including segmented regulation, single regulation, functional regulation, and bimodal regulation. Given the rapid development of China's financial market, it is imperative to draw on better international expertise, innovate domestic regulatory framework, and persist pursuing bimodal regulatory mode under the mixed industry background. By implementing the bimodal regulation of macro prudential regulation and micro behavioral regulation, China is managing to control financial risks, protect investors lawful rights and interests, and foster the long-term and stable expansion of China's financial industry

A supply chain finance risk management model for the electric vehicle supply chain: a data-driven analysis

ABSTRACT Government policies and financial regulations, supply chain risk assessments, and technology have made electric vehicle (EV) supply chain challenging for Thailand to adopt and implement (SCF) effectively. This study aims to perform a data-driven analysis that provides insight into SCF risk management and inputs for an EV supply chain. Prior studies are lacking to propose a data driven SCF risk management model and present the model in the EV supply chain. This study proposed a hybrid approach to validate the attributes and formed the hierarchical structure. This study contributes insights into a valid SCF risk management hierarchical structure, identifies the causal interdependent relationships among the attributes, and determines the attributes for the model. The results show that financing risk control and global SCF strategies are needed for improvement. The bullwhip effect, decision-making processes, bank credit, corporate social responsibility, and reverse factoring are important for practices.

Switzerland: Political Developments and Data in 2023

AbstractIn 2023, Switzerland's profound integration into the globalized world was particularly evident, fundamentally challenging the notion of political sovereignty. Yet, this interconnectedness also means that Swiss domestic rules strongly reverberate around the world, such as in the case of policy failure regarding financial regulation. This article explores how global developments shape Swiss politics, from campaign dynamics ahead of the 2023 federal elections to externally imposed legislative agendas. Even the notorious “Swiss” direct democracy no longer solely reflects citizen‐initiated proposals as further evidenced that year. The article also underscores the inertia of Swiss‐style consensus democracy in gearing up its institutional design for polycrisis. It concludes with a discussion of two major political issues: the collapse of Credit Suisse, one of Switzerland's two leading banks, which marks the most far‐reaching shake‐up of the global banking sector since the 2008 financial crisis, and a potential break‐through in the longstanding stalemate in Swiss–EU relations.

Green financial regulation and corporate strategic ESG behavior: Evidence from China

This article examines the impact of the Green Financial Regulatory Policy on corporate strategic ESG behavior against the backdrop of the 2017 policy integration of “green finance” into the Macro-Prudential Assessment by the central bank. The research identifies that GFRP may shift corporate focus towards the disclosure of ESG performance while neglecting the actual practices of ESG engagement, potentially inducing firms to engage in ESG greenwashing. It is further posited that corporate green perception and executives' environmental backgrounds serve as primary mechanisms in this dynamic. Additionally, the policy efficacy of GFRP on strategic ESG behavior exhibits heterogeneity.

Unlocking Uzbekistan's Growth Through Project Financing

This study examines the implementation and impact of project financing in Uzbekistan's unique economic landscape, particularly its role in fostering investments in fixed capital. Given the country's transition towards market reforms, the research aims to assess how project financing contributes to economic development amidst these changes. Utilizing a mixed-methods approach that combines quantitative data and qualitative interviews, preliminary results highlight the effective mobilization of substantial investments in key sectors such as energy and infrastructure. However, challenges in regulatory and financial transparency remain. The findings suggest that while project financing holds significant potential for economic growth in transitional economies like Uzbekistan, improvements in governance and financial regulations are crucial to optimize its benefits. Highlights: Economic Transition: Project financing boosts Uzbekistan's market reforms. Methodological Insight: Mixed-methods reveal financing impacts. Regulatory Challenges: Improved governance necessary for success. Keywords: Project Financing, Credit Portfolio, Economic Development, Fixed Capital Investment, Transitional Economiesm

Policies of Credit Restructuring Relaxation as Moderation Variable on the Relationship between Financial Ratios and Banking Performance in Indonesia

This study investigates the impact of Indonesia's newly implemented restructuring relaxation policies as moderating variables on the banking sector's performance. Utilizing panel data regression analysis on a sample of 105 banks from 2017 to 2022, the research examines the relationships between non-performing loans (NPL), loan loss provisions (LLP), efficiency ratios, and bank return on assets (ROA). The findings indicate that prior to the policy implementation, the efficiency ratio negatively affected government banks' ROA, while both LLP and the efficiency ratio negatively impacted private and foreign banks' ROA. Post-implementation, the interaction between these policies and each variable (NPL, LLP, and efficiency ratio) was found to be significant for government banks, whereas none of them showed significance for private or foreign banks. This research contributes to understanding financial regulation dynamics and provides insights for policymakers and banking institutions navigating market complexities.

A Comprehensive Analysis of Behavioral Finance and its Impact on Investment Decisions

This paper thoroughly examines behavioral finance, challenging traditional financial theories by questioning investor rationality and market efficiency. Focusing on five key phenomena—loss aversion, short-term momentum, long-term reversal, framing effect, and endowment effect—the analysis relies on real-world observations to reveal how psychological biases significantly impact investor decisions and financial markets. Loss aversion, especially evident during financial crises, highlights humans' tendency to avoid potential losses rather than pursuing equivalent gains. The study explores short-term momentum and long-term reversal, challenging market efficiency theories by illustrating how past performance influences future returns. Emphasizing cognitive biases like framing and endowment effects, the paper underscores their role in diverse investment decisions and irrational asset overvaluation based on a sense of ownership. It advocates for incorporating these biases in financial models, regulations, and investment strategies, emphasizing their importance for stakeholders to navigate the financial landscape, minimize instability, and capitalize on opportunities. The research establishes a foundation for a holistic finance approach, respecting and leveraging human behavior for market stability and benefit.

Security aspects in the implementation of blockchain in payment gateway transactions in Ecuador

This paper explores the security aspects involved in implementing blockchain technology in payment gateway transactions within the Ecuadorian context. Blockchain technology offers numerous security benefits such as data security, immutability, decentralization, authentication, and transparency. These features contribute to enhancing the overall security and trustworthiness of payment transactions. The decentralized nature of blockchain reduces the risk of cyber attacks targeting centralized servers, while its immutability ensures the integrity of transactions. Additionally, authentication mechanisms such as digital signatures and smart contracts help ensure that only authorized parties can participate in and validate transactions. Furthermore, blockchain’s transparency facilitates auditing and compliance with financial regulations. This paper discusses how leveraging blockchain technology can significantly improve security in payment gateway transactions in Ecuador and provides insights into the potential challenges and opportunities associated with its implementation.

A critical analysis of the European Union’s structure and approach to economic recovery during times of crisis

This essay critically analyses the European Union's (EU) approach to economic recovery during times of crisis, focusing on the 2008 financial crisis and the subsequent eurozone debt crisis. The EU's response included various measures such as bailouts, fiscal stimulus packages, and structural reforms. However, shortcomings in these responses are evident, including a lack of long-term planning and the exacerbation of negative effects by bailout announcements. Moreover, the essay examines structural issues within the EU, particularly regarding the European Central Bank's monetary policies and the lack of cohesive fiscal policies among member states. These structural deficiencies contributed to the severity of the crises. Despite lessons learned, including the need for stricter financial regulations and improved coordination among member states, challenges remain. The analysis suggests that while the EU has undergone reforms, its resilience to future crises remains uncertain.