Stability Of Financial System Research Articles

Risk Assessment of Banks and Financial Institutions under COVID-19 Crisis

Systemic risk refers to risks that have a broad and severe impact on the entire financial system or economic system. There are similarities in the definition of systemic risk in China and abroad, which usually refer to threats to the entire financial system or economic system, which can trigger a chain reaction and lead to a systemic collapse. In terms of characteristics and measurements, there may be some differences in views and methods at home and abroad. While foreign countries usually pay more attention to the interconnectedness of financial institutions, market liquidity, macroeconomic factors, etc., China may pay more attention to factors such as the stability of financial markets and the role of state-owned enterprises and governments in the economy. The shortcomings of systemic risk abroad may lie in the fact that the unique circumstances of some characteristic countries or regions are sometimes overlooked, because these factors are not universally applicable on a global scale. Due to its unique environment of large economic size, complex financial system, government intervention, and the influence of state-owned enterprises, the study of systemic risk is particularly important for China. This particular situation may require unique methods and metrics to measure and address risks to ensure the stability and sustainability of China's financial system. It is precisely in view of the lack of foreign research on China's specific context that it is of great significance to study the systemic risk of China's banking industry under China's financial system.

An improved BiGAN model for anomaly detection in finance

Financial systems play a pivotal role in shaping contemporary society, and the detection of financial anomalies holds immense significance in mitigating the adverse repercussions of market uncertainties on the global economy. In this context, this study presents an innovative LSTM-GANs model, specifically crafted to enhance the detection of anomalies in financial stock markets. The model introduces an "Anomaly Score" as a pivotal metric, which is computed through a combination of factors such as Reconstruction Loss, Latent Space Distance, and Discriminator Score. This composite score provides a quantitative assessment of the anomaly level within the financial data. By applying a predefined threshold to this Anomaly Score, the model efficiently identifies and flags anomalies. In a world where financial markets are increasingly complex and prone to unexpected events, the ability to detect and respond to anomalies swiftly is paramount. This novel LSTM-GANs model offers a promising approach to bolster the accuracy and effectiveness of financial anomaly detection, thereby contributing to the stability and resilience of global financial systems.

Stability of the Roman Catholic Church Financing System Based on Germany

To effectively carry out its tasks, the church needs a stable financial system. The aim of this article is to present issues related to ensuring the stability of the Catholic Church financing system in times of significant demographic and socio-cultural changes. This study identifies and characterizes the main sources of income and directions of expenses of the available financial resources. The challenges faced by church authorities in this regard are also described. State authorities finance places of prayer for social, cultural, and psychological reasons. Churches have been places of support in difficult times for centuries as well as places of survival and mental support for society.

Financial stability of the federal budget and budgets of the Russian constituent entities subjects under Western sanctions

According to the definition of the European Commission, public finances financial stability is the ability of a state to maintain current expenditures, conduct tax and social policy in the long term without the threat of loss of the country’s solvency to fulfill its obligations and stipulated expenditures. The subject of the study is the state of revenues and expenditures of the federal budget and budgets of the Russian constituent entities under the Western sanctions. The choice of the Ural Federal District regions (hereinafter – UFD) as the objects of the study is due to the significant share of oil and gas revenues in the federal budget revenues, the export-oriented regions place and role in the oil and gas revenues formation in the federal budget. The purpose of the study is to assess the budget system financial stability on the example of the federal budget and budgets of the Russian constituent entities, in particular, the UFD regions. The article uses generally accepted research methods, such as analysis and synthesis, generalization, grouping, tabular, etc. It has been established that the imposed sanctions have a negative impact on oil and gas revenues. Under such conditions, the budget system stability is supported by a low level of debt, especially at the federal level. The UFD export-oriented regions budget stability indicators exceed similar indicators of the Russian constituent entities budget. The budget stability risks remain the highest at the regional and local levels.

Stabilitas Sistem Keuangan dan Pertumbuhan Ekonomi Melalui Kebijakan Makroprudensial di 5 Negara ASEAN

The objectives of the research include efforts to explore the macroprudential impact on financial system stability (FSS) and economy in 5 (five) ASEAN member countries during the period 2013 to 2019. The methodology of this study is based on the application of the Mutant Method, VAR, and Ardl Panel. Analysis of the research results revealed that the variables Rii Interest Rate (SBR), Money Supply (JUB), Exchange Rate, and Loan to Depocit Ratio (LDR) simultaneously have a significant influence on Gross Domestic Product (GDP). In addition, SBR and JUB have also proven to have an impact on the inflation rate. The results also produced a panel of leading indicators, consisting of the Inflation Index (INF) and currency exchange rates, as a marker of the effectiveness of control variables on economic stability in ASEAN countries. This indicator shows that INF and exchange rates play an important role in controlling economic stability, with controls in the short to long term. These findings provide significant insight into key factors affecting economic stability in the ASEAN region, providing the basis for more effective policy formulation in the future.

A Microstructure Study of Indian Corporate Bond Market: A Review

This Review study explores various dimensions of the Indian capital market, encompassing both equity and bond markets. It delves into the influence of equity market factors, macroeconomic variables, and corporate bond market growth on the overall financial landscape. The relationship between equity market returns, equity market volatility (VIX), and the rupee-dollar exchange rate on bond yields. They highlight that increasing volatility in the equity market leads to a higher demand for fixed income securities, subsequently reducing bond returns. The underscores the significance of a robust corporate bond market for financial system stability, credit availability, and mitigating corporate sector crises. It reviews the growth of the Indian corporate bond market and its implications for monetary, fiscal, and economic variables. The results indicate that a comprehensive corporate bond market does not exhibit a significant positive or negative association with these variables. However, GDP emerges as a crucial factor for India's bond market development, particularly in terms of foreign participants. Lastly, the influence of macroeconomic variables on the Indian corporate bond market over a 23-year period. They reveal a significant correlation between corporate bond market issuance and foreign exchange reserves. Through multiple regression analysis, they found that all selected variables, except GDP and trade openness, significantly explain the volumes of corporate bonds. Collectively, their findings contribute to a comprehensive understanding of the interplay between equity market dynamics, corporate bond market growth, and macroeconomic factors in the Indian capital market. The study provides valuable insights for policymakers and investors, aiding in informed decision-making regarding investment strategies, market stability, and economic growth.

A Comprehensive Methodology for Evaluating Economic Security in the Digitalization of Investment Processes

Purpose: This article aims to present a methodology for evaluating economic security within digitalized investment processes, addressing the evolving financial landscape's demands for innovative assessment approaches. Methods: The methodology developed integrates key components, indicators, and measurement techniques to offer a holistic evaluation of economic security. Case study countries are analyzed to identify common patterns, trends, and best practices, enriching the methodology's robustness. Results and discussion: The methodology provides valuable insights into maintaining economic security in digitalized investment environments, emphasizing factors such as legal and regulatory frameworks, technological infrastructure, data security, and investor protection. The analysis facilitates a nuanced understanding of economic security dynamics in digital transformation. Implications of the research: This research has significant implications for policymakers, researchers, and industry practitioners by offering a comprehensive tool to navigate the complexities of economic security in the digital era. It enables stakeholders to adapt effectively to digitalization challenges and opportunities, ensuring investor protection and financial system stability. Originality/value: This research contributes to the discourse on economic security and digital transformation by presenting a reliable and efficient evaluation methodology. It fills a critical gap in current methodologies, enhancing the ability of stakeholders to address the intricacies of digitalized investment processes and safeguard economic security.

Loopholes in the Indian Banking System concerning Non-Performing Assets (NPAs) – A Case Study of “Axis Bank and HDFC Bank”

Abstract -The paper presents a comparative case analysis of two leading banks, Axis Bank and HDFC Bank. The rising tide of Non-Performing Assets (NPAs) in the banking sector is a major threat to financial stability and economic progress. The case study uncovered severe deficiencies in risk management, credit evaluation, and regulatory compliance, which have resulted in a considerable accumulation of Non-Performing Assets. The banks' exposure to economically sensitive sectors amplifies the impact of downturns on asset quality. The limitations in credit risk assessment underline the necessity for increased due diligence. Regulatory frameworks, such as the Insolvency and Bankruptcy Code, and prompt corrective action have a significant impact on NPA responses. The findings highlight the complicated interplay between internal banking practices, regulatory frameworks, and economic conditions that affect a bank's financial performance. Addressing discovered weaknesses inside both these banks is important to the stability of India's financial system. The implications, as indicated by rising NPAs, are felt throughout the sector, jeopardizing overall resilience. Addressing these problems is crucial for reducing systemic risks, preventing a credit crisis, and rebuilding trust in the financial industry. A better banking system is critical for India's financial stability, economic growth, and stakeholder trust. As major private sector players, Axis Bank and HDFC Bank’s successful remediation set a precedent, emphasizing the need for excellent risk management, regulatory compliance, and strategic adaptation. Key Words: Axis Bank, HDFC Bank, Non-Performing Assets, Risk Management, Regulatory Compliance, Financial Stability, Economic Impact

The Effect of Emergency Monetary Policy on Liquidity and Financial System Stability in Property Sector Companies in Indonesia

Through a quantitative study utilizing Structural Equation Modeling with Partial Least Squares (SEM-PLS), this research examines the impact of emergency monetary policies on liquidity and financial system stability within Indonesian property sector enterprises. The study takes into account company size, regional distribution, and financial performance by using a broad sample of property sector firms. The validity and reliability of indicators for liquidity, financial system stability, and emergency monetary policies are guaranteed by the measurement model analysis. Contrary to popular belief, the structural model shows that emergency monetary actions have a substantial negative influence on liquidity levels. Complexity can be seen in the relationship between financial system stability and certain policy factors, which can have both positive and negative effects. The robustness of the model is verified by cross-validation and bootstrapping. The results provide sophisticated perspectives to the body of literature by highlighting the necessity of customized methods for formulating policies and devising action plans in the real estate industry amid financial downturns.

Impact of China on commodity exporters

AbstractWe compare the effect of a domestic shock in China and the US on the real economy and financial markets of various commodity‐exporting countries. To obtain a reliable indicator for China's macroeconomic conditions, we estimate a Bayesian dynamic factor model using block‐exclusion restrictions to identify a China factor and a US factor from monthly macroeconomic data for China and the US. We, then, assess the implications of a negative shock to both factors on the macroeconomy of a commodity‐exporting nation using Bayesian FAVARs based on recursive identification. A negative China shock leads to output loss and a fall in stock prices in these countries. China shock affects the output of only a subset of countries in our sample compared to the US shock, which affects all countries. China shock has a larger, quicker and more persistent impact on the stock markets of commodity‐exporting countries compared to the US shock. Countries with weaker institutional or business environments experience a larger negative real effect of the China shock, whereas countries with less stable financial systems demonstrate stronger financial effects. Using historical decomposition, we establish a growing role of the China factor over time, in particular for large emerging economies such as Brazil and Russia.

Concepts of Money Laundering Resulting Destroy the Structure of Financial Policy

Money laundering is the technique used to make significant sums of money earned illegally through drug trafficking, terrorism, or other major crimes that appear to have come from legitimate sources. Money laundering has a negative influence on the nation's economic and political stability, hence it must be strictly prohibited. As one of the most significant components of the financial system, it serves as the backbone of the money market and plays a vital role in raising funds for beneficial investments that advance economic growth in a nation. An effective and stable financial system is a requirement for the nation's overall growth.

The Impact of Macroeconomic Indicators and Bank Spesific Factors on Comercial Bank NPLs in the Province of South Sumatera

Non-Perfoming Loan or non-performing loan is a ratio that can affect the stability of the banking financial system if NPLs are not managed properly, it will cause chaotic financial conditions and will cause economic problems.The purpose of this research is to examine the impact of macroeconomic indicators and bank-spesific factors on the Non Perfoming Loan ratio of commercial banks in Lampung Province. The study made use of time series data from 2010QI – 2022QIV. The type of data used is secondary data obtain from the Central Bureua of Statistics and Bank Indonesia. The independent variabeles are macroeconomic indicators such inflation, exchange rate, BI rate, as well as bank-spesific factors such as LDR, with Non-Perfoming Loan serving as the dependent variable. This study employs multiple liniear analysis methods as well as traditional assumptions. The findings revealed that macroeconomic variables and bank specific indikators both affect NPL, with LDR having a partially negative effect on NPL. The exchage rate has a positive effect non-perfoming loans, while inflation and the BI rate have no effect.

The Role of Stress Tests in Enhancing Bank Transparency: A Comparative Study of Islamic and Conventional Banks

Abstract The global financial crisis highlighted the crucial role of stress tests in evaluating a bank’s resilience to severe economic shocks. Accordingly, the purpose of the study was to examine the contribution of stress tests to credit risk in terms of hedging banking opacity and improving financial resistance against negative shocks in MENA countries, observed for the period from 2012 to 2022. Furthermore,, this study explores the impact of stress tests on enhancing bank transparency, particularly within the contexts of Islamic and conventional banking systems using the Panel-VAR and GMM approach. A conceptual framework is established to explain the connection between stress testing and bank transparency, emphasizing on the mechanisms through which stress tests can promote greater disclosure and accountability. A comparative analysis of stress testing practices across both banking sectors reveals similarities and distinctions in scenario selection, modeling techniques, and disclosure practices. In-depth case studies of Islamic and conventional banks illustrate the practical application of stress testing in fostering transparency. These results show that stress tests produce information about credit risk exposure and about the real conditions of financial institutions. Therefore, more transparency on bank losses and risks would have also enabled bank regulators to focus more attention on financial institutions and react early to take “corrective measures”. Policy recommendations are drawn to enhance the effectiveness of stress testing in promoting transparency and financial stability within both Islamic and conventional banking sectors. This study contributes to a deeper understanding of stress testing’s role in fostering a more resilient and stable financial system.

EXPLORING THE IMPACTS OF BANK COMPETITION ON FINANCIAL STABILITY: A SOUTH ASIAN PERSPECTIVE

The aim of this study is to explore impact of bank competition on financial stability in South Asia to provide profound insights into the dynamics of the banking industry within the region. To achieve this objective, current study used multiple regressions on the data from Pakistan, India, Sri Lanka and Bangladesh for the period 2000–2022. Results show that delicate competition encourages the banks to assume more robust risk management practices and operational efficiency, contributing to overall stable financial environment. The study invokes the attention of government and policymakers to find the results valuable as they navigate delicate balance amid fostering competition and maintaining secure banking sector. The research contributes to ongoing discourse on role of competition in shaping the stability of financial systems, particularly in emerging economies. This adds to scarce literature on impact of bank competition on financial stability in South Asian countries. Study contributes to literature on issue like role of competition in shaping stability of financial systems, mainly in emerging economies by challenging earlier studies that proposed negative link between competition & stability in diverse satiations & context.

URGENSI RESESI EKONOMI DAN PENGARUHNYA TERHADAP STABILITAS SEKTOR JASA KEUANGAN

The aim of the research is to determine the development of the Indonesia financial services sector amidst the issue if the economic recession and to map strategies and policies that need to be improved through the implementation of structural reform policies in theIndonesian economy. The high dynamics of the global economy has resulted in adecline in intermediation performance in several national economics sectors. Meanwhile, the stability of the domestic financial services sector remains maintained with solid capital, a maintained risk profile and adequate liquidity. As a preventive measure in facing a recession to minimize the impact on society and encourage national economic performance through the implementation of structural reform policies in the Indonesian economy to maintain monetary stability and financial system stability as elements of continuity in supporting the planning and implementation of sustainable development programs through optimizing management owned natural resources, building reliability in the industrial sector, building resilience in the energy and food sectors, strengthening the economic financing structure,developing inclusive economic activities and strengthening development capital capabilities.

Factors affecting country fintech: an European analysis

Purpose- FinTech represents all innovation related to how businesses seek to improve the process, delivery, and use of financial services and it is not a mere technological phenomenon. Considering that the various innovations in the financial and technological fields require the use of explanatory indices, the aim of this work is to propose an analysis of the factors that influence the degree of adoption of Fintech in the European countries. Methodology- We use a correlation model in order to highlight the first results on the relationship between the degree of Fintech at a geographical level and some explanatory variables. The final sample consists of 28 European countries that have all variables requested in the analyisis. Specifically, the level of Fintech is measured by The Global Fintech Index developed by Findexable, while the factors that influence the Fintech come from dataset of International Monetary Fund (IMF): the number of ATMs, number of commercial bank branches, while the intensity of outstanding deposits with commercial banks and outstanding loans from commercial banks is lower Findings- Regarding the analysis of the year 2021, our result indicates preliminarily that Fintech is negatively affected by the number of ATMs, number of commercial bank branches, while the intensity of outstanding deposits with commercial banks and outstanding loans from commercial banks is lower. This findings are consistent with this assumption: one of the driver of the Fintech is the digitalization. Conclusion- The result of our model indicates that the degree of Fintech at a geographical leve seems to be linked to explanatory variables that are related to the banking world. This represents a useful information to academic, practitioners and policymakers. In fact, according to literature, Fintech has an effect on financial system and financial stability. Therefore the explanation of Fintech phenomenon and its measurement represent a crucial point. Future extensions of research could consider additional measures of Fintech and a focus on the most representative explanatory variables. Keywords: Fintech, financial system, banks, banking, digitalization. JEL Codes: G20, G29, 030

THE SMALL CLAIM COURTS DURING COVID-19: ANALYSIS OF INDONESIAN BANKS’ CLAIMS ON BAD CREDIT

The purpose of this study is to discuss the suitability of small claim courts to solve bad credit claims that are filed by banks as an alternative to dispute contract defaults. The study analyses the trend of banks’ small claims during the COVID-19 pandemic. This study employed an empirical normative approach. It combines a normative legal approach and additional empirical elements in the form of cases and decisions. The results show that some of the regulations that were released before the pandemic, such as the Regulation of the Supreme Court Number 4 of 2019 on the Settlement of Small Claim Courts, provide benefits for banks to settle credit disputes because they allow various expansions. The Regulation of the Supreme Court Number 3 of 2018 on The Administration of Cases in Electronic Courts has introduced some electronic applications. Although business (bank) litigation remains dominant, the trend of bank claims in the middle of the COVID-19 pandemic has dropped. In contrast, the trend of individual claims has increased significantly. The decline is influenced by countercyclical policies that are issued by the Financial System Stability Committee. The committee members consist of representatives of the Ministry of Finance, Bank Indonesia, the Financial Services Authority, and the Deposit Insurance Corporation. It aims to handle and cope with the banks’ crisis related to the pandemic.

Global trends in the financial system and their impact on the banking sector of Ukraine: analysis and recommendations

The paper covers the modern global trends in the financial sphere and their impact on the banking sector of Ukraine. The research was carried out on the basis of a comprehensive analysis of global financial changes, the dynamics of technological innovations and unique challenges facing the banking system of Ukraine. The study reveals key trends in the development of the banking sector, focusing on global challenges and prospects. The modern banking system of Ukraine is in an era of significant technological changes adapted to meet the needs of customers and optimize banking processes. Ukrainian banks must respond to global trends in the financial sphere to ensure competitiveness and meet the growing demands of customers. This requires innovation, digitization and flexibility to respond to rapid changes in technology and consumer behavior. Competition for customers and leadership in innovation are among the key points. Focusing on important aspects of transformation, the scientific work contains not only a thorough analysis of modern trends, but also specific recommendations for Ukrainian banks regarding their effective adaptation to global financial trends. In order to create a strategic direction for Ukrainian banks and ensure their successful future, the authors proposed a comprehensive set of recommended measures covering key aspects of financial activity. If these recommendations are successfully implemented, Ukrainian banks can become the foundation of a stable and innovative financial system that meets the challenges of the global market and contributes to the sustainable development of the country's economy. The paper is distinguished by highlighting not only the problems, but also the opportunities that global financial trends generate. This approach contributes to the uniqueness and value of the work from among the scientific developments in this area for specialists in the financial industry, scientists and everyone who is interested in the future development of the Ukrainian banking system.

Cash Management in Response to COVID-19 Pandemic at Regional Financial and Asset Management Agency of West Nusa Tenggara

This study aims to explore regional treasury management in the face of the COVID-19 pandemic. This research uses qualitative methods through library research and field research to manage cash availability, optimization, and control at the Regional Financial and Asset Management Agency in West Nusa Tenggara Province. Data analysis uses the Atlas.ti application to get codes, categories, and network diagrams. The result shows that effective and efficient cash management is closely related to the presence of a cash management system. Several internal and external constraints challenge the Government in managing cash. The COVID-19 pandemic is one of the external obstacles that has become the Government's primary concern over the past three years. The Government has maintained financial system stability through responsive and adaptive management of the state budget through a cash management system that can retain cash availability and optimize state/regional cash. Maintaining cash management performance during force majeure conditions, such as during COVID-19, is essential in maintaining the availability of state/regional cash to finance government spending.

The implication of cryptocurrency volatility on five largest African financial system stability

This study examined the interconnectedness and volatility correlation between cryptocurrency and traditional financial markets in the five largest African countries, addressing concerns about potential spillover effects, especially the high volatility and lack of regulation in the cryptocurrency market. The study employed both diagonal BEKK-GARCH and DCC-GARCH to analyze the existence of spillover effects and correlation between both markets. A daily time series dataset from January 1, 2017, to December 31, 2021, was employed to analyze the contagion effect. Our findings reveal a significant spillover effect from cryptocurrency to the African traditional financial market; however, the percentage spillover effect is still low but growing. Specifically, evidence is insufficient to suggest a spillover effect from cryptocurrency to Egypt and Morocco’s financial markets, at least in the short run. Evidence in South Africa, Nigeria, and Kenya indicates a moderate but growing spillover effect from cryptocurrency to the financial market. Similarly, we found no evidence of a spillover effect from the African financial market to the cryptocurrency market. The conditional correlation result from the DCC-GARCH revealed a positive low to moderate correlation between cryptocurrency volatility and the African financial market. Specifically, the DCC-GARCH revealed a greater integration in both markets, especially in the long run. The findings have policy implications for financial regulators concerning the dynamics of both markets and for investors interested in portfolio diversification within the two markets.