Free Reserves Research Articles

ПОДАТКОВІ СТИМУЛИ ЕКОНОМІЧНОГО ЗРОСТАННЯ: ДОСВІД ПІВДЕННОЇ КОРЕЇ

The article is devoted to the study of South Korea’s tax policy, its impact on the economic development of this country and ways to use the experience of its tax reforms for the postwar reconstruction of Ukraine. The study has found that a set of measures aimed at stimulating South Korea’s economic development included tax breaks aimed at supporting its export sector, with a focus on knowledge-intensive and high-tech products. The correlation analysis has been used in this study demonstrated the well-known export component of South Korea’s economic growth and has confirmed the positive impact of lower overall tax rates on the country’s GDP growth rate. However, the analysis showed that the correlation of GDP growth with tax revenues in total GDP is almost absent, which means no relationship between the share of taxes in GDP and its growth rate. It has been found that tax policy in combination with other economic measures had a positive impact on the economic development of South Korea. In particular, the country has used special depreciation, investment tax credit and tax free reserves, tax holidays and other tax benefits that had a positive impact on the development of science-intensive export-oriented production. However, it is difficult to measure the net effect of tax breaks on the Korean economy, as they have been accompanied by other measures, such as export industries, which also received widespread credit support in the 1960s. The analysis revealed that the main shortcomings of South Korea’s tax system, which have held back its economic growth for a long time, include the non-transparency of preferential taxation and the complexity of the tax system as a whole. However, in general, the analysis shows that the share of taxes in South Korea’s GDP compared to other countries is at an average level. The article identifies promising ways to use the Korean tax experience in our country. Given the experience of South Korea, the reform of Ukraine’s tax system in the direction of promoting a knowledge intensive export sector on the basis of transparency and prevention of corruption is considered as promising.

FINANCIAL ACCELERATOR AND BANK EXCESS LIQUIDITY IN CEMAC ZONE

In this paper, we broaden the debate on the determinants of bank excess liquidity by focusing on a new mechanism. Using time series data from six CEMAC countries and using shock simulation in a structural VAR as well as Cointegration analysis in an ARDL model, the empirical analysis shows that the financial rigidity caused by the increase in the information asymmetry premium leads to a fall in investment which weakens economic activity. The fall in economic activity amplifies the increase in information asymmetry premium resulting in an increase of free reserves. Finally when the effect of the financial accelerator is reduced by stretching the information asymmetry premium towards zero, then the refunding policy through calls to tender favors a decrease of interest rates, a profusion of credit and consequently the increase of investments and consumption. We suggest all measures aimed at reducing the asymmetry of information on the credit market, in particular, the creation of credit offices and / or public credit registers, the creation of rating agencies for companies and individuals, improvement of the quality of institutions whose poor quality leads to the camoufl age of information and moral hazards.

Blood serum amino acid pool violation of in patients with liver cirrhosis

Objective. To investigate serum amino acid pool changes in patients with liver cirrhosis.
 Materials and methods. 95 patients with liver cirrhosis were participated in the study. In the 1st group (class A disease severity according to Child- Pugh score) there were 18 (18.95%) patients, in the 2nd group (class B) - 25 (26.3%), in the 3rd groups (class C) - 52 (54.7%) patients. The amount of free amino acids in blood serum was determined by reversed-phase high-performance liquid chromatography in isocratic elution mode with electrochemical detection.
 Results. Violations of free amino acid reserves were revealed in patients with cirrhosis of the liver with a predominant accumulation of aromatic amino acids: phenylalanine - (162.45 ± 14.12) nmol/ml, tyrosine - (99.05 ± 10.07) nmol/ml, tryptophan - (76.10 ± 12.40) nmol/ml, as well as an increase in the content of proline, lysine, cysteine (p <0.05) . In parallel, the decreasing of free serum amino acids with branched side chain levels were observed: valine - up (150.10 ± 8.92) nmol/ml leucine - up (75.14 ± 5.12) nmol/ml (p < 0.05) and isoleucine - up to (80.40 ± 8.01) nmol/ml.
 Conclusions. The correlation between the second degree of thick guts dysbiosis and increased levels of tryptophan was determined (r = 0.77; p <0.01). III degree thick dysbiosis was correlated with increasing levels of phenylalanine (r = 0.71; p <0.01). In patients of 2nd group the correlations between levels of tryptophan and II degree of intestinal dysbiosis (r = 0.58; p <0.01) and the levels of tyrosine in phenylalanine in III stage intestinal dysbiosis were detected.

Variation in winter thrush abundance during the hunting season in southern Europe: the importance of hunting–free reserves

We analysed variations in the abundance of the song thrush (Turdus philomelos) and the blackbird (T. merula) in the hunting season in hunting areas and hunting–free reserves. After controlling for habitat, we found that the abundance of song thrushes (hunted species) was lower in hunting areas than in reserves during the hunting season. This effect was not found for the blackbird (non–hunted species). This finding indicates hunting–free reserves have a positive effect on song thrush conservation. Further research is crucial to determine the traits that should be promoted in this type of reserve in order to improve their efficiency.

КРЕДИТНИЙ КАНАЛ ТРАНСМІСІЙНОГО МОНЕТАРНОГО МЕХАНІЗМУ ТА ЙОГО МІСЦЕ В ЕКОНОМІЧНОМУ ЗРОСТАННІ

The article examines the impact of the credit channel of the transmission monetary mechanism on economic growth. The features and qualitative characteristics of the transmission monetary mechanism, the main transmission channels are revealed. It is determined that the economic growth of the state depends primarily on the dynamic development of the real sector of the economy, and is estimated using the gross domestic product. It is proved that the credit channel of the monetary transmission mechanism occupies a leading place in ensuring economic growth in the country. The article substantiates that the credit channel reflects the impact of the central bank's monetary policy on the availability of resources in credit markets by influencing monetary policy instruments to change the supply of credit resources by changing the amount of free reserves of the banking system.

Bankovní sektor České republiky: vývoj v krizovém období a současnost

Autor analyzuje vývoj českého bankovního sektoru za posledních deset let se zaměřením na vybrané položky aktiv a pasiv s cílem posoudit stav a vývoj likvidity a solventnosti. Banky neměly vážnější problémy ani v letech ekonomického poklesu 2009 a 2012-2013, nepotřebovaly pomoc od centrální banky či od státu. Potenciálním a paradoxním problémem může být vysoký stav volných rezerv u centrální banky. Jde sice o bezriziková a vysoce likvidní, ale také o málo výnosná aktiva. Tento stav rovněž vede k prakticky nulovému stavu půjček bank od centrální banky. Hlavním důvodem dramatického růstu rezerv byly devizové intervence proti koruně. Banky jako celek jsou také solventní, průměrná kapitálová přiměřenost výrazně převyšuje stanovené minimální požadavky. Těžké finanční krize se ve sledovaném období nevztahují na český bankovní systém.

THE IMPACT OF THE MONETARY TRANSMISSION MECHANISM ON MACROECONOMIC STABILITY IN UKRAINE

The ability of changes in money supply to influence business activity is realized through the transfer mechanism of monetary policy. The purpose of the study is to reveal the theoretical foundations of the transmission mechanism of monetary regulation and the key channels for its implementation to ensure economic growth. The effect of the interest rate channel is that the change in monetary policy, primarily through the official discount rate, directly affects the short-term rates on the financial market, and through the yield curve – the long-term rates. The credit channel reflects the impact of the central bank's monetary policy on the availability of resources on the credit markets, primarily because of the volatility of the free reserves of the banking system. The action of the currency channel is that, in the event of a decrease in domestic interest rates resulting from an increase in money supply, the demand for the national currency decreases, which leads to a decrease of the national currency, and as a result, to the growth of net exports and aggregate demand. The action of the money channel is characterized by the direct influence of the money supply on the money market and the level of prices in the economy. The channel of expectations characterizes the impact of monetary policy changes on the expectations of economic agents concerning future prices and the macroeconomic situation and, accordingly, their decisions on volumes of consumption, savings and investments. The perspective direction in the field of improving the functioning of the transmission mechanism in Ukraine may be the further orientation towards the mode of inflation targeting, rebooting the banking system.

Asymptotic results for a Markov-modulated risk process with stochastic investment

In this paper we consider a Markov-modulated risk model, where the premium rates, claim frequency and the distribution of the claim sizes vary depending on the state of an external Markov chain. The free reserves of the insurer are invested in a risky asset whose prices are modelled by a geometric Brownian motion, with parameters that are also influenced according to the external Markov process. A system of integro-differential equations for the ruin probabilities and for the expected discounted penalty function is derived. Using Laplace transforms and regular variation theory, we investigate the asymptotic behaviour of both quantities for the case of light or heavy tailed claim size distributions. Specifically, within this setup (where we lose the strong Markov property of the risk process), we show that the ruin probabilities decrease asymptotically as a power function in the case of the light tailed claims, whilst for the heavy tails we show that the probabilities of ruin decay either like a power function, depending on the parameters of the investment, or behave asymptotically like the tails of the claim size distributions.

SHARE HOLDERS� VALUE CREATION OF INFOSYS TECHONOLIGIES LTD

ABSTRACT There are different stakeholders who are directly interested in Financial matters of a company. These stakeholders include promoters, moneylenders, government, creditors, shareholders etc. In the era of corporate governance and globalization, the efficient management of a company is pre-condition for survival of any company. The value creation for shareholders is one of the parameter of efficient management of the company. It is continuous endeavor of companies to increase shareholders wealth. Shareholder wealth is directly connected with financial health of the company and shareholders both. In this paper an effort is made to analyze the change in shareholders wealth in Infosys Technologies limited over last five years ie. from 2002-03 to 2006-07. The shareholders value creation by Infosys technologies is analyzed from the view point of (i) Free Reserves, (ii) Right Shares, (iii) Bonus Shares, (iv) Share split, (v) Selling off the shares at NASDAQ, (vi) Market price of shares (vii) Market capitalization of Shares, (viii) Dividend. Some qualitative factors such as Ethics honesty merit CSR, exploring opportunity R&D, expansion, employees satisfaction, customer satisfaction etc. are found responsible for steady growth of the company which are also responsible for value creation. It is concluded that the company has adopted three dimensional measures for value creation. Which are Qualitative dimension, dimension of financial strength in the form of EPS, BOOKVALUE per share and free reserves. The third dimension is transfer of value creation in the hands of share holders in the form of dividend pay out, bonus share and increase in the market price of shares. The Infosys Technologies has proved itself as investors friendly company over the years.

Corporate Risks, Risk Bearing Ability and Equity

There is a relation between corporate risks, risk bearing ability and equity. In order to assess the risk bearing ability of a corporation, one reference figure is equity, understood as the sum of legal capital and reserves, free reserves and accrued profits. Equity shows the risk bearing ability related to the risk of asset reduction as well as the ability of the corporation to attract new liquidity by increasing debts, in case of a negative free cash flow. Equity is the risk reserve of the corporation. The relation between equity and risk bearing ability allows defining the necessary amount of equity by analyzing the corporate risks. Furthermore, it leads to rules for the valuation of assets, the creation of reserves and as to the board's duty of care on how to pursue the corporate strategy.

The Reserve Equation and the Analytics of Pakistan’s Monetary Policy

This paper deals with the computation and analysis of some fundamental reserve aggregates and associated monetary statistics, which impart important information regarding the design and conduct of monetary policy at the State Bank of Pakistan (SBP). Specifically, we compute the data series for borrowed, unborrowed, free, and drainable reserves using balance sheet data published by the SBP for the period 1985-2009. Results show that Pakistan’s monetary policy revolves around managing the exchange rate while using the t-bill rate as a key policy instrument. However, the value of the t-bill rate is both incorrectly and sub-optimally related to macroeconomic fundamentals rendering monetary policy time inconsistent. This hinges on the finding that, since 2000/01, the SBP has targeted the net free reserves of the banking system at 4 percent of total private deposits. Among other observations, we find that the scope of open market operations as a tool of monetary policy remains limited and that this limited role of open market defenses derives from the concern of the central bank to sterilize its own foreign exchange reserves. Furthermore, the growth rate of unborrowed plus drainable reserves bears a strong negative correlation with the annual average rate of inflation, which, on account of the former being consistently negative since 2005, implies that neither the government nor the SBP have an overriding concern for controlling inflation.

The Reserve Equation and the Analytics of Pakistan's Monetary Policy

This paper deals with the computation and analysis of some fundamental reserve aggregates and associated monetary statistics which impart important information regarding the design and conduct of monetary policy at the State Bank of Pakistan. Specifically, we compute the data series for borrowed, unborrowed, free and drainable reserves using balance sheet data published by the State Bank of Pakistan for the period 1985-2009. Results show that Pakistan’s monetary policy revolves around managing the exchange rate while using the t-bill rate as the key policy instrument. However, the value of the t-bill rate is both incorrectly and sub-optimally related to macroeconomic fundamentals rendering monetary policy time inconsistent. This hinges on the finding that since 2000-01, State Bank of Pakistan is targeting net free reserves of the banking system at 4% of total private deposits. Among other observations, we find that the scope of open market operations as a tool of monetary policy remains but limited and that this limited role of open market defenses derives from an indiscreet concern of the central bank to sterilize its own foreign exchange reserves. Furthermore, the growth rate of unborrowed plus drainable reserves bears a strong negative correlation with the annual average rate of inflation, which, on account of the former being consistently negative since 2005, implies that the government and the State Bank of Pakistan both have absolutely no concern for controlling inflation.

The Gerber-Shiu Discounted Penalty Function for Risk Process with Double Markovian Environment

In this paper, we study the Gerber-Shiu discounted penalty function. We shall consider the case where the discount interest process and the occurrence of the claims are driven by two distinguished Markov process, respectively. Moreover, in this model we also consider the influence of a premium rate which varies with the level of free reserves. Using backward differential argument, we derive the integral equation satisfied by the expected discounted penalty function via differential argument when interest process in every state is perturbed by standard Wiener process and Poisson process. In some special cases, closed form expression for these quantities are obtained.

Ruin probability with variable premium rate and disturbed by diffusion in a Markovian environment

We consider a risk model with a premium rate which varies with the level of free reserves. In this model, the occurrence of claims is described by a Cox process with Markov intensity process, and the influence of stochastic factors is considered by adding a diffusion process. The integro-differential equation for the ruin probability is derived by a infinitesimal method.

On Merton’s Problem for Life Insurers

This paper deals with optimal investment and redistribution of the free reserves connected to life and pension insurance contracts in form of dividends and bonus. Formulated appropriately this problem can be viewed as a modification of Merton’s problem of optimal consumption and investment with a very particular form of consumption and utility hereof. Both are linked to a finite state Markov chain. We distinguish between utility optimization of dividends, where a semi-explicit result is obtained, and utility optimization of bonus payments. The latter connects to the financial notion of durable goods and allows for an explicit solution only in very special cases.

On Merton’s Problem for Life Insurers

This paper deals with optimal investment and redistribution of the free reserves connected to life and pension insurance contracts in form of dividends and bonus. Formulated appropriately this problem can be viewed as a modification of Merton’s problem of optimal consumption and investment with a very particular form of consumption and utility hereof. Both are linked to a finite state Markov chain. We distinguish between utility optimization of dividends, where a semi-explicit result is obtained, and utility optimization of bonus payments. The latter connects to the financial notion of durable goods and allows for an explicit solution only in very special cases.

A Rehabilitation of Monetary Policy in the 1950's

Monetary policy in the United States in the 1950s was remarkably modern. Analysis of Federal Reserve records shows that policymakers had an overarching aversion to inflation and were willing to accept significant costs to prevent it from rising to even moderate levels. This aversion to inflation was the result of policymakers' beliefs that higher inflation could not raise output in the long run, that the level of output that would trigger increases in inflation was only moderate, and that inflation had large real costs in the medium and long runs. Furthermore, both narrative and empirical analysis indicates that policymakers were not wedded to free reserves or other faulty indicators in their implementation of policy. Empirical estimates of a forward-looking Taylor rule show that policymakers in the 1950s raised nominal interest rates more than one-for-one with increases in expected inflation, and suggests that monetary policy in the 1950s was more similar to policy in the 1980s and 1990s than to that in the late 1960s and 1970s. One implication of these findings is that the inflation of the late 1960s and 1970s must have been the result of a change in the conduct of policy.

Probability of ruin with variable premium rate in a Markovian environment

The probability of ruin is investigated under the influence of a premium rate which varies with the level of free reserves. In the considered risk model, the occurrence of claims is described by the Cox process.

Optimal dynamic equilibrium in insurance policies

AbstractInsurance companies sell contracts of various types each of them having a specific probability of return. Insurers may also own, at the same time, several insurance contracts which evolve through time. In this context, expectation and variance of the free reserves appear as functions of the number of customers in different classes as well as their evolution. Assuming that the customer system can be formulated as an open Markov one characterized by free entry, it is interesting to seek the optimal new customer distribution over the different customer classes j, which permits the minimization of the variance of free reserves for a desired average level of free reserves at a given time horizon. It is shown that, under some conditions, the customer system converges to an optimal growth steady state.

What Should Central Banks Do? What Should Be Their Macroeconomic Objectives and Operations?

Before turning to the normative question of what Central Banks (hereafter CBs) should do, we need to deal with the contentious issue of what CBs actually can do in the field of monetary control. One might think that this should be a relatively straightforward matter of fact. Instead, there is a yawning chasm of mutual misunderstanding, which has persisted for decades, between economists and those working in CBs, which has bedevilled the subject. Virtually every monetary economist believes that the CB can control the monetary base (hereafter Mo), and, subject to errors in predicting the monetary multiplier, the broader monetary aggregates as well. After all, Mo (apart from some relatively unimportant qualifications about coins from the Mint), represents the liabilities of the CB, and the CB should be able to control its own liabilities by open market operations. Hence the normal assumption is that Mo is controllable within a narrow margin. If the Central Bank should fail to do so, it must be because it has chosen some alternative operational guide for its open market operations, e.g. holding interest rates constant at some level, which operational rule is frequently decried as sub-optimal. Assuming that CBs can, almost perfectly, control Mo, economists have constructed several simulated schemes of how an optimal rule for so doing might be set up; McCallum (I993a, b) provides good recent examples. Almost all those who have worked in a CB believe that this view is totally mistaken; in particular it ignores the implications of several of the crucial institutional features of a modern commercial banking system, notably the need for unchallengeable convertibility, at par, between currency and deposits, and secondly that commercial bank reserves at the CB receive a zero, or belowmarket, rate of interest. The first means that fluctuations in the public's demand for cash, which are both strongly seasonal and somewhat unpredictable, must be accommodated. The second means that commercial banks will not willingly hold free reserves at the end of each day (assuming for this purpose that a stated reserve ratio has to be held on each day, rather than averaged over, say, a couple of weeks) beyond that needed to meet late fluctuations in the demand for cash after the money market has closed, or become thin. Only if interest rates fall to the very low levels of the I930s, and/or risks of interest rate variability or late-in-the-day cash runs increase, would commercial banks increase their desired free reserves. Thus, given the