Liquid Assets Research Articles

Fortifying Physical and Psychological Wellbeing: Leveraging Capital for Resilience Against Racism and Adversity Across Racial Groups.

This study examines the impact of various adversities-including racism, indirect adversity, loss of a loved one, and adverse police contact-on psychological and physical health outcomes such as sleep quality, depressive symptoms, serious illness, and self-reported health. Additionally, it investigates how economic, educational, social, and spiritual capital moderate these effects, with attention to racial differences. Leveraging a sample of 1139 participants from the 1995 Detroit Area Study, analyses reveal nuanced effects of adversity, with the impact being neutralized, attenuated, or amplified by coping capacities. Economic and educational supports generally provide protectivehealth benefits, while social and religious supports reveal complex, sometimes divergent effects. Subgroup analyses reveal racial differences: for instance, Black individuals face a higher likelihood of developing aserious illness in connection with adverse police encounters, and White individuals benefit from liquid assets in buffering depressive symptoms. These findings underscore the need for multifaceted, context-sensitive health interventions and policies that enhance economic stability, educational opportunities, and mental health services, while strengthening social and spiritual support systems to build resilience and mitigate the adverse health effects of these adversities.

Effectiveness of Internal Control of Financial Reporting (PIPK) on Inventory Management at BPS Pasuruan Regency

Inventory is one of the important and liquid assets in an organization, including at BPS Pasuruan Regency. Effectively managed inventory can maintain smooth operations, minimize the risk of deviations, and help the organization achieve its goals. The flow of inventory management includes the process of receiving, storing, issuing, and controlling. Internal financial reporting control (PIPK) is the key to ensuring that inventory management has been running effectively and accountably. This study aims to analyze the effectiveness of the implementation of PIPK on inventory management at BPS Pasuruan Regency. The study was conducted using a qualitative approach with a case study method. Data were collected through interviews with inventory managers, direct observation, and documentation. The results of the study indicate that PIPK at BPS Pasuruan Regency has been implemented quite well. The implementation of PIPK has had a positive impact on inventory management at BPS Pasuruan Regency, such as increasing accountability, efficiency, and effectiveness in inventory management.

Carry Trades and FX Risk Buffers: Foreign Currency Debt of Emerging Market Firms

Abstract The surge in foreign currency (FC) corporate debt in emerging economies has sparked concerns about macroeconomic stability, heightened by speculation about non-financial firms engaging in carry trades. Using firm-level data on the currency denomination of both assets and liabilities, we find evidence of firms' carry trades: firms save in local currency liquid assets and earn higher interest income after issuing short-term FC debt. They also set aside FC liquid assets as FX risk buffers. A large degree of heterogeneity in incentives is observed. Notably, listed firms participate more in carry trades and allocate less FX risk buffers than non-listed firms.

Risk for Financial Precarity From Hospitalization: Implications for Targeting Financial Assistance in Medicare.

High out-of-pocket costs in Medicare may leave many beneficiaries in financial precarity. Beneficiaries with modest incomes are often ineligible for Medicaid (which covers most out-of-pocket Medicare costs) and may have insufficient resources to pay an unexpected health care bill. This has prompted calls to improve financial protections, but the target population remains uncharacterized. To identify beneficiaries who would face financial precarity if exposed to the Medicare Part A hospital deductible ($1600). Cross-sectional study of the 2018 wave of the Health and Retirement Study. United States. Community-dwelling Medicare beneficiaries with incomes greater than 100% to 400% or less of the federal poverty level. Nationally representative estimates of financial precarity, defined as having insufficient funds to pay the deductible, examined across 4 scenarios that considered checking and savings account balances, total liquid assets (with a reserve for future living costs), and supplemental insurance. Among 4881 beneficiaries (population weighted n = 26 619 823), 45.0% had insufficient funds in checking and savings accounts to pay the Medicare hospital deductible. Financial precarity was more prevalent among Black and Hispanic versus White beneficiaries (73.5% and 76.2% vs. 36.2%), those with less versus more than high school education (70.0% vs. 37.1%), and those with 3 or more versus 2 or fewer chronic conditions (49.2% vs. 39.1%). In defining financial precarity to include beneficiaries with insufficient liquid assets to pay the deductible while maintaining a $5000 reserve for future living expenses, 50.7% were financially precarious. Building off this definition to assume supplemental insurance covered the deductible, 39.0% remained financially precarious. Cost-sharing exposure is limited to hospitalization. Many Medicare beneficiaries with modest incomes are at risk for financial hardship from costs of a single hospital stay. National Institute on Aging.

The Determinants of Bank’s Liquidity: Comparative Analysis From Global Islamic Banks and Conventional Banks

This study investigates the determinants of bank liquidity in both Islamic and Conventional banks across 15 countries, focusing on key variables such as profitability, capital adequacy, bank size, and credit risk. Utilizing data from 107 Islamic banks and 506 Conventional banks spanning from 2013 to 2022, the analysis reveals significant differences in liquidity management between the two banking systems. The Random Effect Model (REM) was employed based on the Hausman test results to ensure robustness. The findings indicate that profitability negatively impacts liquidity in Islamic banks, likely due to investments in less liquid, Sharia-compliant assets, while it positively influences liquidity in Conventional banks, where profits are often reinvested into liquid assets. Capital adequacy emerges as a crucial determinant of liquidity in both bank types, highlighting the importance of maintaining strong capital buffers. The study also finds that credit risk significantly reduces liquidity in Conventional banks, whereas it has a lesser impact on Islamic banks. These insights contribute to a deeper understanding of liquidity management practices in Islamic and Conventional banks, offering valuable implications for bank managers, policymakers, and regulators.

Vulnerable options with regime switching and stochastic liquidity

Investigating default risk in pricing options holds significant practical importance, as nearly all market participants and institutions face credit risk. Additionally, economic cycles and asset liquidity are crucial factors that should be incorporated. This paper considers these factors and derives an analytical pricing formula. Specifically, we model the economic cycles through switching volatility driven by a continuous-time Markov chain, while we adopt a discounting factor based on market liquidity levels to model the asset liquidity. We establish a risk-neutral measure after embracing a regime-switching Esscher transform, and formulate a price representation to value vulnerable options analytically despite the complexity of the developed model. We conduct several numerical experiments to validate the model’s efficacy and flexibility.

Liquidity risk analysis via drawdown-based measures

Trading volumes are key variables in determining the degree of an asset's liquidity. We examine the volume drawdown process and crash recovery measures in rolling-time windows to assess exposure to liquidity risk. The time-varying windows protect our financial indicators from the massive amount of volume transactions that characterize the opening and closing of the stock market. The empirical study is carried out for three Nasdaq-listed assets from April to September 2022. Firstly, we shape all of the volume time series using a weighted-indexed semi-Markov (WISMC) model, as well as the EGARCH and GJR models for comparisons. Next, we calculate drawdown-based risk measures on real and synthetic data, simulated from all the considered econometric models. Finally, we employ the Kullback-Leibler divergence to compare real and simulated risk indicators. Results reveal that the WISMC model reproduces all the drawdown-based risk measures better than the EGARCH and GJR models do for all the considered stocks.

“Liquid assets”: Coastal wetlands, regional parks, and the protection of Mediterranean deltas

After a century of accelerating drainage, in the 1960s coastal wetlands became the object of unprecedented protection campaigns around the world. This paper compares the history of three successful cases of coastal wetland protection in the Mediterranean between the 1960s and 1980s: the Rhône (France), Po (Italy), and Ebro (Spain) River deltas. As most of the coast of Mediterranean Europe, these three cases were at the center of renewed redevelopment attempts, to further expand intensive agriculture, industry, and seaside tourism, which invariably involved wetlands drainage. In these three cases, protection was achieved by establishing “regional parks” in the deltas. We argue that it was not by chance. Wetland advocates at the international, national, and local scales coated their plea for protection in the language of economics, making the case for wetlands’ value as “liquid assets.” They argued that wetland protection could rhyme with development and, abandoning initial projects to protect deltas as national parks, focused their efforts on creating regional parks instead. Stemming from the European regional planning movement, the regional park framework proved expedient to combine development expectations and wetland protection. Thanks to modular land use zoning, it promised to combine productive activities with protected areas, without imposing uniform restrictions on the entire deltas such as those often associated with national parks. The history of these three coastal parks, therefore, sheds light on the counterintuitive but strong relationship existing between coastal development and protection by uncovering the discursive strategies and unlikely coalitions that made conservation possible.

Present Bias Amplifies the Household Balance-Sheet Channels of Macroeconomic Policy

Abstract We study the effect of monetary and fiscal policy in a heterogeneous-agent model where households have present-biased time preferences and naive beliefs. The model features a liquid asset and illiquid home equity, which households can use as collateral for borrowing. Because present bias substantially increases households’ marginal propensity to consume (MPC), present bias increases the effect of fiscal policy. Present bias also amplifies the effect of monetary policy, but at the same time, slows down the speed of monetary transmission. Interest rate cuts incentivize households to conduct cash-out refinances, which become targeted liquidity injections to high-MPC households. Present bias also introduces a motive for households to procrastinate refinancing their mortgages, which slows down the speed with which this monetary channel operates.

Research on Problems and Solutions of Quantitative Investment in the Chinese Market

Quantitative investment has gradually become increasingly important in the Chinese finance market in recent decades. It improves the efficiency of investment, reduces the risk of investment, enhances the liquidity of some market assets and provides new opportunities to accumulate wealth for investors. As a new investment method, it raises some problems which lead to the turmoil of the market when it keeps developing and gaining traction. This paper will review the current situation of quantitative investment in the Chinese market from its development history and the sizes of funds. This study shows that there are mainly four problems existing in the application of quantitative investment in China. Listed below are problems. The evident government intervention in the market has a negative impact on the fitting effectiveness of quantitative models. Some kinds of assets and commodities face poor liquidity and for them, quantitative investment strategies can hardly be conducted accurately. The accuracy of quantitative analysis can be unreliable for the financial data is sometimes incomplete and unreliable in the Chinese market. The high-frequency trading affects the stability of the whole market because of lack of market supervision. This paper also puts forward relevant countermeasures and suggestions according to these problems. This study has great significance to the healthy development of quantitative investment in the Chinese market.

The Determinants of Liquidity: A Comparison of Islamic and Conventional Banks Covering the COVID-19 Period

Banking and risk are synonymous concepts. The risk concepts for both conventional and Islamic banks are broadly similar, and liquidity risk is among the most important risks that all banks are exposed to. The management process of liquidity risk, which arises when banks do not have enough assets to meet their liabilities at maturity, may differ in conventional and Islamic banks. This study aims to present a comparative analysis of the liquidity determinants of conventional and Islamic banks operating in Turkey. Using the data of 3 Islamic and 17 conventional banks for the period between 2011Q1-2022Q2, the analysis, which also aims to see the short and long-term effects, concludes that the determinants of liquidity risk for conventional and Islamic banks are largely similar. However, the liquidity of Islamic banks is more sensitive to bank-specific variables. The findings showed that Islamic banks, which cannot use all of the conventional liquidity management tools in the liquidity management process for different reasons, have to hold higher liquid assets than conventional banks in the short term, even if they are balanced in the long term.

Cross-momentum strategies in the equity futures and currency markets

This study focuses on two of the most liquid assets—currencies and international equity futures indices—and investigates whether cross-momentum enhances momentum portfolios. We uncover that a combination of equity futures and currency portfolios sorted by cross-momentum outperforms a combination of those sorted by normal-momentum. The change in the Sharpe ratio is 0.32 and the economic gain based on the performance fee measure differs by 4.11% per annum. Moreover, we observe that the cross-momentum strategy is more strongly associated with commodity exporting countries. This stems from the positive relationship between equity futures and macroeconomic conditions for commodity exporting countries.

Income inequality, banking competition, and monetary policy

AbstractPrevious research has shown that inflation contributes to income inequality. However, in recent years, there have also been increasing concerns about the effects of concentration in the banking system on economic activity. Notably, we ask the fundamental questions: “How does the concentration of assets in the banking system contribute to the concentration of income in society? Do the effects of inflation on inequality depend on the degree of banking concentration?” We develop a general equilibrium model with heterogeneous agents and microeconomic foundations for financial intermediaries to study the effects of concentration and monetary policy. The model predicts that concentrated banks contribute to inequality by holding large amounts of liquid assets in order to raise private—but not social—returns from capital investment. As concentrated banks distort the level of investment in the economy, the adverse effects of inflation on inequality are magnified in concentrated banking systems.

A Comparative Study On Financial Performance Of Sbi In The Pre And Post Merger Periods Using Camels Rating Model

The core objective of the study aims to compare the performance of State Bank of India through CAMELS model during the pre and post merger periods with five of its associates. The study period covers 2012 to 2022. Data from secondary sources were used in this study. The comparison is made on the basis of the parameters like capital adequacy, asset quality, management quality, earning quality, liquidity and sensitivity to market risk. Data is analysed by using Paired sample t-test and also CAMELS ratings in the present study. The outcomes of the study reveals that SBI’s financial competency is improving post merger periods. But attention is required in liquidity quality in terms of total loans to total deposits (L1). Liquidity quality in terms of circulating assets to total assets (L2) and sensitivity to market are excellent in CAMELS ranking. Out of six parameters in CAMELS, management quality and liquidity quality in terms of total loans to total deposits (L1) are found to be significant in the post merger period. The study concluded that post-merger SBI's earnings quality is improved but liquidity did not. So management should be meticulous with managing liquid assets.

Research on Working Capital Management Performance of Wuliangye from the perspective of supply chain

During the process of the firm's continuing existence and expansion, the working capital of the enterprise, which is the most liquid asset of the business, plays a critical part in the process. The liquor industry has been under the simultaneous strain of market consumption structure upgrade and overcapacity in recent years. Both of these pressures have been a challenge for the sector. As a consequence of this, the amount of competitiveness that exists within the industry has recently increased. Therefore, the industry needs to leave its old way of thinking, which focuses on the management of its internal working capital, and instead pay more attention to the performance that is brought about by coordinating with important firms in the supply chain. This is because performance is directly related to the efficiency of the supply chain. Using Yibin Wuliangye Co., Ltd. as the research object, this paper first examines the internal structure of the company's working capital, then, from the perspective of the supply chain, from the procurement, production, and sales of three links, conducts an in-depth analysis of the status quo of the company's working capital management, discovered that Wuliangye in the management of the working capital of the three links of the problem of occupying too much of the funds of the suppliers, higher production costs, and the reduction of contractual liabilities. In conclusion, it provides targetedrecommendations for optimisation with the purpose of enhancing Wuliangye's capability to adequately manage its working capital and promoting the long-term growth of the company.

Real Estate Insights: The current state and the new future of tokenization in real estate

PurposeThis real estate insight provides a comprehensive analysis of the current state and future potential of tokenization in the real estate industry mentioning several challenges to overcome to take advantage of this technology. We highlight potential benefits, including enhanced liquidity, increased security and improved accessibility. Additionally, the real estate insight critically discusses potential drawbacks, such as regulatory challenges and technological risks, and explores the impact of tokenization on real estate prices.Design/methodology/approachThis real estate insight employs a comprehensive literature review alongside a qualitative analysis of various case studies to explore current implementations of tokenization within the real estate industry. Multiple applications of tokenization in the real estate industry are examined, including fractional ownership, property management and transaction processes. The study investigates the optimization potential of tokenization for asset liquidity in the real estate area, transaction transparency and security. It also critically discusses potential challenges, such as regulatory compliance, security vulnerabilities and market adoption.FindingsThe future of real estate tokenization, driven by blockchain technology and smart contracts, offers significant potential for growth, enhancing liquidity and accessibility through fractional ownership. Smart contracts automate and secure transactions, while evolving standards and regulatory frameworks in regions like North America, Europe and Asia support market expansion. Since its initial implementation with the St. Regis Aspen Resort STO, a stream of successful projects has highlighted the viability of tokenization. However, challenges remain, including the need for regulatory clarity, industry and customer education, displacements of market participants and jobs and environmental impacts. Integrating advanced technologies like AI and IoT can further streamline property management and investment decisions.Practical implicationsThe real estate insight’s practical implications extend to industry professionals, policymakers and technology developers. Professionals gain insights into how tokenization can enhance liquidity and security in the real estate sector, guiding strategic decision-making. For policymakers, understanding potential challenges like regulatory compliance and technological risks informs the development of supportive regulations. Technology developers can also benefit from understanding the sector-specific applications and concerns raised. Highlighting the need for robust security measures and regulatory compliance in tokenization systems may foster better design practices. Therefore, the real estate insight’s findings could significantly shape the future development of tokenization integration in the real estate industry.Originality/valueThis real estate insight offers original value through a comprehensive analysis of the current and future impacts of tokenization in the real estate industry. It examines various applications of tokenization and critically discusses the potential challenges. The focus on informing strategic decisions for professionals and policymakers enhances its utility as a resource. Additionally, by addressing both the benefits and drawbacks, this study contributes to the broader discourse on the societal implications of tokenization. In the context of rapid technological advancement, such thorough studies are rare, further underscoring the real estate insight’s originality.

Real asset liquidity and accounting conservatism: evidence from asset redeployability

PurposeThis study examines the implications of real asset liquidity for accounting conservatism. We investigate whether the liquidity of a firm’s physical assets mitigates lenders’ demand for conservatism by increasing the amount lenders can recover if the firm is liquidated, a theoretical prediction in Göx and Wagenhofer (2009).Design/methodology/approachWe use an asset redeployability index as a proxy for firm-level real (physical) asset liquidity and adopt ordinary least squares (OLS) regressions in the test. We also investigate the differential impact of real asset liquidity on conservatism in two unique settings where lenders’ demand for accounting conservatism varies (loan initiation and bank deregulation).FindingsWe find that accounting conservatism decreases as real asset liquidity increases. The negative effect of real asset liquidity on conservatism increases as the quantity of the firm’s real assets increases, and the negative association is strengthened when firms face high financing constraints and have access to public debt markets. The moderating effect of real asset liquidity on lenders’ demand for conservatism increases (decreases) when real asset liquidity is more (less) important to lenders.Originality/valueThis study provides direct empirical evidence for the theoretical prediction in Göx and Wagenhofer (2009). Prior research shows that real asset liquidity impacts a firm’s capital structure and investment decisions (Campello and Giambona, 2013; Kim and Kung, 2017; Ortiz-Molina and Phillips, 2014; Williamson, 1988). We complement this literature by providing evidence that real asset liquidity also plays a role in financial reporting by reducing accounting conservatism.

A Financial Analysis and Valuation of Chevron Corporation

With the continuous development of the global economy, the demand for energy continues to grow, and the market size of oil and gas as an important source of energy continues to expand, and the growth potential of the oil and gas market in the future is still huge. As an internationally renowned energy company, Chevron occupies an important position in the global oil and gas market. Firstly, the financial indicator analysis method is used to compare the financial data in 2023 with the other three energy companies to obtain its financial strength with strong asset liquidity, high solvency and strong profitability. Secondly, from the aspects of profitability, development ability and valuation, it is concluded that Chevron has strong market competitiveness, large room for stock price growth, and greater investment opportunities. Finally, it is concluded that Chevron has a high investment value, but it still faces certain risks and challenges, and it is necessary to pay attention to the impact of international oil price fluctuations on the company's performance and should pay close attention to its risk factors and take corresponding measures to face it positively.

PENGARUH SEKURITISASI KPR TERHADAP ASET KPR BTN DAN DAMPAKNYA TERHADAP PENINGKATAN KEPEMILIKAN RUMAH MASYARAKAT INDONESIA

Bank funding sources that are more efficient and more independent than using only third party funds that can be withdrawn at any time by depositors. One of the efforts to overcome the dependence of third party funds for Home Ownership Credit Financing is by securitizing KPR assets that have been financed in the stock market. Types of business industries that have implemented asset securitization as a funding instrument in carrying out their business include banking, electricity, toll roads and airlines. KPR securitization by banks is considered important because it can convert KPR receivables into liquid assets without having to wait for the return of mortgage installments for the next 20 years, and the proceeds from this securitization can be used to be channeled back into new mortgages and increase the number of home ownership for Indonesian citizens. However, only state-owned banks such as Bank Mandiri and Bank BTN have only recently implemented KPR asset securitization. Bank BTN has been securitizing since 2009 and Bank Mandiri in 2016, so it can be concluded that in the current banking industry there is still a gap between the timeframe for the source of funds and those distributed in the mortgage business (mismatch funding).

Liquidity regulation, bank capital ratio, and interbank rate

We study the impact of the Basel III liquidity coverage ratio (LCR) on bank capital ratio and the interbank rate in a traditional banking model. We find that inappropriate parameters assigned to calculate High-Quality Liquid Assets (HQLAs) and Net Cash Flows (NCOs) would lower the equilibrium capital ratio especially when the required liquidity ratio is strengthened. In addition, these regulatory parameters may have macro-prudential effects to steer the interbank rate.