Regional Development Banks Research Articles

Influence of Service Quality to the Satisfaction, Commitment and Costumers Saving Relationship intention on the Main Branch of South East Sulawesi Regional Development Bank

Influence of service quality to the satisfaction, commitment and costumers saving relationship intention on the main branch of South East Sulawesi Regional Development Bank. Service quality delivery to the costumers due to the competition with the other services company is analyzed using descriptive statistical analysis techniques and interferential statistic using Structural Equation Modeling (SEM) package program AMOS 4.0 and SPSS version 11.5. The result shows that service quality has significant influence to the satisfaction, commitment and relationship intention.

Financing utilities: How the role of the European Investment Bank shifted from regional development to making markets

In the face of continuing financial and economic crises, the European Investment Bank (EIB) has been criticized for being overly-conservative in its loans to Europe. Critics in particular have called on the EIB to vastly increase its investment in utilities as a counter-cyclical measure. To take stock and, in order to evaluate the role of the EIB in financing utilities over time, we compile and analyze an original database of all EIB utilities project loans from 1958 to 2004. We find the EIB started out by functioning as a regional development bank, prioritizing utilities finance in its members' poorer zones; however, energy crises in the 1970s marked a shift whereby the logic of EIB finance to utilities became more politically-oriented. By the 1980s, utilities projects supported by the EIB were intimately related to those required for the Single Market. The origins of the EIB's current conservative approach to utilities loans was born in the 1970s and fully consolidated by the 1990s.

O sistema brasileiro de instituições financeiras subnacionais para o desenvolvimento: um panorama

O objetivo deste trabalho é oferecer um panorama sobre a experiência brasileira recente com o sistema composto das instituições financeiras públicas que chamaremos de "subnacionais", voltadas para o financiamento do desenvolvimento: um banco regional de desenvolvimento, três bancos estaduais de desenvolvimento e 13 agências estaduais de fomento. Em geral, esse sistema é débil, possui fontes de funding pouco diversificadas e depende do BNDES e dos governos estaduais. As operações de crédito oriundas das instituições financeiras subnacionais para o desenvolvimento (IFDs-SN) são qualitativamente distintas das dos bancos públicos federais brasileiros. Salvo o setor comercial, em todos os demais as operações de crédito cresceram a taxas inferiores à média do Sistema Financeiro Nacional (SFN) ou mesmo dos bancos públicos, à exceção do ano de 2009, revelando que as IFDs-SN contribuíram para a ação anticíclica implementada pelos bancos públicos brasileiros após a crise financeira internacional.

ASIA'S ROLE IN THE GLOBAL ECONOMIC ARCHITECTURE

The global economic and financial landscape has been transformed over the past decade by the growing economic size and financial power of emerging economies. The new Group of Twenty summit process, which includes the largest emerging economies, has established high‐level international policy cooperation in this new setting. This article argues that effective global economic governance will also require changes in key global organizations—such as the International Monetary Fund, World Bank, World Trade Organization, and the Financial Stability Board—and closer collaboration between global and regional organizations. We suggest that federalism be introduced on a global scale by creating hierarchies of global and regional organizations with overlapping ownership structures in various functional areas (as is already the case with the World Bank and regional development banks in the area of development finance). Asia could contribute to this transformation by building effective institutions to promote macroeconomic and financial stability and deepen regional trade and investment integration. Similar logic could be applied to a broader issue of providing international public goods, such as environmental and climate protection, communicable disease control, and disaster risk management. (JEL F02, F13, F33, F55, O59)

Regional Public Goods in Finance, Trade and Infrastructure

This paper analyzes the potential for regional collective action in Latin America in the areas of finance, trade and infrastructure. Seven priority areas emerge. First, regional cooperation within increasingly important global financial and trade institutions (the G20, the Financial Stability Board, the Basle Committees, the IMF, the WTO, etc) may enhance the influence of the region in the pursuit of its common interests. Second, regional harmonization of financial markets regulations and cooperation in supervision could play a key role in achieving a safer and more efficient financial integration into the global economy. Integration of regional securities and insurance markets and setting up regional catastrophic insurance facilities may also bring significant efficiency gains. Third, some degree of collective pooling of reserves (through a Regional Monetary Fund) would also contribute to a safer and more efficient financial integration. Fourth, completing missing links in the spaghetti-bowl of regional (and extra regional) free trade areas (FTA's), deepening trade liberalization within them and, especially, harmonizing rules of origin and other trade practices under current overlapping FTA's, could render major efficiency benefits. Fifth, given that at present high freight costs are limiting trade expansion (especially intra-regional trade), even more than remaining tariffs and quotas, selected regional transport infrastructure initiatives and harmonization of regulatory frameworks can lead to significant efficiency gains. Cooperation in logistics and in maritime and air transport negotiations can also deliver large benefits. Sixth, regional infrastructure and regulation in telecommunications and energy can also lead to significant efficiency gains. Regional development banks can contribute to set up or strengthen specialized regional institutions required to solve the complex coordination, cost-allocation, financing and conflict resolution problems that are at present limiting regional collective action in these areas.

Socio-Economic Rights in the World Market: China, India, and the Gang of Four

The entry of China and India into the global economy involves not only the internal transformation of those two societies, but also a significant step towards what Marx called the ‘completion of the world market’ – the expansion of foreign trade and the transformation of social relations of production, and with that the intensification of competition across the global economy. They represent crucial cases, therefore, for the gang of four international organizations most closely concerned with the governance of labour markets, social policy and trade – the ILO, the OECD, the World Bank, and the WTO. Over the past two decades these organizations have converged, along with the IMF and the multilateral regional banks, on a programme aimed at reshaping socio-economic rights to make them consistent with and supportive of the rule of capital, and competitiveness in the global economy. This paper analyses the manner in which the Gang of Four seek to fit social and economic rights to the exigencies of the world market, and explores in detail the engagement of the OECD with China and India. In terms of the overall project of which this is a part, the objective is to sketch in the background against which regional development banks and emerging economies engage in the wake of the financial crisis.

PENGARUH KARAKTERISTIK KOMITE AUDIT TERHADAP PENGAWASAN BANK (Studi Kasus Pada Bank Pembangunan Daerah Seluruh Indonesia)

The aim of this research is to show whether there issignificant effect of competence, independence and integrity toeffectiveness of bank supervision. The object of this research are thebanking company incorporated in the Regional Development Bank(BPD) throughout Indonesia. The respondents are individuals at theaudit committee team on Regional Development Bank (BPD)throughout Indonesia. The research method that was used ishypothesis testing with correlation analysis. Data collection in thisresearch was by sending questioners directly and also by mail survey.From the 81 questioners only 40 questioners was returned, thereforethe data was tested 40 respondents. The hypothesis test was by singmultiple regression method. The research find that there is nosignificant effect of competence and independence audit committee toeffectiveness of bank supervision, however there is significant effect ofintegrity to effectiveness of bank supervision.

Crisis financiera global y nuevas arquitecturas financieras para el desarrollo (Segunda de dos partes)

Esta segunda parte se dibuja un panorama de los acuerdos institucionales de integración financiera en África a partir de la Unión Monetaria de la Comunidad de África Occidental. El Fondo Monetario Árabe cuya influencia es determinante en esta zona económica. Se destaca además cómo hasta antes de la crisis actual, el Banco de Desarrollo Asiático ya prestaba más que el Banco Mundial en esa región y, el Banco Interamericano de Desarrollo y el Fondo Latinoamericano de Reservas financiaban mas que el Fondo Monetario Internacional durante la crisis en América del Sur. Los bancos regionales (multilaterales) de desarrollo y las iniciativas financieras bilaterales en el mundo en desarrollo, así como los swaps de divisas bilaterales, y otros tipos de flujos financieros bilaterales Sur-Sur, representan una creciente asistencia oficial para el desarrollo, mayor que los organismos financieros internacionales como el Banco Mundial, a países en desarrollo. Esto ha fomentado un papel contra cíclico cuya importancia representa una gran transformación en la arquitectura financiera de los países del Sur global.

Is Anyone Listening? Does US Foreign Assistance Target People's Top Priorities?

The United States government has made repeated declarations over the last decade to align its assistance programs behind developing countries’ priorities. By utilizing public attitude surveys for 42 African and Latin American countries, this paper examines how well the US has implemented this guiding principle. Building upon the Quality of Official Development Assistance Assessment (QuODA) approach, I identify what people cite most frequently as the ‘most pressing problems’ facing their nations and then measure the percentage of US assistance commitments that are directed towards addressing them. By focusing on public surveys over time, this analysis attempts to provide a more nuanced and targeted examination of whether US portfolios are addressing what people care the most about. As reference points, I compare US alignment trends with the two regional multilateral development banks (MDBs) – the African Development Bank and the Inter-American Development Bank. Overall, this analysis suggests that US assistance may be only modestly aligned with what people in Sub-Saharan Africa and Latin America cite as their nation’s most pressing problems. By comparison, the African Development Bank – which is majority-led by regional member nations – performs significantly better than the United States. Like the United States, however, the Inter-American Development Bank demonstrates a low relative level of support for people’s top concerns.The paper concludes with a number of policy questions, which should be considered if the US government plans to concertedly pursue closer alignment with local concerns and priorities. These include whether the US government should: (1) require regular citizen surveys to help formulate foreign assistance strategies and programmatic priorities; (2) recalibrate health assistance programs in Sub-Saharan Africa; (3) increase support for the African Development Bank; (4) expand under-utilized private sector-based development tools, such as the Overseas Private Investment Corporation; (5) increase its engagement in select Latin American countries to help combat crime and insecurity; (6) better leverage the Millennium Challenge Corporation, which is the only U.S. development institution with an explicit mandate to support country-based priorities; and (7) expand support for USAID’s under-resourced economic growth programs, such as the Development Credit Authority.

Assam Financial Corporation and Industrial Development in Assam

Assam, one of the economically backward states of India represents a contradiction in that, on the one hand, it has a wide availability of resources and on the other, it lies economically and industrially much behind most other states of the country. The limitations posed by geographical isolation, inadequacy of savings, insufficient flow of investment to the region and the like, that hamper industrialisation of the state can be largely met by promoting small scale industries in the state. The small scale industrial sector therefore presents a critical area on which the state’s development strategy should focus and for which AFC was initiated by the government. Such finance led industrial or economic progress was conceptualised long time before by economists like Schumpeter, Kalecki and Keynes. Development banks are a group of heterogeneous financial institutions initiated in the country for the purpose of extending credit of long and medium nature for the purpose of bringing forth industrialisation and overall economic development. State Financial Corporations are regional level development banks established to provide long and medium term finance to small scale industries and to address the region specific requirements for industrialisation. However, with the onset of the era of liberalisation and privatisation in the country such institutions are fast eroding. Yet, the development oriented significance of such institutions has ever been recognised for which caution is raised in completely removing such institutions. The present paper studies the performance of Assam Financial Corporation (AFC) in extending financial assistance to Assam vis-a-vis North-East Development Finance Institution (NEDFi) and Small Industries Development Bank of India (SIDBI), concerned with the promotion of small scale industries. The study analyses the total assistance sanctioned and disbursed, per capita assistance sanctioned and disbursed in the post-liberalisation era. The study concludes that AFC has failed to perform satisfactorily in the stated period.

Crediamigo: partnering with Vivacred?

Subject area The case is suitable for undergraduate and MBA courses: strategic management, social entrepreneurship. Study level/applicability Masters, Bachelors. Case overview In Fortaleza, January 2008, an urban microfinance manager and the planning committee of Crediamigo, Brazil's largest microfinance institution need to devise an entry strategy to Rio de Janeiro's microfinance market. A part of the Banco do Nordeste, and a regional development bank for ten years, Crediamigo has 400,000 clients in the Northeast of Brazil. Its objective is to double its clients base for 2011; Rio de Janeiro's market was the next priority. Crediamigo has two options. The first consists of partnering with VivaCred, a small experienced microcredit non-governmental organization (NGO) which operates in Rio de Janeiro's slums. VivaCred was a microfinance NGO with relatively low organizational capabilities and with a low performance in terms of loan repayment. Its lending methodologies were different from Crediamigo's experience. The second option was to set up a new branch of Crediamigo in Rio and to shape it in Crediamigo's image. The committee was aware that this, “far away from home”, would be a costly and slow venture. Expected learning outcomes After using this case, students will: have been exposed to the strategic, managerial and operational challenges of microfinance expansion in an emerging country; understand better the market entry strategy (acquisition/integration of an organization vs green field) in such a context; have discussed the conditions related to the replication of microcredit methodologies (individual, group and village lending methodologies) in their contexts of operations. Supplementary materials Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

Financing climate-friendly energy development through bonds

In this paper we review the various instruments that have been proposed and implemented for financing renewable energy and low-carbon technology projects, in both the developed and developing world, with a focus on private sector involvement. We consider their common features and compare their total impact so far with the scale of renewable energy funding likely to be needed over the next several decades, as estimated by such bodies as the International Energy Agency, which puts the amount at one trillion US dollars per year. An increase of this magnitude in the required financing provides opportunities for developing new financing instruments, based on what has been accomplished so far, and for regional development banks to be involved in the process, subject to sound risk management principles.

Did the Establishment of the Indonesia Deposit Insurance Corporation (IDIC) Significantly Impact the Performance of Indonesian Banking Industry?

The article analyzes the impact of the establishment of the Indonesia deposit insurance corporation on bank intermediation in Indonesia. Results from technical analysis and econometric methods show that enormity of the tasks of isolating the effect of IDIC establishment on banking intermediation from the influence of other factors (high interest rate, relatively volatile exchange rate during the post IDIC period, among others). Nonetheless, in the very short term, though there is no significant difference in total bank deposits before and after IDIC establishment, the composition in growth shows a different picture. State owned banks mobilize the highest level of savings followed by private national banks, regional development banks, and foreign and joint venture banks, and there is significant difference in asset-weighted credit prior to and after the IDIC establishment, the same applies to the case of credit channeled by private national banks, and foreign and joint venture banks, and regional development banks. To a certain extent such behavior manifests what some authors have termed the indiscipline of large savers wanting to shift risks, an effect that is corroborated by a lower decrease in savings deposits placed in state owned banks compared to what occurs in national private, regional development and foreign and joint venture banks. By the same token, savings deposits placed in state owned and foreign and joint venture banks (have not been dogged by bank closures), experiencing a shallower dip compared with a steep decline in savings placed in national private national banks after IDIC establishment This behavior also points to risk aversion in savers’ behavior. The shift to savings deposits from time deposits and demand deposits, and reducing the amount per account to the maximum covered by the IDIC in the immediacy of IDIC establishment, reflect savers’ desire to redefine their risk profiles by emphasizing safety over return as the new banking regime gets established. Such a hypothesis is backed by the fact that asset weighted savings in state owned banks remained higher than in national private banks, and regional development banks, but higher in foreign and joint venture banks after IDIC establishment. Moreover, the growth in banks assets in state owned banks and regional development banks after IDIC establishment was higher than in private national and foreign and joint venture banks, signaling that state owned and regional development banks are lending more, hence more trusted as sources of funds by economic agents than private national and foreign and joint venture banks. If that holds through the long run, then there no denying the fact that IDIC establishment has to some extent altered, in some way, the behavior of savers, investors, and lenders from being passive onlookers to becoming active monitors of what goes on in the banking industry. This is because the establishment of IDIC has increased the cost for the banking institution and the individual of not doing so. Moreover, though IDIC establishment hasn’t altered fundamentally the determinants of sources of funds for commercial banks and uses to which such funds are put, has increased the sources of potential risk for banks and savers alike indicated by higher fluctuation in some credit disbursements especially to risky sectors (SMEs and agriculture), and rising levels of bank Indonesia certificates. However, analysis results show that in the long run, IDIC establishment hasn’t changed fundamentally the savings and borrowing functions in Indonesian banking system; no significant shift in savers’ behavior involving the transfer of their money from relatively longer time horizon (time deposits) to savings deposit accounts in both state and private national banks, an effect that tapers off returning savings habits to pre IDIC patterns; and in general regional and state owned banks, do not seem to gain more ground in attracting savings and source of loans, than national, private, and foreign and joint venture banks, rather the increasing dominance of national private banking institutions in bank intermediation.

Caribbean Science Foundation sets sail

Initial investment for the funding agency will come largely from the region’s diaspora scientists, from corporate sponsors, and from development banks.

Getting Credit to High Return Microentrepreneurs: The Results of an Information Intervention

Small-scale entrepreneurs typically cite access to finance as the most important constraint to growth. Recent randomized experiments have shown the return to capital to be very high for the average microenterprise in Sri Lanka. An intervention was designed to improve access to credit among these high-return microenterprises without subsidizing interest rates or requiring group lending. The intervention consisted of information sessions providing details of the microfinance loan product offered by a regional development bank and a reduction from two to one in the number of personal guarantors required for these loans. Ten percent of the microenterprises invited to the information meetings received a new loan, doubling the proportion of firms receiving loans over this period. However, the loans do not appear to be going to particularly high-return firms but rather to firms with more household assets. Many more firms would like loans but are constrained by an inability to find personal guarantors and by other bureaucratic procedures. The results suggest that information alone is unlikely to be enough for most firms and point to the need for credit bureaus that cover microfinance loans and for continuing innovation in loan products that can reach the urban microenterprise sector.

Financing for Regional Economic Integration for Northeast Asia II

The Northeast Asian region is one of the most dynamic economic regions in the world, which includes the major players of China, Japan and Korea, with productive linkages to resource-rich Russia and Mongolia and to the United States. In contrast to the region's robust economic growth regional security has long been fragile, mainly due to the geopolitical condition resulting from the Cold War era. If the countries in Northeast Asia wish to further their development and prosperity, they will have to learn to harness their dynamic economies and create a region in which peaceful coexistence and common prosperity prevail. Northeast Asia has a northern subregion that includes North Korea, Mongolia, the Russian Far East, and the northeastern provinces of China - an area that is well - endowed with latent natural and human resources. This subregion has the potential of becoming an important source of natural resources for the entire region, and what is needed is to realize that potential through infrastructure investment. Energy security and environment is for example, an important area of cooperation, as the three major countries are heavily dependent on energy imports and are highly vulnerable to energy crisis. Financing requirements for the necessary cross-border infrastructure are likely to be large, and a regional development bank is a key in meeting that financing need. This volume, which is a sequel to the first volume, Financing for Regional Economic Integration for Northeast Asia, is comprised of papers, research reports and summaries of a main conference and several specialized meetings, as well as affiliated activities, that took place under this project. The results of this project represent a considerable beneficial to the region and have been carried out in a spirit of cooperation that we esteem.

Revisiting the BOT Structure in Direct Foreign Investment Transactions

Revisiting the BOT Structure in Direct Foreign Investment Transactions

Remaking the architecture: the emerging powers, self-insuring and regional insulation

This article examines the interaction between the emerging and traditional powers in global governance reform, and asks whether we are heading towards an international financial system that is more fragmented, where power is more diffused and national and regional arrangements play a more prominent role, at the expense of global multilateral institutions. It begins with a brief discussion of the global systemic and country-specific factors that motivate Brazil, China and other emerging countries to accumulate large currency reserves. We find that national arrangements for managing financial and currency crises will continue to hold sway for emerging countries in the wake of the global crisis. However, the actual capacity of regional arrangements in managing future financial crises is uncertain, and the significance of regional alternatives in the emerging architecture should not be overstated. The real capacity of East Asian regional arrangements to manage financial crises, payments problems or currency attacks is still untested, and key thresholds in multilateralization still lie ahead. In South America, multilateral lender-of-last-resort support inside the region is largely confined to the sub-regional level and is limited by Brazil's reticence. Enduring reliance on bilateral measures for financial crisis management is noted. Where there has been progress in regional solutions, since the global crisis, has been in the role of regional development banks in providing financing for developing countries to enact counter-cyclical policies. Such support also provides insulation for states in the region against the contagion effects of international financial crisis. We are in the midst of transitioning to a more diverse and multi-tiered global financial and monetary system. A reformed IMF could have a role to play in addressing global imbalances and encouraging a shift from national reserves to collective insurance, however, it would be preconditioned by significant shifts in the policy, lending operations, and internal governance of the Fund, and willingness among the G20 to strike a new consensus on how to deal with imbalances, and new accommodation on acceptable reserve levels.

Instituições financeiras públicas de fomento: exagero de conservadorismo da política de investimentos?

Este artigo analisa a questão do conservadorismo no que concerne à gestão de recursos por tesourarias de instituições financeiras públicas, que incorrem em um trade-off por não ter essa gestão como prioridade, mas sim as atividades associadas ao desenvolvimento. Fazendo-se uso do capital asset pricing model (CAPM), as evidências para o Banco do Nordeste do Brasil, o maior banco de desenvolvimento regional da América Latina, sugerem que sejam viáveis as mudanças institucional e na legislação que restringe a política de investimentos dessas organizações.

Restoring Trade Finance During a Period of Financial Crisis: Stock-Taking of Recent Initiatives

The paper discusses the efforts deployed in 2008 and 2009 by various players, Governments, multilateral financial institutions, regional development banks, export credit agencies, to mobilize sufficient flows of trade finance to off-set some of the pull-back by commercial institutions in the period of acute crisis that has characterized the financial sector in the past two years. Given that 80 to 90% of trade transactions involve some form of credit, insurance or guarantee, one can reasonably say that supply-side driven shortages of trade finance have a potential to inflict further damages to international trade. As an institution geared towards the balanced expansion of world trade, the WTO had been concerned with occurrences of market tightening throughout this period. While a number of public-institutions mobilized financial resources for trade finance in the fall of 2008, this has not been enough to bridge the gap between supply and demand of trade finance worldwide. As the market situation continued to deteriorate in the first quarter of 2009, G-20 leaders in London (April 2009) adopted a wider package for injecting additional liquidity and bringing public guarantees in support of $250 billion of trade transactions in 2009 and 2010. Ahead of the Pittsburgh Meetings, experts reported that more than the targeted amount had been mobilized. In the meantime, through the summer and the fall of 2009, the market situation seemed to have eased – although in many countries, access to trade finance by the smaller traders had become either significantly more expensive or had simply disappeared. One can expect the trade finance market to have its up and downs for some time, because lending for trade is a function of the general lending situation of commercial banks. The paper discusses longer-term initiatives aimed at improving the resilience of the trade finance market to short-term and longer-term shocks.