Stability Of Financial System Research Articles

The Impacts of Land and Real Estate Price Fluctuations on Financial Stability: Evidence from China

AbstractWe construct a provincial financial stability index, and use panel vector autoregression to construct a model for empirical testing. We find that local governments' reliance on land grant premiums amplifies the impact on financial stability. In addition, the relationship between the real estate market and the financial system allows real estate price fluctuations to significantly affect market participants, further impacting financial system stability. Finally, in the eastern region, land price fluctuations have a less adverse impact on financial stability, while in other regions, rising commodity real estate prices are the biggest threat to financial stability.

The impact of financial inclusion on national development and national financial system stability

Abstract This study seeks to understand the relationship between financial inclusion, national development, and the stability of the national financial system in Indonesia. The data collected in this study is a secondary data that includes the data of the number of commercial bank accounts, number of commercial banking service offices, number of general credits, average income, population welfare, goods and services production, and number of credits of 34 provinces throughout Indonesia, from 2015 until 2019. A dynamic statistic panel Model of the Generalized approach of Moments (GMM) is used for data analysis. The results of this research showed that financial inclusion has a significant negative influence on national development, but it can increase the national financial stability system. This is possible due to the diversity of demography, economic condition, and geographical condition in each province of Indonesia.

Studi Literatur Peran Bank Indonesia Terhadap Stabilitas Keuangan

Bank Indonesia's primary responsibility in monetary, banking and payment systems is to ensure monetary and financial system stability. Without financial system stability, Bank Indonesia's success in maintaining monetary stability will not be significant. support long-term economic growth. The forces associated with money and monetary soundness resemble different sides of a coin that cannot be separated. Financial stability is the foundation upon which the efficacy of monetary policy is built, and the converse is that monetary policy has a significant impact on financial stability. Because the financial system is one of the monetary policy transmission channels, monetary policy transmission cannot function normally if financial system instability occurs. Conversely, financial system stability will be fundamentally affected by monetary instability due to ineffective financial system operations. Therefore, maintaining financial system stability remains the duty and responsibility of Bank Indonesia.

Systemic Risk Contribution and Bank’s Competitiveness

There are two competing views about bank’s competitiveness and its systemic risk contribution: competition-stability and competition-fragility. Previous research shows mixed results. To test empirically the relationship, this research proposes a quadratic functional form that may reconciliate these two opposite views. Using Marginal Expected Shortfall as individual bank’s systemic risk contribution measurement and Lerner Index as individual bank’s competitiveness, this research find that the relationship resembles U-shape. In the first phase, competition creates prudent banking operation and low systemic risk contribution. But when competition become excessive, competition drive dominant bank to be a systematically important financial institution which may cause a serious systemic defaults and threat financial system stability.

Державні фінанси в умовах воєнного стану

Introduction. With the beginning of the large-scale Russian invasion of Ukraine, a number of important socio-economic issues moved to another level, instead, the efforts of state authorities to solve the primary tasks have gained the growth: increasing budget revenues for the needs of the army, solving humanitarian issues, ensuring the stability of the financial system, maintaining the general economic situation in a stable state. In this connection, the issues of the role and importance of state finances in the conditions of martial law are brought up to date. Problem Statement. Ukraine is under martial law for the first time in more than half a century. Therefore, a significant range of issues is understudied, in particular in the aspect of public finance management. Purpose. The goal is to identify the peculiarities of state finance management in the conditions of martial law. Methods. General scientific and special methods are used: analysis, synthesis, grouping, description, modeling, comparison, theoretical generalization and abstract-logical. Results. In the conditions of the war, the question of the effectiveness of the management of state finances, in particular their components: revenues and expenditures of the budget, is becoming actualized. The volumes of the latter depend on the capacity of the country's fiscal space, as well as the effectiveness of the tax system. The stability of the budget system and each budget in particular (state and local) is an important element of ensuring the stability of the entire financial system of the country. It was emphasized that an important direction of ensuring macro-financial stability should be the close interaction of the National Bank of Ukraine and the Ministry of Finance of Ukraine in matters of control over the situation and its timely, justified regulation. International support and external sources of financing strengthened the sustainability of public finances. Increased mobilization of budget revenues is a forced step and at the same time a prerequisite not only for high-quality implementation of budgets at all levels, meeting the needs of the country's defense, maintaining macro-financial stability, but also a strong basis for the country's recovery. The mechanism for determining losses and damages caused by Russian aggression, introduced by the government, is analyzed. The author's definition of the term “war damage” is proposed. Conclusions. In the conditions of open aggression, state authorities rallied primarily around the President of Ukraine and his Office with the aim of preventing the collapse of the national economy, maintaining the stability of state finances, and the stability of the financial system. At the same time, the mechanism for economic recovery, revitalization of business activity, reconstruction of destroyed infrastructure, housing stock, etc. was launched. The implemented mechanism for determining losses and damages caused by Russian aggression needs some adjustment in order to develop an effective toolkit that will help in the future reduce the pressure on public finances for the reconstruction of the country, to use a sound methodology as an evidence base in legal proceedings and lawsuits against Russia to obtain reparations for the damage and losses caused.

МАКРОЕКОНОМІЧНІ КРИТЕРІЇ ВАЛЮТНО-ФІНАНСОВОЇ КОНВЕРГЕНЦІЇ: ОРІЄНТИРИ ДЛЯ УКРАЇНИ

The aim of this study was to identify the most problematic issues of compliance by European countries with macroeconomic convergence criteria, to determine promising ways to overcome them and to assess new opportunities that open up to Ukraine as a result of further European integration. Most research devoted to the study and achievement of monetary and financial convergence criteria focus on the candidates for joining the eurozone. However, the stability of monetary and financial system of the united Europe depends, to a certain extent, on how much the «old» members of the eurozone adhere to these criteria. That is why, the research methods included statistical data analysis of the EU member states at the time of joining the eurozone and during the last 10 years. To reveal the closeness of the relationship between individual indicators of monetary and financial convergence correlation analysis was used. It was established that the degree of compliance with the reference values of public-debt related indicators in the eurozone countries is not the same. At the time of the introduction of the euro in 1999, only in 3 out of 11 countries the debt-to-GDP ratio was below 60%. In 2021, in 12 countries out of 19 consolidated public debt exceeded the reference value. Another indicator, the ratio of the deficit/surplus of the state budget to GDP, during the period of economic stability (2014-2019), in the majority of the eurozone countries, remained within the reference value. Also, almost all of the eurozone member countries meet the criterion of interest rates convergence throughout the entire period. The analysis of the price stability criteria showed that price dynamics basically reflects the state of the economy of the EU countries as a whole. During the periods of more or less stable growth (2014-2016), almost all countries, both within the eurozone and outside it, met the criterion of price stability. Beginning from 2017, each year, 5-6 countries go beyond the criterion due to the fact that the potential of the growth phase fades and countries try to stimulate it by accelerating inflationary processes. The criterion of exchange rate stabilityty, at first sight, seems to be inapplicable for the analysis of the situation in those countries that are already members of the eurozone. However, although formally EUR to USD exchange rate may be identical in all countries of the eurozone, the ratio of the EUR real purchasing power in different countries may differ significantly. It was found that there are only few countries where purchasing power parity and the current exchange rate are quite close. It indicates that during the two decades of the EU membership, some countries still significantly lag behind the leaders, which may lead to disintegration tendencies. The currency and financial convergence criteria can become guidelines for designing a post-war economic model of Ukraine. At the same time, the specifics of the situation will force our country, during the first post-war years, to deliberately deviate from these criteria, provided that this deviation is controlled.

Online Trading During the Covid-19 Pandemic: A Model from the Perspective of Indonesian Law

In order to prevent its spread, the Government has regulated mobility restrictions for the community through the Large-Scale Social Restriction scheme. Limited mobility makes people meet their needs by shopping online to reduce the spread. Various policies have been issued by the government to break the chain of spread of the virus and even for the country's economic recovery. One of them is by issuing the Regulation in lieu of Law Number 1 of 2020 concerning State Financial Policy and Financial System Stability for Handling the Corona Virus Disease 2019 Pandemic (Covid-19) and / or in the Context of Facing Threats that Endanger the National Economy and / or Financial System Stability, and has been passed in Constitution Number 2 of 2020. This regulation summarizes a series of stimuli in the form of relaxation in the tax sector, relaxation in the customs and excise sector, relaxation in the banking sector, trade sector, public welfare and health sectors as well as for the benefit of Micro, Small and Medium Enterprises. In this regulation, the government also decides to impose taxes on trading businesses through an electronic system in the midst of the Covid-19 outbreak. Keywords: Online Trading, E-Commerce, Law, Covid-19.

Modelling the effect of bank performance on financial stability

This study examines the link between bank performance and bank stability in the context of African countries. Using the Augmented Mean Group (AMG) estimator and panel data from 16 selected African countries covering the period 2002–2019, this study considers whether the banking sector's performance influences the banking system's financial stability. The findings reveal a significant positive long-run relationship between ROA and financial stability. This was the case when the AMG estimator was employed and when the CCEMG was employed to check for robustness. Inflation was initially negative and insignificant but a highly significant determinant when a more robust method (CCEMG) was used. Economic growth has a negative relationship using both estimators but is insignificant, while trade openness and non-interest income had insignificant coefficients in both estimators. The granger causality results show a one-way causality established to bank stability in the case of bank performance and trade openness. In addition, there was a non-causal relationship between bank stability, non-interest income and inflation as against a double-track causation between bank stability and economic growth. African countries should strive to improve bank performance to enhance the stability of the sector.

Changing vulnerability in Asia: contagion and spillovers

An increasing involvement of the Asian market in the global context plays a fundamental role in spreading shocks across the financial system. This paper examines the extent of vulnerability across Asian equity markets and the United States (US) equity market by distinguishing between spillovers and contagion. Spillovers are detected using a generalised historical decomposition method, while contagion is identified using a portfolio mimicking factor framework using moment conditions. The transmission of spillovers is assessed to capture the direction, strength and signs of the spillovers. The findings show evidence of changing vulnerability in Asia and the US. This is as a result of increased spillovers during crisis events and the presence of contagion. Stronger connections during crisis periods are evident as well as a general deepening of the global network. These connections may result in reduced opportunities for emerging markets. The findings suggest that caution is needed when developing regulations or methods to create a stable financial system.

The impact of ESG-factors on financial stability

An increasing attention has been riveted recently on so called ESGfactors impacting financial stability. This paper provides a systematic review of the empirical studies which assess the impact of environmental (climatic), social factors as well as various aspects related to corporate governance on financial stability. Overall, higher ESG-rankings, both aggregate and in terms of the three pillars (E, S, G), tend to enhance the financial system stability from the microand macroprudential perspective by mitigating aggregate individual risk of financial institutions and the contribution to systemic risk, respectively. Nonetheless, the research intensity within the ESG pillars differs substantially. There are significantly more studies investigating the impact of environmental and corporate governance factors then tackling the effects of social ones. This literature review is closed with the discussion of possible directions for future investigation in the given research program.

Mexico

Mexico’s financial system is digitalizing rapidly, increasing exposure to cyber risk. As in other jurisdictions, internet and mobile banking users in Mexico have increased substantially, but cyber incidents have also surged in recent years. The tight interdependencies within its financial system, and beyond, make Mexico vulnerable to evolving cyber threats. Thus, the Financial System Stability Council (CESF) has recognized cyber as a risk with potential to impact financial stability.

Dynamics of biodiversity loss and financial system stability nexus in developing countries

Global warming has been escalating along with its major damaging effects. One such effect is its negative impact on economic growth. This paper is premised on the fact that, in addition to its threats to economic growth, climate change can affect financial institutions unfavorably and become a significant cause of financial risk. Therefore, this study aims to investigate the nexus between the dynamics of biodiversity loss and financial system stability in sub-Saharan Africa (SSA). Using annualized data from World Bank indicators, the study adopted panel techniques. The panel data results indicate that carbon emission has no positive impact on bank non-performing loans in the short run. The findings strongly support that carbon emission in this region does not contribute significantly to financial instability in the short run. This shows that Africa may well be able to assist the world to counteract climate change by providing an essential carbon sink while resisting deforestation and effectively managing the continent’s marine resources. Based on the research findings, it is recommended that policymakers in SSA should promote economic activities that reduce climate fragility while ensuring sustainable economic development.

Analisis Pengaruh Kompetisi, Capital Buffer, Inklusi Keuangan, dan Ukuran Bank terhadap Stabilitas Perbankan di Indonesia

Apart from being an intermediary institution in the economy, banks also play a role in carrying out the transmission function. Therefore, a stable banking system is needed to stimulate the economy and maintain financial system stability to anticipate financial crises. This study investigates the effects of competition, capital buffer, financial inclusion, and bank size on Indonesia's banking system's stability between 2015-2020. This study uses the panel data regression method. The results show that the banking sector supports the competition-fragility hypothesis, which means that a low level of competition can increase bank stability. This study finds that capital buffer and bank size positively impact bank stability. However, financial inclusion only has a positive impact on the stability of large banks but has a negative impact on small banks. It is said that financial inclusion will increase stability in banks with better supervision. In addition, this study finds that larger banks have higher market power and stability than small banks. Therefore, the result supports the implementation of POJK Konsolidasi Bank Umum in improving banking stability through increasing the quantity of bank capital.

Development of Financial Technology Investment in Indonesia Increasing Public Interest Industrial Revolution 5.0

The creation of a stable financial system that benefits all levels of society. In this regard, financial institutions play an important role through their intermediary function to promote economic growth, income distribution, poverty alleviation and the achievement of financial system stability. Just industryfinance that is growing very rapidly is not necessarily accompanied by access to finance adequate finance. In fact, access to financial services is a prerequisite. The involvement of the wider community in the economic system is important. The existence of Fintech makes the process of financial transactions more practical and faster. Fintech is now developing all over the world, including Indonesia in the face of the 5.0 industrial revolution.

National Strategy for Financial Education in India

The concept of implementing National Strategy for Financial Education has been gradually building. Most of the nations globally take initiative for implementing sound National Strategy for Financial Education. Whereas some developed countries already have their unified and coordinated national strategy for financial education. India is having second largest population in the world. There is an urgent need to develop a sound and stable financial system. it is more necessary to quickly formulate and implement a national strategy. Financial Literacy and Financial Education play important role in financial inclusion, inclusive growth and sustainable prosperity. Financial Literacy develops confidence, knowledge and skills to manage financial products and services enabling them to have more control of their present & future circumstances.59 countries worldwide are implementing National Strategy using guidance from the OECD/INFE high level principles on National Strategy for Financial Education. Several empirical studies have found that financial literacy level amongst Indians low by global standards. The need of the hour is to boost up financial education initiatives and comprehensive research should be done on national strategy for financial education. The present study aims at finding the role and relevance of financial education in India.

Multilayer Financial Complex Networks and Their Applications

In the context of global integration, the theory of financial complex networks has made significant contributions to the establishment of stable financial systems and effective regulatory systems. This survey paper presents a systematic methodology for the multi-layer financial complex networks and their applications. Several typical financial networks in existing research are first summarized: the interbank network, the credit network, the international trade network, and the dealer network. The main methods used in the existing literature to analyze the structure of financial networks include maximum entropy methods, network characterization, community detection, and dynamic multi-layer network. Financial risk contagion as well as spillover effects are the core issues that most of the literature focuses on. Finally, this paper reviews the shortcomings of the existing literature and suggests future research directions in this area.

How vulnerable are interconnected portfolios of South African banks?

Price shocks that propagate through the financial system present a significant risk to financial system stability. This study was an evaluation of the vulnerability of South African banks’ portfolios to pricemediated contagion in the last decade. Using longitudinal data of balance sheet positions of the 10 largest banks from 2010 to 2020, the stress tests were triggered by price shocks on one marketable asset held by all banks: South African government bonds. Overall, the study found that second-order feedback effects from bank deleveraging are muted and that the concentrated structure of the South African banking system has a positive effect on shock absorption. However, a gradual trend towards more similar asset portfolios in the past 10 years has gradually increased exposure to the price-mediated contagion channel. Significance: The paper presents a novel modelling framework to study feedback price-effects in stress tests conducted on the South African banking system. A new data set shows the evolution of South African banks’ portfolio structure and vulnerability by computing two fragility metrics and a portfolio similarity measure. Using this data set, the relationship between banking sector vulnerability and portfolio similarity is tested empirically and it is shown how common asset holdings aggravate systemic risk to pricemediated contagion.

Regional Financial Data Processing Based on Distributed Decoding Technology

Aiming at the problems of low storage efficiency, small storage space, and poor stability of traditional financial data storage systems, a dynamic and secure financial data storage system based on distributed decoding is designed. The system uses a cloud security storage service system to store a large number of financial data obtained from the sensing layer and achieve the reasonable scheduling of financial dynamic cloud data through the constraint software function. In addition, a distributed security computing scheme based on hierarchical coding is proposed, and the influence of different subtask sizes and different computing layers on the scheme is analyzed. The results show that the distributed security computing scheme based on hierarchical coding can significantly reduce the completion time of the overall computing task and enhance the stability of dynamic financial data storage. This system has a good storage performance of financial big data, and its efficiency is good, which provides strong support for the financial cause of our country.

Peranan account officer (AO) dalam memberikan pelayanan dan meningkatkan loyalitas nasabah pada PT. BPR Ciledug Dhana semesta di tengah pandemi corona virus disease 2019

Bank Perkreditan Rakyat (BPR) is a Bank that conducts business activities conventionally or based on sharia principles, which in its activities does not provide services in payment traffic, BPR activities are much narrower when compared to the activities of commercial banks because BPR is prohibited from receiving current deposit, foreign exchange activities, and insurance. The number of People's Credit Banks (BPR) is now making competition more intense and vying for the best rating in the eyes of the public, especially PT. BPR Ciledug Dhana Semesta. Therefore, a good anlisis strategy is needed by each bank to increase profit and have good quality. This study aims to determine the role of Account Officers in increasing customer loyalty at PT. BPR Ciledug Dhan in the midst of the 2019 corona virus disease pandemic. This study uses a descriptive analysis method, which describes the overall role of the Account Officer at PT. BPR Ciledug Dhana Semesta. The results of the study indicate that customer needs can be met properly until customers are satisfied with their services so that customer loyalty occurs so that BPR does not lose customers causing substantial losses or loss of income as well as utilizing digital technology to facilitate customer needs. The purpose of all of this is of course to maintain financial system stability, so that the interests of the community and the interests of the national economy are maintained, especially in the banking world.

Themes in Southeast European Banking: A Review of Literature

In this paper we review the literature around three main research questions: the impact of foreign bank entry on net interest margins, financial system stability and credit supply. We also motivate the focus on Southeast European (SEE) countries. SEE economies although under the umbrella of European transition economies exhibit different macroeconomic and financial sector features from these countries and as such could benefit from a more focused empirical investigation. This could tailor and improve the recommendations given to policymakers in these countries which will help promote financial and economic development. Other countries in the world that share similar macroeconomic and financial sector features could benefit from the results as well. In addition, it is argued that SEE countries offer a unique laboratory for the proposed research questions because of the dramatic increase of foreign bank presence in these countries and their low level of financial and economic development. Keywords: foreign bank entry, Southeast Europe, net interest margins, financial system stability, credit supply DOI: 10.7176/EJBM/14-18-07 Publication date: September 30 th 2022