Financial Statistics Research Articles

Kingdom of Lesotho

In response to a request from the authorities and as part of the United Kingdom’s Department for International Development (DFID) Enhanced Data Dissemination Initiative (EDDI) 2 project, a government finance statistics (GFS) mission visited Maseru, Lesotho, during January 20–31, 2020. The mission was the last, in a series of five consecutive technical assistance (TA) missions to Lesotho, as part of the EDDI 2 project. The objective of the five-year project, that started in 2015 was to foster compilation and dissemination of GFS and public sector debt statistics (PSDS) consistent with international methodological standards. The work program under the project identified the enhancement of classification of transactions in fiscal accounts and the expansion of the institutional coverage of data to include all significant general government units as key milestones to achieve by the end of the project.

The Effect of Migrants Remittance on Economy Growth in Nigeria: An Empirical Study

Remittance inflows have been increasing significantly in Nigeria over the past decades. They are becoming one of the most constant sources of economic growth and development. This research work examined migrants’ remittance and economic growth in Nigeria. Remittance inflow was used as dependent variable and gross domestic products, inflation, imports and exports were independent variables. In this study, secondary data were utilized. The study employs annual data obtained from world development and international financial statistics which covers the period of 29 years (1990-2018). Quantitative data collected were evaluated through descriptive statistics; and the hypotheses formulated were tested with the use of multiple linear regressions which includes ANOVA, Correlation, and Coefficient. And this was done with the aid of SPSS version 21. From the findings of the study and the tested hypotheses, it was discovered that significant relationship exists between remittance and gross domestic product, exports and imports in Nigeria while inflation has no significant relationship with remittance. The study therefore proffers some recommendations towards utilizing influx of remittance for economic growth in Nigeria.

Determinant Of Sharia Bank Indonesia Rate With Financing And Deposit In Indonesian Islamic Banking Asset

This study aims to analyze the effect of bank certificates of Indonesia sharia (SBIS), financing to deposit ratio (FDR), and non-performing financing (NPF) against assets of Islamic Banking in Indonesia. The data used in this study are monthly time series data from the period from 2009 until 2013, published by Bank Indonesia of Indonesian Financial Statistics Report. The method of analysis used in this study is the Ordinary Least Square (OLS). The results of this study indicate that the variable certificates Indonesia sharia banks ((5.296593 and 0.0000), and financing to deposit ratio (5.512164 and 0.0000) had significant positive influence on Islamic banking assets in Indonesia. While non-performing financing variables (15.78500 and 0.0000) had significant negative towards Islamic banking assets in Indonesia.

Automatic machine learning algorithms for fraud detection in digital payment systems

Data on global financial statistics demonstrate that total losses from fraudulent transactions around the world are constantly growing. The issue of payment fraud will be exacerbated by the digitalization of economic relations, in particular the introduction by banks of the concept of Bank-as-a-Service, which will increase the burden on payment services. The aim of this study is to synthesize effective models for detecting fraud in digital payment systems using automated machine learning and Big Data analysis algorithms. Approaches to expanding the information base to detect fraudulent transactions have been proposed and systematized. The choice of performance metrics for building and comparing models has been substantiated. The use of automatic machine learning algorithms has been proposed to resolve the issue, which makes it possible in a short time to go through a large number of variants of models, their ensembles, and input data sets. As a result, our experiments allowed us to obtain the quality of classification based on the AUC metric at the level of 0.977‒0.982. This exceeds the effectiveness of the classifiers developed by traditional methods, even as the time spent on the synthesis of the models is much less and measured in hours. The models' ensemble has made it possible to detect up to 85.7 % of fraudulent transactions in the sample. The accuracy of fraud detection is also high (79‒85 %). The results of our study confirm the effectiveness of using automatic machine learning algorithms to synthesize fraud detection models in digital payment systems. In this case, efficiency is manifested not only by the resulting classifiers' quality but also by the reduction in the cost of their development, as well as by the high potential of interpretability. Implementing the study results could enable financial institutions to reduce the financial and temporal costs of developing and updating active systems against payment fraud, as well as improve the effectiveness of monitoring financial transactions

Cambodia

As part of Cambodia’s participation in the Japan-funded Government Finance Statistics (GFS) and Public Sector Debt Statistics (PSDS) project for selected Asian countries (JSA3),1 this mission conducted an in-country workshop (December 2–4, 2019) and provided follow-up technical assistance (TA) on GFS and PSDS (December 5–13, 2019).2 Both activities were aimed at strengthening compilation and dissemination of fiscal data in line the GFS Manual 2014 (GFSM 2014) and the PSDS: Guide (PSDSG) to support surveillance and decision making. At the request of the authorities, the TA mission participated in the inter-agency workshop on data consistency in macroeconomic statistics conducted by the Ministry of Economy and Finance (MEF) during December 5–6, 2019.

Interest Rate Spread and the Efficacy of Commercial Banks’ Loans and Advances in Nigeria

Abstract: The main objective of this study is to analyze the impact of interest rate spread on the efficacy of commercial banks’ lending in Nigeria. Data were obtained from secondary sources; Central Bank of Nigeria Statistical bulletin of 2018 and International Monetary Fund, International Financial Statistics and data files. Unit root test on the time series data displayed a combination of 1(0) and 1(1) variables, the Autoregressive Distributed Lag (ARDL) Model was employed for data estimation. Several diagnostic tests such as auto-correlation test, Ramsey stability test, serial correlation test and test for heteroscedasticity were also carried out and they all confirmed the goodness of fit and validity of the model employed. Findings reveal that: interest rate spread impacted positively and significantly on commercial banks’ loans and advances in Nigeria. The study therefore concludes that interest rate spread impacted commercial banks’ loans and advances in Nigeria positively across the period covered by this study. The study recommend that commercial banks in Nigeria should maintain their current interest rate spread strategy, since it is working well for them and helping them realize a high demand for their loans and advances in Nigeria.

Can financial inclusion reduce the presence of corruption? Evidence from selected countries in Africa

PurposeThe purpose of this paper is to evaluate the impact of financial inclusion (FI) on control of corruption in selected African countries.Design/methodology/approachThe study employs secondary data spanning over a period of 2005–2016. These data are sourced from IMF's International Financial Statistics, World Bank Development Indicators, Global Financial Development Database, Transparency International and International Country Risk Guide. The author uses Sarma (2008) approach to construct the FI index for 13 countries in Africa. The author applies random effect, robust least square and instrumental variable (IV) estimations to examine the impact of FI on control of corruption in Africa.FindingsThe author finds that financial inclusion improves the control of corruption. The author tests for possible FI threshold to avoid the case of extreme FI in Africa. The results show that there is a threshold level if reached, FI would have negative impacts in the control of corruption. This may likely happen mainly due to weak institutions in Africa. The results are robust to alternative proxy for control of corruption and various alternative estimation techniques.Practical implicationsThe finding indicates that FI can serve as part of toolkits for reducing corruption in Africa.Originality/valueThis study stresses the important role of FI in the economic system. It is the first paper that empirically suggests the role of FI in controlling corruption in Africa.

METHODOLOGICAL PECULIARITIES OF FINANCIAL SECTOR REPRESENTATION IN MACROECONOMIC STATISTICS SYSTEMS

The article investigates the importance of macroeconomic statistics systems as a methodological and information base for the studying of financial sector. The System of National Accounts (SNA) is a coordinating framework for all systems of macroeconomic statistics. Monetary and Financial Statistics can be seen as an extention of the SNA regarding financial sector activities. The System of National Accounts and Monetary and Financial Statistics are consistent and harmonized. That is why the same conceptual and methodological approaches to the analysis of financial sector development can be used. The information base of national accounting allows to investigate the role of financial corporations as providers of financial services, namely their participation in the process of social reproduction. The analysis can be deepened by identifying nine subsectors within the financial sector (Central Bank, deposit-taking corporations except the Central Bank, money market funds (MMF), non-MMF investment funds, other financial intermediaries except insurance corporations and pension funds, financial auxiliaries, captive financial institutions and money lenders, insurance corporations, pension funds). The rationale for subsectoring is nature of financial activiies of institutional units belonging to the financial corporations' sector. In addition, subsectors can be combined into different segments depending on the objectives of the study: System of National Accounts divides financial corporations into three categories: financial intermediaries, financial auxiliaries and other financial corporations. Monetary and Financial Statistics applies a different approach for the financial corporations' subsectoring. All subsectors are grouped into two segments: money-issuing (Central Bank and other depository corporations – deposit-taking corporations except the Central Bank and money market funds) and money-holding (the rest of subsectors). The combination of methodological and informational potential of the System of National Accounts and Monetary and Financial Statistics provides a comprehensive analysis of the functioning of the financial sector by highlighting various aspects of the financial corporations' activities.

Dialectic of the Relationship Between Unemployment and Economic Growth According to Okun's Law in Egypt

The study focused on the subject of unemployment and economic growth in Egypt, using a set of econometric methods to determine the relationship between the variables of the study and to analyze the appropriateness of okun's law to the Egyptian economy. Statistical results of the unit root test indicate that the time series of the variables under study are stable at their levels. In addition, the application of Co- integration test confirmes that the variables are integrated. Moreover, it tends to be stable in the long run. however, while testing the causality of a Grager, there is a negative long-term causal relationship in one direction, going from the gross domestic product to unemployment. The analysis depends on annual data from the International Financial Statistics (IFS) published by the IMF for the period 1980-2018.The Okun coefficients estimated at -0.78, meaning that a 1% increase in economic growth leads to a decrease in unemployment of 0.78%.

Apples, oranges and lemons: public sector debt statistics in the 21st century

In both academic research and policymaking, public sector debt and debt-to-GDP ratios are relied on for a multitude of important economic, political and socioeconomic decisions, especially as public sector balance sheets expand to an unprecedented size in the midst of the 2019–2020 COVID pandemic. The reliance on available data from reputable sources often overlooks the question of whether the denominator in this ratio is accurately measured or how well the denominator is understood by the audience interpreting it. Building on past work in international financial statistics, and making use of a unique and newly created dataset on media reporting of public sector debt, the purpose of this article is to examine the quality, accuracy, interpretation and overall meaningfulness of public sector financial statistics. The main findings suggest that i) most of the world’s governments still do not seem to feel sufficient pressure to voluntarily provide comprehensive financial statistics based on well-defined modern methodological frameworks and ii) high profile financial statistics, which are reported, have become increasingly numerous and complicated, making it difficult for non-experts to know which is most appropriate in the context of their analysis.

An analysis of the commercial banks' credit policy implemented in regional financial markets

Subject. This article deals with the issues of optimal credit policy of commercial banks in light of the current situation in the Russian regions' financial market and the balance between it and the State monetary policy. Objectives. The article seeks to justify integrated approaches to the formation of banks' effective credit policy in the corporate segment of the regional financial market to supply the gaps in the scholarly literature. Methods. For the study, we used the methods of systems, business, and statistical analyses, classification, comparison, and the method of expert assessment. The Bank of Russia and Russian lead banks' annual reports and financial statements statistics are the information base of the study. Results. The article reveals the reasons for the lack of efficiency in lending to enterprises of the real sector of the economy by banks. It assesses the negative impact of external and internal factors on banks' credit policy. The article substantiates the application of integrated approaches when developing the credit policy of commercial banks and provides recommendations to solve the identified problems. Relevance. The conclusions of the article can be used by specialists of State and municipal governments when developing planned solutions in the area of cooperation between enterprises and commercial banks in order to improve lending to regional businesses.

Industrial development dynamics: An exquisite examination of European Union and United Kingdom

AbstractA better functioning industrial sector matters directly for growth and contributes indirectly to poverty alleviation, unemployment reduction, trade promotion, exchange of goods and services, increased per capital income, GDP growth and so forth. in developed and Least developed countries (LDC). Nonetheless, after global financial crisis and fall of Bretton wood system a new debate was generated to re‐examine the issue after the implementation of financial liberalization policies in different economies. Therefore the present research focuses on examining the predominant determinants of industrial developments for a sample of developed economies and check the comparison between European Union (27 Countries) and United Kingdom. The explicit aim of the present research is to investigate the association between capital account openness (CAO), trade openness (TO), equity openness (EO) and industrial development (IDV) for economies of Europe (EU without UK) and United Kingdom (UK). Time series data set over 1986 to 2017 was employed for empirical analysis. Industrial development was measured by industry value added; KAOPEN as a measure of CAO, TO measured by the ratio of the sum of imports and exports relative to GDP and EO measured by market capitalization divided by GDP. The data sources predominantly included International Financial Statistics and World Development Indicators. Stationarity of data was measured through augmented Dickey–Fuller test, OLS regression was used to examine the association and percentage variation between the study variables. Findings reported only EO and TO as significant predictor of industry development in case of EU. However, EO, TO and CAO does not contribute as a significant determinant in case of United Kingdom. Lastly, the study also explains tremors, subsequent effects and magnitudes, intra‐ and inter‐reliance of constructs under consideration by employing vector auto‐regression (VAR), impulse response function and variance decomposition.

Modelling the monetary policy transmission on the manufacturing output: Evidence from the fastest growing Indian economy

The existing literature portrays that the instruments of monetary policy, such as interest rate, money supply, and price have a direct bearing on economic growth and social welfare. Against this background, the present study investigates the monetary policy transmission on manufacturing output in one of the fastest‐growing economies—India. Highlighting how the Central Bank works in a political–economic context, the precise research question used entails—how does monetary policy affect the manufacturing output in India? And what is the transmission channel and level of magnitude? To address these questions, we employed autoregressive distributed lag bounds testing for co‐integration on the time series data collected from World Development Indicators and International Finance Statistics for the period from 1980 to 2018. The model estimation affirms the presence of a co‐integrating relationship among the variables. In the short run, we have a mixed result of relationship among determining variables and manufacturing output, while in the long run, the lending rate has positive and the exchange rate has significant relationships among the variables. The variables such as consumption and gross capital formation have insignificant influence even though negative. The causality test reveals unidirectional short‐run causality stemming from lending rate to industrial output testifying lending rate‐driven growth. In a nutshell, the lending rate has long‐term positive relationship with that of industrial output, and the functional independence of the Central Bank has long‐term consequences on output and this requires a right chord of balance to be struck between political motives and the RBI's autonomy.

Liquidity Management and Financial Performance: Evidence From Commercial Banks in Botswana

The study examined the impact of liquidity management on the financial performance of commercial banks in Botswana. The study used Return on Assets and Return on Equity to measure financial performance. Cash and cash equivalents to total assets ratio, Cash to deposits ratio, Loans to deposits ratio, Loans to total assets ratio, Liquid assets to total assets ratio, and Liquid assets to deposits ratio were used as proxies for liquidity management. The research population was all the 9 commercial banks in Botswana and the study covered a period of 9 years from 2011 to 2019. This descriptive study sourced monthly secondary data from Bank of Botswana Financial Statistics database. Descriptive statistics, correlation and regression analyses were applied to analyse the data. The results from regression analysis show statistically significant positive relationships for Loans to total assets ratio and Liquid assets to total assets ratio with return on assets and return on equity. Loans to deposits ratio and Liquid assets to deposits ratio had statistically significant negative relationships with return on assets and return on equity. Cash and cash equivalents to total assets ratio had statistically insignificant positive relationship with return on assets and return on equity whilst cash to deposits ratio had statistically insignificant negative relationship with return on assets and return on equity. Findings suggest that the commercial banks should try to optimize liquidity variables to boost bank performance. The policy makers also, through the Central Bank, should come up with initiatives such as prescribing minimum liquidity requirements that will help banks to stay profitable.

Misallocation and financial frictions: The role of long-term financing

We analyze misallocation of capital in a model where firms face different types of financial constraints. Private firms borrow subject to a collateral constraint while public firms issue long-term bonds subject to default risk. We estimate our model using employment and financial statistics reflecting the overall distribution of firms in conjunction with firm-level data on credit spreads that we target for the set of public firms. In our model, a productive private firm is unable to grow fast if its collateral is limited. But a productive public firm can overcome its financial constraints because it faces low borrowing costs in the debt market, a relationship we also verify in the data. As a result, financial frictions for private firms disrupt investment behavior to a greater degree and generate a larger misallocation of resources relative to financial frictions for public firms.

Expenditure Decentralization: Does It Make Us Happier? An Empirical Analysis Using a Panel of Countries

This paper analyzes whether fiscal decentralization of education, health, housing, social protection, recreation, culture and religion, public order and safety, and transportation have a significant effect on individual well-being. The empirical analysis is based on a non-linear hierarchical model that combines individual data (level 1) with country-level data (level 2). We match 89,584 observations from the World Value Service and the European Value Service (various years) with the average value of data recorded for 30 countries by the Government Financial Statistics (IMF). While fiscal decentralization in education and housing appears to have a negative effect on well-being, this effect is positive in the cases of health and culture and recreation. We interpret this as evidence in favor of a “selective” decentralization approach.

The single payment area of financial markets in the EAEU: Organizational challenges

Subject. This article explores the issues related to institutional and financial relations within the integration of financial markets in the EAEU countries on the basis of a single payment area. Objectives. The article aims to develop proposals to arrange a single payment area in the regional integration association of the EAEU. Methods. For the study, I used the general scientific knowledge techniques and examined financial and foreign trade statistics and reviews of the Eurasian Economic Commission, and statistical databases of the World Bank and International Monetary Fund. Results. The article presents proposals to include a new mechanism for building a single payment area in the system of cooperation within the framework of harmonization of financial markets in the EAEU, which is to unite the processes of target setting and building a common format of activities in the field of financial regulation and a single payment infrastructure arrangement. Conclusions. The proposed organizational mechanism for the integration of financial markets in the EAEU can help prepare the financial systems of the EAEU countries for integration and implement it in the most effective way.

Vietnam

The main purpose of the mission was to continue TA to assist with upgrading the compilation and dissemination of fiscal data and GFS in Vietnam in line with the international standard, the Government Finance Statistics Manual 2014 (GFSM 2014).

An Analysis of Money Supply in Indonesia: Vector Autoregressive (VAR) Approach

The role of money in the modern economy highly determines the intensity and the development of the macroeconomy. The money supply is assumed to be as much as money demand, which reflects the economic character of a country and indicates the growth and development of macroeconomy. In Indonesia, the money supply (M1) is related to the economic dynamics in either the monetary market or the goods market. This research aims at analyzing factors that influence the money supply and to what extent the economic factors affect the money supply in Indonesia. The analysis method used in this research was Vector Autoregressive (VAR) with some variables, such as money supply (M1), interest rate, and Gross Domestic Product (GDP) from the 1st quarter of 2001 until the 1st quarter of 2013. The data collection method was in the form of data compilation from credible sources, such as Bank of Indonesia (BI), Central Bureau of Statistics (CBS), and International Financial Statistics (IFS). To obtain adequate analysis results, several tests were taken, such as unit-root test, Granger causality test, and optimal lag. VAR analysis formulates the correlation among independent variables, so it also sees the study of impulse response and matrix decomposition.

Zambia

In response to a request from the authorities and as part of the United Kingdom’s Department for International Development (DFID) Enhanced Data Dissemination Initiative (EDDI) 2 project, a Government Finance Statistics (GFS) mission visited Lusaka, Zambia, during November 19–30, 2018. This was the third mission to Zambia under the DFID EDDI2 project, following the March 2016 and November 2017 missions. The mission worked essentially with staff at the Zambia Central Statistical Office (CSO) Public Finance Unit (PFU), but also had meetings with staff from the Ministry of Finance’s Accountant General, Budget, Investment and Debt Management, and Economic Management departments.