Structure Of Financial System Research Articles

Influence of Non-Economic Factors on the Formation and Development of the Design of Financial Systems

The purpose of this scientific work is to investigate the impact of non-economic factors on the design of financial systems, focusing on the concept of institutional quality, which is measured using six indices according to the World Bank's methodology. To assess this impact, we utilized data from 1996 to 2022 for a wide range of countries, grouped into five clusters based on per capita income. The comparative analysis of these country clusters revealed a direct and consistent relationship between per capita income dynamics and financial development with changes in institutional quality. It also highlighted the significant influence of this relationship on the structural features of national financial systems. The study demonstrates that institutional quality is the starting point of this entire process, determining the effectiveness of the link between financial development and economic growth through changes in the financial structure. The findings confirm the convergence of financial development levels among countries with different financial system structures and legal traditions, provided they maintain high-quality institutions. The study underscores the importance of institutional quality in minimizing the consequences of structural distortions in the financial system and addressing gaps in financial and economic development. These results are crucial for economic policymakers in developing countries and those with low per capita incomes. Doi: 10.28991/ESJ-2024-08-05-08 Full Text: PDF

Financial resilience, growth and risk sharing in the EU

We build a financial resilience index capturing the structure and stability features of financial systems and benchmark EU financial systems against their ability to enhance stable growth and international risk sharing. The index comprises financial openness, market orientation, equity deepening, maturity structure, and institutional soundness. Our results show that: (i) EU financial systems are highly heterogeneous and converge to a clustered pattern; (ii) the index is highly significant in growth regressions, suggesting that financial structure and institutional soundness are key to enduring growth; (iii) the heterogeneity of EU financial systems has implications for the vulnerability to domestic output shocks: the risk-sharing mechanism is more effective in the market-based and institutionally sound economies that group in the top financial clusters, whereas unsmoothed consumption is higher in economies belonging to the low-resilience clusters, especially in the aftermath of the global financial crisis, when the credit channel is significantly downsized.

The grand bargain on local government debt: Evidence from China's intergovernmental relations

IMPACT This article provides a deeper understanding of policy implementation in local government, highlighting the key role of subnational governments in public risk governance. In fiscally centralized countries with significant local government debt problems, officials at the central government level cannot effectively mitigate local government debt risks solely through restrictive financing policies. The authors explain why policy-makers at the central government level in these countries need to revaluate the structure of the local government financial system.

Local Financial Structure and the Pandemic’s Effect on the Distribution of Employment

Abstract Does the structure of financial systems influence the employment respo0nse to adverse shocks? Using (a) county-industry employment data differentiated by firm size and (b) high-frequency county employment data differentiated by income, we find that employment at small firms, employment of low-income workers, and overall employment fell less in counties with higher proportions of small banks in response to the pandemic. Furthermore, small banks lend more to small businesses than large banks, above and beyond government-guaranteed PPP loans. Evidence suggests that small banks cushioned small firms and low-income workers from the adverse effects of the pandemic. (JEL G21, E24, E32, J21, H12) Received: 15 April 2021; Editorial decision: 13 December 2023 Editor: Andrew Ellul Authors have furnished an Internet Appendix,which is available on the Oxford University Press Web site next to the link to the final published paper online.

Modeling and Analysis of the Fuzzy-Fractional Chaotic Financial System Using the Extended He–Mohand Algorithm in a Fuzzy-Caputo Sense

This paper contains modeling of a fuzzy-fractional financial chaotic model based on triangular fuzzy numbers (TFNs) to predict the idea that long-term dependency and uncertainty both have an impact on the financial market. For solution purposes, the He–Mohand algorithm is proposed where homotopy perturbation is hybrid with Mohand transform in a fuzzy-Caputo sense. In analysis, solutions and corresponding errors at upper and lower bounds are estimated. The obtained numerical results are displayed in tables to show the reliability and efficiency of the proposed methodology. Upper bound errors range from 10 − 6 to 10 − 12 and lower bound errors from 10 − 6 to 10 − 11 . For graphical analysis, system profiles are illustrated as two-dimensional and three-dimensional plots at diverse values of fractional parameters and time to comprehend the physical behavior of the proposed fuzzy-fractional model. These plots demonstrate that the interest rate, price index, and investment demand decrease with the increase of the value of the r -cut at the lower bound. At the upper bound, this behavior is totally opposite. The chaotic behavior of the system at smaller values of saving rate, elasticity of demands, and per-investment cost is greater in contrast to their larger value. Analysis reveals that the proposed methodology (He–Mohand algorithm) provides a new way of understanding the complicated structure of financial systems and provides new insights into the dynamics of financial markets. This algorithm has potential applications in risk management, portfolio optimization, and trading strategies.

Research on the structure of corporate financial management objective system based on BRP method

Abstract Exploring the architecture of corporate financial management objectives of the BRP method is to help companies achieve revenue growth. In this paper, we analyze the motivation for implementing business process reengineering and constructing an intelligent financial management system based on the BRP method and intelligent technology. The DSBPR data analysis and processing model is constructed by using Bayesian ranking model combined with similarity in heterogeneous information networks in the intelligent financial management system. The intelligent financial management system constructed in this paper is analyzed in terms of the operating capacity and profitability of the enterprise. From the viewpoint of operating capability, the turnover rate of receivables, total assets, and current assets decreased by 87.17%, 91.85% and 49.68%, respectively in ten years, and the change rate of inventory turnover was 7.91%. In terms of profitability, there is a difference of 166.12% between the maximum and minimum values of return on net assets. This shows that the use of an intelligent financial management system can provide intuitive data analysis for enterprise development, which helps enterprises to target the coordinated development of enterprise strategies and thus promote the improvement of economic returns.

Design and implementation of financial data statistics and risk early warning analysis system in the era of big data

In the era of big data, the financial field is facing more and more data statistical risk, in order to ensure the continuous improvement of the financial economic development level, Chinese scholars put forward the transformation of the traditional non-empirical analysis method and artificial subjective evaluation method, reasonable use of experts system and information technology as the core management mode. From the perspective of overall development, traditional assessment methods still play an important role in financial data statistics and risk early warning analysis, while the application level of relevant information systems and expert systems is not high. Therefore, in the future innovation and development of the financial field, it is necessary to continue to discuss the design and implementation of financial data statistics and risk early warning analysis system in the era of big data. After understanding the statistical characteristics of financial data and the design principles of risk early warning system in the era of big data, this paper mainly studies the design structure and implementation of financial data statistics and risk early warning analysis system, which will play a positive role in enhancing the competitiveness of financial institutions in the new era.

The New Development Bank and the structure of the multilateral development financial system

AbstractThis paper investigates the influence of the New Development Bank (NDB) on the structure of the multilateral development financial system, using social network analysis. The findings show that some emerging economies have been significantly affected by establishment of the NDB, whereas developed countries still dominate. Although the influence of BRICS countries has increased, they still play a relatively weak role. Further analyses examine the influence of the NDB's expansion; developed countries and most BRICS countries are not affected, and the rankings of some entry countries has increased whereas that of non‐entry countries with nondominant power has decreased.

A STUDY OF FINANCIAL SERVICES WITH SPECIAL REFERENCE TO KUMBHI KASARI CO-OPERATIVE BANK

The banking section will navigate through all the aspects of the Banking System in India. It will discuss upon the matters with the birth of the banking concept in the country to new players adding their names in the industry in coming few years. Banking in India in the modern sense originated in the last decades of the 18th century. The first banks were Bank of Hindustan (1770-1829) and The General Bank of India, established in 1786 and since defunct. The financial system and the economy have inter-relationship and the Indian financial structure has made with the rock foundation in Indian economy. The structure of Indian financial system is classified mainly into four groups that are financial institution, financial market, financial instruments and financial services. The scope of financial services has expanded without boundaries now-a-days since the advent of mammoth of financial products. Almost every now and then, new product is innovated and thereby the services are extended to every nook and corner. Thus the financial services have become part of life of common men and enable the development of society. The Kumbhi Kasari Co-Operative Bank Ltd. Kale.Was established in the year of 1999 by considering good location. Late ShriDatatrey Narke was the man behind formation of this bank and thus is the pioneer of co-operative movement in state. The Kumbhi Kasari Co-Operative Bank has created awareness among the people live in Kale about the importance of co-operative bank and benefits of saving. They created censoriousness about saving money in bank is like to keep money safe as well as secured. The Kumbhi Kasari Co-Operative Bank due to enthusiasm among the people got good responses regarding banking services. The specialty of this society is that there are different facilities reasonable rates of interest, services, interest for adult people and prestigious person under the guidance of experts. This co-operative bank is by the people of the people and for the people. Keywords: Banking In India, Indian Financial Services, Internet Banking, Product and Services, Financial Market, Customers Satisfaction, Co-Operative Banks, RBI Policies, Banking Importance, Role Of Banks.

Impact of Covid-19 on Digital Transformation and Resilience of Small and Medium Enterprises: The Case of Azerbaijan

Currently, the digital economy has a huge impact on the development of the economy and the financial system in various countries of the world. Covid-19 has affected lives, businesses, economies, and the world at large. The virus has had a profound impact on business operations in many areas around the globe and more so if we look closely into what is happening now in Baku, Azerbaijan. This essay focuses on how Covid-19 may affect Baku’s digital transformation and resilience of small and medium enterprises. The first section deals with the introduction of technology in Azerbaijan and its current status, while the second part provides an analysis of how Covid-19 is affecting them. Lastly, the third section deals with future implications of these developments. The relevance of the chosen topic is expressed in the fact that the modernization of the domestic economy of states today is impossible without effective management of the development of the digital economy, which has a significant impact on the development of the financial system and business structures. The experience of foreign countries shows that the digitalization process , understood as the introduction of information and telecommunication technologies into economic processes, is objectively necessary and is accompanied by progressive changes in various areas of economic and social life. Due to the increase in the level of digitalization , the efficiency of the functioning of the business sector and individual sectors of the economy, as well as the financial system as a whole, increases. Among the tasks that modern commercial organizations face is to increase the efficiency of work and the level of competitiveness in a constantly changing market environment. It is possible to increase the efficiency of commercial activities by optimizing business processes, introducing modern equipment, using automation tools, and training personnel in new techniques and technologies for performing work. The article examined the impact of the pandemic on the digital transformation of small and medium-sized enterprises in Azerbaijan, as well as assessed the use of digital technologies in small and medium-sized businesses and their effectiveness during the pandemic. As a result of the study, it was revealed that the pandemic had a significant impact on the acceleration of digital transformation in most countries of the world, including the economy of Azerbaijan. The aim of the research work is to study the impact of the pandemic on the digital transformation and sustainability of small and medium-sized enterprises using the example of Azerbaijan.

Robo-Sukuk pricing for Chinese equities

Sukuks have assumed increasing importance in the global financial industry, with both institutional and retail investors realizing the benefits of Sukuk, both in terms of their adherence to Islamic principles, as well as being more stable and robust. The growing importance of the Sukuk markets has happened simultaneously with the significant development of China. With the financial crisis and other recent events reducing the trust and confidence of investors in the existing financial system structures, Islamic financial products have received great attention due to their connection to real assets and risk-sharing. While Sukuk financial instruments differ significantly from their conventional bond counterparts, pricing has mostly followed conventional bond pricing methodologies. This represents a significant challenge as the characteristics of Sukuk are not considered, misrepresenting the value and associated performance of the Sukuk. An innovative data-driven methodology for the pricing of Sukuk in the Chinese equity market is presented. It overcomes the challenges with conventional bond pricing methodologies applied to Sukuk pricing. The methodology integrates a deep learning framework for the estimation and forecasting of Sukuk prices, considering factors, such as cashflows, net income, and stock price performance, in addition to textual information. Illustrated on thirty major Chinese corporations listed on the Hong Kong Stock Exchange, the framework provides a more market and value-based approach to pricing Sukuk considering the partnership nature of the Islamic financial product.

The regulators’ dilemma and the global banking regulation: the case of the dual financial systems

This paper aims to contribute to the literature debate on the regulators’ dilemma affecting international financial regulations focusing on the banking regulation of dual financial systems. In this regard, the paper provides a new taxonomy of Islamic Financial Systems considering the banking regulation as a driver for the classification and a more detailed definition of dual financial systems. The literature review reveals the existence of different financial system structures affected by socio-cultural biases due to different characteristics of various countries and financial systems globally. The risk of regulatory arbitrage or over-regulation phenomena is high, stifling the growth and the level playing field for both some systemically financial systems.

A tensor-based unified approach for clustering coefficients in financial multiplex networks

Big data and the use of advanced technologies are relevant topics in the financial market. In this context, complex networks became extremely useful in describing the structure of complex financial systems. In particular, the time evolution property of the stock markets have been described by temporal networks. However, these approaches fail to consider the interactions over time between assets. To overcome this drawback, financial markets can be described by multiplex networks where the different relations between nodes can be conveniently expressed structuring the network through different layers. To catch this kind of interconnections we provide new local clustering coefficients for multiplex networks, looking at the network from different perspectives depending on the node position, as well as a global clustering coefficient for the whole network. We also prove that all the well-known expressions for clustering coefficients existing in the literature, suitably extended to the multiplex framework, may be unified into our proposal. By means of an application to the multiplex temporal financial network, based on the returns of the S&P100 assets, we show that the proposed measures prove to be effective in describing dependencies between assets over time.

Insider ownership and stock price crash risk around the globe

Insider ownership is one of the most important aspects of corporate governance. In this study, we examine how insider ownership affects firms' stock market downside risk, as measured by stock price crash risk, globally. We use a large-scale international sample consisting of observations from 40 countries, and find an inverted U-shaped relationship between insider ownership and stock price crash risk. These results remain unchanged by extensive robustness tests using various settings and specifications. We also identify some factors that moderate the relationship between insider ownership and stock price crash risk: the degree of ownership dispersion at the country level, and country-level investor protection regimes / information environment / financial system structure (bank- or market-based).

The structure of financial systems and top incomes in advanced economies: A comparative distributional analysis of the financial wage premium

Prior country case studies show substantial wage premiums in the financial sector contributes to growth of top incomes and wage inequality in a select group of advanced economies. However, while comparative studies show financialization exerts heterogenous effects on wage inequality across advanced economies, it is unclear whether the magnitude and location of financial wage premium in the distribution of income varies across advanced economies. We address this gap in the empirical literature by examining the financial wage premium across the labor income distributions of 13 advanced economies since the 1980s using harmonized labor force data from multiple waves of the Luxembourg Income Study. Consistent with prior studies, we find the financial wage premium is concentrated at the upper end of the income distribution in most advanced economies, but the magnitude of the premium substantially varies across these economies. We account for this variation by showing the market structure of financial systems exacerbates the financial wage premium at the upper end of the distribution. Overall, this study shows the financial wage premium is an important distributional mechanism for understanding the growth of top incomes and wage inequality in advanced economies and the marketization of financial activity amplifies the wage dynamics of financialization.

Threshold Effect of Financial System on High‐Quality Economic Development

The relationship between financial system and economic development is not a simple linear relationship. In some cases, the development of finance may not improve the economic development level. This paper studies the influence of the financial system on the high‐quality economic development, constructs the comprehensive index of the financial system by the factor analysis method, and calculates the green total factor productivity as the index of high‐quality economic development by the CRS multiplier model. Empirically, this paper takes the panel data of 30 provinces, municipalities, and autonomous regions in China from 2005 to 2018 as samples, constructs the panel threshold model, and applies the financial system, economic development level, infrastructure, and industrial structure as threshold variables to study the nonlinear relationship between the financial system and high‐quality economic development. The results demonstrate that the impact of the financial system on the high‐quality economy presents an inverted U‐shaped relationship when the financial system and industrial structure are the threshold variables, indicating that there is an optimal interval, that is, when the financial system threshold is between 0.1355 and 0.1377 and the industrial structure threshold is between 0.1364 and 0.1408, the financial system plays a greater role in the allocation of funds and has the most obvious positive impact on high‐quality economic development. Meanwhile, the impact of the financial system on the high‐quality shows a marginal decreasing trend when the economic development level and infrastructure are the threshold variables; when the economic development threshold is less than 0.1409 and the basic setting threshold is less than 0.1167, the financial system has the greatest effect on promoting high‐quality economic development. Based on the research results, targeted policy suggestions are put forward.

An agenda for research and action toward diverse and just futures for life on Earth.

Decades of research and policy interventions on biodiversity have insufficiently addressed the dual issues of biodiversity degradation and social justice. New approaches are therefore needed. We devised a research and action agenda that calls for a collective task of revisiting biodiversity toward the goal of sustaining diverse and just futures for life on Earth. Revisiting biodiversity involves critically reflecting on past and present research, policy, and practice concerning biodiversity to inspire creative thinking about the future. The agenda was developed through a 2‐year dialogue process that involved close to 300 experts from diverse disciplines and locations. This process was informed by social science insights that show biodiversity research and action is underpinned by choices about how problems are conceptualized. Recognizing knowledge, action, and ethics as inseparable, we synthesized a set of principles that help navigate the task of revisiting biodiversity. The agenda articulates 4 thematic areas for future research. First, researchers need to revisit biodiversity narratives by challenging conceptualizations that exclude diversity and entrench the separation of humans, cultures, economies, and societies from nature. Second, researchers should focus on the relationships between the Anthropocene, biodiversity, and culture by considering humanity and biodiversity as tied together in specific contexts. Third, researchers should focus on nature and economies by better accounting for the interacting structures of economic and financial systems as core drivers of biodiversity loss. Finally, researchers should enable transformative biodiversity research and action by reconfiguring relationships between human and nonhuman communities in and through science, policy, and practice. Revisiting biodiversity necessitates a renewed focus on dialogue among biodiversity communities and beyond that critically reflects on the past to channel research and action toward fostering just and diverse futures for human and nonhuman life on Earth.

Network geometry and market instability.

The complexity of financial markets arise from the strategic interactions among agents trading stocks, which manifest in the form of vibrant correlation patterns among stock prices. Over the past few decades, complex financial markets have often been represented as networks whose interacting pairs of nodes are stocks, connected by edges that signify the correlation strengths. However, we often have interactions that occur in groups of three or more nodes, and these cannot be described simply by pairwise interactions but we also need to take the relations between these interactions into account. Only recently, researchers have started devoting attention to the higher-order architecture of complex financial systems, that can significantly enhance our ability to estimate systemic risk as well as measure the robustness of financial systems in terms of market efficiency. Geometry-inspired network measures, such as the Ollivier–Ricci curvature and Forman–Ricci curvature, can be used to capture the network fragility and continuously monitor financial dynamics. Here, we explore the utility of such discrete Ricci curvatures in characterizing the structure of financial systems, and further, evaluate them as generic indicators of the market instability. For this purpose, we examine the daily returns from a set of stocks comprising the USA S&P-500 and the Japanese Nikkei-225 over a 32-year period, and monitor the changes in the edge-centric network curvatures. We find that the different geometric measures capture well the system-level features of the market and hence we can distinguish between the normal or ‘business-as-usual’ periods and all the major market crashes. This can be very useful in strategic designing of financial systems and regulating the markets in order to tackle financial instabilities.

Financial System Structure and Economic Growth in Cameroon: Relative Efficiency of bank and market finance

Financial System Structure and Economic Growth in Cameroon: Relative Efficiency of bank and market finance

Political origins of financial structure in developing countries

AbstractThe structure of the financial system refers to the way funding is shared between banks and financial markets. This paper investigates the determinants of the financial structure variability across emerging economies. It particularly seeks to study the effects of democratic versus autocratic political regimes on the financial system structure. The results provide evidence that democracy is associated with higher market‐based financial systems. In this line, democracy tends to promote financial systems where stock markets are more active and efficient than banks. Therefore, policymakers are recommended to strengthen democratic institutions through reinforcing political rights and civil liberties, as part of a strategy of stock markets development.