Supervision Of Financial Institutions Research Articles

Unlocking Urbanization: The symbiotic relationship between inclusive finance and urban development in China

The emergence and development of inclusive finance has made it possible for more economic entities to have easy access to a wider selection of financial services. This shift has significantly addressed the financial challenges inherent in the process of urbanization, making it a driver of the process of urban development. Therefore, this paper provides empirical evidence on the relationship between financial inclusion development and urbanization construction in China using provincial data and a panel-VAR model. The results show that: (1) There is a significant co-integration relationship among inclusive finance, urbanization, government support, and real estate development. (2) Inclusive finance has a long-term positive impact effect on urbanization. (3) Population urbanization has a positive impact on inclusive finance, but income urbanization has a negative impact on inclusive finance. To effectively promote the development of inclusive finance and urbanization, the following measures are of utmost importance: Firstly, while accelerating urbanization construction, it is necessary to expand and enhance the coverage of financial services. This will ensure that multiple regions can benefit from financial services. Secondly, to meet the diverse needs of different regions, more targeted financial products should be developed, making full use of the advantages of inclusive finance. Lastly, the government should strengthen its supervision of financial institutions and reduce the risks associated with inclusive finance, thereby ensuring a positive interaction between inclusive finance and urbanization development.

Financial Management Related to Fiqh Muamalah in Bengkalis City

Humans cannot fulfill their needs only by their own efforts. There are times when you need things that are owned or managed by someone else. So to facilitate the exchange system required money. While institutions related to money are financial institutions. This research is a literature study on fiqh muamalah money and financial institutions, so that it can be seen what discussions have been researched and discussions that need to be researched. This study uses a qualitative approach. There are 30 articles published in 2021 to 2022 which are grouped into two main topics, namely the topic of money and the topic of financial institutions. The topic of discussion of money is then grouped into three sub-topics, namely: 1) dinar dirham, 2) the use of E-Money, and 3) virtual currency (cryptocurrency). And the topic of discussion of financial institutions is also grouped into three sub-topics, namely: 1) implementation of contracts at financial institutions, 2) management of financial institutions, and 3) supervision of financial institutions. The topic of financial institutions with sub-topics of contract implementation at financial institutions is the most articles with a 33.4% presentation. While the articles that were the least discussed were the dinar and dirham sub-topics on the topic of money, with a presentation of 3.3% of the overall theme of money and financial institutions. Discussions that need to be researched, such as: the law of buying and selling currency in Islam, the exchange rate in the perspective of Islamic economics, monetary in the view of Islam and the relationship between money and financial institutions in fiqh muamalah.

The fatter the tail, the shorter the sail

AbstractGuided by the extreme value theory, this study empirically investigates the impact of tail risk measures on financial distress of publicly traded bank holding companies (BHCs) in the United States. Our results show that tail risk measures namely, value‐at‐risk and expected shortfall, are significantly and positively related to banks distress risk. Implying that BHCs with more frequent extreme negative daily equity returns induce higher tail risks, thereby increasing their likelihood of experiencing financial distress. Our results also show that tail risk measures enhance the explanatory power of traditional models explaining banks distress risk based on accounting information. These results indicate that market discipline is generally beneficial in managing and regulating banks, bolstering claims of the importance of macro‐prudential supervision of financial institutions.

Three-Party Stochastic Evolutionary Game Analysis of Supply Chain Finance Based on Blockchain Technology

In the process of accounts receivable financing under supply chain finance, the phenomenon of accounts receivable forgery and default have caused great pressure on the supervision of financial institutions. We consider the integration of blockchain technology with a supply chain finance platform around the fraudulent default phenomenon in supply chain finance receivables financing and construct a three-party stochastic evolutionary game model among financial institutions, core enterprises, and Micro, Small, and Medium Enterprises (MSMEs). Firstly, we use Ito^’s stochastic differential equation theory to analyze the conditions for the stability of the behavior of game subjects. Secondly, we use numerical simulations to quantitatively analyze the impact of the regulatory strength of financial institutions, the information sharing of the blockchain platform, and the change of incentive parameters on the strategy choice of game subjects. Through the above analysis, we conclude that the information-sharing incentive coefficient promotes financial institutions to choose to connect to the blockchain platform, and the information-sharing risk coefficient and the regulatory intensity have the opposite effect on the blockchain platform construction. Meanwhile, the allocation of incentive shares has a significant influence on the core enterprises. Finally, we give priorities and directions for adjusting the relevant parameters to provide recommendations for financial institutions to regulate the financing process more effectively.

Fiqih Muamalah Uang dan Lembaga Keuangan: Studi Literatur

Humans cannot fulfill their needs only by their own efforts. There are times when you need things that are owned or managed by someone else. So to facilitate the exchange system required money. While institutions related to money are financial institutions. This research is a literature study on fiqh muamalah money and financial institutions, so that it can be seen what discussions have been researched and discussions that need to be researched. This study uses a qualitative approach. There are 30 articles published in 2021 to 2022 which are grouped into two main topics, namely the topic of money and the topic of financial institutions. The topic of discussion of money is then grouped into three sub-topics, namely: 1) dinar dirham, 2) the use of E-Money, and 3) virtual currency (cryptocurrency). And the topic of discussion of financial institutions is also grouped into three sub-topics, namely: 1) implementation of contracts at financial institutions, 2) management of financial institutions, and 3) supervision of financial institutions. The topic of financial institutions with sub-topics of contract implementation at financial institutions is the most articles with a 33.4% presentation. While the articles that were the least discussed were the dinar and dirham sub-topics on the topic of money, with a presentation of 3.3% of the overall theme of money and financial institutions. Discussions that need to be researched, such as: the law of buying and selling currency in Islam, the exchange rate in the perspective of Islamic economics, monetary in the view of Islam and the relationship between money and financial institutions in fiqh muamalah.

SO MUCH OWED BY SO MANY TO SO FEW: HOW THE FINANCIAL ADVISORY AND INTERMEDIARIES ACT 37 OF 2002 ADDRESSES “CONFLICT OF INTEREST”

Winston Churchill delivered his famous speech entitled “The Few” after the Battle of Britain of 1940. This historical conflict saw 2353 young men from Great Britain and 574 from overseas, pilots and other aircrew fly at least one authorized operational sortie with an eligible unit of the Royal Air Force or Fleet Air Arm during the period 10 July to 31 October 1940. Although conflict on the scale of a world war cannot be equated to conflicts of interest between financial-services providers (FSPs), representatives and clients, the potential damage that can be caused by intermediaries and representatives who act in their own interest can be devastating to that particular client. In addition, it also has wider implications for the financial-services industry. It is consequently up to the FinancialServices Board (FSB) to ensure that conflict of interest between intermediaries and representatives and clients are managed in anacceptable way. As a matter of background: The FSB was established by the Financial Services Board Act (97 of 1990) and has as its main objective the supervision of financial institutions in order to achieve maximum consumer protection. As such, the FSB acts as statutory registrar of a variety of financial institutions. Hattingh and Millard explain that the FSB is currently in control of the Collective Investment Schemes Control Act, the Financial Services Board Act, Financial Institutions (Protection of Funds) Act , Financial Supervision of the Road Accident Fund Act, Friendly Societies Act, Inspection of Financial Institutions Act, Long-term Insurance Act, Pension Funds Act, Short-term Insurance Act, Supervision of the Financial Institutions Rationalisation Act, the Securities Services Act, and the Financial Advisory and Intermediaries Act. The FSB drafted the FAIS Act with the aim of creating a regulatory structure which regulates the way in which intermediary and advisory services in respect of financial products are rendered. Conflict of interests is but one of the issues that arise between intermediaries, advisors, financial-services providers and clients and the purpose of this note is to analyse a number of key issues introduced by Board Notice 58 of 19 April 2010. This note sets out to explain what the position was before the introduction of the new rules on the management of conflict of interest. It then proceeds to discuss the new definitions that now form part of the legislation. In addition, it discusses the detailed provisions pertaining to conflict of interest and explains what a conflict-of-interest management policy entails. Finally, the note evaluates the new regulations and asks whether they have thepotential to eliminate unfair dealings by advisors and intermediaries and thereby enhancing the professionalism of those who work in the financial-services industry.

An Empirical Study on the Influence of Internet Attention on the Performance of Individual Stocks in the Securities Market Under the Environment of Big Data

In the era of big data, the impact of the massive public opinion information generated by the Internet on the securities market has become a factor that can't be ignored in investment decision-making and supervision. Under the influence of these factors, investors are influenced and restricted by psychology, self-cognition and limited attention, which will make them pay different attention to stocks, which spread to the securities market, and then have an impact on the market performance of individual stocks. This paper selects big data's public opinion information from securities websites, authoritative media data and mainstream social networking sites designated by China Shenzhen Stock Exchange to quantify the Internet attention index. According to different subjects and angles, it is divided into: media attention, netizens' attention, public opinion attention. Based on these three kinds of attention index data, this paper establishes the panel regression model and the GARCH (1, 1) model of the influence of different subject attention on individual stocks, and introduces abnormal media attention, abnormal netizens' attention, abnormal public opinion attention, lag attention and change of attention into the model to empirically test the three main market manifestations of individual stocks, namely, earnings, liquidity and volatility. Through comprehensive analysis and research, this paper discusses in detail and comprehensively the internal mechanism of the influence of Internet attention on the performance of individual stocks in China's securities market under the environment of big data. The conclusion of the study provides a reference for investor decision-making, market capitalization maintenance of listed companies and supervision of financial institutions.

Role of Financial Service Authorities on Legal Protection of The Sharia Banks Customers in Indonesia

Sharia Bank is a bank that runs its business activities based on sharia principles, in the collection of funds and the distribution of funds, in order to serve the needs of society and improve the standard of living of the people. Various banking problems, such as not yet optimal protection of consumer financial services (bank customers), therefore it is necessary to supervise the operational banking activities. The purpose of bank supervision is to protect the interest of the savers who entrust their funds to the bank. Based in Law Number 21 of 2011 on the Authority of Financial Services, the arrangement and supervision of financial institutions becomes the authority of the Financial Services Authority. This supervision is also applied to banks with sharia principles. In this paper will discuss the Financial Services Authority oversight in the application of the principle of legal protection for customers in sharia banks.

CLASSIFICATION OF MODELS OF REGULATION AND SUPERVISION BY THE ACTIVITIES OF FINANCIAL INSTITUTIONS

Introduction. In the conditions of globalized world, a mechanism for coordination of national systems of regulation and supervision of financial institutions is considered an urgent need. The problems of the formation of regulatory and supervisory systems in the financial sector are the core ones for many scholars' researches (such as B.Eihengrin, D. Kalvo, G. Karcheva, A.Melecki, V.Mishchenko, etc.). Scientists have conducted many relevant and effective studies of the evolution of institutional support for such systems. However, these studies differ in their approaches to the determination of the models of the regulatory and supervisory systems. Purpose. The article aims to conduct the analysis of the positive practice of developing regulatory and supervisory systems to control financial institutions activity and to identify the main factors for the classification of models of such systems. Results. Author establishes the objective reasons for the emergence of a sectoral model, such as different nature of financial services, which establish the legal relationship between financial institution and consumer of financial services. The article defines the differences between consolidated and integrated models. These differences outline the responsibility for oversight by one or more supervisors and display the existence of different supervisory methodologies - unified and integrated. Author determines the main advantages provided by the system of consolidated supervision and estimates the shortcomings of the transitional period in the process of transforming of the sectoral model into a consolidated regulatory and supervisory model. According to the proposed criteria (supervision of financial institutions, protection of consumers of financial services and investors, micro-prudential and macroprudential supervision, withdrawal of financial institutions from the market), author determines four models of the system of regulation and supervision of financial institutions. They are sectoral model, consolidated model with centralization and consolidation of the functions in the central bank, a consolidated model with centralization and consolidation of functions in a single authorized oversight body and an integrated model Twin Peaks. Investigation of the transformation processes of the regulation and supervision systems over the activities of financial institutions allowed generalizing the advantages and disadvantages of different models of regulatory and supervisory systems, which have been outlined in this paper.

Challenges of implementing an effective risk-based supervision on anti-money laundering and countering the financing of terrorism under the 2013 FATF methodology

PurposeThe purpose of this study is to assess whether level of income of a particular country affects the level of effectiveness in anti-money laundering (AML)/ countering the financing of terrorism (CFT) supervision to identify the most important recommendations in achieving high level of effectiveness and critically discuss the findings of the fourth round evaluations with the outcome of first two objectives.Design/methodology/approachThe level of effectiveness was rated in terms of a four-point Likert scale given 4 for high, 3 for substantial, 2 for moderate and 1 for low level of effectiveness. The countries were ranked using a four-point Likert scale given 4 for high income, 3 for upper middle income, 2 for lower middle income and 1 for low income countries as per the categorisation of World Bank list of economies (World Bank, 2017). For the purpose of estimation, level of effectiveness was rated in terms of a four-point Likert scale given 4 for high, 3 for substantial, 2 for moderate and 1 for low level of effectiveness. The level of technical compliance was ranked using a five-point Likert scale given 5 for compliant, 4 for largely compliant, 3 for partially compliant, 2 for non-compliant and 1 for not applicable as per the ratings given in FATF 2013 methodology (FATF, 2013).FindingsIt was observed that the level of income of a particular jurisdiction has a positive relationship with the level of effectiveness in AML/CFT supervision. Statistical analysis reveal that AML/CFT framework on regulation and supervision of financial institutions (Recommendation 26) and providing guidance and feed back to reporting entities (Recommendation 34) have significant impact on effectiveness level on AML/CFT supervision over the powers of supervisors (Recommendation 27), regulation and supervision of designated non-financial business and professions (Recommendation 28) and sanctions (Recommendation 35).Research limitations/implicationsThe research was limited to 36 fourth round mutual evaluation reports.Originality/valueThis paper is an original work done by the author as a result of the experience which the author received involving as an assessor in mutual evaluations.

Are Banks Still Special?

Banks have long played a special role in the financial system. Individuals and institutions use banks to access the payment system, and central banks rely on banks to transmit monetary policy to the real economy. Hence, financial and economic stability has rested on the stability of the banking system, in particular, on the safety and soundness of systemically important banks. This is the primary reason why banks have access to central banking lending facilities, as well as why banks are regulated and supervised. It has also served as the overriding rationale for the reform of regulation and resolution that the G20 initiated and implemented in the wake of the financial crisis of 2007-08. But, banks are not inherently special. Banks are only as special as central banks make them. Via quantitative easing (QE) as well as eligibility easing (EE), central banks have broadened the transmission mechanism beyond banks. As a result, banks have become less special. This in turn has significant implications for central banks’ responsibilities for liquidity provision, and for the regulation and supervision of financial institutions. Banks’ special role could erode further if central banks introduce central bank digital currencies. Such an innovation would not only replace cash, but could also displace deposits. Central banks could not only impose significantly negative rates of interest; they could potentially determine the volume, distribution and pricing of credit, so that the transmission mechanism becomes direct. That in turn would have significant and not necessarily positive implications for banks, for financial markets and for the economy at large.

Revisiting Financial Services Sector Transparency through Whistleblowing: The Case of South Africa and Switzerland

AbstractThe recent global financial crisis has demonstrated the ineffectiveness of traditional regulation in averting financial crime. Consequently the supervision of financial institutions has been increasingly re-evaluated and such endeavours have resulted in the reregulation of the sector in many jurisdictions. This article argues that, much as these strategies can be said to be laudable, until they emphasize engagement with the people who work in those institutions through making it possible for them to report corporate misconduct, these legislative paradigms will not avail much. As such, this article argues for the increased use of insiders through whistleblowing as a mechanism to support the exposure of illegal activities. By comparing the whistleblowing approaches adopted in South Africa and Switzerland, this article attempts to contribute to the standardization of approaches that can be used to enhance global financial sector transparency and minimize financial crime.

РЕФОРМУВАННЯ ДЕРЖАВНОГО РЕГУЛЮВАННЯ ТА НАГЛЯДУ ЗА ФІНАНСОВИМИ УСТАНОВАМИ В УКРАЇНІ

Urgency of the research. Introduction of efficient system of state regulation and supervision of financial institutions is key direction of state policy of Ukraine for creating stable financial system. Target setting. Difficult situation in financial sector of Ukraine, low financial stability of financial institutions and high sensitivity to risks tell about necessity of reforms in state regulation and supervision of financial institutions. Actual scientific researches and issues analysis. Native and foreign scientists pay much attention to mechanisms of state regulation and supervision of financial services markets, including: O. Baranovsky, S. Barnes, V. Korneev, I. Krupka, V. Mischenko, S. Naumenkova, T. Smovzhenko, K. Styroch, M. Tailor, V. Fedosov, and others. Uninvestigated parts of general matters defining. At the same time existing scientific researches don’t provide proper review of justification of efficient institutional model for Ukraine. The research objective. Investigation of existing models of state regulation and supervision of financial institutions in the world and justification of efficient institutional model for Ukraine. The statement of basic materials. The results of investigation show that in terms of open financial market existing in Ukraine model doesn’t provide efficient supervision of financial institutions. Conducted critical analysis of existing models of state regulation and supervision of financial institu-tions helped to determine advantages and disadvantages of each model and justify the necessity of reforms in state regulation and supervision. Conclusions. Is suggested the way of transformation of existing in Ukraine sectoral model into efficient system of state regulation and supervision of financial institutions by combining model of concentration of all monitoring functions in one monitoring institution with assignment of supervising responsibilities under systemically important financial institutions on individual and consolidated basis on National bank of Ukraine.

The Analysis of the Collapse of Lehman Brothers

The causes of the failure of Lehman Brothers, preventive measures, and recommendations for going forward constitute the subject for discussion in this paper. The bankruptcy of Lehman Brothers in 2008 sent shock waves through the entire global banking and financial system across numerous and unexpected transmission channels when the price bubble in the US housing market tied to the subprime mortgage market suddenly burst. Actions, which largely relate to the risk return relationship, bad accounting treatment of financial transactions, and loose risk management policies and strategies at Lehman, led the financial conglomerate to its eventual collapse. Global stock markets, individual and corporate investors, and staff of the Firm and its other related businesses bore the brunt of the financial disaster in the form of huge losses, liquidations, job losses, reduction in asset prices and a subsequent global financial crises which could have been prevented. Strong corporate governance structures, robust risk management policies, and constant, effective monitoring and supervision of financial institutions, especially the larger ones by regulatory bodies are therefore highly recommended to ensure against failure of financial institutions.

Supervision of financial institutions

Purpose – This paper aims to highlight the new regulatory framework established by Basel III. Design/methodology/approach – This paper provides a critical review of the existing literature concerning bank supervision while providing an overview of the transition from Basel I to Basel III rules and critical appraisal of the current regulatory framework. Review of the existing literature. Findings – Basel III introduces new measures in favor of bank stability and in order to mitigate the propagation of financial shocks. But on the other hand the new regulatory framework adds an extra burden to banks’ business plans affecting credit policies and thus the real economy. Another issue that is not properly addressed is the rising of financial innovations that are able to pass by the new regulations. Overall Basel III rules are moving to the right direction but need to stay always up-to-date in order to catch up with the modern ever-evolving financial system. Pros and cons. Need for improvement. Originality/value – The paper presents an up-to-date review of Basel rules with future prospects.

Three Topics at the Periphery of Corporate Governance: Business Rescues and Wrongful Trading, Supervisory Law for Financial Institutions and the Perspective on Islamic Financial Institutions

In this paper three specific areas and their impact of corporate governance are analysed. The first part of the article questions the adequacy of current obligations under German law to inform shareholders of a financial crisis. The risk that directors and other managers will make risky decisions because of a desire to avoid insolvency and the rules governing corporate conduct in situations of insolvency or near-insolvency in Germany are considered and contrasted with the English approach. The approach to supervision of financial institutions, and the potential for these rules to apply to companies other than financial institutions, are considered. The current rules for financial institutions in Germany, and the ways in which the managements and auditing of such companies differs from the norm are analysed. The potential for Islamic law to have an effect on the management of corporations forms the subject matter of the final part of this article. The role of Sharia Supervisory Boards (SSB) in the German unitary and two-tier systems, and the proper classification of such boards are thoroughly explored. The possible consequences for SSBs and the corporations that use them under the German laws on Corporate Governance are considered. The article concludes with a summary outlining the ways in which Corporate Governance affects the areas covered; business rescue laws, supervisory laws for financial institutions, and Islamic Financial Institutions.

Supervision of Financial Institutions: The Transition from Basel I to Basel III. A Critical Appraisal of the Newly Established Regulatory Framework

Supervision of Financial Institutions: The Transition from Basel I to Basel III. A Critical Appraisal of the Newly Established Regulatory Framework

Macroprudential warnings in the Euro zone and Hungary

During the present financial crisis, the focus of the regulation and supervision of financial institutions has shifted from being institution-based (microprudential) towards the systemic level (macroprudential). A special element of the macroprudential regulatory and supervisory toolkit is the issue of macroprudential warnings. Prior to the crisis, both the international and the domestic authorities issued warnings concerning the emergence of system-wide risks in the financial sector. However, these warnings did not result in significant changes in the behaviour of the banks, which were the main addressees of the warnings. The article analyses the practice and effectiveness of macroprudential warnings in relation to the European Central Bank and the competent Hungarian authorities. The subject matter is particularly topical, taking into account that one of the very first steps in changing the institutional framework of financial supervision, as a response to the financial crisis, has been the establishment of an institutional framework for issuing macroprudential warnings.

Supervision of Non-Banking Financial Institutions in Croatia

Financial sector has a specific role in the country’s economy as a driving force of growth and development. In the same way as the efficiency of the national economy can be fostered by the development of financial mechanism, it can be also threatened by possible financial crisis and instabilities.Therefore, a question of regulation and supervision of all parts of financial system are of major importance for any country. The regulations refer mostly to maintenance of financial stability and consumer protection. In order to protect the interest of the society and to accelerate the economy development it is necessary to provide adequate legal framework as well as independent supervision institutions.The structure of the financial sector in the Republic of Croatia is underdeveloped and characterized by domination of the banking sector and the issue of regulatory model of financial sector is solved by adopting the model of a group of independent agencies for each activity. The Croatian National Bank is in charge of the supervision of operations conducted by banks and savings banks. Non-banking financial institutions (investment funds, pension funds, insurances) are regulated by a wide range of regulatory institutions – The Securities Commission of the Republic of Croatia, Agency for Supervision of Pension Funds and Insurances, Directorate for Supervision of Insurance Companies, State Agency for Deposit Insurance and Bank Rehabilitation and Ministry of Finance. Because of such a wide range of regulatory institutions, the problems of authority overlapping and insufficient regulation unavoidably arises, especially by the development and deregulation of financial markets.Because of that, it seems reasonable to investigate the existing regulatory framework of non-banking financial institutions in Croatia. The aim of this paper is to determine if the introducing of an integrated financial supervision of non-banking financial sector is justified. In order to give an answer to this complex question, a comparative analysis will be carried out by presenting a models of consolidated supervision of financial institutions and markets for several European countries.The authors conclude that there are measures to ensure a stable and more efficient financial system.

The Credit Cycle and the Business Cycle in Canada and the U.S.: Two Solitudes?

Recent events highlight the importance of understanding the relationship between credit availability and real economic activity. This paper estimates macroeconomic models for Canada to investigate the relationship between changes in non-price lending standards, business loans and output. We allow for the possibility that macroeconomic and financial market conditions in the U.S. affect those in Canada. The responses to financial shocks are dissimilar in both countries. Real time data are also found to have a significant impact on the results. The U.S. and Canada may indeed be likened to 'two solitudes' insofar as the impact of credit conditions is concerned. Differences in the quality of banking standards and supervision of financial institutions, as well differences in the effectiveness of monetary policies in the two countries may partially explain the results.