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1 – 10 of over 8000The 2008 financial crisis emerged in the United States. However, the crisis spread across other countries very rapidly. The European Union countries were also affected by the…
Abstract
The 2008 financial crisis emerged in the United States. However, the crisis spread across other countries very rapidly. The European Union countries were also affected by the crisis. The uncertainties and the decreases in balance sheet assets observed in European countries complicated the discharge of debts of countries, which have more fragile structures, and turned the financial crisis into a debt crisis in the year 2010. The European debt crisis caused a significant pressure on the Eurozone, put the financial sector under stress, and expanded the gaps in capital budgets. In order to restructure after the crisis and to eliminate the effects of the crisis, many measures were taken, and various mechanisms were developed. As a result of the measures are taken and the policies implemented, recovery was seen in financial and economic indicators as of the year 2012, but the COVID-19 pandemic emerging in the year 2019 brought a new shock wave. As a result, it became necessary to review the economic and financial measures taken before, to add new ones to the current mechanisms, and determine and monitor the vulnerability of the system. For this purpose, in January 2021, European Commission declared that a new strategy was set. In the present study, the measures taken and the mechanisms developed after the 2008 crisis were summarized and the advancements in financial and economic variables were examined by making use of the statistical data. Moreover, also information about the new strategy set after the year 2021 was provided. It is projected that, in the long run, the consistent and uniform implementation of measures taken and ensuring the efficient functioning of mechanisms developed would strengthen the economic and financial structures of European economies, support the integration, and increase the competitive power.
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Emre Bulut and Başak Tanyeri-Günsür
The global financial crisis (GFC) of 2007–2008 had far-reaching consequences for the global economy, triggering widespread economic turmoil. We use the event-study method to…
Abstract
The global financial crisis (GFC) of 2007–2008 had far-reaching consequences for the global economy, triggering widespread economic turmoil. We use the event-study method to investigate whether investors priced the effect of significant events before the Lehman Brothers' bankruptcy in European and Asia-Pacific banks. Abnormal returns on the event days range from −4.32% to 5.03% in Europe and −5.13% to 6.57% in Asia-Pacific countries. When Lehman Brothers went bankrupt on September 15, 2008, abnormal returns averaged the lowest at −4.32% in Europe and −5.13% in Asia-Pacific countries. The significant abnormal returns show that Lehman Brothers' collapse was a turning point, and investors paid attention to the precrisis events as warning signs of the oncoming crisis.
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Peterson K. Ozili, Olajide Oladipo and Paul Terhemba Iorember
This paper investigates the effect of abnormal increase in credit supply on economic growth in Nigeria after controlling for the quality of the legal system, size of central bank…
Abstract
Purpose
This paper investigates the effect of abnormal increase in credit supply on economic growth in Nigeria after controlling for the quality of the legal system, size of central bank asset, banking sector cost efficiency and bank insolvency risk.
Design/methodology/approach
The authors employ the generalised method of moments (GMM) regression methodology to estimate the effect of abnormal increase in credit supply on two measures of economic growth in Nigeria.
Findings
The abnormal increase in credit supply has a significant effect on economic growth. Abnormal increase in credit supply increases real gross domestic product (GDP) growth. The abnormal increase in credit supply decreases real GDP per capita during the global financial crisis. The abnormal increase in domestic credit to the private sector has a significant positive effect on GDP per capita when there is strong legal system quality in Nigeria. In contrast, the abnormal increase in domestic credit to the private sector has a significant negative effect on real GDP growth when there is strong legal system quality in Nigeria.
Practical implications
The abnormal increase in credit supply is ineffective in increasing GDP per capita during crisis years. Policymakers should be cautious in pressuring financial institutions to release an abnormally large amount of credit into the economy particularly during financial crises. Rather, policymakers should encourage financial institutions to supply credit in a sustained manner – not in an abnormal manner –and in a way that supports growth.
Originality/value
The present study contributes to the literature by analysing the effect of abnormal increase in credit supply on economic growth in a developing country context.
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Ümit Şengel, Merve Işkın, Mustafa Çevrimkaya and Gökhan Genç
Since the first moment of the pandemic, national and international travel restrictions are in place to reduce human mobility. This actual situation makes the tourism industry one…
Abstract
Purpose
Since the first moment of the pandemic, national and international travel restrictions are in place to reduce human mobility. This actual situation makes the tourism industry one of the areas most affected by the pandemic. Many microeconomic factors (households and firms) were adversely affected by the pandemic, and this situation brought about macroeconomic contraction. Naturally, governments seek to sustain production and employment by offering financial packages to reduce the negative economic effects of the pandemic. Given such information, the study aims to examine the financial policies implemented by countries to support the tourism industry during the pandemic period.
Design/methodology/approach
Content analysis, which is a technique of qualitative research method, was applied in the analysis process of the data. Assessments were made based on data published by the United Nations World Tourism Organization (UNWTO) on the financial and monetary policies implemented by countries to support the tourism industry. The data were analyzed using the MAXQDA qualitative analysis program.
Findings
According to the results of the study, countries support the tourism industry financially in terms of credit and liquidity. Also, tourism investments are encouraged by tax breaks and low interest rates.
Originality/value
It is aimed to determine what issues the financial and monetary policies published by the UNWTO focus on to solve the problems in the tourism sector. In this way, it is thought that the study will reveal the problems experienced by tourism enterprises during the pandemic period with a holistic perspective.
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Elżbieta Bukalska and Michał Bernard Pietrzak
Poland was coined a ‘green island’ during the Global Financial Crisis (GFC) of 2007–2009 with a stable growth in Gross Domestic Product (GDP), while other countries experienced a…
Abstract
Research Background
Poland was coined a ‘green island’ during the Global Financial Crisis (GFC) of 2007–2009 with a stable growth in Gross Domestic Product (GDP), while other countries experienced a dramatic drop in the GDP growth. We assumed that this is due to the stronger resilience of Polish economy and Polish companies.
Purpose of this Chapter
The aim of the research is to identify the companies' stability (resilience) in the crisis situations (especially the GFC and COVID-19 crisis). We also wonder whether corporate resilience is accompanied by the financial flexibility.
Methodology
We use GDP growth rate and Profitability as the measures of the resilience. Additionally, we include in our research financial flexibility measured by debt and cash ratio as factors affecting corporate resilience. Our research covers the period 2000–2021. Our data refer to three European countries: France and Germany as the leading European countries and Poland as the leader of changes in Central and Eastern Europe.
Findings
We found that Polish economy – against German and French – have higher GDP growth and profitability ratio over the 2000–2021 period. These ratios also show lower volatility around the trend. We proved that higher corporate resilience is accompanied by higher financial flexibility of Polish companies.
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The world’s so-called developed countries of the West have long economic and political history compared to those of the East. The developed countries are far away from today’s…
Abstract
The world’s so-called developed countries of the West have long economic and political history compared to those of the East. The developed countries are far away from today’s developing countries in terms of aggregate income, aggregate capital formation, total number of human capital, etc. Though some countries from the East have outpaced some of the Western countries in terms of gross domestic product (GDP), aggregate bank credit and capital formation, in the twenty-first century, such as China and India, they are far behind in terms of per capita income, per capita financial facilities and per capita capital stock. On the other hand, the countries from the East, except a few one, are also well lagging behind their Western counterparts in the level of human development. With the theme of the book on the growth and developmental aspects of credit allocations, the present chapter makes an introduction to the subject area by means of credit histories in the selected 10 countries and their phase-wise levels of GDP, credit and Human Development Index (HDI). The figures for GDP, credit and HDI reflect the rising trends in GDP and credit for all in the entire phase but there are some downfalls in the GDP and credit during the phase of the global financial crisis. Besides, it observes rising trends of HDI in all the countries but the rates of rise are more in the case of the developing countries. There are thus the possibilities of getting correlations among the different pairs of the variables across the countries.
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Baah Aye Kusi, Joseph Ato Forson, Eunice Adu-Darko and Elikplimi Agbloyor
Financial crises (FC) remain a global threat to the financial stability of financial institutions and international bank regulatory capital requirement (IBRCR) by the Committee on…
Abstract
Purpose
Financial crises (FC) remain a global threat to the financial stability of financial institutions and international bank regulatory capital requirement (IBRCR) by the Committee on Banking Supervision provides mechanism for curbing the adverse effect of FC on financial stability. Hence, the purpose of this study is to provide, evidence on how IBRCR tones down the adverse FC effects on bank financial stability (BFS).
Design/methodology/approach
The study uses 102 economies between 2006 and 2016 in a two-step dynamic generalized method of moments model.
Findings
The results show that while FC and IBRCR negatively and positively impact BFS, respectively, it is observed that under the increasing presence of IBRCR, the negative effect of FC on BFS declines. Additionally, the results show that economies that maintain minimum IBRCR above 10.5% recommended by BASEL III are able to reinforce a significant reduction in the negative effect of FC on BFS.
Practical implications
These findings imply that in as much as financial crisis is injurious to BFS, regulators and policymakers can rely on IBRCR to avert the injurious effects of FC on BFS. Clearly, while IBRCR is necessary for reinforcing BFS through FC, bank managers who maintain IBRCR above the recommended 10.5% stands a better chance to taming the avert effect of FC on BFS. Additionally, economies that have not full adopted the BASEL minimum capital requirement may have to do so given its potential of dampening the adverse effect of FC on BFS.
Originality/value
The study presents an international perspective of how BASEL capital requirements can help tame global financial crisis using a global sample of 102 economies.
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Carlos Sampaio, Luís Farinha, João Renato Sebastião and António Fernandes
The COVID-19 pandemic caused unprecedented global turmoil and a halt on international tourism. This study aims to evaluate the scientific literature about tourism crisis and…
Abstract
Purpose
The COVID-19 pandemic caused unprecedented global turmoil and a halt on international tourism. This study aims to evaluate the scientific literature about tourism crisis and disasters and depicts how this research stream evolved in the face of economic, security, health, environmental or trust crises, further providing insights about a research agenda on this stream.
Design/methodology/approach
This study uses bibliometric methods and topic models, specifically latent Dirichlet allocation (LDA) methods to evaluate the nature and course of the tourism crises and disasters scientific literature. Data from 2,810 documents were retrieved from the Web of Science database and were used to perform the analysis.
Findings
The results show an increase of tourism crises and disasters scientific literature departing from 2010, and a surge in 2020 and 2021 due to the COVID-19 pandemic. Furthermore, themes such as tourism competitiveness, tourism demand, crisis management, perceived risk, natural disasters and destination recovery are among the most relevant themes in the research line, showing that the effect of economic and financial crises on tourism industry, sustainable tourism and tourism demand are set to be among the most relevant in the upcoming years.
Research limitations/implications
This study fills a void in the tourism literature by providing a roadmap to understand the past, present and future of the tourism crises and disasters research line and the avenues for future research in this field, including methods, in the period post-COVID-19.
Originality/value
Previous studies on tourism crises and disasters were focused on literature review and on the relationship between crises and disasters and the tourism industry. This study uses a set of methods unused before in the research stream, namely, a combination of bibliometric methods and LDA methods, to provide a road map for the present state-of-the-art of tourism crises and disasters research and promising future research lines.
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Etienne G. Harb, Nohade Nasrallah, Rim El Khoury and Khaled Hussainey
Lebanon has faced one of the most severe financial and economic crises since the end of 2019. The practices of the Lebanese banks are blamed for dangerously exposing economic…
Abstract
Purpose
Lebanon has faced one of the most severe financial and economic crises since the end of 2019. The practices of the Lebanese banks are blamed for dangerously exposing economic agents and precipitating the current financial collapse. This paper examines the patterns of manipulation of the 10 biggest banks before and after implementing the financial engineering mechanism.
Design/methodology/approach
The authors apply Benford law for the first and second positions of the reports of condition and income and four out of the six aspects of the CAMELS rating system (Capital Adequacy, Assets Quality, Management expertise, Earnings Strength, Liquidity and Sensitivity to the market) by excluding Management and Sensitivity. The deviations from BL frequencies are tested using Z-statistic and Chi-square tests.
Findings
Banks seem to have manipulated their Capital Adequacy, Liquidity and Assets Quality in the pre-financial engineering and considerably in the post-financial engineering periods. Fraudulent manipulations in the banking sector can distort depositors, shareholders and regulating authorities.
Research limitations/implications
This study has many implications for governmental authorities, commercial banks, depositors, businesses, accounting and auditing firms, and policymakers. The Lebanese government needs to implement corrective fiscal and monetary policies and apply amendments to the bank secrecy and capital control law. The central bank should revamp its organizational structure, improve its disclosure practices and significantly reduce its ties to the government and the political elite.
Practical implications
The study findings suggest that the central bank should revamp its organizational structure, improve its disclosure practices and significantly reduce its ties to the government and the political elite.
Originality/value
The study is the first to examine the patterns of fraudulent manipulation in the Lebanese banking industry using Benford Law (BL).
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