Search results

1 – 10 of over 13000
To view the access options for this content please click here
Article
Publication date: 4 January 2021

Arvid Hoffmann, Simon McNair and Jason Pallant

The purpose of the paper is to examine how psychological characteristics predict membership of and transitions between states of higher vs lower financial vulnerability

Abstract

Purpose

The purpose of the paper is to examine how psychological characteristics predict membership of and transitions between states of higher vs lower financial vulnerability – and vice versa – over time.

Design/methodology/approach

This research uses a dynamic latent class model (latent transition analysis) to explore the dynamics of consumers’ financial vulnerability over time using longitudinal data obtained by repeatedly administering a measure of financial vulnerability.

Findings

This research finds that consumers in a state of lower vulnerability are “fragile” in having a relatively high likelihood of moving to a state of higher vulnerability, whereas those in a state of higher vulnerability are “entrenched” in having a relatively low likelihood of moving to a state of lower vulnerability. This pattern of results is called the “financial vulnerability trap.” While financial self-efficacy explains state membership, the consideration of future consequences drives state transitions.

Research limitations/implications

Future research could follow consumers over a longer period and consider the role of alternative psychological characteristics besides those examined.

Practical implications

This research provides practitioners with actionable insights regarding the drivers of changes in consumers’ financial vulnerability across time, showing the value of financial self-efficacy and the consideration of future consequences when developing strategies to prevent consumers from sliding from a state of lower to higher financial vulnerability over time.

Originality/value

There is scant research on financial vulnerability. Further, prior research has not examined whether and how consumers’ psychological characteristics help explain their membership of and transitions between states of different levels of financial vulnerability over time.

To view the access options for this content please click here
Book part
Publication date: 17 August 2011

Biswa Nath Bhattacharyay

Several developing economies witnessed a large number of systemic financial and currency crises since the 1980s that resulted in severe economic, social, and political…

Abstract

Several developing economies witnessed a large number of systemic financial and currency crises since the 1980s that resulted in severe economic, social, and political problems. The devastating impact of the 1982 and 1994–1995 Mexican crises, the 1997–1998 Asian financial crisis, the 1998 Russian crisis, and the ongoing financial crisis of 2008–2009 suggests that maintaining financial sector stability through reduction in vulnerability is highly crucial. The world is now witnessing an unprecedented systemic financial crisis originated from the USA in September 2008 together with a deep worldwide economic recession, particularly in developed countries of Europe and North America. This calls for devising and using on a regular basis an appropriate and effective monitoring and policy formulation system for detecting and addressing vulnerabilities leading to crisis. This chapter proposes a macroprudential/financial soundness monitoring, analysis, and remedial policy formulation system that can be used by most developing countries with or without crisis experience as well as with limited data. It also discusses a process for identifying and compiling a set of leading macroprudential/financial soundness indicators. An empirical illustration using Philippines data is presented. There is an urgent need for increased coordination, collaboration, and partnership among central banks, banking and financial market supervision agencies, and ministries of finance, economic, and planning for proper macroprudential monitoring. A high-level national financial stability committee under the auspices of the head of the state as well as a ‘‘regional financial stability board’’ needs to be established to complement and support the activities of an “international stability board.”

Content available
Article
Publication date: 2 April 2021

Emanuele Padovani, Silvia Iacuzzi, Susana Jorge and Liliana Pimentel

This paper explores how global pandemic crises affect the financial vulnerability of municipalities.

Downloads
1877

Abstract

Purpose

This paper explores how global pandemic crises affect the financial vulnerability of municipalities.

Design/methodology/approach

This paper is developed from the relevant literature an analytical framework to examine municipal financial vulnerability before a global pandemic crisis and in its immediate aftermath by mapping and systematizing its dimensions and sources. To illustrate how it can be used and evaluate its robustness and flexibility, such a tool was applied to Portugal and Italy, two countries that particularly suffered from the Covid-19 crisis.

Findings

The application of the analytical framework has shown how financially vulnerable municipalities are to global pandemic crises. Financial vulnerability relates to issues ranging from institutional design to internal financial conditions and the perception of the capacity to cope with a crisis. Results further reveal that vulnerability has an inherent contingent nature in time and space and can lead to paradoxical outcomes.

Research limitations/implications

This paper provides a tool that can be useful for both academic and public policy purposes, to further appreciate municipal financial vulnerability, especially during crises.

Practical implications

Municipalities can use the framework to better manage their financial vulnerability, strengthening their anticipatory and copying capacities, while oversight authorities can use it to help municipalities become less financially vulnerable or, at least, more aware of their financial vulnerability.

Originality/value

Municipal financial vulnerability to global shocks has not been explored extensively. Also, the Covid-19 pandemic is different from previous global crises as it affected society overnight with the implementation of lockdown and social distancing measures.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. 33 no. 4
Type: Research Article
ISSN: 1096-3367

Keywords

Content available
Article
Publication date: 22 February 2021

Sarah Elkhishin and Mahmoud Mohieldin

This paper aims to assess to what extent the COVID-19 shock is expected to create a debt crisis in emerging markets and developing economies (EMDEs) through two main…

Downloads
1830

Abstract

Purpose

This paper aims to assess to what extent the COVID-19 shock is expected to create a debt crisis in emerging markets and developing economies (EMDEs) through two main questions: what are the main determinants of EMDEs external vulnerability? How vulnerable are EMDEs to the current COVID-19 shock compared to the global financial crisis (GFC)?

Design/methodology/approach

In addition to a descriptive analysis of the determinants of EMDEs external vulnerability, this paper designs two sub-indices of overindebtedness and financial fragility that capture EMDEs’ distinct characteristics. The two sub-indices together illustrate the overall external vulnerability to the current shock.

Findings

EMDEs are more vulnerable compared to the GFC era. Current debt threats arise mainly from debt architecture and the domination of volatile debt forms – primarily foreign currency-denominated bonds. Excessive fear of debt-deflation spirals after the GFC prompted EMDEs to expand their growth trajectories through a pattern of cheap private lending, loose measures and unmonitored fiscal expansion.

Research limitations/implications

Conclusive post-crisis data are still unavailable.

Practical implications

EMDEs need to balance between temporary accommodative measures and a post-shock policy mix that prevent a deflation spiral without worsening indebtedness and financial fragility. Moreover, financial prudence in face of growing credit demand is crucial, particularly in light of the monetary expansion and injected liquidity.

Originality/value

The indices offer a framework for examining external vulnerability in EMDEs based on theoretical and historical revisions, IMF benchmarks and EMDEs specific debt characteristics. The indices components can be offered for empirical examination in separate future research once conclusive data become available.

Details

Review of Economics and Political Science, vol. 6 no. 1
Type: Research Article
ISSN: 2356-9980

Keywords

To view the access options for this content please click here
Article
Publication date: 12 July 2021

Constantino Stavros, Kate Westberg, Roslyn Russell and Marcus Banks

Service captivity is described as the experience of constrained choice whereby a consumer has no power and feels unable to exit a service relationship. This study aims to…

Abstract

Purpose

Service captivity is described as the experience of constrained choice whereby a consumer has no power and feels unable to exit a service relationship. This study aims to explore how positive service experiences can contribute to service captivity in the alternative financial services (AFS) sector for consumers experiencing financial vulnerability.

Design/methodology/approach

A total of 31 interviews were undertaken with Australian consumers of payday loans and/or consumer leases.

Findings

The authors reveal a typology of consumers based on their financial vulnerability and their experience with AFS providers. Then they present three themes relating to how the marketing practices of these providers create a positive service experience, and, in doing so, can contribute to service captivity for consumers experiencing financial vulnerability.

Research limitations/implications

The benefits derived from positive service experiences, including accessible solutions, self-esteem, and a sense of control over their financial situation, contribute to the service captivity of some consumers, rendering alternative avenues less attractive.

Practical implications

AFS providers must ensure a socially responsible approach to their marketing practices to minimize potentially harmful outcomes for consumers. However, a systems-level approach is needed to tackle the wider issue of financial precarity. Policymakers need to address the marketplace gaps, regulatory frameworks and social welfare policies that contribute to both vulnerability and captivity.

Originality/value

This research extends the understanding of service captivity by demonstrating how positive service experiences can perpetuate this situation. Further, specific solutions are proposed at each level of the service system to address service captivity in the AFS sector.

Details

Journal of Services Marketing, vol. 35 no. 6
Type: Research Article
ISSN: 0887-6045

Keywords

To view the access options for this content please click here
Article
Publication date: 1 August 2016

M. Teresa Sánchez-Martínez, Jose Sanchez-Campillo and Dolores Moreno-Herrero

This paper aims to study the financial vulnerability of the Spanish households derived from their primary residence mortgage debt payments. This paper shown as the…

Abstract

Purpose

This paper aims to study the financial vulnerability of the Spanish households derived from their primary residence mortgage debt payments. This paper shown as the economic and financial crisis triggered after the burst of the housing bubble brought an unemployment shock and a fall in the disposable family income, which alarmingly aggravated the financial vulnerability of the mortgaged households. Consequently, the number of financially vulnerable households almost doubled.

Design/methodology/approach

Econometric model of discrete election.

Findings

The most vulnerable households – and therefore those with a higher risk of mortgage payment default – are those whose family head is a married and self-employed female. In contrast, in social housing the mortgaged households have been less vulnerable in the context of economic and financial crisis and unlike what would have been initially expected, higher education levels have not acted as a protective factor against households’ financial vulnerability.

Originality/value

There is a great need to understand how the financial health of the mortgaged families that bought their primary residence has deteriorated in a context of significant changes in macroeconomic conditions. This need is specially pressing in a country such as Spain which is one of the OECD’s countries with a higher rate of household property and which shows a sector of highly mortgaged households.

Details

International Journal of Housing Markets and Analysis, vol. 9 no. 3
Type: Research Article
ISSN: 1753-8270

Keywords

To view the access options for this content please click here
Article
Publication date: 26 July 2018

Nurul Afroze Zainal Abidin and Bingunath Ingirige

The dynamics and effects of interconnected risks among construction organisations tend to be overlooked across the Malaysian public project supply chains, making them…

Abstract

Purpose

The dynamics and effects of interconnected risks among construction organisations tend to be overlooked across the Malaysian public project supply chains, making them highly vulnerable to supply chain disruptions. This study aims to investigate this dynamism by assessing the supply chain’s critical vulnerabilities and capabilities that formulate the level of resilience in handling disruptive events in construction projects.

Design/methodology/approach

A comprehensive questionnaire survey was conducted with 105 construction professionals from two groups of respondents, the public and private organisations that work in public projects to identify their current vulnerabilities and capabilities. Data were analysed and compared using the Mann–Whitney U and Kruskal–Wallis tests.

Findings

The findings revealed that the top five critical vulnerability factors of the supply chain include political or regulatory changes, market pressures, management, financial and strategic vulnerability. Further comparisons highlighted that the public organisations faced significantly higher political threats compared to the private organisations whilst the private organisations faced significant market pressures. The survey also shows that despite the private organisations’ high capability in financial strength, the public organisations’ financial vulnerability has destabilised the entire supply chain.

Originality/value

This study presents the construction supply chain’s vulnerabilities in a layered framework approach that can provide managers a new perspective on the dynamics of the cascading impacts of these vulnerabilities when observed through several layers of supply chains.

Details

Construction Innovation, vol. 18 no. 4
Type: Research Article
ISSN: 1471-4175

Keywords

To view the access options for this content please click here
Book part
Publication date: 2 March 2011

Carlo Gola and Francesco Spadafora

The global financial crisis has magnified the role of Financial Sector Surveillance (FSS) in the International Monetary Fund's activities. This chapter surveys the various…

Abstract

The global financial crisis has magnified the role of Financial Sector Surveillance (FSS) in the International Monetary Fund's activities. This chapter surveys the various steps and initiatives through which the Fund has increasingly deepened its involvement in FSS. Overall, this process can be characterised by a preliminary stage and two main phases. The preliminary stage dates back to the 1980s and early 1990s, and was mainly related to the Fund's research and technical assistance activities within the process of monetary and financial deregulation embraced by several member countries. The first ‘official’ phase of the Fund's involvement in FSS started in the aftermath of the Mexican crisis, and relates to the international call to include financial sector issues among the core areas of Fund surveillance. The second phase focuses on the objectives of bringing the coverage of financial sector issues ‘up-to-par’ with the coverage of other traditional core areas of surveillance, and of integrating financial analysis into the Fund's analytical macroeconomic framework. By urging the Fund to give greater attention to its member countries' financial systems, the international community's response to the global crisis may mark the beginning of a new phase of FSS. The Fund's financial sector surveillance, particularly on advanced economies, is of paramount importance for emerging market and developing countries, as they are vulnerable to spillover effects from crises originated in advanced economies. Emerging market and developing economies, which constitute the majority of the Fund's 187 members, are currently the recipients of over 50 programmes of financial support from the Fund (including those of a precautionary nature), totalling over $250 billion.

Details

The Impact of the Global Financial Crisis on Emerging Financial Markets
Type: Book
ISBN: 978-0-85724-754-4

Keywords

To view the access options for this content please click here
Book part
Publication date: 30 May 2017

Céline du Boys

French municipalities are in charge of a large number of local public services and benefit from a good, even if decreasing, financial autonomy. They have been until…

Abstract

French municipalities are in charge of a large number of local public services and benefit from a good, even if decreasing, financial autonomy. They have been until recently and despite the 2008 crisis, in a good financial situation supported by stable tax revenues and protective national policies. But they are now weakened by strong cuts in their main operating grant operated from 2015.

Through a case study, this chapter attempts to better understand French municipalities’ patterns of financial resilience in times of austerity. Interviews have been driven in four middle size municipalities in various financial situation, to understand the effects of the crisis on their vulnerability and the influence of their financial and organisational capacities on their resilience patterns.

The study shows that all four municipalities enhanced their responsiveness following the 2015 cut in grants. The latter appeared as a major shock that prompts them to change their behaviours and strengthen their resilience. But municipalities took up different paths of resilience, building up or investing in different anticipatory and coping capacities. Buffering capacities, such as cost cuts, were present in all cases to cope with shocks. Conversely, adapting and transforming capacities were not as prevalent. The pro-active resilient municipality relies on a mix of capacities. But three out of four cases show patterns of financial resilience that leave them insufficiently prepared for future shocks. This research shows the necessity to develop and constantly maintain anticipatory and coping capacities that are suitable for tackling the municipalities’ specific vulnerability sources.

Details

Governmental Financial Resilience
Type: Book
ISBN: 978-1-78714-262-6

Keywords

To view the access options for this content please click here
Article
Publication date: 9 December 2020

Gajendra Liyanaarachchi, Sameer Deshpande and Scott Weaven

This conceptual paper explores gaps in bank privacy protection practices and advocates for banks to integrate market-oriented (MO) approaches in their corporate digital…

Abstract

Purpose

This conceptual paper explores gaps in bank privacy protection practices and advocates for banks to integrate market-oriented (MO) approaches in their corporate digital responsibility (CDR) initiatives to minimize consumer data vulnerability.

Design/methodology/approach

To apply MO in CDR, this study recommends adoption of a behavior change framework comprising of the co-creation, build and engage (CBE) model and proposes the creation of consumer segments based on generational cohort and tailoring strategies through motivation, opportunity and ability (MOA) model to manage vulnerability.

Findings

The study specifies that managing consumer data vulnerability requires a unique strategy different from conventional service delivery. A holistic approach is recommended by integrating corporate digital responsibility as a pivotal element of organizational strategy and by positioning vulnerable customers as a critical stakeholder.

Originality/value

The paper contributes to the research in corporate social responsibility (CSR), privacy and data vulnerability in the banking sector in two prominent ways: first, the study demonstrates the importance of MO as a premise to develop a novel version of CDR called market-oriented digital responsibility (MODR). The study considers MODR as a strategy to reposition vulnerable consumers as a key stakeholder, and, second, the study proposes an innovative set of consumer segments based on data vulnerability and introduces a data vulnerability growth model (DVGM) connecting vulnerability with age.

Details

International Journal of Bank Marketing, vol. 39 no. 4
Type: Research Article
ISSN: 0265-2323

Keywords

1 – 10 of over 13000