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The purpose of this paper is to analyze whether companies that contracted loans from the Brazilian National Bank for Economic and Social Development (BNDES) between 2002 and 2014 were able to invest more than companies that did not. The literature on financial constraints, particularly that based on the investment-cash flow sensitivity model, is among the most studied and controversial in the area of finance, and the discussion on the role of development banks is equally controversial.

The main econometric model of this study was based on the investment-cash flow sensitivity model, with the incorporation of a binary variable that captures the role of the BNDES. This model is applied to a sample of companies listed on the B3 from 2002 to 2014.

This study shows that loans from the BNDES amplify the effects of cash flow on investments, generating a kind of credit multiplier. An important role of development banks is to reduce the financial constraints typical of developing countries.

The use of the cash flow sensitivity model in companies that contracted loans from the BNDES is a relevant instrument to test the effect of the BNDES on companies with financial constraints.

The contracting of BNDES loans by companies can affect both capital structure and cash generation, particularly in companies or years in which there was financial constraint.

Due to the nature of the BNDES as a development bank, there are ramifications in terms of the generation of employment and income inherent to the mission of this type of institution. Knowing the multiplier effect on the cash flow potential of companies has a direct impact on their preservation, enabling them to maintain and expand the supply of jobs.

This study is the first to integrate two important areas of study. From the theoretical perspective, this study provides evidence on the relationship between the BNDES and company financial constraints that open new avenues of research. From the managerial point of view, the evidence of the multiplier effect is highly important for the management of the capital structure and cash flow of companies.

In this paper, the authors study the failure of Russian banks between 2012 and 2019.

The authors analyze the entire population of Russian banks and combine a logit model with the survival analysis.

In addition to the usual determinants, the authors find that not-failed banks have higher levels of fulfillment of the Central Bank requirements of solvency, liquidity, provide fewer loans to their shareholders and own more shares of other banks. The results of this study suggest an asymmetric effect of the strategic orientation of banks: whereas the proportion of deposits from firms is negatively related to the probability of failure, the loans to firms are positively related to bankruptcies. According to this research, the fact of being controlled by a foreign bank has a significant negative relationship with the likelihood of failure and moderates the effect of bank size, performance and growth on the bankruptcy likelihood.

On the whole, the results of this study support the new Central Bank rules, but show that the thresholds imposed by the Russian regulator actually do not make a difference between failed and not failed banks in the short and medium term.

The authors specially focus on the effectiveness of new rules issued by the Central Bank of Russia in 2013.

The restructuring of shipping and shipbuilding companies in the midst of rapidly shrinking global shipping demand has become a prominent issue in Korea. In shipping finance, loan syndication featuring many creditors surges as the preferred option. However, increasing the numbers of creditors in the syndicate results in two opposite effects. First is the beneficial effect from their enhanced monitoring power. On the other hand, there is the adverse effect resulting from increased difficulty in coordination when syndicate members increase, particularly in bankruptcy. Our aim of this paper is to analyze the role of finance in the shipping and shipbuilder markets, and determine the theoretical optimal number of creditors for the shipping finance syndicate based on Bolton and Scharfstein (1996). The two issues above result from moral hazard and non-verifiability: coordination among many creditors for collection of bonds in case of default, and the enhancement of monitoring private benefit exploitation by the ship-owner during default. Considering the two conflicting forces result from an increase in creditor membership, we draw conclusions on determining the optimal number of creditors by considering trade-offs between these two factors: More creditors are preferred when the monitoring effect dominates. Otherwise, less creditors are preferred.

The paper aims to disentangle the physiological credit risk from the credit risk coming from the inefficient screening and monitoring management process. The analysis is conducted on a sample of 338 Italian banks–56 joint-stock banks (SpA), 23 cooperative banks (Popolari) and 259 mutual banks (BCCs)–over the time period 2006–2017.

The authors use the maximum likelihood method to estimate the efficient frontier, as a set of best management credit practices, which minimises the credit risk defined on the basis of the level of loans granted, the technical structure of the loan portfolio (such as credit lines, mortgages, consumer loans and other technical loan categories) and the interest rate charges.

The empirical results show that the increase in non-performing loans (NPLs) is related both to the severe and protracted recession in Italy, which significantly reduced borrowers' capacity to service their debt, and to other factors, such as banks' lending monitoring policies with limited capacity to work-out defaulted loans.

The authors propose a new approach to the study of the performance of the credit process. With the stochastic frontier, the physiological credit risk, assumed by the bank according to its lending activity and management choices, is separated from the credit risk resulting from an inefficient management of the screening and monitoring process. In addition, the authors analyse the determinants of the excess of NPLs. This aspect is considered particularly original because the scientific contributions which consider the causes of NPLs have largely focused on the level of NPLs not considering the physiological part, linked to the structure of the bank's loan portfolio and its operational strategy and therefore not compressible and in any case not attributable to mismanagement or moral hazard.

Innovation in financing processes, enabled by the advent of new technologies, has supported the development of alternative finance funding tools. In this context, the study analyses the growing importance of alternative finance instruments (such as equity crowdfunding, peer-to-peer (P2P) lending, venture capital, and others) in addressing the small and medioum enterprises' (SMEs) financing needs beyond traditional bank and market-based funding channels. By providing more flexible terms and faster approval times, these instruments are gradually reshaping the traditional bank-firm relationship.

To comprehensively understand this innovation shift in funding processes, the study employs a novel approach that merges three MCDA methods: Spherical Fuzzy Entropy, ARAS and TOPSIS. These methodologies allow for handling ambiguity and subjectivity in financial decision-making processes, examining the effects of multiple criteria, including interest rate, flexibility, accessibility, support, riskiness, and approval time, on the appeal of various financial alternatives.

The study’s results have significant theoretical and practical implications, supporting SMEs in carefully evaluate financing alternatives and enables banks to better identify the main “competitors” according to the “financial need” of the firm. Moreover, the rise of alternative finance, notably P2P lending, indicates a shift towards more efficient capital access, suggesting banks must innovate their funding channels to remain competitive, especially in offering flexible solutions for restructuring and high-risk scenarios.

The study advises top management that SMEs prefer traditional loans for their reliability and accessibility, necessitating banks to enhance transparency, innovate, and adopt digital solutions to meet evolving financing needs and improve customer satisfaction.

The study introduces a novel integration of Spherical Fuzzy TOPSIS, Entropy, and ARAS methodologies to face the complexities of financial decision-making for SME financing, addressing ambiguity and multiple criteria like interest rates, flexibility, and riskiness. It emphasizes the importance of traditional loans, the rising significance of alternative financing such as P2P lending, and the necessity for banks to innovate, thereby enriching the literature on bank-firm relationships and SME funding strategies.

This paper aims to investigate bank credit policies and uncover yacht building finance assessment factors from bank credit policies toward the yacht industry.

This study’s questionnaire attempts to identify survey respondents’ degrees of awareness through difference analysis, and then uses entropy weighting and gray relational analysis to discover priority ranking order of bank credit assessment considerations from the perspective of Taiwan’s banking sector.

The research findings show that yacht builders have to review their ship financing application methods and improve shortcomings to meet banks’ credit granting requirements.

Banks emphasize yacht builders’ repayment ability to protect their depositors and shareholders.

The framework of this paper is financial mathematics and, more specifically, the control of data fraud and manipulation with their subsequent economic effects, namely, in financial markets. The purpose of this paper is to calculate the global loss or gain, which supposes, for the borrower, a change of the interest rate while the contracted loan is in force or, in another case, the loan has finished.

The methodology used in this work has been, in the first place, a review of the existing literature on the topic of manipulability and abusiveness of the loan interest rates applied by banks; in the second place, the introduction of a mathematical-financial analysis to calculate the interests paid in excess; and, finally, the compilation of several sentences issued on the application of the so-called mortgage loan reference index (MLRI) to mortgage loans in Spain.

There are three main contributions in this paper. First, the calculation of the interests paid in excess in the amortization of mortgage loans referenced to an overvalued interest rate. Second, an empirical application shows the amount to be refunded to a Spanish consumer when amortizing his/her mortgage loan referenced to the MLRI instead of the Euro InterBank Offered Rate (EURIBOR). Third, consideration has been made to the effects and the possible solutions to the legal problems arising from this type of contract.

This research is a useful tool capable of implementing the financial calculation needed to find out overpaid interests in mortgage loans and to execute the sentences dealing with this topic. However, a limitation of this study is the lack of enough sentences on mortgage loans referenced to the MLRI to get some additional information about the number of borrowers affected by these legal sentences and the amount refunded by the financial institutions.

To the best of the authors’ knowledge, this is the first time that deviations in the payment of interests have been calculated when amortizing a mortgage.

In the digital era, the banking sector has transformed into a powerful intermediary, effectively connecting surplus and deficit units. This dynamic landscape empowers savers to secure their finances and generate returns, while simultaneously enabling businesses and individuals to access capital for investment and promoting economic growth. This study explores the relationships among banking development dimensions – represented by primary assets and liabilities, bank capital (core capital and required reserves) and economic growth as measured by components of gross domestic product (GDP).

The study consolidated monthly balance sheets from digital banks over a 20-year period, resulting in an aggregate monthly balance sheet that reflects the financial position of all digital banks in the Palestinian economy. The research employs both maximum likelihood and Bayesian structural equation modeling to measure the causal pathways of the consolidated balance sheet with the individual components of GDP.

The results revealed that bank main assets (investments and loans) and liabilities (deposits) collectively explain for 97% of bank capital. Investments and loans demonstrate significant negative correlations with bank capital, while deposits exhibit a positive impact. This leads to a fundamental conclusion that a substantial proportion of retained earnings within the banking sector is reinvested, fueling expansion and growth. Additionally, the results showed a significant relationship between bank capital and various GDP components, including private consumption, gross investment and net exports (p = 0.000). However, while the relationship between bank capital and government spending was insignificant in the maximum likelihood estimation, Bayesian estimation revealed a slight yet positive impact of bank capital on government spending.

This research stands out due to its unique exploration of the intricate relationship between bank sector development dimensions, primary assets and liabilities and their impact on bank capital in the digital era. It offers fresh insights by dividing this connection into specific dimensions and constructs, utilizing a comprehensive two-decade dataset covering the digital banks records.

The level of non-performing assets (NPAs) best indicates the soundness of the banking sector of a country. The purpose of this study is an effort to look into the contribution of the different banks individually to the NPA in the industry by looking into its growth pattern during the period 2010-2017. Further, the study is made to look into the effect of different groups of banks, namely, State Bank of India (SBI) and its associates, nationalised banks and private sector banks on the banking industry in this regard.

The individual private sector banks, nationalised banks and SBI and its associates have been considered for the purpose of the study. The analysis is based on secondary data collected from the Reserve Bank of India website for the period 2010-2017. The geometric mean has been used as a statistical tool for arriving at the mean growth rate of gross NPAs. Further, refinement of the result is done by comparing the growth of gross NPAs of individual banks with that of the average growth rate.

The assessment of private sector banks reveals that the growth rate of NPAs is low as compared to the nationalised banks, as well as the SBI and its associates. The nationalised banks and the associate banks of SBI failed to handle the issue of poor loans effectively due to which the growth in such loans has been phenomenally high.

The research is interesting as the study period follows the financial crisis. There is no such previous study that has looked at the perspective of banking from this angle. The research is valuable from two angles. Firstly, it brings to light the situation of the different categories of banks with regard to NPAs. Secondly, the information can be useful for investors as the issue of poor loans is a relevant one for them because it has an impact on the profitability of banks and thereby the future prospects.

As many businesses faced economic disruption due to the Covid-19 pandemic and sought financial relief, existing bank relationships became critical to getting a loan. This study examines factors associated with the development of personal relationships of rural small businesses with community bank representatives.

We applied a mixed-method approach. We employed descriptive statistics, principal factor analysis and logistic regression for data analysis. We distributed an online survey to rural small businesses in five states in the United States. Key informant interviews with community bank representatives supplemented the survey results.

A business owner’s trust in a banker was positively associated with the establishment of a business–bank relationship. However, an analysis of individual trust’s components revealed that the nature of trust is complex, and a failure of one or more components may lead to decreased trustworthiness in a banker. Small businesses that preferred personal communication with a bank were more inclined to relationship banking.

Due to the relatively small sample size and cross-sectional data, our results may not be conclusive but should be viewed as preliminary and as suggestions for future research. Bankers should be aware of the importance of trust for small business owners and of the actions that lead to increased trustworthiness.

The study extends the existing knowledge on the business–bank relationship by focusing mainly on social (instead of economic) factors associated with the establishment of the business–bank relationship in times of crisis and high uncertainty.