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Open Access
Article
Publication date: 2 March 2023

Abdulla Albinali

The purpose of the paper is to study the relevance of macroprudential policies (MPPs) in influencing bank lending in small open economies with dual banking systems.

Abstract

Purpose

The purpose of the paper is to study the relevance of macroprudential policies (MPPs) in influencing bank lending in small open economies with dual banking systems.

Design/methodology/approach

In the analysis, the author employed the dynamic panel data methodology as compared to alternate techniques since it is able to address potential endogeneity challenges.

Findings

Using quarterly data from the period 2002–2020, the author finds that MPPs are highly effective in containing the growth of public credit, whereas its impact on private credit is much less effective. The disaggregated findings reveal that macroprudential measures are less effective in containing the growth of private credit by Islamic banks.

Originality/value

The majority of studies on MPPs are focused on emerging and advanced economies, limiting their policy appeal from the standpoint of small open economies. In this connection, this paper contributes to the literature on the relevance of such policies for a small open economy with a dual banking system and significant hydrocarbon exports. The paper's analysis therefore holds relevance for similar economies, both in the region and elsewhere, on the role and relevance of MPPs with emphasis on Islamic banks.

Details

Islamic Economic Studies, vol. 30 no. 2
Type: Research Article
ISSN: 1319-1616

Keywords

Open Access
Article
Publication date: 20 October 2023

Thembeka Sibahle Ngcobo, Lindokuhle Talent Zungu and Nomusa Yolanda Nkomo

This study aims to test the dynamic impact of public debt and economic growth on newly democratized African countries (South Africa and Namibia) and compare the findings with…

Abstract

Purpose

This study aims to test the dynamic impact of public debt and economic growth on newly democratized African countries (South Africa and Namibia) and compare the findings with those of newly democratized European countries (Germany and Ukraine) during the period 1990–2022.

Design/methodology/approach

The methodology involves three stages: identifying the appropriate transition variable, assessing the linearity between public debt and economic growth and selecting the order m of the transition function. The linearity test helps identify the nature of relationships between public debt and economic growth. The wild cluster bootstrap-Lagrange Multiplier test is used to evaluate the model’s appropriateness. All these tests would be executed using the Lagrange Multiplier type of test.

Findings

The results signify the policy switch, as the authors find that the relationship between public debt and economic growth is characterized by two transitions that symbolize that the current stage of the relationship is beyond the U-shape; however, an S-shape. The results show that for newly democratized African countries, the threshold during the first waves was 50% of GDP, represented by a U-shape, which then transits to an inverted U-shape with a threshold of 65% of GDP. Then, for the European case, it was 60% of GDP, which is now 72% of GDP.

Originality/value

The findings suggest that an escalating level of public debt has a negative impact on economic growth; therefore, it is important to implement fiscal discipline, prioritize government spending and reduce reliance on debt financing. This can be achieved by focusing on revenue generation, implementing effective taxation policies, reducing wasteful expenditures and promoting investment and productivity-enhancing measures.

Details

International Journal of Development Issues, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1446-8956

Keywords

Content available
Book part
Publication date: 25 July 2019

Perry Warjiyo and Solikin M. Juhro

Abstract

Details

Central Bank Policy: Theory and Practice
Type: Book
ISBN: 978-1-78973-751-6

Open Access
Article
Publication date: 19 October 2023

Łukasz Kurowski and Paweł Smaga

Financial stability has become a focal point for central banks since the global financial crisis. However, the optimal mix between monetary and financial stability policies

Abstract

Purpose

Financial stability has become a focal point for central banks since the global financial crisis. However, the optimal mix between monetary and financial stability policies remains unclear. In this study, the “soft” approach to such policy mix was tested – how often monetary policy (in inflation reports) analyses financial stability issues. This paper aims to discuss the aforementioned objective.

Design/methodology/approach

A total of 648 inflation reports published by 11 central banks from post-communist countries in 1998-2019 were reviewed using a text-mining method.

Findings

Results show that financial stability topics (mainly cyclical aspects of systemic risk) on average account for only 2%of inflation reports’ content. Although this share has grown somewhat since the global financial crisis (in CZ, HU and PL), it still remains at a low level. Thus, not enough evidence was found on the use of a “soft” policy mix in post-communist countries.

Practical implications

Given the strong interactions between price and financial stability, this paper emphasizes the need to increase the attention of monetary policymakers to financial stability issues.

Originality/value

The study combines two research areas, i.e. monetary policy and modern text mining techniques on a sample of post-communist countries, something which to the best of the authors’ knowledge has not been sufficiently explored in the literature before.

Details

Central European Management Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2658-0845

Keywords

Content available
Book part
Publication date: 25 July 2019

Perry Warjiyo and Solikin M. Juhro

Abstract

Details

Central Bank Policy: Theory and Practice
Type: Book
ISBN: 978-1-78973-751-6

Open Access
Article
Publication date: 14 August 2020

Abdelkader Derbali, Lamia Jamel, Monia Ben Ltaifa, Ahmed K. Elnagar and Ali Lamouchi

This paper provides an important perspective to the predictive capacity of Fed and European Central Bank (ECB) meeting dates and production announcements for the dynamic…

1057

Abstract

Purpose

This paper provides an important perspective to the predictive capacity of Fed and European Central Bank (ECB) meeting dates and production announcements for the dynamic conditional correlation (DCC) between Bitcoin and energy commodities returns and volatilities during the period from August 11, 2015 to March 31, 2018.

Design/methodology/approach

To assess empirically the unanticipated component of the US and ECB monetary policy, the authors pursue the Kuttner's approach and use the federal funds futures and the ECB funds futures to assess the surprise component. The authors use the approach of DCC as introduced by Engle (2002) during the period from August 11, 2015 to March 31, 2018.

Findings

The authors’ results suggest strong significant DCCs between Bitcoin and energy commodity markets if monetary policy surprises are incorporated in variance. These results confirmed the financialization of Bitcoin and commodity energy markets. Finally, the DCC between Bitcoin and energy commodity markets appears to respond considerably more in the case of Fed surprises than ECB surprises.

Originality/value

This study is a crucial topic for policymakers and portfolio risk managers.

Details

Journal of Capital Markets Studies, vol. 4 no. 1
Type: Research Article
ISSN: 2514-4774

Keywords

Content available
Book part
Publication date: 19 October 2020

Abstract

Details

The Econometrics of Networks
Type: Book
ISBN: 978-1-83867-576-9

Open Access
Article
Publication date: 18 October 2021

Salwa Abdelaziz and Mariam Wagdy Francis

This study aims to analyze the impact of cooperation between banking supervisory entities on maintaining financial stability, using Single Supervisory Mechanism evolution and…

Abstract

Purpose

This study aims to analyze the impact of cooperation between banking supervisory entities on maintaining financial stability, using Single Supervisory Mechanism evolution and performance as instance. Then banking supervisory cooperation and financial stability in Egypt are reviewed.

Design/methodology/approach

The qualitative method is used to study and analyze the practices that contributed to financial instability and raised the need for supervisory cooperation. Descriptive qualitative method is used to study the interrelations between supervisory authorities on various levels and its impact on financial stability.

Findings

Findings show that maintaining financial stability through strong, consistent complete or semi unified supervisory framework faces challenges. Providing cooperation between different supervisory authorities, effective information sharing, gained experience in the long run contributes to financial stability.

Originality/value

The originality of this research paper arises from the fact that it encompasses the academic aspect through interpreting the developments that occurred to the cooperation in banking supervision in relation to the financial instability times in the Eurozone that led to the establishment of Single Supervisory mechanism, and the challenges it faced. The supervisory cooperation in Egypt is studied as well at international, regional levels and its role in contributing to financial stability. To the best of the authors' knowledge this is the first study that studies the banking supervisory cooperation between Egyptian supervisory authorities and other international and regional authorities.

Details

Review of Economics and Political Science, vol. 7 no. 1
Type: Research Article
ISSN: 2356-9980

Keywords

Content available
Book part
Publication date: 15 February 2021

Abstract

Details

New Frontiers in Conflict Management and Peace Economics: With a Focus on Human Security
Type: Book
ISBN: 978-1-83982-426-5

Content available
Book part
Publication date: 4 December 2018

Indranarain Ramlall

Abstract

Details

The Banking Sector Under Financial Stability
Type: Book
ISBN: 978-1-78769-681-5

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