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1 – 10 of over 9000Mohammad Azeem Khan, Masudul Hasan Adil and Shah Husain
The purpose of the paper is to address money demand instability and investigate the impact of economic uncertainty, stock market uncertainty and monetary uncertainty on money…
Abstract
Purpose
The purpose of the paper is to address money demand instability and investigate the impact of economic uncertainty, stock market uncertainty and monetary uncertainty on money demand in India over the period 2003Q1–2019Q4.
Design/methodology/approach
The study checks the stationarity of the variables through standard unit root tests. Based on the mixed order of variables' integration, the authors adopt the autoregressive distributed lag (ARDL) model to confirm the cointegration and check the stability of the money demand function (MDF).
Findings
The findings confirm the presence of cointegration and reveal a well-specified MDF, which exhibits stable parameters. Besides the conventional variables, all forms of uncertainties emerge as the essential long-term determinants of money demand. Long-run findings show that people demand more money to avoid the future financial crunch amid high economic, monetary and stock market uncertainties.
Practical implications
The paper recommends, based on the findings, incorporating the monetary aggregates in the monetary policy framework as one of the essential information variables to control the fluctuation in the price level under the current flexible inflation targeting (FIT) regime.
Social implications
The findings also add to the knowledge of economic agents in terms of the overall response of individuals to changes in different forms of uncertainties, thereby helping to formulate their portfolios more diligently.
Originality/value
The current work is the first of its kind in the Indian context. The incorporation of uncertainty measures in the MDF adds to the existing knowledge on money demand.
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Tooba Akram, Suresh A/I Ramakrishnan and Muhammad Naveed
This paper aims to provide a comprehensive conceptual framework and strong arguments with an intent to examine the stock market variables (predictors) indicating the money…
Abstract
Purpose
This paper aims to provide a comprehensive conceptual framework and strong arguments with an intent to examine the stock market variables (predictors) indicating the money laundering (ML) and terrorism financing (FT) proceeds.
Design/methodology/approach
This paper provides a comprehensive review of ML/FT through the stock market across developed, developing and emerging jurisdictions, sheds light on the existing literature and critically evaluates the gap in the relevant studies. Moving forward, this paper develops the conceptual framework and formulates hypotheses to explore the empirical relationship.
Findings
This paper advocates and finds a basis to carry out much-needed empirical research between the ML/FT and stock market keeping in view the growing criminal cases in the developing countries. This paper suggests mining proxies from the publically available stock market data and the results of existing seminal research as variables of the study. These data and results carry information about the ML determinants. After developing hypothetical research providing concepts, this paper also finds that using a suitable methodology, preferable Bayesian logistic and linear regression models, it is possible to find the typologies and factors that can indicate and endorse the use of the stock market for ML/FT. Broadly, it is found that the significance of this study will be two-pronged: empirical development and policy implications.
Research limitations/implications
This paper mainly focuses on the developing region, a newly emerging market and, peculiarly, a grey-listed region by the Financial Action Task Force (FATF).
Practical implications
In light of the existing literature and to the best of the researchers’ knowledge, this study will bring into focus the new age of the action research on the ML regime in the securities markets of the developing countries, hence, the emerging markets. Moreover, this research shall have a sheer significance for the policy measures on FATF recommendations on ML and FT, especially for the countries listed as “grey”.
Social implications
The research based on comprehensive review will help in controlling the social behaviours aiding the proceeds of ML.
Originality/value
This research is extremely novel to the best of the researcher's knowledge.
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Janusz Brzeszczyński, Jerzy Gajdka, Tomasz Schabek and Ali M Kutan
This study contributes to the pool of knowledge about the impact of monetary policy communication of central banks on financial instruments' prices and assets' value in emerging…
Abstract
Purpose
This study contributes to the pool of knowledge about the impact of monetary policy communication of central banks on financial instruments' prices and assets' value in emerging markets.
Design/methodology/approach
Empirical analysis is executed using the National Bank of Poland (NBP) announcements about its monetary policy covering the data from the broad financial market in its three main segments: stock market, foreign exchange market and bonds market. The reactions are measured relative to the changes in the NBP announcements and also with respect to investors' expectations. Autoregressive conditional heteroscedasticity (ARCH) models with dummy variables are used as the main methodological tool.
Findings
Bonds market and foreign exchange market are the most sensitive market segments, while interest rate and money supply are the most influential types of announcements. The changes of the revealed new macroeconomic figures had more impact on assets' prices movements than the deviations from their expectations. Moreover, greater diversity of the Monetary Policy Council (MPC) members' opinions on the voted motions, captured in the MPC voting reports, is associated with more cases of statistically significant NBP communication events.
Practical implications
The findings have direct relevance for fund managers, portfolio analysts, investors and also for financial market regulators.
Originality/value
The results provide novel evidence about how the emerging financial market responds to monetary policy announcements. They help understand the nature of the impact of public information on financial assets' valuation and on movements of their prices, analysed comprehensively in three market segments, in the emerging market environment.
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Oguzhan Ozcelebi, Jose Perez-Montiel and Carles Manera
Might the impact of the financial stress on exchange markets be asymmetric and exposed to regime changes? Departing from the existing literature, highlighting that the domestic…
Abstract
Purpose
Might the impact of the financial stress on exchange markets be asymmetric and exposed to regime changes? Departing from the existing literature, highlighting that the domestic and foreign financial stress in terms of money market have substantial effects on exchange market, this paper aims to investigate the impacts of the bond yield spreads of three emerging countries (Mexico, Russia, and South Korea) on their exchange market pressure indices using monthly observations for the period 2010:01–2019:12. Additionally, the paper analyses the impact of bond yield spread of the US on the exchange market pressure indices of the three mentioned emerging countries. The authors hypothesized whether the negative and positive changes in the bond yield spreads have varying effects on exchange market pressure indices.
Design/methodology/approach
To address the research question, we measure the bond yield spread of the selected countries by using the interest rate spread between 10-year and 3-month treasury bills. At the same time, the exchange market pressure index is proxied by the index introduced by Desai et al. (2017). We base the empirical analysis on nonlinear vector autoregression (VAR) models and an asymmetric quantile-based approach.
Findings
The results of the impulse response functions indicate that increases/decreases in the bond yield spreads of Mexico, Russia and South Korea raise/lower their exchange market pressure, and the effects of shocks in the bond yield spreads of the US also lead to depreciation/appreciation pressures in the local currencies of the emerging countries. The quantile connectedness analysis, which allows for the role of regimes, reveals that the weights of the domestic and foreign bond yield spread in explaining variations of exchange market pressure indices are higher when exchange market pressure indices are not in a normal regime, indicating the role of extreme development conditions in the exchange market. The quantile regression model underlines that an increase in the domestic bond yield spread leads to a rise in its exchange market pressure index during all exchange market pressure periods in Mexico, and the relevant effects are valid during periods of high exchange market pressure in Russia. Our results also show that Russia differs from Mexico and South Korea in terms of the factors influencing the demand for domestic currency, and we have demonstrated the role of domestic macroeconomic and financial conditions in surpassing the effects of US financial stress. More specifically, the impacts of the domestic and foreign financial stress vary across regimes and are asymmetric.
Originality/value
This study enriches the literature on factors affecting the exchange market pressure of emerging countries. The results have significant economic implications for policymakers, indicating that the exchange market pressure index may trigger a financial crisis and economic recession.
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In 2022, US financial regulators proposed to mandate a single central clearing mechanism for treasury bonds and repo transactions to stabilize financial markets. The systemic…
Abstract
In 2022, US financial regulators proposed to mandate a single central clearing mechanism for treasury bonds and repo transactions to stabilize financial markets. The systemic risks inherent in repo markets were first highlighted by the global financial crisis and, as a response, global financial authorities such as the Financial Stability Board (FSB) and Bank for International Settlements (BIS) have advocated for the introduction of a central counterparty (CCP). This study examines the structural characteristics of Korean repo markets and proposes the introduction of CCPs as a way to mitigate systemic risk. To this end, the author analyzes the structural differences between US and European repo markets and estimates the potential consequences of introducing CCP clearing in local repo markets. In general, CCPs offer two benefits: they can reduce required capital through netting in multilateral transactions, and they can mitigate the effects of risk transfer by isolating counterparty risk during periods of turbulence. In Korea, the latter effect is expected to play a pivotal role in mitigating potential risks.
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This paper aims to assess the legal and regulatory framework for mobile banking (M-banking) in Tanzania. The technological development in information and communication…
Abstract
Purpose
This paper aims to assess the legal and regulatory framework for mobile banking (M-banking) in Tanzania. The technological development in information and communication technologies has converted a mobile phone from a simple communication device to a very complex instrument that allows people to perform various digital transactions and extra operations such as web browsing and email reading. Such tremendous developments have brought in place the regime of M-banking. The birth of M-banking has brought legal and institutional challenges that were not anticipated before. It has complicated the traditional role of the telecommunication regulator and financial regulator in the business and caused legal gaps that need to be bridged.
Design/methodology/approach
To disclose the legal gaps and bridge them, the study used doctrinal legal method and comparative study to learn the experience of international legal instruments and policies and laws of other jurisdictions. This paper has evaluated the contribution of international legal instruments and legal frameworks of foreign jurisdictions such as Kenya and the Philippines.
Findings
It has been revealed that the prevailing laws regulating M-banking in Tanzania do not adequately address and bridge the existing legal gaps. There is a need to enact a specific law regulating M-banking and confer such powers to a specific institution to deal with regulatory issues.
Originality/value
This paper stresses the importance of enacting new laws that will offer room for financial inclusion in the digital economy and protect consumers against financial risk. It also intends to act as a catalyst and change agent in policy and legislative development in the M-banking industry. It would also bring special attention to addressing consumer rights, security and risky issues surrounding the M-banking industry. Although several other authors in Tanzania have written in this area, they have not clearly focused on disclosing the existing legal gaps resulting from the convergence of the financial and communication sectors. This paper is therefore trying to offer an extensive discussion on the legislative development in the M-banking industry in Tanzania.