Search results

1 – 10 of over 1000
To view the access options for this content please click here
Article
Publication date: 3 April 2017

Alexey Ponomarenko

This paper aims to discuss the money creation mechanisms in emerging markets with special focus on external transactions and outlines the implications for monetary policy…

Abstract

Purpose

This paper aims to discuss the money creation mechanisms in emerging markets with special focus on external transactions and outlines the implications for monetary policy and financial stability issues.

Design/methodology/approach

To make the argument, the authors analyze a historical episode of flows of funds in Korea and Russia and conduct a canonical correlation analysis for a cross-section of emerging market economies.

Findings

The authors show that changes in the net foreign assets of the banking system are associated with (or cause) deposits fluctuations. In emerging markets, however, the scope of such fluctuations is limited unless driven by changes in the foreign reserves of a central bank.

Originality/value

Some preliminary implications for financial stability implementation may be drawn from this analysis. Introducing the net stable funding ratio requirement is unlikely to have any significant destabilizing effect on credit creation in emerging markets (in this regard, it is similar to the restriction on banks’ foreign currency position, which is a common prudential measure). Instead, it is likely to trigger a balance of payment adjustment that is similar to that experienced by an economy during its transition from fixed to flexible exchange rate regime.

Details

Journal of Financial Economic Policy, vol. 9 no. 1
Type: Research Article
ISSN: 1757-6385

Keywords

To view the access options for this content please click here
Article
Publication date: 13 January 2012

G. Thiyagarajan and A. Arulraj

The mobilization of funds was severely affected with the linking of their funds mobilization to their internal owned funds. Therefore, the purpose of the study is to…

Abstract

Purpose

The mobilization of funds was severely affected with the linking of their funds mobilization to their internal owned funds. Therefore, the purpose of the study is to identify the mediating effects of funds with profitability and to focus on the funding strategy to maximize profits in the non‐banking financial sector in India.

Design/methodology/approach

The paper discusses various approaches to maximize profits. The study also examines trends in sources of funds using key financial variables. A formative model to capture the mediating effects of funds with profitability is tested using structural equation modeling (SEM) technique. The paper includes various financial variables including external and internal funds. These variables' relationship with the core operating profit is tested in a graphical structural equation environment using package software.

Findings

Mediating effects of borrowings with profitability are established. The paper concludes that the gap in funds can be matched effectively through mobilization of funds of short duration. The study establishes that a combination of fund raising strategies such as flotation of debentures, bank borrowings and short term funding program can affect profits.

Research limitations/implications

The study is confined to non‐bank finance companies in a particular state in India. The geographical and demographical differences may affect generalization. However, care has been taken to match the geographical and demographical characteristics of the country.

Originality/value

The findings of this paper are of immense value for industry managers, lenders and for financial forecasting within the sector. New entrepreneurs can use the findings in their funding plans.

To view the access options for this content please click here
Article
Publication date: 17 May 2021

Sudipa Majumdar and Rashita Puthiya

The global sukuk market has seen widespread innovations in the last couple of decades, which helped sukuk develop into one of the most acceptable Islamic instruments for…

Abstract

Purpose

The global sukuk market has seen widespread innovations in the last couple of decades, which helped sukuk develop into one of the most acceptable Islamic instruments for raising finance. According to the State of the Global Islamic Economy Report (2018–19), United Arab Emirates (UAE) is ranked second among Islamic economies and Nasdaq Dubai is credited to be the leading international center for sukuk listings (Thomson Reuters, 2018). However, there has been limited research studies on this financing option within the region. To the best of the authors’ knowledge, this study is the first to focus on the role of signaling theory driving the financing choice for listed entities in the UAE. The paper aims to make a significant contribution in light of the recent expansion of sukuk issuances and fills the lacuna in research carried out in the UAE bond market.

Design/methodology/approach

This study empirically tested the hypotheses on a data set that covered a sample of 1,354 bond issuances over the period 2008–2019. The authors used logistic regression to distinguish between the issuance of sukuk versus conventional bond. Sukuk structuration leads to information asymmetry that prompts firms to send signals to the capital market. Information asymmetry has been studied in terms of issue-specific (maturity and issue size) and issuer-specific (firm size, growth, profitability, leverage) variables. Two control variables were included to capture the years under study and the macroeconomic effects of economic slowdown.

Findings

The banking sector accounted for 93% of bond issuances but contributed only 63% of the bond market in the UAE in terms of issue size. The data evidenced that non-banking sukuk issuances expanded over the years, with participation from sectors like real estate, oil and gas, logistics and utilities and contributed 50% of issuances in the UAE sukuk market. Typically, firms with smaller asset sizes and higher financing requirements were found to favour sukuk. The banking sector revealed irrelevance of information asymmetry, as Islamic Banks were mandated to issue sukuk. Non-financial firms with high profits and high debts were prompted to prefer conventional bonds, in line with the adverse selection mechanism.

Originality/value

Although UAE’s sukuk market has existed for more than a decade, scant research has been carried out. Few studies exist for the GCC region that either concentrated on stock market reactions to issuances of Islamic versus conventional bonds or studied capital market characteristics of non-financial entities alone. This is the first study to focus on signaling theory and information asymmetry playing a role in the capital structure of all listed firms (banking and non-banking) issuing bonds in the UAE.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1753-8394

Keywords

To view the access options for this content please click here
Book part
Publication date: 1 March 2021

Indrani Manna

This chapter proposes a measure of systemic default interconnectedness between banks, non-banks, housing finance companies in India and globally systemically important…

Abstract

This chapter proposes a measure of systemic default interconnectedness between banks, non-banks, housing finance companies in India and globally systemically important banks based on variance decompositions associated with a multiple variable vector autoregression of probability of default of the institutions. We call it the “vulnerability spillover index” (VSI). The vulnerability indices capture all the major macro and financial stress events in the Indian and global economy explaining the interconnections between sectors and underlying reasons for spillovers and potential for a systemic crisis. Thresholds of VSI are calculated which may enable prediction of financial stress events.

Details

Recent Developments in Asian Economics International Symposia in Economic Theory and Econometrics
Type: Book
ISBN: 978-1-83867-359-8

Keywords

To view the access options for this content please click here

Abstract

Details

Economic Modeling in the Nordic Countries
Type: Book
ISBN: 978-1-84950-859-9

To view the access options for this content please click here
Book part
Publication date: 4 December 2018

Indranarain Ramlall

Abstract

Details

The Corporate, Real Estate, Household, Government and Non-Bank Financial Sectors Under Financial Stability
Type: Book
ISBN: 978-1-78756-837-2

To view the access options for this content please click here
Article
Publication date: 4 November 2014

Noel Yahanpath and Mahbubul Islam

The purpose of this study is to explore whether the present measures being taken by the New Zealand (NZ) government are strengthening its non-banking sector effectively to…

Abstract

Purpose

The purpose of this study is to explore whether the present measures being taken by the New Zealand (NZ) government are strengthening its non-banking sector effectively to address the recent financial crisis and ensure better financial stability to the economy.

Design/methodology/approach

The basic methodology used in this paper is the “documentary research method”. For this study, data has been collected from various published sources; e.g. The Bulletin, the Financial Stability Report and other publications of the Reserve Bank of NZ, publications by Statistics NZ and a number of NZ government Ministries, and some newspapers and magazines, etc.

Findings

We find that the NZ government is revamping the non-banking sector by introducing a prudential regime. However, we also find some gaps in the existing regulatory systems that need to be addressed to ensure soundness in the total system.

Research limitations/implications

The basic limitation of documentary research will be applicable to this study. Further research may be carried out to investigate the policy responses of government from banking, corporate governance and other regulatory perspectives.

Practical implications

Our study identifies some gaps in current policy responses along with some suggestions for the future that may be taken into consideration by the respective policy-makers to further strengthen the support provided by policy responses to financial crises.

Originality/value

Our study provides a unique insight into the evaluation of post-GFC policy response and its effectiveness with regard to non-banking sector and, to our knowledge, the first of its kind in NZ in the post-global financial crisis period.

Details

Journal of Financial Regulation and Compliance, vol. 22 no. 4
Type: Research Article
ISSN: 1358-1988

Keywords

To view the access options for this content please click here
Book part
Publication date: 16 June 2021

Abstract

Details

Monetary Policy, Islamic Finance, and Islamic Corporate Governance: An International Overview
Type: Book
ISBN: 978-1-80043-786-9

To view the access options for this content please click here
Book part
Publication date: 4 December 2018

Indranarain Ramlall

Abstract

Details

Understanding Financial Stability
Type: Book
ISBN: 978-1-78756-834-1

To view the access options for this content please click here

Abstract

Details

Tools and Techniques for Financial Stability Analysis
Type: Book
ISBN: 978-1-78756-846-4

1 – 10 of over 1000