Capital inflows and bank stability around the financial crisis: The mitigating role of macro-prudential policies

Mirzaei, Ali; Aguir, Iness

doi:10.1016/j.intfin.2020.101254

Cited by 26 publications

(10 citation statements)

References 50 publications

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“…Table 1 describes and defines the variables used in this study in two groups: macroeconomic variables and bank specifics variables. The bank liquidity ratio, a measure for bank solvency (Ali & Iness, 2020), is used for two purposes: to assess the relationship between its evaluation and agriculture production proxies since 1970. Another reason is that bank Liquidity is a perfect measure for bank insolvency while using the Z-Score approach (Ali & Iness, 2020).…”

Section: Data Study Scope Variable Definitions and Sourcesmentioning

confidence: 99%

“…The bank liquidity ratio, a measure for bank solvency (Ali & Iness, 2020), is used for two purposes: to assess the relationship between its evaluation and agriculture production proxies since 1970. Another reason is that bank Liquidity is a perfect measure for bank insolvency while using the Z-Score approach (Ali & Iness, 2020). The lower the liquidity is, the higher the bank risk is, and vice versa.…”

Section: Data Study Scope Variable Definitions and Sourcesmentioning

confidence: 99%

“…A volatility measurement was employed to assess how consistent bank earnings were towards the agricultural production factors (Hafeez et al, 2022). Z-score = (ROA+ bank liquidity)/( σ (ROA)) for liquidity and for the bank capital ratio, which was the proxy for bank size in the GMM model (Ali & Iness, 2020). The Z-score formula: (ROE + bank liquidity)/( σ (ROE)) for liquidity earnings, with σ (ROA) and σ (ROE) as the standard deviation of returns for liquidity (Beck et al, 2013).…”

Section: Z-score Metrics For Bank Risks/stability: Measures For Robus...mentioning

confidence: 99%

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The impact of African agriculture production on bank stability through bank risk and profit

Jean-Petit¹,

Zheng²

2022

IJRBS

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The African farming sector suffers from insufficient finance. Climate changes and socio-political issues hold down the required production level while food on the continent is still inadequate, with more vulnerable people on the one side. On the other side, credit institutions need reasons and guarantees to raise their risk-taking level (financial benefits). Then, this study tries to conciliate those two sides with new shreds of evidence by demonstrating the short and long-run effects of agricultural production on bank sustainability in 40 Sub-Saharan African countries. The study used different agro-production factors (Food and Cereal production factors), bank stability proxies (Liquidity Ratio, NPLs, LLRs), and bank profitability proxies (ROA and ROE). The GMM, DFE, and FMOLS models were used for short (with the 2010-2019 dataset) and long-run analysis (with the 1970-2018 dataset). The results demonstrated that agricultural production increases bank stability and profitability but reduces bank risks. The study concludes that farming finance increases agro-production and stabilizes banks (win-win). Governments, via central banks, should encourage commercial banks to increase bank risk-taking levels to sustain their banking system, increase farming production, and improve food security.

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Section: Data Study Scope Variable Definitions and Sourcesmentioning

confidence: 99%

Section: Data Study Scope Variable Definitions and Sourcesmentioning

confidence: 99%

Section: Z-score Metrics For Bank Risks/stability: Measures For Robus...mentioning

confidence: 99%

See 1 more Smart Citation

The impact of African agriculture production on bank stability through bank risk and profit

Jean-Petit¹,

Zheng²

2022

IJRBS

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“…How to measure systemic financial risks scientifically? Basically, an outbreak of financial crisis is a result of accumulation of systemic financial risks [8]. Domestic and overseas scholars have carried out research studies from multiple perspectives to explore the connotations and measurement of systemic financial risks.…”

Section: Connotations and Measurement Of Systemic Financialmentioning

confidence: 99%

How Does Capital Account Liberalization Affect Systemic Financial Risks? Evidence from China

Zheng

Feng

et al. 2021

Mathematical Problems in Engineering

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Capital account liberalization typically results in higher volumes of capital inflows and outflows for a country, yet abnormal cross-border capital flows may lead to overall financial risk accumulation, in turn causing tremendous damages to the economy. Using a time-varying parameter structural vector autoregression model with stochastic volatility (SV-TVP-SVAR), we identify time-varying effects of capital account liberalization on four types of systemic financial risks in China. Empirical results demonstrate that capital account liberalization, in the short run, can effectively curb the accumulation of macroeconomic and sudden stop risks. On the other hand, capital account liberalization may heighten credit crunch and asset bubble risks to varying degrees. We also find that some important capital account liberalization measures are double-edged: reform policies are likely to increase macroeconomic risk when optimizing the financing structure and reducing credit crunch risk.

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“…After the 2010-2014 crisis the financial stability of banks of developing countries reduced mostly due to foreign capital in the form of portfolio and/or credit investments. They emphasize the destructive role of financial crises that don't let developing countries to take advantage of financial stability brought by cross-border flows [2].…”

Section: Introductionmentioning

confidence: 99%

Movement of the components of Russian financial capital

et al. 2021

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In the article there is revealed movement of financial capital components as a substance – the unity of diversity and the diversity of unity. Analysis of USD / RUB, RGBI, RTSI, SBER, IMOEX dynamics revealed speculative behavior of financial capital owners (IMOEX, USD / RUB, SBER) in relation to internal (RGBI) and external (RTSI) market. Analysis of importance of growth rates of GDP and its components revealed the state priority of GDP deflator regulation (Central Bank – inflation targeting) in the context of state revenues growth and, as a structural consequence, reduction of importance of growth rates of GDP and expenditures of households consumption against the background of increase of importance of commodities and services import. At the same time the quite high values of importance of growth rates of export of Russian commodities and services are identical to ones of such countries as Australia, Estonia and Columbia. Analysis of capital growth rates revealed fixation of interrelations between the Central Bank and financial corporations in the context of regulation of money supply and currency outside financial corporations and internal claims. These relations strengthen due to focusing of monetary and credit policy at “clear requirements to central government” and at inflation targeting. Research of the Russian financial capital components movement demonstrated corporate strengthening of interrelations between the Central Bank and the financial corporations and also defined the options for regulation of speculative behavior of financial capital owners.

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Capital inflows and bank stability around the financial crisis: The mitigating role of macro-prudential policies

Cited by 26 publications

References 50 publications

The impact of African agriculture production on bank stability through bank risk and profit

The impact of African agriculture production on bank stability through bank risk and profit

How Does Capital Account Liberalization Affect Systemic Financial Risks? Evidence from China

Movement of the components of Russian financial capital

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