Overcoming the loan-to-deposit ratio by a financial intermediation measure — A perspective instrument of financial stability policy

Boďa, Martin; Zimková, Emília

doi:10.1016/j.jpolmod.2021.03.012

Cited by 19 publications

(15 citation statements)

References 28 publications

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“…The 68-year long period of British banking was characterised by variations in not only operations but also policies and regulations. Although Goodhart and Kashyap (2013) argue that no single regulatory tool is going to be sufficient to address the multiple sources of systemic risk, we support Le Leslé and Avramova (2012) and Boďa and Zimková (2021), who argue for the use of LTD as a tool for signalling indicator for liquidity problems at banks.…”

Section: Discussionmentioning

confidence: 49%

“…As the role that LTD plays in financial stability policy continues to be recognised, there have been improvements and proposal to make it more suited to the needs of macroprudential regulation of financial systems. Boďa and Zimková (2020, 2021) propose a financial intermediation measure (FIM: a measure of attainment of financial intermediation) as an amendment to the LTD ratio to compensate for the descriptive nature of the LTD ratio. With the FIM adjustment, and judgement on upper bound, LTD becomes more suited to and useful for macroprudential regulation.…”

Section: Discussionmentioning

confidence: 99%

“…While LTD may not be fully appreciated by the academic community, it is a regulatory standard used by central banks (Office of the Comptroller of the Currency, 2016; DiSalvo and Johnston, 2017; European Banking Authority, 2017; Boďa and Zimková, 2020). Since the 2007–2008 financial crisis, there has been increasing focus on the use of LTD as a measure of liquidity and a tool for macro prudential policy to mitigate liquidity risk (Goodhart, 2014; Van den End, 2016; Satria et al , 2016; Boďa and Zimková, 2020, 2021) and a predictor of bank vulnerability to crises (Jordà et al , 2021). By way of Trend analysis and Panel Regression, we examine the impact of changing severity of government controls on LTD ratio for the period 1945–2012 for Major British Banking Group (MBBGs) [1].…”

Section: Introductionmentioning

confidence: 99%

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UK Government controls and loan-to-deposit ratio

Mabwe

Jaffar

2022

JFRC

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Purpose This paper aims to present an analysis of the UK bank loans and deposits in tandem, linking the loan-to-deposit (LTD) ratio to macroprudential policy and funding restrictions. LTD ratio is used by micro and macroprudential authorities to address both structural (long-term) and cyclical (short-term) liquidity risks. It is an outcome of several political and economic factors and should be evaluated against this background. Design/methodology/approach The authors use trend analysis and panel regression to investigate LTD ratio of Major British Banking Groups from 1945 to 2012 in the midst of changing the UK Government policies. Findings The results show that wholesale funding, government intervention and repression were the major forces behind LTD trends. Originality/value The authors recommend the use of LTD as a complement to other liquidity ratios in micro and macro-prudential regulation, particularly in the context of current reforms to banking capital requirements.

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Section: Discussionmentioning

confidence: 49%

Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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UK Government controls and loan-to-deposit ratio

Mabwe

Jaffar

2022

JFRC

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“…This is because the amount of funds needed to finance credit is getting bigger. This is supported by the results of research that there is a positive influence between LDR and NPL (Boďa & Zimková, 2021;Sujana & Mustanda, 2015).…”

Section: Discussionmentioning

confidence: 66%

“…NPL (Apriyantari & Ramantha, 2018;Setiawan et al, 2019). The Loan to Deposit Ratio is a ratio to measure the composition of the amount of credit given compared to the amount of public funds and own capital used (Boďa & Zimková, 2021;Dia & VanHoose, 2019). Credit distribution is the main activity of banks, therefore the main source of bank income comes from credit.…”

Section: Introductionmentioning

confidence: 99%

Effectiveness of Non-Performing Loans Management at the Penglatan Traditional Village Credit Institution (LPD)

Suardika

Dewi

2021

IJSSB

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As a microfinance institution, the LPD, which is finance belonging to the village of Pakraman, aims to collect funds from the community to be further channeled back to the community. Seeing the critical role of the LPD as a micro institution in Bali, the LPD institution with traditional villages, and the government's desire to develop LPD in Bali, the existence of the LPD needs to be maintained and maintained. This study aims to determine the effectiveness of managing Non Performing Loans (NPL) in LPd Desa Adat Penglatan through the Non-Performing Loan Ratio (NPL), Capital Adequacy Ratio (CAR), Loan to Deposit Ratio (LDR), Earning Asset Quality (KAP) and Costs. Operating Operating Income (BOPO). This research was conducted at the Village Credit Institution (LPD) of the Penglatan Traditional Village. The instrument used to collect data is a questionnaire. This study used a population and 36 months or three-year samples using the purposive sampling technique. The collection technique uses an observation process on financial statement data. The techniques used in analyzing the data are Multiple Linear Regression Analysis, Classical Assumption Test Analysis, F-Test Analysis (F-Test), Determination Analysis, and T-Test Analysis (T-Test). The results of this study explain that the Capital Adequacy Ratio (CAR) has a significant negative effect on Non Performing Loans (NPL) and Loan to Deposit Ratio (LDR), Earning Assets Quality (KAP), and Operating Income Operating Costs (BOPO) have a significant influence for Non-Performing Loans (NPL).

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Inclusive Finance, Gender Inequality, and Sustainable Economic Growth in Africa

Asiedu²,

Effah³

2022

J Knowl Econ

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Overcoming the loan-to-deposit ratio by a financial intermediation measure — A perspective instrument of financial stability policy

Cited by 19 publications

References 28 publications

UK Government controls and loan-to-deposit ratio

UK Government controls and loan-to-deposit ratio

Effectiveness of Non-Performing Loans Management at the Penglatan Traditional Village Credit Institution (LPD)

Inclusive Finance, Gender Inequality, and Sustainable Economic Growth in Africa

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