The effect of macro factors on bank credit activity in the Republic of Serbia

Abstract

This paper investigates whether and how key macro-fundamentals in Serbia affect the volumes of issued loans of Erste bank to public and business sector in Serbia. We made an effort to determine which particular macro factor has the highest influence on issued credits of Erste bank, and to measure the exact average magnitude of these influences. The main idea is to find out how GDP, inflation, central bank referent interest rate, exchange rate changes and Euribor affect short-term and long-term credit activity of Erste bank in Serbia. The computations are done by applying several multivariate regression models in which dependant variables are the volume of issued credits towards civil sector and enterprises. Based on the results, we can report that Euribor is the most important factor of all scrutinized macro-aggregates, since it affects most of the analysed bank loans. Besides Euribor, we find that other macro fundamentals influence the issued loans only sporadically. In other words, the level of GDP and inflation affect only long-term loans for businesses, while referent interest rate influences only short-term loans for public. We find that exchange rate changes have no effect on any loan of Erste bank, whatsoever, which clearly indicates that the bank protects itself very successfully against this type of macro risk.

Accounting and legal aspects of budget execution

“…Payment can be made in advance if the delivery of the funds is partially or fully conditioned by such payment and when the favorable effects realized by such payment, i.e. possible damages that would arise from this delay, are determined (Živkov, Poparić & Ilić, 2020). Obligations are paid in the manner and within the time limit provided in the document by which the obligation was created, that is, within the time limit provided by the contract or general act.…”