Does country risk impact the banking sectors’non‑performing loans?Evidence from BRICS emerging economies

This study aims to fill the gap in the literature by specifically investigating the impact of country risk on the credit risk of the banking sectors operating in Brazil,Russia,India,China,and South Africa(BRICS),emerging countries.More specifically,we explore whether the country-specific risks,namely financial,economic,and political risks significantly impact the BRICS banking sectors’non-performing loans and also probe which risk has the most outstanding effect on credit risk.To do so,we perform panel data analysis using the quantile estimation approach covering the period 2004–2020.The empirical results reveal that the country risk significantly leads to increasing the banking sector’s credit risk and this effect is prominent in the banking sector of countries with a higher degree of non-performing loans(Q.25=−0.105,Q.50=−0.131,Q.75=−0.153,Q.95=−0.175).Furthermore,the results underscore that an emerging country’s political,economic,and financial instabilities are strongly associated with increasing the banking sector’s credit risk and a rise in political risk in particular has the most positive prominent impact on the banking sector of countries with a higher degree of non-performing loans(Q.25=−0.122,Q.50=−0.141,Q.75=−0.163,Q.95=−0.172).Moreover,the results suggest that,in addition to the banking sectorspecific determinants,credit risk is significantly impacted by the financial market development,lending interest rate,and global risk.The results are robust and have significant policy suggestions for many policymakers,bank executives,researchers,and analysts.

The Efficiency and Productivity Analyses of the Turkish Banking Sector After the Restructuring Program

After the 2001 economic crisis, the banking sector restructuring program （BSRP） has been designed for the establishment of a stronger financial framework and the improvement of competition in the Turkish banking sector. The program constitutes the policies for solving specific problems such as the mismanaged assets of some banks and the recovery of regulating and supervising of the sector. This study aims to analyze the efficiency and productivity changes in the Turkish banking sector during 2002-2009. During this period the Banking Sector Restructuring Program has been applied. The data envolepment analysis （DEA） is conducted for the efficiency measurement under the production and intermediation approaches and it is observed that the efficiency of banks increased for both approaches. The mean efficiency values for the intermediation approach are higher than the values for the production approach, indicating a better functioning in financial intermediation as compared to their operational performance. The Malmquist index based on the intermediation approach is calculated to determine the productivity of the banking sector. It is observed that the productivity of banks increased during the period and the increase resulted mainly from investments in technology.

Banking Sector Development and Agricultural Productivity in Central African Economic and Monetary Community (CEMAC)

There is high pressure for investment capital and financial services for agricultural activities necessary for poverty reduction,economic growth,sustainable development and food security.This study investigated the long-term causation between banking sector development and agricultural productivity in the six Central African Economic and Monetary Community(CEMAC)states from 1990 to 2018,hypothesizing no causation between banking sector and agriculture output.With the autoregressive distributed lag(ARDL)model and vector error correction model(VECM),the study demonstrates that banking sector and agricultural productivity in the CEMAC region are related.It implies long-run relationship exists between banking sector and agricultural productivity in the CEMAC zone.The results reveal that bidirectional causality exists between banking sector and agricultural productivity in the CEMAC region.This is insinuating that in the CEMAC region,agricultural productivity and banking sector development are operating in mutualism.The findings indicate the reason to establish the banking sector using proper macroeconomic,legal and regulatory policies to boost agricultural productivity by creating incentive systems that channel more credit to agricultural investment and promoting the banking system.

Non-performing Loans in Turkish Banking Sector and Balance Sheets Effects

In the 21st century, while the scope of banking activities has been expanding every day, collecting deposits and providing credit remain as their main and most important functions. They transfer the collected funds thanks to the market confidence they create back to the market in terms of the credits they give. For the organizations operating in the banking sector, crediting is the highest revenue earning source. However, uncollected loans may disrupt the activities of banks and may reduce their effectiveness. Therefore, the control of bank credits has a particular importance in the bank balance sheets. In this study, the relationship between bank balance sheets and non-performing loans （NPL） will be analyzed using Granger causality test and vector autoregressive （VAR） method. This study aims to discuss the impact of NPL on balance sheets and contribute to making correct credit decisions. It also intends to assist to reduce the NPL ratios of banks and minimize the level of negativity in their financial statements.

Impact of the Jews and Polish-Jewish Relations on the Development of the Banking Sector in Poland

The development of the Polish banking sector cannot be separated from the historical, cultural, and religious background. A key role in this area was played by the Jewish minority. Although the discussed subject matter relates to very remote times, due to the durability of cultural determinants, it has a large impact on the present shape of the Polish banking sector. The paper is dedicated mainly to the presentation of interrelations between Christianity and Judaism, the development of the historical Polish-Jewish relations and the role of the Jews in the development of the banking sector on Polish territory. In the light of the deliberations, the author refers to a deeply ingrained distance between a wide group of users of financial services and banks themselves, and to the relations resulting from the domination of foreign capital on the Polish banking market.

HongKong's New Policy on Banking Sector

The Hong Kong Monetary Authority(HKMA)recently published a package of policy initiativesto reform the local banking market.First of the two prominent features of thisreform package concerns the deregulation of theremaining interest rate ceilings.The first phase of deregulation,scheduled totake place on July 1,2000,will see the

Evaluating Banking Efficiency in Kuwait --A Pre and Post Recession Perspective

This paper studies banking efficiency from a Kuwaiti banking sector perspective. This will be accomplished by comparing and analysing the efficiency of Kuwaiti banking operations before and after the International Financial Crisis. Traditional and Islamic banks will be taken into consideration. The overall goal of this inquiry is to determine whether the efficiency of Kuwaiti banks has improved and why. Internal and external influences on Kuwaiti banking efficiency will be examined as well. Methods of work performed by bank managers and policy makers in Kuwait contributing to banking operations efficiency will be considered as well.

Analysis of financial development and open innovation oriented fintech potential for emerging economies using an integrated decision‑making approach of MF‑X‑DMA and golden cut bipolar q‑ROFSs

The purpose of the paper is to identify the factors of financial development that have the greatest impact on open innovation in 7 emerging countries.The analysis was performed featuring the MF-X-DMA method,as well as its further verification for auto-correlation and heteroscedasticity.The time period covers years from 2002 to 2020.The article states that the main indicators to improve financial development should enhance the process of bank lending and equity market development.An important area is the development of competition by providing equal access to information to all market participants in a continuously refining technical infrastructure.Regression analysis with the MF-X-DMA method confirms the statistical significance of this influ-ence.The article fills the knowledge gap into the link between open innovations and the relatively low capitalization of the modern emerging countries’financial market,low liquidity in small cap stocks at the financial market and concentration of the banking sector,as well as risks arising in the process of globalization.Another analysis has also been conducted by generating a novel fuzzy decision-making model.In the first stage,the determinants of open innovation-based fintech potential are weighted for the emerging economies.For this purpose,M-SWARA methodology is taken into consideration based on bipolar q-ROFSs and golden cut.The second stage of the analysis includes evaluating the emerging economies with the determinants of open innovation-based fintech potential.In this context,emerging seven countries are examined with ELECTRE methodology.It found the most significant factor is the open innovation-based fintech potential.

The accounting valuation of bank stocks in Europe

In this study we examine the validity of the earnings-book value capitalization model in the pricing of bank stocks in Europe. We perform cross-sectional tests using a sample of banks operating in 21 European Union countries. We split our sample into code and common law countries to control for the influence of the financial reporting system upon the pricing of earnings and book value. Our empirical findings suggest that disaggregating total reported clean surplus income into reported gains and losses from securities and other income increases the explanatory power of the accounting valuation model. Indeed, reported gains and losses from securities are priced lower than other income, irrespective of whether the financial reporting system is classified as a code or a common law system, probably because the market considers the former as a less stable source of income. Additionally, we observe that the pricing of both earnings and book value is influenced by the financial reporting system. We conclude that earnings announced under a common law financial reporting system are priced differently from those reported under the respective code law system. Finally, we provide evidence that comprehensive and dirty surplus income are two value relevant variables for banks reporting earnings under the code law system, although dirty surplus income is priced lower than clean surplus income.

Interest Rate Statistics in Nigeria： Its Sampling Techniques and Computational Procedures

Developing nations, like Nigeria, whose financial systems and infrastructural base are not yet fully developed face data rendition challenges which may hamper the representativeness of their interest rate statistics.A critical component of any credible interest rate data compilation framework relates to the sampling procedure.In Nigeria, no work has been done with regards to employing alternatives sampling techniques in the computation of interest rate statistics largely because of the small number of deposit money banks in the country. Leveraging on existing literature and established statistical methods, the study examines two sampling techniques for generating credible and reliable interest rates in Nigeria. The current interest rate compilation framework in the country is presented and alternative sampling procedures were explored with a view to investigating their appropriateness for Nigeria＇s interest rate computation. The interest rates generated based on the current population-based compilation method is compared with those of the alternative approaches. This paper recommends the use of purposive sampling method that covers Deposit Money Banks （DMBs） which account for about 70.0 per cent of the banking sector total assets as an appropriatealternative.

Artificial Intelligence Trends and Ethics: Issues and Alternatives for Investors

Artificial intelligence (AI) based technology, machine learning, and cognitive systems have played a very active role in society’s economic and technological transformation. For industrial value chains and international businesses, it means that a structural change is necessary since these machines can learn and apply new information in making forecasts, processing, and interacting with people. Artificial intelligence (AI) is a science that uses powerful enough techniques, strategies, and mathematical modelling to tackle complex actual problems. Because of its inevitable progress further into the future, there have been considerable safety and ethical concerns. Creating an environment that is AI friendly for the people and vice versa might be a solution for humans and machines to discover a common set of values. In this context, the goal of this study is to investigate the emerging trends of AI (the benefits that it brings to the society), the moral challenges that come from ethical algorithms, learned or pre-set ideals, as well as address the ethical issues and malpractices of AI and AI security. This paper will address the consequences of AI in relation to investors and financial services. The article will examine the challenges and possible alternatives for resolving the potential unethical issues in finance and will propose the necessity of new AI governance mechanisms to protect the efficiency of the capital markets as well as the role of financial authority in the regulation and monitoring of the huge expansion of AI in finance.

What Are the Real Problems of China’s Economic Growth?

CHINA is the world’s second-largest economy,and how its economic growth progresses will inevitably influence that globally.The outside world has followed closely the sustainability of China’s economic growth.Such interest was the basis for the BBC documentary How China Fooled the World.The documentary is centered around China’s economic growth having been driven by vast amounts of credit from the banking sector over the past few years.

Economy

Chinese Banks to Issue Large-denomination Certificates of Deposit The People’s Bank of China,the country’s central bank,issued a provisional regulation on June 2 that allows financial institutions to issue large-denomination certificates of deposit(CD),giving banks more freedom in pricing interest rates.Individual investors can buy certificates of deposit worth at least RMB 300,000 and institutional investors at least RMB 10 million’s worth.

Deciphering the black box of HPWSeinnovation link:Modeling the mediatory role of internal social capital

This study investigates the impact of High-Performance Work Systems(HPWS)on radical and incremental innovation in the services industry.Insights from the Social Exchange Theory(SET)and Ability-Motivation-Opportunity(AMO)Framework have been used to assess the role of social capital(SC)as a mediator between HPWS,radical innovation(RI),and incremental innovation(II).By using a simple random sampling technique,328 responses were received from respondents in Pakistan's banking sector firms.For data analysis,structural equation modeling was applied.The results of the study show that HPWS is a significant driver of II,but not RI,in banking sector firms.Moreover,SC plays the role of mediator in the HPWS-innovation link.Outcomes of the study extend the understanding of the“black-box”(i.e.,the transmission mechanism between systems of human resources(HR)practices and innovation).It also contributes to understanding HPWS,SC,II,and RI in the context of Pakistan's banking sector.This study expands on earlier research in the areas of HPWS,SC,and Innovation.It supports the view that internal SC enables RI and II.Prior studies indicated that HPWS drives innovations,yet there has been no clear explanation about the mechanism of this effect.By providing empirical evidence on the mediating role of SC,this study expands on existing literature.Empirical validation of an association between HPWS RI,and II contributes to theory by supporting the tenets of the AMO Framework.Unlike prior research that focused on short-term financial outcomes,this study used RI and II as alternate indicators of organizational performance.Our study expanded the literature into the services sector.Furthermore,we contributed to the methodology by conceptualizing HPWS as a high-order formative construct,resulting in significant model parsimony.Insights from our study are relevant to managers because it shows that HPWS implementation not only helps banks to attract,develop,and retain talent but also facilitates the development of SC,which is critical for enabling the innovation capability of the firm.Top managers need to consider internal SC in the design of HPWS because carefully designed HPWS drives SC.This enables idiosyncratic relationships among members of the organization.Thus,the firm gets a competitive advantage that is harder to be copied by competitors.First,data were collected from a single industry.It will be useful to know the effects of multiple industries in future research.Second,this study did not differentiate between different dimensions of SC,i.e.,structural,cognitive,and relational.It will be interesting to see how these dimensions relate to HPWS and innovation in future research.