Monetary Economics: Financial System & Institutions eJournal最新文献

{"title":"Was the U.S. Great Depression a Credit Boom Gone Wrong?","authors":"Natacha Postel-Vinay","doi":"10.2139/ssrn.3413697","DOIUrl":"https://doi.org/10.2139/ssrn.3413697","url":null,"abstract":"The US Great Depression was preceded by almost a decade of credit growth. This review paper suggests that low general inflation and a slowdown in broad money growth in the 1920s masked the extent of the credit boom and a deterioration in the banking system’s balance sheet. Credit from commercial banks grew tremendously, and credit from savings institutions grew even more. While there was no general inflation, the credit boom was reflected in asset price inflations which occurred in certain parts of the economy, such as the real estate and stock markets. Broad money growth slowed in part because of a fall in the liquidity of commercial banks. And as the literature tends to show, the growth of credit and the fall in liquidity made financial institutions as well as households vulnerable to shocks. While monetary authorities managed to keep inflation in check, standard monetary policy tightening was ineffective in quelling the credit boom, and at times counter-productive. This points to macro- and micro-prudential tools as potentially more successful alternative measures to keep credit under control.","PeriodicalId":275096,"journal":{"name":"Monetary Economics: Financial System & Institutions eJournal","volume":"36 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-02-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123509080","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Money in the Twenty-First Century: From Rusty Coins to Digital Currencies","authors":"M. Prates","doi":"10.2139/ssrn.3781269","DOIUrl":"https://doi.org/10.2139/ssrn.3781269","url":null,"abstract":"After the Global Financial Crisis, central banks became identified as banks’ closest allies, rescuing them from failure when things go wrong. Banks, in turn, emerged as complex and unstable institutions that privatize profits and socialize losses, to the despair of taxpayers. And regulation and regulators were seen as incapable of curbing financial excess. The coronavirus pandemic only exacerbated the generally negative sentiment, as governments lacked a fast and simple way to send relief money directly to their citizens. In the meantime, sovereign currencies have faced increased private competition, from Bitcoin to big tech global projects. At this point, some structural reform of the monetary system seems not only desirable but inevitable. It is about time to look again at the role of money in the modern economy and better understand its features and flaws. This Article thus offers a guide to the recent evolution of money and what its future might hold.","PeriodicalId":275096,"journal":{"name":"Monetary Economics: Financial System & Institutions eJournal","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-02-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116510154","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Liquidity Insurance vs. Credit Provision: Evidence from the COVID-19 Crisis","authors":"Tumer Kapan, Camelia Minoiu","doi":"10.2139/ssrn.3773328","DOIUrl":"https://doi.org/10.2139/ssrn.3773328","url":null,"abstract":"We exploit the unexpected surge in corporate credit line drawdowns in the early phase of the COVID-19 pandemic as a bank balance sheet shock and examine the impact on banks’ lending decisions. We show that banks with larger ex-ante credit line portfolios---and hence higher risk of drawdowns---reported tightening lending standards on new C&I loans to small and large firms, curtailed the supply of large syndicated loans, and reduced the number and volume of small business loans since March 2020. Exposed banks were also less likely to participate in and grant loans through government-sponsored credit programs such as the Paycheck Protection Program and the Main Street Lending Program. We document that the main mechanism by which the risk of credit line drawdowns likely affected banks' lending decisions was a reduction of risk tolerance rather than balance sheet (liquidity and capital) constraints. Our findings suggest that tension may arise during crises between banks providing liquidity insurance to firms through pre-committed credit lines while at the same time sustaining loan supply to the broader economy, with important implications for monetary policy and financial stability policies.","PeriodicalId":275096,"journal":{"name":"Monetary Economics: Financial System & Institutions eJournal","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-01-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123809339","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Common Mutual Fund Ownership and Systemic Risk","authors":"Michael Iselin, Scott Liao, H. Zhang","doi":"10.2139/ssrn.3791743","DOIUrl":"https://doi.org/10.2139/ssrn.3791743","url":null,"abstract":"We examine whether bank connections via common mutual fund ownership serve as a contagion channel affecting the systemic risk of the banking system. We first document that the extent of a bank’s connection with other banks via common ownership increases its contribution to systemic risk. We further find that this association is primarily driven by passive mutual funds. We provide evidence that common passive ownership results in higher systemic risk through two mechanisms: non-discretionary sell-offs of bank stocks and a common pattern of voting. Our findings are also robust to two alternate instrumental variable analyses. This study contributes to the literature by documenting an unintended, macro-level consequence of common mutual fund ownership.","PeriodicalId":275096,"journal":{"name":"Monetary Economics: Financial System & Institutions eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-01-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116881474","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The Contours of Money, the Financial System and Ancillary Matters","authors":"Jayson B. Brown","doi":"10.2139/ssrn.3764506","DOIUrl":"https://doi.org/10.2139/ssrn.3764506","url":null,"abstract":"Recent developments in the monetary sphere of Liberia including the “dearth of local currency banknotes” have triggered escalating public conversations about the financial system of Liberia and perceived risks and opportunities. Many pundits from within and outside Liberia have yielded to the innate summons of the moment to express their views on the nature of the problems and what solutions they believe exist. I have observed with keen interest the trend of the debate and deemed it super important to advance some thoughts that would at least refresh the experts and provide orientation for others.<br><br>I have explained why the concept of money, its creation process and management framework need to be properly understood as the discussions in the public about the financial sector and the dearth of local currency banknotes heighten. I have posited that under the fractional reserve system, part of what we term as money and queue up to banks to collect physical currency against, is created out of “thin air” and is not matched by any available physical currency/banknotes. Coupled with the fact that banks use currency/banknotes deposited to extend loans which is expected to be repaid overtime, no financial system in the world can survive if an extremely high number of depositors show up for their deposits.<br><br>The highly dollarized nature of the financial system makes the implementation of monetary policy a serious challenge as a greater share of the country’s money supply is in foreign currency (United State dollars) for which the local authorities have no control. The total money supply is incomplete as the quantum of United States dollars circulating outside the banking system is not calculated and reported. Calculating and reporting the total USD in circulation is practically difficult. At any point, it is difficult to know the total amount of US dollars circulating in the economy and impacting monetary conditions as anyone could fly in and out of Liberia with the US dollars. Therefore, expediting the de-dollarization roadmap would prove useful. And this would require the right monetary autonomy to have adequate amount of local currency to substitute the foreign currency. Actions directed at increasing the use of the Liberian dollar in daily transactions such as the Remittance Split Policy introduced few years ago but now suspended, while good for de-dollarization, led to significant surge in the Liberian dollar in circulation. In other words, significant de-dollarization would mean having more Liberian dollar for the conduct of daily transactions. Except digitization efforts gain traction, this would require more printing!","PeriodicalId":275096,"journal":{"name":"Monetary Economics: Financial System & Institutions eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-01-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131281172","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Do Mortgage Lenders Compete Locally? Implications for Credit Access","authors":"Greg Buchak, Adam Jørring","doi":"10.2139/ssrn.3762250","DOIUrl":"https://doi.org/10.2139/ssrn.3762250","url":null,"abstract":"We study the impact of mortgage lender concentration on household credit access. An extensive literature has found little to no relationship between local lender concentration and mortgage interest rates; consequently, federal regulators regard mortgage markets as national and view their local concentration as irrelevant to financial regulation and monetary policy. We argue that this view is incomplete, showing that although local concentration has no influence on interest rates, it strongly affects lending standards and upfront fees. In more concentrated areas, mortgage application rejection rates are higher (this effect is particularly pronounced for low-income, female, and racial-minority applicants), and the pool of originated mortgages is less risky in terms of both ex-ante credit scores and ex-post default. On the intensive margin, lenders charge higher fees in more concentrated markets: non-interest fees are on average 35 basis points higher in the 10% most concentrated markets than in the 10% least concentrated markets. Again, these effects are strongest among minority applicants. Our findings suggest that contrary to current policy, regulators concerned with credit access should regard mortgage markets as local when making policy decisions such as bank merger approvals.","PeriodicalId":275096,"journal":{"name":"Monetary Economics: Financial System & Institutions eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-01-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125825628","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"A Prudential trade-off? Leakages and Interactions with Monetary Policy","authors":"Baptiste Meunier, Justine Pedrono","doi":"10.2139/ssrn.3840224","DOIUrl":"https://doi.org/10.2139/ssrn.3840224","url":null,"abstract":"While monetary and prudential policies are generally analysed separately, this paper focuses on how the two interact. Taking an international perspective, we show that monetary policy in a centre economy (Euro Area) spill over its borders through bank lending – therefore inducing volatility in cross-border lending flows. Investigating a sample of 30 advanced and emerging economies, we find evidence that prudential policy in the receiving-country interact with monetary policy so that a tighter prudential stance in the recipient-country mitigates the volatility of banking flows induced by monetary policy abroad. But we also show that a tighter prudential stance – interactions apart – implies a higher growth of cross-border lending. Taken together, these results might suggest a trade-off: while a tighter prudential stance reduces the volatility of cross-border lending flows, it also implies that local borrowers resort more to lending from abroad. Taking advantage of the granularity of our confidential dataset, we finally explore heterogeneities and show that such leakages arise only for financially more open economies and only through the financial sector, with evidence that such leakages are driven by intra-group lending.","PeriodicalId":275096,"journal":{"name":"Monetary Economics: Financial System & Institutions eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129318044","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The Advantages of Promoting Interest-Free Microfinance Institutions over Interest-Free Banks in Developing Countries: The Case of Ethiopia","authors":"A. Aman, A. Ali, Ibrahim Bushera","doi":"10.2139/ssrn.3802598","DOIUrl":"https://doi.org/10.2139/ssrn.3802598","url":null,"abstract":"The major objective of this study is to amplify the advantages of fostering interest-free microfinance (IFM) institutions in Ethiopia. Their economic, social, legal, technological and other upper hands over the other institutions are assessed. Some country-cases are presented, and an analysis is made using a comparative descriptive approach. The results point out that, in developing countries like Ethiopia, IFM institutions are more capable than other interest-free banks (IFB) in reducing poverty, increasing financial inclusion, creating employment opportunities, empowering women and boosting local development. Moreover, they are simple to start, easily manageable, community-based by nature, efficient, and necessitate less technology, infrastructure and human resources than banks. Therefore, in parallel to the expansion of the IFB industry, backing IFM institutions in Ethiopia can benefit the socio-economic development of the country.","PeriodicalId":275096,"journal":{"name":"Monetary Economics: Financial System & Institutions eJournal","volume":"17 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130906080","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"تبصرہ کتاب: غیر سودی بنکاری میں تمویل کے طریقے شرعی معیارات کی روشنی میں (Book Review: Modes of Financing of Interest Free Banks in the Light of Sharī‘ah Standards)","authors":"Muhammad Asghar Shahzad","doi":"10.2139/ssrn.3757884","DOIUrl":"https://doi.org/10.2139/ssrn.3757884","url":null,"abstract":"<b>Urdu Abstract:</b> اسلامی بنکاری دنیا بھر میں روایتی بنکاری کے متبادل کے طور پر منظرعام پر آئی ہے، جس میں اسلامی اسالیب ِ تمویل کے ذریعے فنانسنگ کی جاتی ہے۔ بنک کے روز مرہ امور میں ان کی راہنمائی کے لیے شریعہ بورڈ کی خدمات بھی لی جاتی ہیں جن کا کام اس بات کو یقینی بنانا ہے کہ اسلامی بنکوں کے تمام معاملات شریعت کے اصولوں کے مطابق ہوں۔ اسلامی بنکوں کی مصنوعات اور خدمات کے حوالے سے مختلف ادارے کام کر رہے ہیں اور مروجہ اسلامی بنکوں کے لیے معیارات ترتیب دیتے ہیں ، ان اداروں میں هيئة المحاسبة والمراجعة للمؤسسات المالية الإسلامية اور مجلس الخدمات المالية الإسلامية قابل ذکر ہیں۔ هيئة المحاسبة والمراجعة للمؤسسات المالية الإسلامية کے جاری کردہ معیارات میں سے متعدد معیارات ، بنک دولت پاکستان ملک بھر میں کام کرنے والے اسلامی بنکوں میں ضروری ترمیم کے ساتھ لاگو کرتا رہتا ہے۔ حال ہی میں شریعہ معیار نمبر ۴۹ کو لاگو کیا گیا۔ <br>یہ معیارات بنیادی طور پر عربی زبان میں جاری کیے جاتے ہیں اور بعد ازاں ان معیارات کا ترجمہ انگریزی اور دیگر زبانوں میں کیا جاتا ہے۔ گذشتہ سال ان معیارات کا ترجمہ اردو زبان میں بھی شائع کیا گیا۔ضرورت اس امر کی ہے کہ ان معیارات کو عام فہم زبان اور مثالوں کے ذریعے سمجھانے کے لیے لٹریچر اردو زبان میں بھی مہیا کیا جائے تاکہ جو معیارات پاکستان میں نافذ کیے گئے ہیں ان کا نفاذ کما حقہ کیا جا سکے۔ <br>زیر نظر کتاب ’’غیر سودی بنکاری میں تمویل کے طریقے شرعی معیارات کی روشنی میں‘‘ ڈاکٹر مفتی محمد حسان اشرف عثمانی صاحب کا پی ایچ ڈی کا تحقیقی مقالہ ہے، جو مکتبہ معارف القرآن کراچی نے کتابی شکل میں شائع کیا ہے۔ کتاب کی طباعت دیدہ زیب ہے اور کتاب کا طباعتی معیار بہت اچھا ہے۔ دو رنگوں کے استعمال نے قاری کے لیے کتاب کو مزید پر کشش بنا دیا ہے۔ کتاب بنیادی طور پر اسلامی بنکاری کے طریقہ ہائے تمویل یا فراہمی سرمایہ کے طریقوں اور اسالیب سے متعلق گفتگو کرتی ہے۔ اس میں مصنف نے مرابحہ، اجارہ ، سلم ، استصناع، مشارکہ ، مضاربہ اور ضمانات کو بہت تفصیل کے ساتھ بیان کیا ہے۔ اسالیب کے فقہی احکام اور بنیادوں پر بہت شَرح و بَسْط کے ساتھ گفتگو کی ہے۔ کتاب میں اسالیب ِ تمویل کی تشریح و تعبیر هيئة المحاسبة والمراجعة للمؤسسات المالية الإسلامية کے شرعی معیارات کی روشنی میں کی گئی ہے۔ اسالیب تمویل پر درسی کتب کے لٹریچر میں یہ ایک معقول اضافہ ہے۔ <br><br><b>English Abstract:</b> Modes of Financing of Interest Free Banks in the Light of Sharī‘ah Standards is a unique book on the subject which has tried to explain the modes of financing of the contemporary Islamic Banking Institutions in the light of Sharī‘ah Standards issued by AAOIFI.","PeriodicalId":275096,"journal":{"name":"Monetary Economics: Financial System & Institutions eJournal","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125882140","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Bail-in vs. Bailout: A Persuasion Game","authors":"Sylvain Benoît, Maroua Riabi","doi":"10.2139/ssrn.3736093","DOIUrl":"https://doi.org/10.2139/ssrn.3736093","url":null,"abstract":"We propose a model with incomplete information where a distressed bank asks its creditor, a healthy bank, to reduce its debt. Given the information disclosed by the regulator about the asset quality of the distressed bank and its possible bailout by the government, the healthy bank can accept or not the bail-in operation. The role of the regulator is to select the optimal disclosure rule that reduces its expected loss function. We find that the full disclosure is desirable in some circumstances, especially in extreme periods, but not in others. For instance, when the bail-in cost is large, the optimal loss is reached thanks to a partial disclosure in normal times. In contrast, when the bailout cost is high, no disclosure minimizes the regulator's expected welfare losses in normal times.","PeriodicalId":275096,"journal":{"name":"Monetary Economics: Financial System & Institutions eJournal","volume":"22 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133699856","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}