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Purpose: The financial system plays an essential role in facilitating the intermediation process for economic growth. Policymakers stress on achieving a well-developed and regulated financial system to achieve economic development and resiliency. Using data from the State of Qatar, this paper aims to examine the impact of financial development indicator on economic growth; the impact of financial development indicator on hydrocarbon and nonhydrocarbon sector; the impact of Islamic banking on hydrocarbon and nonhydrocarbon economic growth. Design/methodology/approach: The research uses quarterly data from 2007 to 2019 and adopts autoregressive distributed lag cointegration techniques to test the long- and short-run dynamic relationship between various measures of financial development and economic growth. Findings: The results present evidence of long-term cointegration between overall financial development indicator and economic growth. Furthermore, the authors document the existence of long-term relationship between financial development and nonhydrocarbon sector. However, there is a lack of evidence on the long-run relationship between financial development and the hydrocarbon sector. Notwithstanding, Islamic banking contributes to overall economic development, as well as to the nonhydrocarbon sector. Practical implications: This paper offers policymakers with insights to evaluate measures to diversify the economy. It also assists decision-makers in promoting Islamic finance, particularly to the banking sector as a vital contributor to economic growth. Originality/value: To the best of the author's knowledge, this paper is the first to evaluate financial development and economic growth for the case of Qatar in light of recent developments in Islamic finance. [ABSTRACT FROM AUTHOR]

This paper presents a comprehensive analysis of key financial indicators influencing the operational efficiency of banks in Jordan over the period 2006 to 2021. The study, focusing on fifteen commercial banks, employs seven regression models to assess the impact of selected variables on bank operating efficiency. Our findings reveal novel insights with substantial contributions to banking practice. We identify a statistically significant influence of both bank-specific factors and temporal effects, demonstrating the nuanced dynamics shaping the operational efficiency of Jordanian banks. Notably, a positive and significant correlation is established between the operating efficiency ratio and return on assets, bank size, and the ratio of loan loss provisions to net interest income, providing valuable strategic guidance for effective management. Conversely, a significant negative relationship is observed between the operating efficiency ratio and the total expense ratio, underscoring the critical importance of careful cost management. No significant associations are found between the operating efficiency ratio and credit risk, the equity-to-asset ratio, the deposit-to-liability ratio, and the equity-to-liability ratio. This study makes a unique contribution by shedding light on these previously unexplored correlations, offering actionable insights for enhancing operational efficiency in the banking sector. Additionally, our research advocates for the Central Bank of Jordan (CBJ) to persist in adaptive policy measures, which are crucial for ongoing banking reforms and improved monitoring practices. Based on our empirical findings, these recommendations aim to fortify the resilience and adaptability of Jordan's banking sector, contributing both academically and practically. Importantly, they reinforce the symbiotic link between a stable banking sector and sustained economic development in Jordan. [ABSTRACT FROM AUTHOR]

This paper proposes a new methodological approach arising from an idea first presented in Burgsthaler and Dichev (1997) for detecting income smoothing. The proposed test does not rely on specific distributional assumptions, as is the case in previous studies, and may be applied to small databases. The procedure could be particularly useful in analyzing economic activities where significant economic power is concentrated in a small number of firms. The proposed methodology is applied to the case of Spanish Savings Banks during the period 1993--2001. It is revealed that these institutions would appear to be interested in reporting a consistently stable and detectable growth rate. Income smoothing is essentially applied to avoid both small earnings decreases and very small earnings increases. Income smoothing is revealed in changes in scaled pretax earnings and in scaled surplus (net earnings) for the year. [ABSTRACT FROM AUTHOR]

The relationship between financial development and economic growth remains an enigma for the economists. Extensive review of the literature points out conflicting empirical evidence. Results also vary depending on the choice of indicators, stage of development of the economy and kinds of tests used. The present paper has explored the complex relationship between financial development and economic growth in India. The Indian banking sector is now well developed and the stock market also competes well with leading economies in terms of technological development, timely settlements, etc. However, it is still not clear whether India is integrated with the world financial markets or it is decoupled from it; as was experienced during the 2008 US financial crises. The paper has used appropriate indicators of financial development and the real economy to understand the relationship. The data has been analyzed using appropriate econometric techniques after testing for stationarity and cointegration. ECM has also been conducted to explore the direction of relationship between indicators of economic growth and financial development. [ABSTRACT FROM AUTHOR]

This paper summarizes the first publicly available, user-side data set of indicators that measure how adults in 148 countries save, borrow, make payments, and manage risk. We use the data to benchmark financial inclusion—the share of the population that uses formal financial services—in countries around the world, and to investigate the significant country- and individual-level variation in how adults use formal and informal financial systems to manage their day-to-day finances and plan for the future. The data show that 50 percent of adults worldwide are "banked," that is, have an account at a formal financial institution, but also that account penetration varies across countries by level of economic development and across income groups within countries. For the half of all adults around the world who remain unbanked, the paper documents reported barriers to account use, such as cost, distance, and documentation requirements, which may shed light on potential market failures and provide guidance to policymakers in shaping financial inclusion policies. [ABSTRACT FROM AUTHOR]

The pursuit of competitiveness has become a major and permanent concern for both developed and developing countries in a highly competitive and constantly changing context. Morocco is engaged in a process of improvement and development of the business environment and the gradual liberalization of its foreign trade with a view to its integration into the world economy, through the signing of several free trade agreements and considerable efforts for the promotion of foreign trade (adoption of the Commercial Code, improvement of the business environment, adoption of Morocco Export Plans, Morocco Emergence Plan...). In this paper, we will focus on exploring recent developments in the Moroccan economy as well as the role of the banking system in encouraging investment. As a result, we will return to the major benchmarks of economic reforms taken by Morocco. Subsequently, we will treat the Moroccan context by analyzing the possible relationships that may exist between some macroeconomic indicators, as well as the evolution of investments and the structure of bank loans in Morocco. [ABSTRACT FROM AUTHOR]

This paper assesses international remittance services in Lesotho. It finds that only a small portion of inward remittances are processed via formal remittance services, with the bulk going through informal channels, which are unsafe and inefficient. Existing commercial bank channels are rarely used, and international money transfer operators have a limited presence in Lesotho. Innovative channels, such as the mobile money services and Shoprite cashto-cash services, have the potential to substantially formalise inward remittances and encourage the move towards digital payments and broader financial inclusion. However, the market faces numerous challenges, including: a high preference for cash; the limited number of access points and agent networks outside of urban areas; and inefficient interoperability between the commercial banks and mobile network operators, as well as between mobile network operators themselves. This paper argues that the authorities in Lesotho should enhance the payment systems infrastructure, harmonise the legal and regulatory framework, enhance financial literacy and encourage remittance service providers to be more active in the remittance market. In addition, the authorities should clarify the consumer protection and dispute resolution framework for remittance services as well as other financial services. [ABSTRACT FROM AUTHOR]

This paper examines the impact of stock markets on economic growth in Cote D'Ivoire, Ghana, and Nigeria using three proxies to determine whether the impact of stock markets on economic growth is sensitive to the proxy used to measure stock market development. It also seeks to determine whether the impact of stock markets on economic growth is sensitive to the inclusion of banking development indicator in the regression. After accounting for structural breaks and cross-sectional dependency, the study reveals that stock markets have positive impact on economic growth in all the countries, albeit the impact is not very robust in Ghana. The results are neither sensitive to the proxy used to measure stock market development nor the inclusion of banking development indicator in the regression. This implies that stock market is a complement rather than a substitute for banking development in the process of economic development in West African countries. Thus, the countries should strengthen policies that promote all aspects of stock market development in order to accelerate sustainable economic development. [ABSTRACT FROM AUTHOR]

Whether banking industry development supports Palestinian economic growth or not is critical question empirically. Thus, this study examines the impact of some banking sector indicators (credit facilities, depositors fund, the number of branches, and interest rate,) on gross domestic product using quarterly data from the period of 2000 to 2015. The empirical model was carried out using ordinary least square regression to prove that output is significantly influenced by boosting banking sector toward growth. The result reveals that banking credits are positively related to economic growth. This indicates that banking industry development tends to improve productive capacity of Palestinian economy as case of supply leading. However, interest rate, customers deposits and number of branches have not significant impact on economic growth. Finally, the result of this paper provides some important lesson to the Palestinian authority policymakers: there is strong real benefit from Banking credits policy due to the significant effect on Palestinian economy. [ABSTRACT FROM AUTHOR]

Object of attention in the present work is the profitability and efficiency of banks in the Republic of Northern Macedonia. The subject of the study is focused on the strength and direction of influence of the new Basel III regulatory framework on their final financial results. The purpose of the paper is to reveal the effect of using modern regulatory requirements on the profitability of the country's banking system. The study includes observations on developments in the banking sector for the period 2007-2018. A coefficient of analysis is applied using a system of appropriately selected indicators: cost / income ratio, ROA, asset yield, earnings margin, unit costs, net earnings per share unit cost of staff efficiency factor. An analysis of real empirical data reveals that the implementation of the new regulatory measures does not have a negative effect on the final financial results of the banks, but rather a trend towards improvement of a number of their key financial indicators. [ABSTRACT FROM AUTHOR]

This paper investigates leading indicators of systemic banking crises in a panel of 11 EU countries, with a particular focus on Finland. We use quarterly data from 1980Q1 to 2013Q2, in order to create a large number of macro-financial indicators, as well as their various transformations. We make use of univariate signal extraction and multivariate logit analysis to assess what factors lead the occurrence of a crisis and with what horizon the indicators lead a crisis. We find that loans-to-deposits and house price growth are the best leading indicators. Growth rates and trend deviations of loan stock variables also yield useful signals of impending crises. While the optimal lead horizon is three years, indicators generally perform well with lead times ranging from one to four years. We also tap into unique long time-series of the Finnish economy to perform historical explorations into macro-financial vulnerabilities. [ABSTRACT FROM AUTHOR]

This paper examines the contribution of the banking sector to overall economic activity for a sample of 15 OECD countries during an 18-year period. Resorting to a recently defined global Malmquist index, we detect productivity growth in both cases and study the influence of its two components, efficiency change and technical change. We further analyze the relationship between each of the two banking productivity components and economic productivity. [ABSTRACT FROM AUTHOR]

Globalization is a concept of widespread international circulation, launched since the last decade of the previous century in all academic, financial and commercial environments. Globalization has been a subject of debate, both for and against, through its differentiation due to the economic progress of the various participants in the process. In this paper we aimed to address the evolution of the banking phenomenon in the context of globalization and to highlight the differences in the structure in banking according to the main global financial indicators. [ABSTRACT FROM AUTHOR]

This paper analyses the macroeconomic drivers of stock market development in the Philippines during the period 2001Q4-2016Q4. In particular, the paper examines the impact of banking sector development, inflation rate, exchange rate, economic growth, trade openness and stock market liquidity on the development of the Philippine stock market. Theoretical and empirical literature reveals diverse views on the relationship between each determinant and stock market development. In addition, the Philippine stock market has experienced remarkable growth in recent decades. However, there is no similar study on this country in the literature. The paper, therefore, enriches the literature by investigating the macroeconomic drivers of stock market development in the Philippines using the ARDL bounds testing procedure. The results show that trade openness has had a negative impact on Philippine stock market development in the long run, whereas banking sector development and the exchange rate have had positive impacts on the development of the Philippine stock market in the short run. These findings are robust to alternative specifications of the model. [ABSTRACT FROM AUTHOR]

This article gives an overview of the Baltic States banking sector, analysis of the evolution, structure and their perspective. The banking sector was most focused on, as is currently the most important financial intermediation chain, which has the highest weight. The crisis 2008 has highlighted the impact of globalization on the financial sector. The banking industry must take responsibility not only for a profitable business, but also for the banking activities of the possible consequences economy as a whole. This article analyzes the evolution of the banking sector in Baltic States economy recovery; financial stability in Baltic States related to the uncertainty. This paper analyzes the banking sector problems, efficiency indicators and its evolution. Article examines the changes in banking sector with the economic growth, in crisis and after the crisis. It examined the banking sector in different States and its future development, improvement perspective. [ABSTRACT FROM AUTHOR]

Eight times a year, approximately two weeks before every FOMC meeting, the Federal Reserve releases a description of economic conditions in the twelve Federal Reserve districts. Called the Beige Book, this description relies primarily on surveys and anecdotal evidence gathered by the twelve district banks. For this paper, we read and numerically scored past Beige Books in order to determine the extent to which the descriptions in these books accurately reflect current economic activity as measured by quarterly real GDP growth. We find that both in-sample and out-of-sample, the quantitative Beige Book indices do have significant predictive content for current and next quarter real GDP growth. Furthermore, the Beige Book has information about current quarter real GDP growth not present in other indicators such as the Blue Chip Consensus Forecast or time series models that use real-time data. [ABSTRACT FROM AUTHOR]

This paper empirically investigates the relationship between financial development and economic growth in the North Africa region, using a panel regression and different indicators of financial development. We find that the relation depends on the type of the indicator of financial development. In fact, while both financial institutions and markets in Morocco and Tunisia have a positive effect on the economic growth, only the financial markets in Egypt will improve economic growth by increasing the supply of financial services. For Algeria, the banking system has a positive effect on economic growth. [ABSTRACT FROM AUTHOR]

Recent studies indicate that the effect of migrants' remittances on the economic growth of receiving countries depends negatively on the level of development of the domestic financial sector. In this paper, we introduce a new indicator of financial development to measure the efficiency of the domestic banking system, and find the existence of complementarity between remittances and bank efficiency in economic growth, such that remittances promote growth only in countries whose banks function well. This result is robust to controls for other traditional measures of financial depth and institutional quality indicators. [ABSTRACT FROM AUTHOR]

The Asian Development Bank (ADB) has relatively few but well-founded and relevant studies, reports and publications on inclusive growth, inclusive development, or inclusive social development. This paper seeks to summarize the knowledge products obtained from existing ADB studies, statements and initiatives. It draws from the research and analytic work undertaken in the recent years by ADB's Economics and Research Department, the East Asia Regional Department and the Operations Evaluation Department, and other sources. One of the findings is that while there is no agreed and common definition of inclusive growth or inclusive development, the term is understood to refer to 'growth coupled with equal opportunities', and consisting of economic, social and institutional dimensions. Among the major recommendations of the ADB literature are that efforts to achieve inclusive growth and inclusive development should involve a combination of mutually reinforcing measures including: (1) promoting efficient and sustainable economic growth, (2) ensuring a level political playing field and (3) strengthening capacities and providing for social safety nets. [ABSTRACT FROM AUTHOR]

Does the institutional environment affect the causal relationship between banking development and economic growth? In the theoretical section of this paper, we develop an endogenous growth model where the institutional environment is captured through two indicators: judicial system efficiency and easiness of informal trade. We show that an improvement in the institutional environment has two effects. First, it intensifies the causality direction from banking to economic growth through a reduction in defaulting loans. Second, it reduces the interest rate spread. In the empirical section of the paper, we find bidirectional causality when analyzing 22 Middle Eastern and North African countries over the period 1984–2004. The first causality, which runs from banking development to economic growth, is more intense in countries with more developed institutional environment. The second causality runs from economic growth to banking and indicates that a more developed economy has a more developed banking system. [ABSTRACT FROM AUTHOR]

Özyıldırım S. and Önder Z. Banking activities and local output growth: does distance from centre matter? Regional Studies. In this paper the relation between local banking activities and local output growth is empirically studied in Turkey during the period 1991-2000. Although there is no legal restriction against regional banking, the banking sector is spatially concentrated in Turkey. In this institutional structure, the distance between headquarters and the local branches is argued to affect the role of financial intermediation in the development of provincial prosperity. Empirical findings suggest that banking activities have a significant positive impact on the per capita local output growth of regions, especially on those that are distant from the financial centre. However, when bank loans are adjusted to the size of the local economy (provincial gross domestic product, GDP), the relation between banking activities and the output per capita is found to be negative, suggesting that these loans are used to finance unprofitable and unproductive projects in distant provinces... [ABSTRACT FROM AUTHOR]

Banks are important for mobilizing savings and then channeling those funds to productive investment projects. While providing these and other services that contribute to economic growth and development, banks take on various types of risks with the expectation that the return they receive will compensate for the risks. This paper presents a simple model and tests the extent to which information asymmetry between bank owners and depositors induces risk-shifting behavior that allows for higher bank net interest margins. The empirical results support the hypothesis that the greater the degree of information asymmetry the higher net interest margins base upon a sample of 3,115 banks in 98 countries. [ABSTRACT FROM AUTHOR]

Copyright of Transformations in Business & Economics is the property of Vilnius University and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The banking industry plays an essential role in China's economic growth, and the assessment of bank efficiency has attracted increasing interest in the past two decades. Given that the data envelopment analysis cross-efficiency method can provide a more reliable reference set, a large number of studies targeting performance evaluation and its applications adopt this method. Few studies, however, address the issue of the non-uniqueness of weights in cross-efficiency evaluation. Whereas, this paper proposes a cross-efficiency interval considering all weighting schemes along with a VIKOR aggregate model to gauge the universal productive efficiency of 16 major Chinese commercial banks of China and rank them for the period of 2007–14. Specifically, we use the cross-efficiency interval to generate the global performance of each bank based on internal and external assessment while using VIKOR to compare the solution with the attitude index which ranks all of the banks. The results indicate that the cross-efficiency interval can provide more information than the traditional DEA model, that the banking system efficiency of China has been improved during the study period, especially for SOBs; that JSBs are more efficient compared with SOBs; and the efficiency gap narrowed during the study period. [ABSTRACT FROM AUTHOR]

We try to make Keynes' approach compatible with an endogenous theory of the money supply. For that purpose, the principle of liquidity preference is generalized within a competitive banking framework. Private banks can impose a monetary rationing independently of the central bank. Then, we analyse the consequences of a monetary policy shock on the financial behaviour of banks. We clarify the dynamic process between the monetary policy and net investment within a Minskyan approach. First, we build a Post-Keynesian stock-flow consistent model with a private-bank sector introducing more realistic features. Second, we perform some simulations. [ABSTRACT FROM AUTHOR]

Presents a study which analyzed the link between efficiency and size of the banking sector and economic growth using panel data for transition countries during the period 1993 to 2001. Ways in which financial development might affect economic growth; Link of the amount of credit to gross domestic product growth; Implication of the study's findings for further reform in Russia.

The purpose of this paper is to investigate to what extent the international financial community has taken into account the risk characteristics of less developed countries (LDCs) when granting loans. Specifically, this study analyzes the determinants of the spread between the interest rate charged to a particular country and the London Interbank Borrowing Rate. The recent foreign debt crisis faced by some LDCs has generated concern among economists, bankers and politicians. In particular, the ability of the international banks to distinguish between "good" and "bad" risks has been questioned. It has even been suggested that the inability to restrict credit to countries with low "credit worthiness" has resulted in the overextension of some major banks and that, as a consequence, this has increased the probability of a global international financial collapse. The empirical analysis of the determinants of the default risk premium is important for several reasons. An understanding of the factors that influence lending behavior is useful for borrowing countries.

Copyright of Journal of Accounting Review is the property of Journal of Accounting Review and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This study was carried out to investigate the nexus between banking industry indicators and economic growth in Nigeria. The investigation based on time series data from CBN statistica l bulletin (1980-2019) incorporated banking indicators such as: volume of capitalization (TBC); customer deposits (VCD); credits to private sector (CPS); interest rate (INR); non-performing loans (NPL); and volume of bank frauds (VBF) as explanatory variables against GDP which proxy economic growth. The findings of the study revealed that: within the period under study: Volume of Customer Deposit (VCD) and credit to private sector (CPS) has positive and significant impact on economic growth in Nigeria while interest rate (INR); non-performing loans (NPL); and volume of bank frauds (VBF) has negative and significant impact on economic growth in Nigeria. The major recommendation is that operations of banking industry should be strengthened through appropriate policy measures towards enhancing its contribution to economic growth and development in the country. And that there should be more monitoring of banking industry indicators especially interest rate (INR); non-performing loans (NPL); and volume of bank frauds (VBF) so as to contribute positively to the growth of Nigerian economy. [ABSTRACT FROM AUTHOR]

The article reports about the bank profits in Rwanda. This paper discusses the economic growth in the country which forms a strong backdrop in commercial banks. The second-biggest bank in Rwanda, Rwanda Commercial Bank has had a steady growth in its customer base and this boosted growth in performance. Pre-tax profits are reported. Competition in rolling out new products has improved and customers are more attracted to invest. Profits has improved and continuously rose. The bank is owned by Actis but the government still owns a part.

Financial system of a country is an important system in its economy. The sustainability and growth of banking sector is critical for development of the financial sector as well as economic growth. Economic development of a country is reflected through the soundness of its banking system. Therefore in order to sustain and grow, banks have to be financially sound. Many researchers in Pakistan and in other countries have conducted studies on evaluating the financial soundness of banking sector by using different tools and methods. Bankometer is used in this study to evaluate the financial soundness of banks. It is a new and efficient model and computationally less expensive than other models like CAMELs and CLSA-stress test. To confirm its accuracy, it has been applied on each banks listed on Pakistan Stock Exchange over the period 2006-2014. Soundness of each bank has been computed separately which demonstrate which bank is super stable and which is close to insolvency. For comparison purpose, Z-score model is also used for banks listed on Pakistan Stock Exchange. These two models reported the same results, but however some are slightly different. As per the results of both models Bank of Punjab's financial soundness is in grey area and need to be enhanced to reach in the protected zone with a score of soundness (70). [ABSTRACT FROM AUTHOR]

The global economic recession, referred to as the Great Recession, endured by the main industrialized countries during the period 2008–09, in the wake of the financial and banking crises, has pointed out the current importance of the financial sector in macroeconomics. In this article, we evaluate the predictive power of some major financial variables to anticipate GDP growth in euro area countries during this specific period of time. In this respect, we implement a Mixed Data Sampling (MIDAS)-based modelling approach, put forward by Ghysels et al. (2007), that enables to forecast quarterly Gross Domestic Product (GDP) growth rates using exogenous variables sampled at higher frequencies. Empirical results show that, overall, stock prices help to improve the accuracy of GDP forecasts by comparison with a standard opinion survey variable, whereas oil prices and term spread appear to be less informative. The views expressed herein are those of the authors and do not necessarily reflect those of the Banque de France. [ABSTRACT FROM PUBLISHER]

Copyright of Studies of Socio-Economics & Humanities / Socioekonomické a Humanitní Studie is the property of College of Banking, Banking Institute and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Corporate governance is now a key concern in China's banking sector. Its importance is related to the important policy questions of how to foster economic growth without increasing inflation in an environment where monetary guidance does not function in a conventional manner and there exist few constraints on bank lending. Under such an environment top-down best practice models offer considerable appeal, but their implementation in China's banking sector suffers from a reform deficit. In this context, this study argues that innovative reforms that draw on existing institutions and expertise such as the reform of the China Postal and Savings Bank and the relaxation of restrictions on foreign banks in the rural sector indicate a unique and policy-driven response to this conundrum. Their advantage is that they provide the state with a ready-made platform to influence economic activity in the rural economy. [ABSTRACT FROM PUBLISHER]

This study investigates the relationship between banking crises, financial supervision and institutional veto players in an empirical study consisting of 65 advanced and developing countries from 1976-2005. While the literature relating banking crises and supervision is extensive, discussions of precisely how domestic political institutions influence the design of banking supervision have not been commonplace. We test whether these political institutions which reflect checks and balances affect the probability of a banking crisis, by way of shaping the quality of a country's financial supervisory policies. We find a significant and negative relationship between banking crises probabilities and the strength of financial sector supervision. Our results highlight the important role of financial regulation and supervision in reconciling the benefits of a liberalised financial system (ie enhanced economic growth) with its costs (ie increased financial fragility). [ABSTRACT FROM AUTHOR]

The article forecasts the economic condition in Great Britain for 2009. The economy of the country is expected to worsen due to the weak performance of its domestic banking system. The problems on the access to credit for households and non-financial companies are projected to end. Gross domestic product (GDP) growth will decline by 5.8%, as well as the distribution output by 2.4%. Economic growth is estimated to deteriorate as a result of the worsening of the availability of credit within the country.

This article evaluates the plausibility of financial development as a tool to boost economic growth, using time series data on a cross-section of thirteen countries at different stages of development. Using annual data from 1960 to 2002, it conducts stationarity tests on the variables, followed by cointegration analysis among the banking and non-banking financial variables and GDP. It also tests for the direction of Granger-causality. Our results show that for Bangladesh, Sri Lanka, Brazil, Malaysia, Thailand and Turkey, this causality runs from economic growth to financial development. Granger-causality is bi-directional for India, Argentina, Germany, Japan, the UK and the USA. There does not exist one-way Granger-causality from financial development to economic development for any of the countries examined [ABSTRACT FROM AUTHOR]

The impact of economic globalization for the countries of Latin America was profoundly shaped by the impact of the debt crisis of the early 1980s. For these countries, the emergence of transnational policy networks involving multilateral and domestic technocrats was instrumental in ushering in market reforms. By 2007, a variety of factors would seem to place middle-income countries such as Mexico and Chile beyond the policy reach of multilateral lending institutions. I argue, however, that the Inter-American Development Bank and the World Bank have, in fact, become closely entangled in the development of conditional cash transfer programs through closed transnational policy networks. The nature and extent of that involvement has been shaped by the different institutional legacies and cultures of the two institutions. While both multilaterals tended to bolster the objectives of domestic policymakers and the exclusion of civil society organizations from the policy process, the greater rhetorical commitment of the World Bank to civil society participation did allow civil society organizations to pry open a small space for policy inclusion in the Chilean case. [ABSTRACT FROM AUTHOR]

Deterioration in the link between M2 and GDP, along with large prediction errors, led the Federal Reserve to downgrade M2 as a reliable indicator in 1993. We argue that the financial condition of depository institutions was a major factor behind this unusual pattern of M2 growth. When constructing measures of M2 based on banks' and thrifts' capital positions, we obtain superior M2 forecasting results and a more stable relationship between M2 and the ultimate goals of policy. M2 may contain useful information when there are no major disturbances to depository institutions. [ABSTRACT FROM AUTHOR]

This chapter sheds some light on the link between financial market regulation and economic growth. Financial systems are found to differ substantially across OECD countries in terms of overall size, structure as well as in the degree of competitive pressures prevailing in the banking and securities markets. To some extent, these variations reflect differences in regulatory underpinnings. In particular, regulatory settings that maintain excessively high barriers to competition in banking, or that provide too little protection for investors in securities markets, hamper the development of financial systems, resulting in weaker economic growth. [ABSTRACT FROM AUTHOR]

Recent empirical analyses of the relationship between financial system development and economic growth find that financial system development causes economic growth, is a good predictor of growth and that its impact is relatively large. Moreover, the empirical literature predicts that the adverse effects of banking crises on economic growth will rise in the absence of an adequate response by the government. Hence, given the Russian government's failure to respond adequately to the 1998 banking crisis, Russia's strong economic growth since the crisis is a puzzle. This study uses simulations to conclude that the growth costs of the 1998 crisis were larger than previously suggested. The adverse effects were compensated by expansionary effects. The findings corroborate the importance of financial development in promoting growth in transition countries. [ABSTRACT FROM AUTHOR]

Since mid-2000 there has been a significant slowdown in global economic growth, marking the end of an extraordinarily dynamic phase. The determining factors were, firstly, the rise in oil prices, which served to dampen down economic activity. Secondly, monetary policy had applied the brakes, in order to reduce the rapid rate of growth recorded until the middle of the year and thus counter any acceleration of inflation. The weakening of growth in the US economy means that the major driving force behind global economic activity has been lost. The economic cooling has already made noticeable effects felt in the Asian newly industrialising countries, where, following a strong recovery, output is only just positive. In the euro-zone, too, the rate of growth has fallen. The slowdown resulted primarily from the fact that real income growth was slowed by the loss of purchasing power to the oil-exporting countries. During the past two years monetary policy in the industrialised countries had been tightened, in order to counter inflationary risks. In the USA central bank rates had been raised by May 2000 by a total of 1.75 percentage points to 6.5%, and in the euro-zone by October 2000 by 2.25 points to 4.75%. In Japan the central bank, against the background of improved economic expectations, had abandoned its zero-interest rate policy in August last year.

Copyright of Canadian Public Administration is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)