1,501 results on '"MONEY market"'
Search Results
2. Traders Pare Fed, ECB Rate-Cut Bets After Stronger Economic Data.
- Author
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Gledhill, Alice and Ye Xie
- Subjects
ECONOMIC statistics ,CENTRAL banking industry ,MONEY market ,EMPLOYMENT statistics ,INVESTORS ,LABOR market ,EUROZONE - Abstract
Traders have reduced their expectations for interest-rate cuts by major central banks this year due to stronger economic data. Money markets now predict 139 basis points of easing from the Federal Reserve, compared to 145 basis points previously, after a private job report showed increased hiring in the US. The odds of a rate cut in March also decreased to 64% from 70%. European business surveys were revised up, leading to a decrease in expectations for easing from the European Central Bank. The global debt market has been uncertain, with investors questioning whether the rally in late 2023 was excessive. [Extracted from the article]
- Published
- 2024
3. German Inflation Jumps Less Than Expected in Boost for ECB.
- Author
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Randow, Jana, Siedenburg, Kristian, Rinneby, Joel, Horobin, William, Keene, Tom, Ferro, Jonathan, Abramowicz, Lisa, Hirai, James, and Sokol, Andrej
- Subjects
PRICE inflation ,CENTRAL banking industry ,EUROZONE ,PRICES ,GAS as fuel ,MONEY market - Abstract
German inflation in December was lower than expected, with consumer prices rising by an annual rate of 3.8%, compared to economists' predictions of 3.9%. This increase was primarily due to base effects, as energy costs were depressed in 2022 but rose in 2023 due to one-time state aid. The European Central Bank (ECB) aims for a 2% inflation target, and the lower-than-expected inflation may help keep wage demands in check. The ECB remains cautious about inflation and is closely monitoring domestic drivers, particularly salaries, as they negotiate new deals in the first half of 2024. The ECB's most recent projections show inflation returning to 2% in the second half of 2025, while the Bundesbank predicts Germany will not achieve that milestone until 2027. [Extracted from the article]
- Published
- 2024
4. Traders Pare ECB, BOE Rate-Cut Bets After Stronger Economic Data.
- Author
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Gledhill, Alice
- Subjects
ECONOMIC statistics ,INVESTORS ,FINANCIAL market reaction ,MONEY market ,PRICES ,BOND prices - Abstract
Traders have reduced their expectations for interest rate cuts by the European Central Bank (ECB) and the Bank of England (BOE) after stronger-than-expected economic data. Money markets now predict 156 basis points of easing from the ECB and 135 basis points from the BOE, indicating a preference for five quarter-point rate cuts in the UK instead of six. This shift in expectations comes after upward revisions to European PMIs and better-than-expected hiring data in the US. However, uncertainty surrounding the UK's general election and the impact of the national living wage hike could affect the BOE's decision-making. [Extracted from the article]
- Published
- 2024
5. French Inflation Inches Higher on Energy, Services Costs.
- Author
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Horobin, William, Goyeneche, Ainhoa, Rinneby, Joel, Siedenburg, Kristian, Gledhill, Alice, and Sokol, Andrej
- Subjects
PRICE inflation ,COST ,PRICES ,CENTRAL banking industry ,MONEY market ,ENERGY industries - Abstract
French inflation increased slightly in December, with service prices and energy costs contributing to the rise. The annual inflation rate was 4.1%, higher than November's 3.9% but still below the peak of 7.3% in February 2023. Monthly prices rose by 0.1%, lower than expected but higher than the previous month. The European Central Bank is not overly concerned about the increase in inflation, as price gains in the euro zone have cooled recently. This has led to speculation that interest rates may be lowered sooner than expected. The sluggish European economy is expected to contribute to a decrease in inflation, with the bloc likely to have experienced a mild recession in the latter half of 2023. Energy prices in France increased by 5.6% in December, while services inflation rose to 3.1%, mainly due to the transport sector. Looking ahead, French inflation is expected to ease to 3.9% in January. [Extracted from the article]
- Published
- 2024
6. Traders Pare ECB, BOE Rate-Cut Bets After Stronger PMI Data.
- Author
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Gledhill, Alice
- Subjects
FINANCIAL market reaction ,INVESTORS ,MONEY market ,PRICES ,INTEREST rates ,BANK notes - Abstract
Traders have reduced their expectations for interest rate cuts by the European Central Bank (ECB) and the Bank of England (BOE) after data indicated that the euro-area and UK economies are more resilient than previously believed. Money markets now anticipate 156 basis points of easing from the ECB this year, slightly lower than the previous day, and 138 basis points from the BOE, down from 145. This repricing has caused bond yields to rise. Investors have been revising their expectations for aggressive monetary easing by major central banks since the beginning of the year, and the upward revision to European PMIs has further supported this trend. [Extracted from the article]
- Published
- 2024
7. Aspects Regarding the Organization and Activity of the Federal Reserve System and the European Central Bank
- Author
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Irena Munteanu and Alexandra Barbu
- Subjects
fed ,ecb ,monetary policy ,money market ,Business ,HF5001-6182 ,Economics as a science ,HB71-74 - Abstract
The Fed and the European Central Bank (ECB) are two key institutions on the global financial markets. The areas of action of these institutions cover approximately 36% of the world economy. Thus, a topic which tackles institutions such as the Fed and the ECB is and will continue to be a relevant subject. The aim of this paper is to identify the similarities and differences between the two institutions, the guidelines and the adopted strategies Last but not least, the measures adopted in 2020 in the context of the COVID-19 pandemic will be presented The objectives of the research are: the comparison of the main pillars on which the activity of the two institutions is based. The objectives, structure and organization, responsibilities and monetary policy instruments will be analyzed comparatively.
- Published
- 2020
8. Sydney Home Auctions Surge as Rate-Cut Expectations Drive Buyers.
- Author
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Heath, Michael
- Subjects
HOUSING ,AUCTIONS ,TREASURY bills ,REAL estate sales ,HOUSE buying ,CONSTRUCTION cost estimates ,MONEY market ,HOME prices - Abstract
Sydney's housing market is experiencing a surge in home auctions, with the highest percentage of successful sales in over two years. This increase is attributed to Australians anticipating a decrease in interest rates and faster property price growth. Despite the Reserve Bank's efforts to combat inflation by raising rates, property prices in Australia have continued to rise due to population growth and limited supply. However, the trajectory of the property market will depend on how Australia addresses high building costs that are impacting housing construction. [Extracted from the article]
- Published
- 2024
9. Spain Lends Out €60 Billion Cash Pile in Bid for Higher Returns.
- Author
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Hirai, James and Goyeneche, Ainhoa
- Subjects
LOANS ,FINANCIAL markets ,MONEY market ,GOVERNMENT securities ,BOND market ,SPREAD (Finance) - Abstract
Spain has begun lending out its cash reserves of over €60 billion in order to increase returns. The country's Treasury is offering funds currently held with the local central bank in exchange for government securities as collateral. By lending out the cash, Spain aims to generate a higher return than the European Central Bank's overnight rate. This move takes advantage of increased demand for cash in European money markets, which has been driven by a surplus of high-quality bonds in the market. Spain's cash holdings are almost double those of Germany, making it an attractive option for lending. [Extracted from the article]
- Published
- 2024
10. Global Repo Markets : Instruments and Applications
- Author
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Moorad Choudhry and Moorad Choudhry
- Subjects
- Business, Money market
- Abstract
Repo, from sale and repurchase agreement, is one for the oldest and widely used instruments in global capital markets. It is a vital ingredient in the smooth and efficient running of the financial markets, and is used by all market participants including central banks, commercial banks, fund managers and corporates. This book is a comprehensive, detailed and authoritative description of the repo instrument. Written by a former repo trader, it covers applications and analysis of the various different instruments used in the repo markets. It also places the repo markets in the overall context of the money markets and banking asset-liability management.
- Published
- 2012
11. Debt Ceiling Debacle Threatening Fireworks in Money Market.
- Author
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McCormick, Liz Capo and Harris, Alexandra
- Subjects
DEBT ,TREASURY bills ,INTEREST rates ,MONEY market ,FIREWORKS ,DEBT management ,REPURCHASE agreements ,INVOICES - Abstract
While the back-and-forth over the debt ceiling is a familiar Washington game, in the past debt traders could see the trajectory of Treasury's cash pile. Keywords: 0230417Z; ALLTOP; BON; BUSINESS; COS; EXE; FRX; GEN; GLOBALMACR; GOV; MARKETS; NORTHAM; US; WORLD; WWTOP; WWTOPAS EN 0230417Z ALLTOP BON BUSINESS COS EXE FRX GEN GLOBALMACR GOV MARKETS NORTHAM US WORLD WWTOP WWTOPAS The imminent return of the U.S. debt ceiling is causing angst for money-market traders once again. Downward pressure on rates is likely to continue given the abundant cash in the system from the Fed's asset purchases, any further declines in the TGA and bill sale cuts. [Extracted from the article]
- Published
- 2021
12. Conventional Versus Sharia Money Market Mutual Funds: Which Performs Better During the Covid-19 Pandemic?
- Author
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Latifah Risqiana, Muliasari, Noverdi Radja Dwilega, Muhammad Rois, and Dina Yeni Martia
- Subjects
Net asset value ,Money market ,Coronavirus disease 2019 (COVID-19) ,Sharia ,business.industry ,Sharpe ratio ,Sample (statistics) ,Monetary economics ,business ,Mutual fund ,Research method - Abstract
This study aims to determine whether conventional money market mutual funds perform better than sharia money market mutual funds or vice versa during the COVID-19 pandemic in Indonesia. This research method is descriptive with a quantitative comparison approach. This study employed secondary data obtained from IDX, Indonesian Bank, and Pasar Dana website. The research employed the money market mutual funds data, Net Asset Value, BI 7 Days Repo rate during year 2020. Sharpe ratio utilized in this research to determine the money market mutual funds performance. Then, the result compared by using Independent sample T-test on SPSS. The result uncovers that in general the performance of conventional money market mutual funds performance superior the sharia money market mutual funds performance during covid-19 in Indonesia. However, both mutual funds average Sharpe ratio show the negative number during 2020. Moreover, there are no significant difference between conventional and sharia money market mutual funds returns during the period 2020. The high different return on the maximum return due to some conventional mutual fund perform exceptional during 2020.
- Published
- 2021
13. Foreign Banks, Liquidity Shocks, and Credit Stability
- Author
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Raoul Minetti, Daniel Belton, Sotirios Kokas, and Leonardo Gambacorta
- Subjects
Economics and Econometrics ,Money market ,business.industry ,Distribution (economics) ,Financial system ,Market liquidity ,Syndicated loan ,Shock (economics) ,Wholesale funding ,Balance sheet ,Hoarding (economics) ,Business ,Business and International Management ,Finance - Abstract
We empirically assess the responses of banks in the United States to a regulatory change that influenced the distribution of funding in the banking system. Following the 2011 FDIC change in the assessment base, insured banks found wholesale funding more costly, while uninsured branches of foreign banks enjoyed cheaper access to wholesale liquidity. We use quarterly bank balance sheet data and a rich data set of syndicated loans with borrower and lender characteristics to show that uninsured foreign banks, which faced a relatively positive shock, engaged in liquidity hoarding. Hence, they accumulated more reserves but extended fewer total syndicated loans and became more passive in the syndicated loan deals in which they participated. These results contribute to the discussion on the role of foreign banks in credit creation, especially in a country like the United States where foreign banks also have a crucial role in managing USD money market operations at the group level.
- Published
- 2021
14. Reciprocal lending relationships in shadow banking
- Author
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Yi Li
- Subjects
040101 forestry ,Economics and Econometrics ,Money market ,050208 finance ,Strategy and Management ,05 social sciences ,04 agricultural and veterinary sciences ,Monetary economics ,Market liquidity ,Dilemma ,Accounting ,0502 economics and business ,Wholesale funding ,Liberian dollar ,0401 agriculture, forestry, and fisheries ,Business ,Volatility (finance) ,Finance ,Reciprocity (cultural anthropology) ,Reciprocal ,Shadow (psychology) - Abstract
Postcrisis regulations apply stricter liquidity rules to both money market funds (MMFs) and banks, requiring MMFs to do more overnight lending and banks to borrow longer-term. MMFs and banks resolve this dilemma by developing a “bundling” strategy across overnight and longer term markets. In particular, MMFs increase longer term funding and charge a lower rate to banks that have recently accommodated MMFs’ overnight depositing needs. Such cross-market reciprocity is stronger between MMFs and foreign banks, which depend on MMFs for dollar funding more than U.S. banks do. MMFs with lower liquidity buffers and higher flow volatility are more likely to engage in bundling.
- Published
- 2021
15. Financial System and SMEs Access to Finance: A Market-Oriented Approach
- Author
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Akinwande Ademosu and Akinola Morakinyo
- Subjects
Economics and Econometrics ,Strategy and Management ,media_common.quotation_subject ,Devaluation ,Financial system ,Regional economics. Space in economics ,Exchange rate ,money market ,smes ,Business and International Management ,HB71-74 ,media_common ,Money market ,l26 ,l25 ,l22 ,Private sector ,Interest rate ,Economics as a science ,HT388 ,Capital (economics) ,capital market ,Access to finance ,Business ,Capital market ,Finance - Abstract
The study uses a market-oriented approach to investigate the relationship between the financial system and SMEs access to finance in Nigeria between 1995 and 2019. Both indicators from the capital and money markets are used as independent variables while some macroeconomic variables such as inflation rate, interest rate and exchange rate are also used. The study made use of Auto-Regressive Distributed Lag to explore the long and short-run relationship and the result shows that the capital market has a more significant impact on SMEs access to finance than the money market. Variables such as inflation rate, exchange rate and interest rate all have a significant influence on access to finance by the SMEs. it is recommended that the money market as an important aspect of the financial system in Nigeria should be made to devote more credit to the SMEs sector as it has shown from this study that the bulk of the credit going into the private sector from the money market might not go into the SMEs sector. The inflation rate should also be controlled as well as reducing the lending rate and guide against unreasonable currency devaluation to promote access to finance by the SMEs in Nigeria.
- Published
- 2021
16. Extroverted financialization: how US finance shapes European banking
- Author
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Mareike Beck
- Subjects
Finance ,Economics and Econometrics ,Money market ,Sociology and Political Science ,business.industry ,Political Science and International Relations ,Economics ,Financialization ,business - Abstract
This paper reconceptualizes the impact of US finance on European banking as a process of ‘extroverted financialisation’. This impact is commonly associated with the rise of ‘market-based banking’ (MBB). While MBB exposes how commercial banking has been deeply transformed by disintermediation and borrowing from wholesale markets, the concept struggles to capture the distinct imperatives of this process, and its uneven nature. By contrast, the concept of extroverted financialization captures the problems European banks faced adapting to US-led financialization. More specifically, the concept portrays the financialization of European banking as an outcome of new funding practices, called liability management (LM), developed in US money markets from the 1960s onwards. I show how this put pressures on European lenders because it allowed US banks to leverage extensively. To catch up, European banks had to improve their access to liquid USD, whichforced them to find a way into the Eurodollar markets and into the US money markets. To operate in these markets, they had to gradually implement the practices of LM. This process of extroversion made their own banking models highly fragile and dependent on US money market funding. Despite adopting LM, they could not reduce their structural disadvantages vis-a-vis US banks.
- Published
- 2021
17. СВІТОВІ МОДЕЛІ РЕГУЛЮВАННЯ ЦИФРОВИХ ВАЛЮТ І СУЧАСНІ ІНІЦІАТИВИ ЦЕНТРАЛЬНИХ БАНКІВ
- Subjects
Money market ,Cryptocurrency ,Digital currency ,Financial literacy ,Circulation (currency) ,Financial system ,Business ,Money laundering ,Market liquidity ,Financial market participants - Abstract
With the advent of digital currency, the most radical transformation in the field of monetary relations has taken place due to the emergence of private emission centers, and only this justifies profound changes in the system of modern monetary relations. Therefore, the world’s governments face the task of creating a legal framework for digital financial assets that would allow innovative projects to operate legally and attract investment, while controlling and neutralizing all associated risks (money laundering, tax evasion, etc.). For central banks, the emergence of not just private cryptocurrencies, including bitcoin, but more stablecoin, has become a significant challenge and impetus for the development of their own digital currency. The purpose of the study is to systematize current trends in the regulation of money market digitization and substantiate scenarios of its impact on the evolutionary transformation of the monetary system. It is proved that the nature and strength of the impact of digital currencies of central banks on the economic and financial spheres will directly depend on the demand for business and the population of the new tool, the possibilities of its widespread use. Regarding the latter, it depends on the model of sales of digital currencies of central banks, namely: 1) retail, in which the digital currency is available to a wide range of individuals and legal entities; 2) wholesale — only professional financial market participants have access to digital currency. In turn, the demand for digital currencies of central banks depends on factors of economic, socio-psychological, cognitive and legal nature, namely: 1) the method of determining the value of digital currency; 2) the level of its liquidity; 3) the possibility of establishing «instantaneous» payments; 4) availability of digital currency circulation infrastructure; 5) internal characteristics of digital currency; 6) trust in the central bank; 7) the level of digital and financial literacy of citizens; 8) the depth of digitalization of society; 9) legislative standardization of digital currencies; 10) methodology for accounting for digital currency subject to its tokenization.
- Published
- 2021
18. Fintech Innovations: The Impact of Mobile Banking Apps on Bank Performance in Vietnam
- Author
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Tam T. Le, Ha N. Mai, and Duong T. Phan
- Subjects
Money market ,Hardware_MEMORYSTRUCTURES ,Mobile banking ,business.industry ,05 social sciences ,Financial system ,FinTech ,Mobile phone ,0502 economics and business ,050211 marketing ,Balance sheet ,Mobile technology ,Business ,Money market fund ,050203 business & management ,Panel data - Abstract
This paper is aimed at analyzing the impact of FinTech innovations on bank performance across mobile banking applications in Vietnam. Using the longitudinal panel data from 2010-2019 (with 220 observations) of 22 local commercial banks in Vietnam. Multivariate panel regression is chosen to experimentally test the research hypotheses. This research paper is one of the first quantitatively investigating the effects of fintech innovation (mobile banking apps) on bank performance in Vietnam. In addition, studies on financial indicators are shown quite comprehensively in the period 2010-2019. Our empirical study has shown the following results: (i) FinTech innovations’ positive impact on bank performance in Vietnam; (ii) Banks’ adoption of mobile banking technologies positively impacted banks’ fee-based income, consumer loans and money market deposits; (iii) The effect of mobile technologies on financial performance was much stronger for small banks than large banks; (iv) As for the balance sheet liabilities aspect, the money market fund of small banks is positively affected by the mobile banking application; (v) In terms of balance sheet assets, consumer loans by small banks are positively affected by the mobile banking application while large banks are not; (vi) GDP per capita has a positive effect on the ROE of both small and large banks; (vii) Mobile phone penetration rates positively affected bank ROA and ROE and its effect was larger on small banks. From the findings, key recommendations to Vietnamese commercial banks to improve bank performance in the context of an increasingly technological development are to: (1) Increase investment in mobile banking apps and the entire mobile banking technology; (2) Increase investment in financial technology, focus more on mobile banking users and the entire mobile banking services; (3) Take advantage of the technical support and consultancy of international organizations and bilateral cooperation with other countries' authorities in management of Fintech businesses; (4) Learn from commercial banks in other countries to draw experiences, thereby develop in own context. (5) Training human resources for the finance and banking industry to not only have professional knowledge and ability to analyze data, but also have to be proficient in operating digital technology. Keywords: Fintech Innovations, mobile banking apps, bank performance, Vietnam, theories of Technological Innovation.
- Published
- 2021
19. How much mortgage can I afford.
- Author
-
BAXTER, JULIETTE
- Subjects
BUSINESS ,ECONOMICS ,MORTGAGES ,FINANCE ,MONEY market - Abstract
The article discusses mortgage affordability and though it's sometimes used in reference to the cost of living in a particular city relative to the average income in that area, you should think about it as the amount a bank or financial institution will allow you to borrow based on your income, debt and living expenses.
- Published
- 2021
20. Becoming a central bank: The development of the Bank of England's private sector lending policies during the Restriction
- Author
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Carolyn Sissoko
- Subjects
Economics and Econometrics ,History ,Money market ,N23 ,N13 ,media_common.quotation_subject ,Operating procedures ,banking ,central banking JEL codes: E58 ,real bills ,Financial system ,Bank of England ,Private sector ,Core (game theory) ,Bullion ,Central bank ,bullionist controversy ,discount market ,Turning point ,Business ,Duty ,media_common ,financial stability - Abstract
This paper studies in detail the changes that took place in the Bank of England’s Restriction era policies governing private sector lending. We find that the Bank was adapting to novel monetary circumstances, created both by the evolution of the English financial system and by the Restriction itself, and that, although the process was far from smooth, the Bank was learning to act as a central bank: during this period the Bank transformed its internal operating procedures to put regulation-based constraints on its private-sector lending, established regular reviews of its policies and their effects on the money market, and adopted a distinct crisis-oriented lending policy. In addition to establishing that these core central bank activities developed over this period, we also find that for 18 months starting in 1809 the Bank’s policies were destabilizing, and that the Bullion Committee likely played a role in a shift in Bank lending policies that took place in mid-1810. Overall, this paper finds that the 1810 crisis was a turning point in the Bank’s understanding of its role in the economy: the Bank directors both acknowledged privately the Bank’s duty to the public, and restructured its discount policies with a view to promoting financial and monetary stability.
- Published
- 2022
21. Institutional investors in function of financial markets development
- Author
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Kovačević Sandra
- Subjects
institutional investors ,financial market ,money market ,capital market ,investment funds ,risk diversification ,stocks ,bonds ,standard deviation (risk) ,income/risk compromise ,Business ,HF5001-6182 ,Finance ,HG1-9999 - Abstract
Management of institutional investors implies market economy as well as the existence of transparent financial market and its segments (money market, capital market, foreign money market, derivative securities market etc). The financial market and its segments make effective mobilization of even the lowest amounts of temporarily free funds of the population, economy and the state possible for their involvement i.e. allocation into financial flows of the market economy. At the same time, financial market helps in quickly and effectively transforming assets into money, as well as the flow of all kinds of funds and their further investment. This contributes to the development of financial market, more effective management of business entities, along with faster and more stable development of the economy. In the following text, the types and functions of institutional investors on the financial market will be highlighted, as well as their contribution to the development of the financial markets.
- Published
- 2014
22. An Investors’ Interest towards Mutual Funds: A Study of Kathmandu Valley, Nepal
- Author
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Madhav Adhikari, Ajay Prasad Dhakal, and Manoj Kumar Chaudhary
- Subjects
Finance ,Money market ,business.industry ,Bond ,Service (economics) ,media_common.quotation_subject ,Financial market ,Flexibility (personality) ,Debenture ,business ,Investment (macroeconomics) ,Mutual fund ,media_common - Abstract
The objective of this study is to assess the investor’s Mind-set towards mutual funds in Kathmandu valley. To fulfill the stated objectives, a total 230 potential respondents were selected purposively through questionnaire. The collected data are analyzed with the help of descriptive and correlation analysis. In terms of familiarity with the various financial securities currently available in the Nepalese financial market, most of investors familiar with fixed deposits, medium familiarity with shares and very low familiarity with bonds and debentures and money market instruments. The analysis of the results concluded that investors attracted towards mutual fund due to its flexibility, secured type of investment mechanism and Professional management Service in Nepal. Further, it is recommended that concern authority, regulations body, Issue Manager should conduct such training and awareness program showing the importance of mutual funds.
- Published
- 2021
23. Effect of consumers’ online shopping on their investment in money market funds on ecommerce platforms
- Author
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Zheren Wang and Shenglin Ben
- Subjects
Estimation ,0209 industrial biotechnology ,Money market ,02 engineering and technology ,Monetary economics ,Seemingly unrelated regressions ,Investment (macroeconomics) ,020901 industrial engineering & automation ,Work (electrical) ,020204 information systems ,0202 electrical engineering, electronic engineering, information engineering ,Endogeneity ,Household finance ,Business ,Information Systems - Abstract
Along with the rapid growth of online and mobile shopping, a recent interesting phenomenon is the introduction of money market funds by many ecommerce platforms. The goal might be to provide consumers the one-stop convenience of both shopping and short-term investment. So far, little rigorous work has examined the relationship between online shopping and investment in ecommerce money market funds (eMMFs). In this study, we examine how consumers’ online-shopping expenditure affects their eMMF investment amounts using data from the China Household Finance Survey (CHFS) dataset. We find that consumers’ online-shopping expenditure increases their eMMF investment amounts, holding other variables constant. This effect is significant and positive even after we consider the potential endogeneity issues with seemingly unrelated regression estimation. Further, analyzing whether consumers’ risky-market experience could moderate this effect, we find the coefficient of the moderating term to be significant after we consider the potential endogeneity issues. These findings suggest that consumers’ eMMF investments is largely affected by their online-shopping experience, and this effect is even stronger for those with risky-market participation.
- Published
- 2021
24. ECONOMETRIC ANALYSIS OF INDICATORS OF DEVELOPMENT OF FINANCIAL AND REAL ECONOMIC SECTORS
- Author
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Serhii Kolodii, L. Gariaga, M. Rudenko, and S. Kolodii
- Subjects
Inflation ,Finance ,Money market ,business.industry ,media_common.quotation_subject ,Money supply ,Monetary policy ,Interest rate ,World economy ,Real gross domestic product ,Economics ,business ,Monetary base ,media_common - Abstract
The instability of the domestic economy and the influence of external factors lead to the deviation of the basic macroeconomic indicators from the normative equilibrium values. This requires the development of a qualitatively new integrated approach to the analysis of the main macroeconomic indicators of the development of the economy sectors in order to identify the effective institutional and financial foundations for stimulating economic progress of our state. The purpose of the work is to study the theoretical positions of the financial and real sectors of the economy and conduct an econometric analysis of the indicators of their development. Results. Theoretical positions about the place of the real and financial sectors of the economy in the general economic system of the state has been systematized in the article. The main indicators (KPIs — key performance indicators) of the studied sectors of the economy has been revealed. The econometric analysis of the main indicators of the development of the economy sectors has been based on real (actual) values corrected for inflation and has been presented in the classical theoretical Hix-Hansen equilibrium model on commodity and money markets (IS-LM). The data of the National Bank of Ukraine on the dynamics of the monetary base (B) and monetary aggregates (M0 — M3), and the State Statistics Service of Ukraine on GDP (Y) and inflation (СРІ) has been used in the research. The econometric analysis has showed a significant correlation between the nominal and real GDP, money supply and money base indicators, which are almost synchronized during 2001—2017. The presence of strong interdependence between the real values of these indicators has been confirmed by very high correlation values, which are ranged from 0.94 to 0.99. Almost functional dependence of the money supply on the monetary base has been explained by the availability of the existing mechanism of monetary multiplication, and the money market multiplier tends to increase. The high statistical dependence between the real NBU discount rate and the weighted average rate on all instruments has been revealed. It proved the effectiveness of the main instrument for implementing the discrete monetary policy of macroeconomic regulation. The negative significance of the correlation coefficients between the interest rates and the quantitative indicators of the real and financial sectors of the economy has shown that the traditional theoretical compromise in choosing the main problems to be solved in the economy to ensure macroeconomic stability is also typical for Ukraine. The application of the «expensive money» policy to combat high inflation negatively affects the real money supply, but taking into account the very high dependence between it and GDP, slows down the growth of the real sector of the economy, and vice versa. The obtained two-factor regression equation with very high reliability has explained by the retrospective changes in the real money supply. The most important factor for it is real GDP. This confirms the strong interconnection between the real and financial sectors of the economy in the process of developing the economic system. Quantitative indicators of development of both sectors are under the influence of long-term trends. They have their own nature and often depend on trends in the development of the world economy and finance as well as internal problems that are often predictable. Conclusions. The results has been obtained suggest that the synchronous long-term dynamics of real GDP, money supply and money base, as well as the statistical interdependence between them, firstly, signal that in Ukraine the rules of a market economy have already been formed and can be applied effectively in such conditions of the methods and tools of macroeconomic regulation, and secondly, processes occurring in one of the specified sectors of the economy will necessarily reflect on another. Therefore, solving macroeconomic problems requires a balanced and integrated approach taking into account the nature and strength of the interdependence between different processes and phenomena.
- Published
- 2021
25. How we entered the crisis caused by the COVID-19 pandemic
- Author
-
Jorgovanka Tabaković
- Subjects
Money market ,Economic policy ,05 social sciences ,National bank ,Fiscal policy ,Market liquidity ,Shock (economics) ,Order (exchange) ,0502 economics and business ,Position (finance) ,050211 marketing ,Business ,Foreign exchange market ,050212 sport, leisure & tourism - Abstract
The paper aims to point out the strength and effects of the shock of the crisis caused by the COVID-19 pandemic on the global and domestic economy. Effects differ depending on the characteristics of individual economies and the response of economic policy makers. The crisis called "the great lockdown" features: 1) suspension of activity in some sectors and huge declines in others, with pronounced asymmetry and 2) implementation of robust packages of monetary and fiscal policy measures. The paper focuses on the measures adopted in Serbia to mitigate the negative effects of the pandemic on the domestic economy. It elaborates on the temporary measures adopted by the National Bank of Serbia (NBS), which helped preserve stability in the foreign exchange market, ensured efficient functioning of the money market, liquidity support to all sectors and more favourable financing conditions, sustained credit activity and supported the domestic real sector. According to our estimate, if the monetary and fiscal policy measures had not been adopted, the fall in Serbia's economic activity in 2020 would have exceeded 6%, while growth in 2021 would be modest, failing to reach the pre-pandemic growth dynamics even in the medium term. The adoption and implementation of the robust package of measures was possible because Serbia faced the crisis in a good macroeconomic and fiscal position owing to the strengthened economy and implementation of structural reforms in the past period. In fact, Serbia can serve as the example of a country confirming the importance of strengthening the economy on sustainable grounds in the past eight years, which created room for the adoption of comprehensive economic measures to support citizens and businesses, in order to preserve production capacities and jobs.
- Published
- 2021
26. The Impact of Belt and Road Initiative on Regional Financial Integration – Empirical Evidence from Bond and Money Markets in Belt and Road Countries
- Author
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Yingzi Hu, Poshan Yu, and Zuozhang Chen
- Subjects
Money market ,050208 finance ,Bond ,0502 economics and business ,05 social sciences ,Sustainability ,Financial integration ,Financial system ,Business ,050207 economics ,Empirical evidence ,General Economics, Econometrics and Finance - Abstract
Belt and Road Initiative (BRI) proposed in 2013 has received wide research attention in recent years. However, rigorous quantitative studies on BRI’s impact on regional financial integration are sc...
- Published
- 2020
27. Exposure to interbank investment and financing risk by Islamic banks: a dynamic panel analysis of Malaysia
- Author
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Mohammad Taqiuddin Mohamad, Meguellati Achour, and Ahmad Azam Sulaiman
- Subjects
Finance ,Money market ,Government ,Panel analysis ,business.industry ,Negative relationship ,Islam ,Balance sheet ,Interbank lending market ,Business and International Management ,business ,Investment (macroeconomics) - Abstract
Purpose The Government of Malaysia has developed an Islamic Interbank Money Market since January 1994 with the objective to facilitate funding for the Islamic banking sector in the country. This platform also enables Islamic banks to obtain Sharīʿah-compliant funds from other Islamic banks. This study aims to examine the effects of interbank investment and financing risk on the financing decisions of Malaysia’s Islamic banks between 1994 and 2015. The financing decisions are used as financing measures to determine the effect of investing in the interbank market and financing risk indicators on financing. Design/methodology/approach The descriptive, correlation and dynamic panel analysis results are derived with the help of LIMDEP 9.0 software. Findings The study found a negative relationship between the interbank investment variable with the financing decisions of Islamic banks. This reflects that an increase in interbank investment leads Islamic banks to reduce their level of financing. These findings prove that the investment activities between Islamic banks had a “substitution effect” and decreased their capability of financing because of their tendency to maintain liquidity. Originality/value Islamic banks are confident that they will generate higher profits in the coming financial year. The economic conditions of Malaysia do not influence Islamic banks’ financing decisions, whereas Islamic banks in this study are more dependent on the balance sheet indicators.
- Published
- 2020
28. Pembatasan Sosial Berskala Besar (PSSB) saat Pandemi Covid-19 dan Dampaknya bagi Pasar Modal Indonesia
- Author
-
Ll. Irman Suhaedading
- Subjects
Money market ,Coronavirus disease 2019 (COVID-19) ,Paired samples ,Scale (social sciences) ,Ocean Engineering ,Financial system ,Business ,Composite index ,Capital market ,Stock price - Abstract
The research aims to see impact of Jakarta’s Large Scale Social Distancing (PSBB) when the Covid-19 pandemic for capital market in Indonesia. The data used are Indonesia Composite Index (IHSG), a month before PSBB (2 March 2020 – 9 April 2020) and during PSBB (13 April 2020 – 5 June 2020). The research used Paired Sample T-Test, for comparing two samples data whether they are related or not.The result: There is no significant different between stock price before PSBB and during PSBB. This point can be explained that investors have been anticipating the impact from Covid-19 pandemic. Likewise, Governor of Bank Indonesia said that PSSB in Jakarta will bring positive impact for money market, so that it makes positive sentiment for investors. Consequently, there is no significant impact for composite stock price
- Published
- 2020
29. Stablecoins: Survivorship, Transactions Costs and Exchange Microstructure
- Author
-
Bruce Mizrach
- Subjects
History ,Money market ,Quantitative Finance - Trading and Market Microstructure ,Polymers and Plastics ,Market microstructure ,Monetary economics ,Industrial and Manufacturing Engineering ,Trading and Market Microstructure (q-fin.TR) ,FOS: Economics and business ,Survivorship curve ,Risk Management (q-fin.RM) ,Business ,Business and International Management ,Database transaction ,Quantitative Finance - Risk Management - Abstract
Seven of the ten largest stablecoins are backed by fiat assets. The 2016 and 2017 vintages of stablecoins have failure rates of 100% and 50% respectively. More than one-third of stablecoins have failed. Tether has a 39% share of 1.77 trillion USD in 2021Q2 transactions, and USD Coin 28%. The top three stablecoins have an average velocity of 28.3. Tether transacted between 3.8 million unique addresses, 63% of the ERC-20 token network. Six of the top ten tokens have unconcentrated Herfindahl indices, but Gemini, Pax and Huobi have single holders with more than 50% of the supply. The median Tether transaction fee is similar to the cost of an ATM transaction, but they are three to four times more for Dai and USDC. Fees, which are proportional to the price of Ethereum, are rising though. Median fees for Tether rose 3,628% over the last year, and 1,897% for USD Coin. 24 hour exchange turnover in Tether is nearly $120 billion. This is comparable to the daily volume at the NYSE and almost ten times the daily flow in money market mutual funds. Narrow bid-ask spreads and depth have attracted active HFT participation.
- Published
- 2022
30. The rise of collateral-based finance under state capitalism in Russia
- Author
-
Ilja Viktorov and Alexander Abramov
- Subjects
Economics and Econometrics ,Collateral ,Economics ,collateral ,Russia ,central counterparty ,0502 economics and business ,050602 political science & public administration ,050207 economics ,Nationalekonomi ,Finance ,Money market ,Economic History ,liquidity ,business.industry ,05 social sciences ,State capitalism ,Capitalism ,0506 political science ,Market liquidity ,state capitalism ,Ekonomisk historia ,business ,repo ,money markets - Abstract
The article examines emerging financial capitalism in Russia and its recent developments, the rise of collateralised finance and trading in repo markets. The main conclusion is that a combination of sophisticated speculative practices with a strong state presence in financial markets is a distinctive feature of Russia after 2008. The decoupling of the financial system from the credit supply to the real sector is still continuing after the collapse of Communism. The role of the capital markets is restricted to short-term liquidity management in money markets, which rose after 2011 due to an increased provision of state liquidity. The existence of a large monetary overhang accumulated within the Russian banking system and its interconnectedness with collateralised markets are discussed. The development stages of the repo markets and the main collateral types are considered in relation to the expansion of the state liquidity supply. This study provides an additional perspective within the ongoing debate on contemporary state capitalism in emerging markets.
- Published
- 2022
31. INVESTASI PADA REKSADANA SYARIAH DI INDONESIA
- Author
-
Dery Ariswanto
- Subjects
Finance ,Money market ,business.industry ,Sharia ,Capital (economics) ,Bond ,Portfolio ,business ,Investment (macroeconomics) ,Mutual fund ,Investment management - Abstract
This article has the purpose to explain and analyze sharia investment activities in Indonesia. Investment has become one of the most popular economic activities in several developed countries, so far it has been common in developing countries, such as Indonesia. Islamic mutual fund is an interesting activity for people who will invest their wealth on the trading floor in accordance with sharia rules. As Sharia mutual funds are a means or container used to collect funds from the public which will then be invested in a portfolio of securities that is assisted by the investment manager. In this case, the securities portfolio can be in the form of money market instruments, stocks, bonds, or a combination of several forms of them. The operational mechanism in sharia mutual funds consists of two channels, first, the contract between the capital owner and the investment manager is implemented with a wakalah system. Secondly, investment managers and investment users are held in a mudharabah agreement. The basic principle in sharia mutual funds is the mudharabah or qiradh principle, which means an activity in which the capital owner gives a portion of his property to others who are competent to be further managed with the provision that the profits to be obtained from the management results are divided according to the conditions that have been agreed by both parties in advance. Keywords: investment, Islamic mutual funds.
- Published
- 2020
32. Auditor response to changing risk: money market funds during the financial crisis
- Author
-
Kyle D. Allen and Drew B. Winters
- Subjects
Corporate finance ,Money market ,Increased risk ,Accounting ,Value (economics) ,Financial crisis ,Financial system ,Audit ,Business ,Audit risk ,General Business, Management and Accounting ,health care economics and organizations ,Finance - Abstract
Audits provide monitoring for investors. The collapse of markets across the financial crisis made assets more difficult to value, which increased risk for auditors. The money markets were at the center of the financial crisis increasing audit engagement risk on money market funds, which at the time of the crisis were highly opaque. Measuring the response to increased engagement risk with audit fees, this study finds that auditors increase their fees for the riskiest class of funds. However, no evidence was found that audit fees increased as funds increased their holdings in the riskiest class of securities.
- Published
- 2020
33. Broken bucks: money funds that took taxpayer guarantees in 2008
- Author
-
Linus Wilson
- Subjects
G28 ,Information Systems and Management ,Exchange rate stabilization fund ,Strategy and Management ,Securities and Exchange Commission ,U.S. Treasury ,WLA ,Financial system ,Bailout ,Guarantees ,Breaking the buck ,Business and International Management ,Floating NAV ,Financial services ,Risk management ,Money market ,G18 ,business.industry ,H12 ,SEC ,Dodd–Frank ,Market liquidity ,Commercial paper ,Financial Stability Oversight Council (FSOC) ,DLA ,Liquidity ,Money market mutual funds ,Financial crisis ,Reserve Primary Fund ,L5 ,Original Article ,Taxpayer ,G22 ,G01 ,G23 ,business ,H81 ,WAL ,WAM ,Regulation - Abstract
This is the first study to look at the characteristics of funds accepting the $2.7 trillion taxpayer guarantee of money market mutual funds during the 2008 financial crisis. Fund shares that benefited from Federal Reserve’s asset-backed commercial paper program were significantly more likely to get bailed out by taxpayers and sponsors. The paper tests if funds adhering to the SEC’s 2010 liquidity reforms prior to their enactment were less likely to be bailed out in 2008. Finally, it examines if funds subject to the 2014 floating NAV regulations were more likely to be bailed out in 2008.
- Published
- 2020
34. Economic Nature of A. Yu. Simanovskiy Crypto-Currency
- Author
-
Т. S. Novashina
- Subjects
National security ,bank notes ,bitcoin ,010501 environmental sciences ,01 natural sciences ,money forms ,essence of money ,International monetary systems ,monetary unit ,money market ,0502 economics and business ,Economics ,050207 economics ,Positive economics ,HB71-74 ,0105 earth and related environmental sciences ,foreign currency market ,Money market ,business.industry ,05 social sciences ,finance tool ,currency ,Monetary system ,virtual currency ,Virtual currency ,system stability ,quant money ,Economics as a science ,Currency ,Casuistry ,crypto-currency ,money ,money-symbols ,money nature ,Economic model ,business ,e-cash - Abstract
The author by analyzing theoretical ideas put forward b y A. Yu. Simanovskiy in the research ‘Concerning Economic Nature of Crypto-Currency’, which was published in the journal “Issues of Economics’ provides his own opinion concerning whether currency (including crypto-currency) can have economic nature. This question is not rhetoric and has nothing to do with casuistry. It is essential, principle and touches upon problems dealing with national security. On the basis of system-functional analysis and achievements of modern theory of money and using its fundamental provisions the author considers the content of money in dialectic unity of form transformation (material, money, paper, electronic) and spheres (social – money as a symbol; economic – bank notes; political and legal – monetary units) of their being. It is shown that currency, especially crypto-currency cannot have economic nature. In this connection the author studying the process of historical transformation of international monetary systems with regard to achievements of finance, technical and social engineering aimed at creation of ‘digital gold’ thinks that the social and economic model of the future international monetary system has been tested already.
- Published
- 2020
35. A STUDY ON RISK & RETURN ANALYSIS OF SELECTED SECURITIES IN INDIA
- Author
-
P. Subramanyam and Nalla Bala Kalyan
- Subjects
Finance ,Money market ,business.industry ,Order (exchange) ,Capital (economics) ,Public sector ,business ,Investment (macroeconomics) ,Capital market ,Mutual fund ,Stock (geology) - Abstract
The main objective of the study is to give investors a basic idea of investing into the mutual funds and encourage them to invest in those areas where they can maximize the return on their capital. The research provided an interesting insight into awareness about the mutual funds, risk taking abilities of investors and investment options preferred etc. The Indian Capital has been increasing tremendously during the last few years. With reforms of economy, reforms of investing policy, reforms of public sector and reforms of financial sector, the economy has been opened up and many developments have been taking place in the Indian money market and Capital market. In order to help the small investors, mutual fund industry has come to occupy an important place. This study helps us to understand how the companies diversify themselves in different sectors and in different companies to maximize the returns and to minimize the risks involved in it.
- Published
- 2020
36. Mutual Funds in Emerging Markets; Prospects for Personal Financial Planning
- Author
-
David Doe Fiergbor
- Subjects
Money market ,business.industry ,Financial market ,Institutional investor ,Financial system ,business ,Emerging markets ,Foreign exchange market ,Capital market ,Mutual fund ,Investment management - Abstract
Globalization has mammoth divergent opportunities that are distinct in promoting economic changes in emerging markets. These include but not limited to trade, foreign direct investments, short-term capital flows, knowledge and movements of labour. The prospects for financial sectors in emerging markets are great. The capital market opens up to new investments that tend to boost overall economic performances. The occurrence has been impelled by technical change, denationalization in emerging markets, the deregulation of the financial markets in industrial countries, increased in institutional investors in developed economies and macroeconomic and trade reforms have portrayed emerging markets more attractive. These amounted to various opportunities for the financial industry in emerging markets. With several natural resources such as oil and other mineral deposits, developing countries mostly within the African region emerge with positive fiscal projections for the capital market. Since some mutual funds invest in the capital and money markets, with proper personal financial planning, financial independence is eminent in the future for the lay investor. Mutual funds have the potential for higher yield with minimum risk as compared to some other risky investment schemes such as forex trading. Professional fund management and easy liquidity of assets are some advantages of investing in mutual funds. However, investment yields on mutual funds are not guaranteed as fund assets are invested in shares, bonds, and stocks which may have fluctuating market price movements. Randomly selected invested capitals were computed using simple expected future value formula. The result indicated higher returns potential on investments in mutual funds in the long run. It was therefore concluded that there is enormous opportunities for wealth creation in investing in mutual funds in emerging markets which is ideal for personal financial planning.
- Published
- 2020
37. Short-term Sharīʿah-compliant Islamic liquidity management instruments to sustain Islamic banking
- Author
-
Aishath Muneeza
- Subjects
Finance ,Sustainable development ,Money market ,050208 finance ,business.industry ,Strategy and Management ,05 social sciences ,Exploratory research ,Islam ,Liquidity risk ,Structuring ,Treasury ,Term (time) ,Accounting ,0502 economics and business ,Business ,050207 economics ,Business and International Management - Abstract
Purpose The purpose of this paper is to describe the structure of the Islamic treasury bills issued by the Central Bank of Maldives, Maldives Monetary Authority (MMA) for the benefit of those jurisdictions that aspire to introduce short term Islamic liquidity management instruments. Design/methodology/approach This is exploratory research where the experience of the author in structuring the Islamic liquidity management instruments discussed in the paper. Findings It is evident from the discussions of this paper that innovation is the key to structure Sharīʿah-compliant short term liquidity management instruments. The example of Maldives has proved that there is a need to amend the laws of the country to facilitate Central banks to deal with Sharīʿah-compliant instruments. Originality/value It is hoped that this research has shed light on the importance of having the proper Sharīʿah-compliant liquidity management instruments for sustainable development of Islamic banking and how jurisdictions have practically made this possible. The Islamic money market has developed gradually and there is a need to innovate novel and competitive instruments and further research is required to be conducted on this.
- Published
- 2020
38. Денежно-кредитная политика банка Японии в условиях глобального кризиса
- Subjects
Money market ,Globalization ,business.industry ,Open market operation ,Monetary policy ,Financial crisis ,Financial system ,Economic miracle ,Business ,Tertiary sector of the economy ,Market liquidity - Abstract
Мировая банковская система непрерывно развивается и совершенствуется. Банковские системы отдельных стран модифицируются под влиянием интеграции финансовых отношений государств мира и глобализации в сфере банковского дела. Экономика Японии получила широкое развитие в период так называемого «экономического чуда», во время которого Япония стала второй страной в мире по общему объёму производства, занимая третье место по экспорту продукции. Быстрыми темпами развивается непроизводственный сектор Японии: сфера услуг, финансы, научно-исследовательская деятельность. Статья посвящена изучению деятельности центрального банка Японии – одного из ведущих мировых финансовых институтов. Выделены организационные принципы функционирования Банка Японии. Рассмотрены три руководящих принципа управления, используемых Банком Японии в процессе его деятельности для выполнения роли центрального банка и достижения таких целей, как поддержание ценовой стабильности и содействие экономическому росту в стране. Банк Японии, будучи первым звеном банковской системы страны, реализует денежно-кредитную политику, применяя комплекс мер, направленных на управление совокупным спросом через условия денежного рынка. В статье отражены инструменты денежно-кредитной политики, применяемые Банком Японии для обеспечения стабильности экономического развития страны. Особое внимание уделяется мерам, предпринятым Банком Японии в связи с кризисом, вызванным пандемией коронавируса COVID-19. Речь идёт о поддержке компаний, пострадавших от последствий коронавируса COVID-19, включая предоставление беспроцентных займов, выдачу гарантий по кредитам малому и среднему бизнесу, пострадавшему от пандемии, субсидии по переводу бизнеса в онлайн. Банк Японии планирует использовать пакет фискальных и монетарных антикризисных мер для поддержки экономики страны. Реализация мероприятий необходима для ограничения экономического ущерба от кризисных явлений, вызванных коронавирусом COVID-19, и сглаживания волатильности рынков. Актуальность исследования обусловлена тем, что в условиях финансовой глобализации необходимо учитывать опыт зарубежных банковских систем, особенно в ситуации мирового кризиса, затронувшего экономики всех стран. Ключевые слова: мировая банковская система, глобализация, банковское дело, Япония, центральный банк, денежно-кредитная политика, операции на открытом рынке, экономическая активность, ликвидность, COVID-19, финансовый кризис, антикризисные меры. The world banking system is constantly developing and improving. The banking systems of individual countries are modified under the influence of the integration of financial relations between the countries of the world and globalization in bank-ing. The Japanese economy was widely developed during the period of the so-called «economic miracle», during which Japan became the second country in the world in total production volume, ranking third in the export of products. The non-manufacturing sector of Japan is developing rapidly: the service sector, finance, and research. The article is devoted to the study of the activities of the Central Bank of Japan – one of the leading global financial institutions. The organizational principles of the Bank of Japan are highlighted. Three management principles used by the Bank of Japan in the course of its activities to fulfill the role of the central bank and achieve goals such as maintaining price stability and promoting economic growth in the country are considered. The Bank of Japan, being the first link in the country's banking system, implements monetary policy by applying a set of measures aimed at managing aggregate demand through money market conditions. The article reflects the monetary policy instruments used by the Bank of Japan to ensure the stability of the country's economic development. Particular attention is paid to the measures taken by the Bank of Japan in connection with the crisis caused by the pandemic of the coronavirus COVID-19. It is about supporting companies affected by the consequences of the coronavirus COVID-19, including providing interest-free loans, issuing guarantees for loans to small and medium-sized businesses affected by the pandemic, subsidies for transferring business online. The Bank of Japan plans to use a package of fiscal and monetary anti-crisis measures to support the country's economy. Implementation of measures is necessary to limit the economic damage from the crisis caused by the coronavirus COVID-19, and to smooth out the market volatility. The relevance of this study is due to the fact that in the context of financial globalization, it is necessary to take into account the experience of foreign banking systems, especially in the situation of the global crisis that affected the economies of all countries. Keywords: world banking system, globalization, banking, Japan, central bank, monetary policy, open market operations, economic activity, liquidity, COVID-19, financial crisis, anti-crisis measures.
- Published
- 2020
39. Money market turbulences: Timeliness and credibility proved to be of crucial importance
- Author
-
Nikola Dragašević and Jorgovanka Tabaković
- Subjects
Inflation ,Money market ,Emerging technologies ,media_common.quotation_subject ,Financial market ,Credibility ,Monetary economics ,Business ,Productivity ,Interest rate ,media_common ,Market liquidity - Abstract
Now that the global financial markets are highly volatile and vulnerable, and the world faces the Fourth Industrial Revolution that ushers in new technologies and potentially, with the growth of productivity, extends the period of low inflation and ultra-low interest rates, stability of the financial system is more important than ever. Technological innovation brings new uncertainty and the markets are extremely sensitive to sudden changes in the business environment, yet more so as they grew accustomed to ample liquidity in the prior period. Two episodes of similar characteristics in the money markets in two different countries, Serbia and the USA, have proven numerous patterns and demonstrated many commonalities. And yet, a somewhat different ambience, monetary measures applied to stabilise interest rates, the increase of which was driven by intensive withdrawals of liquidity from the banking system, as well as the initial signal sent to market participants, whose perception is what matters the most - proved that credibility, timeliness of response and proper choice of instruments are of crucial importance for success.
- Published
- 2020
40. DEVELOPMENT OF BUSINESS PLANNING IN THE FIELD OF FINANCIAL AND CREDIT SUPPORT FOR SMALL BUSINESS
- Author
-
Olena Anatoliivna Ishchenko, Sergiy Sergiychuk, and Iryna Dubynska
- Subjects
0301 basic medicine ,Finance ,education.field_of_study ,Money market ,Rollover (finance) ,business.industry ,Financial risk ,030106 microbiology ,Population ,Small business ,Investment (macroeconomics) ,03 medical and health sciences ,0302 clinical medicine ,Capital (economics) ,030212 general & internal medicine ,Business plan ,business ,education - Abstract
Introduction. Real difficulties with financing are today one of the main problems for small business in Ukraine. Lack of sufficient capital in the majority of the population, complexity, disadvantage or inability to obtain borrowed funds hinder the development of small business. Dependence on domestic sources of funding, the problem of lack of financial resources, difficult access to financial and money markets, high levels of financial risk, limited material resources and capacity, low output - all indicate that small business needs real financial support from the state, commercial banks, venture firms and individual investors. The purpose of the article is to study and identify ways to implement business planning in the field of financial and credit support for small businesses. Method (methodology). The general scientific methods, in particular theoretical generalization - for generalization of types of the initial capital and features of financing and business planning of the enterprise idea are applied in the researched; systematic economic analysis - to justify the types of financing and the required level of business planning, which must have a future entrepreneur. Results. The prepared business plan helps start-up entrepreneurs at every stage of starting and managing their business. It can be used as a roadmap for structuring, running and developing your own business. This is a way to think about the key elements of a new business. A business plan helps to obtain financing or attract new business partners. Investors want to be sure that they will return their investment. This is the main tool of an entrepreneur to convince people to work together and invest in the development of a promising company.
- Published
- 2020
41. ЕКОНОМІЧНІ МЕТОДИ УПРАВЛІННЯ ІНОЗЕМНИМИ ІНВЕСТИЦІЯМИ В УКРАЇНСЬКІЙ ЕКОНОМІЦІ
- Subjects
Macroeconomics ,Money market ,Tax credit ,Accelerated depreciation ,Industrial production ,Money supply ,General Earth and Planetary Sciences ,Portfolio ,Business ,Foreign direct investment ,Portfolio investment ,General Environmental Science - Abstract
The purpose of the article is to summarize information on the optimization of the economic mechanism of state management of foreign investment flows. The relevance of the study is the need to systematize the use of economic levers to stimulate the state direct and portfolio foreign investment. Methods of systematic and historical analysis were used in the study. Among the empirical methods used classification, grouping and description of the study results. The article defines that the goals of state regulation of foreign investments are to increase the volume of foreign investments and direct them to priority branches of industrial production. It is established that the principles of consistency, continuity and coherence should be the basic principles of foreign direct and portfolio investment regulation. By means of systematic analysis, the wrong directions of directing foreign investment funds into the spheres and industries of Ukraine’s economy were determined. It is found that the main goal of state regulation of foreign investment flows into the Ukrainian economy has not been achieved, as there is no increase in the volume of foreign investments in priority areas of industrial production development. The problems of the legislation concerning direct and portfolio foreign investments are specified. The effectiveness of direct and indirect methods of economic regulation of money supply in the economy is analyzed and how it indirectly affects the growth of foreign investment in the country’s economy. Measures to improve indirect methods of economic regulation of foreign investment and the tax system have been proposed. In particular, the need to develop the money market to stimulate the direct and portfolio investment in the sphere of production of products with a high degree of processing is pointed out. The use of tax benefits is specified. The advantages of accelerated depreciation and tax credits are offered among other tax methods of stimulating both direct and portfolio foreign investments. It is determined that the goals of state regulation of foreign investment processes in the Ukrainian economy through direct regulation of money supply have not been achieved in previous years.
- Published
- 2019
42. Cost efficiency and risk as determinants of market share in banking: Evidence from the old and new eu member and candidate countries
- Author
-
Marko Kosak and Bashkim Nurboja
- Subjects
Economics and Econometrics ,Money market ,bank efficiency ,Cost efficiency ,lcsh:Economic theory. Demography ,Monetary economics ,risk ,market share ,Banking industry ,lcsh:HB1-3840 ,Order (exchange) ,bankovna učinkovitost ,rizik ,tržišni udio ,Transition countries ,Endogeneity ,Business ,Business and International Management ,Market share ,Developed country ,Finance - Abstract
U ovom članku istražuje se kako troškovna učinkovitost i rizik utječu na tržišni udio u europskom bankarskom sektoru. Analiza je motivirana poznatom hipotezom učinkovitosti i teorijom strukture-vođenja-uspješnosti. Hipoteza je da su poboljšana učinkovitost i pojačani rizik banke povezani s rastom tržišnog udjela banke. U odnosu na ostala istraživanja, u ovoj analizi uključen je rizik kao odrednica tržišnog udjela. U istraživanju se koriste godišnji podaci za 36 banaka iz europskih zemalja u razdoblju od 2007. do 2015. godine. Rezultati pokazuju da su rizik i učinkovitost pozitivno povezani s tržišnim udjelom imovine, zajmova i depozita. Nadalje, istraživanjem je utvrđeno da su banke u tranzicijskim zemljama bile manje uspješne u pretvaranju prednosti u pogledu troškovne učinkovitosti u povećanje tržišnih udjela od banaka u razvijenim europskim zemljama. Empirijski model je procijenjen korištenjem GMM metode kako bi se uzela u obzir dinamička priroda istraživanih komponenti te s ciljem zaobilaženja problema endogenosti., In this study we investigate how cost efficiency and risk affect market share in European banking industry. Our analysis is motivated by the well-known efficiency hypothesis and structure-conduct-performance theory. We hypothesize that improved efficiency and enhanced riskiness of a bank should be related to an increase in its market share. Therefore, in contrast to other studies, we include risk as a determinant of market share. In the study we use annual data for 36 European countries’ banks for the time span from 2007 to 2015. The results reveal that risk and efficiency are positively associated with market share of assets, loans and deposits. Additionally, we find that banks in transition countries were less successful in transposing their cost efficiency advantages into market share gains than banks in European developed countries. The empirical model is estimated by using the GMM method in order to account for dynamic nature of investigated components and to mitigate the endogeneity problem.
- Published
- 2019
43. Legal Protection of Conventional Bank as Mandatory Convertible Bond Holder
- Author
-
Franciska Mifanyira Sutikno
- Subjects
Money market ,media_common.quotation_subject ,Equity (finance) ,Financial system ,lcsh:KBP1-4860 ,Investment (macroeconomics) ,Legal protection ,Debt ,Prospectus ,Stock market ,bank, legal protection, mandatory convertible bond ,lcsh:Islamic law ,Business ,Convertible bond ,media_common - Abstract
Bank as legal entity has legal right to do Investment to the another party by several investment instrument in Stock Market, Money Market or another agreement. Mandatory Convertible Bond is one of Investment Instrument which has hybird characteristic of Debt and Equity based on the Central Bank Regulatio and International Mandatory Convertible Bond concept leads to the double legal standing to the Bank as the holder. The Objective of this research is to analyze the usage of Mandatory Convertible Bonds and the protection of Bank as its holder. The result of the research are Mandatory Convertible Bond used as equity participation through debt mechanism and the protection of Bank provided by Prospectus and Trust Agreement.
- Published
- 2019
44. Shadow Banking in Europe: Idiosyncrasies and their Implications for Regulation
- Author
-
Hossein Nabilou and André Prüm
- Subjects
Money market ,Droit économique & commercial [E04] [Droit, criminologie & sciences politiques] ,05 social sciences ,0211 other engineering and technologies ,Financial system ,02 engineering and technology ,Business model ,Rehypothecation ,Economic & commercial law [E04] [Law, criminology & political science] ,Shadow banking, securities financing transactions, money market funds, securitization, rehypothecation ,Market structure ,Shadow banking system ,0502 economics and business ,Intermediation ,Securitization ,021108 energy ,Business ,050207 economics ,Safety Research ,Law ,Shadow (psychology) - Abstract
This paper studies the specificities of the regulation of shadow banking in Europe. It argues that the idiosyncratic features of the EU shadow banking sector call for a different (or indigenized) regulatory approach from that of the US. It highlights striking differences between the EU and the US shadow banking sectors based on both market structure and legal micro-infrastructure of the shadow banking sectors in these two jurisdictions. These different institutional and legal infrastructures of the shadow banking activities, instruments, and entities, as well as the different trajectories in the evolution of the banking and shadow banking sectors in terms of business models, size and composition of actors and transactions can be the driving force behind the differential regulatory treatment of shadow banking in the EU and the US. In highlighting the differences between shadow banking across the Atlantic, this paper focuses on the repo markets, as the main instruments and activities that play a significant role in credit intermediation outside the regulatory perimeter of the traditional or regular banking system. It then discusses one specific segment of the shadow banking entities, i.e., Money Market Funds (MMFs), and highlights the fundamental differences in the structure, functioning, and existing regulatory treatment of the MMFs in the US and the EU. The paper concludes that the market structure, business models, as well as legacy legal and regulatory frameworks of shadow banking (as well as banking) display substantial differences in the US and the EU. The findings in this paper rally against one-size-fits-all approaches to addressing the problems of the shadow banking system worldwide and recommends differentiated and more nuanced regulatory approaches to regulating shadow banking across the Atlantic. By implication, any adoption of the US regulatory framework or recommendations of international fora for the shadow banking sector by the EU regulatory authorities should not overlook these differences.
- Published
- 2019
45. MEASURING CONTAGION RISK ON BANKING SYSTEM IN THE DIGITAL ERA
- Author
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Ulil Hartono, Yulita Wulandari, and Musdholifah Musdholifah
- Subjects
Money market ,Financial contagion ,banking institution ,media_common.quotation_subject ,Yield (finance) ,Financial system ,shock ,Payment ,Vector autoregression ,HB1-3840 ,Shock (economics) ,contagion ,interbank market ,systemic risk ,Systemic risk ,Economic theory. Demography ,Business ,Interbank lending market ,media_common - Abstract
As an essential institution to the practice of national payment flow, banks always confront with various risk exposures inherent in them. An interbank interactions through interbank money market might yield higher systemic risks that can lead to a default. This study aims at determining the contagion effects towards Indonesian banks. This study used 18 bank samples who provided annual reports from 2007 to 2016. The measurement of the systemic risks was performed by using financial contagion risk index and was tested using Vector Autoregression method. Results show that there was a one-way causality pattern between banks as the research samples, covering BCA with Bank Mayapada, Bank Maybank, Bank Mega, and Bank Resona Perdania and also Bank CIMB Niaga with BCA, BRI, BNI, BTN, Commonwealth Bank, J-Trust Bank, Bank KEB Hana, Bank Mega, and Bank Permata. Meanwhile, two-way causality occurs between Bank BCA and Bank Mandiri and vice versa. In addition, the impact of the risk pressure of a bank is not always positive, however, it is also negative in some cases, which means that the bank can take advantage of the shocked conditions experienced by other banks
- Published
- 2019
46. Money market digitization consequences on financial inclusion of businesses at the base of the pyramid in Nigeria
- Author
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Oluwafemi Michael Olagunju and Samuel C. Avemaria Utulu
- Subjects
Financial inclusion ,Money market ,Pyramid ,Financial system ,Business ,Base (topology) ,Digitization - Published
- 2021
47. O.M.W. Sprague (the Man Who 'Wrote the Book' on Financial Crises) meets the Great Depression
- Author
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Hugh Rockoff
- Subjects
Finance ,Money market ,business.industry ,media_common.quotation_subject ,Gold standard ,Monetary policy ,Interest rate ,Treasury ,Depression (economics) ,Great Depression ,Economics ,Position (finance) ,business ,media_common - Abstract
When the Great Depression struck the United States, Oliver M.W. Sprague was America’s foremost expert on financial crises. His History of Crises under the National Banking System is a frequently cited classic. Had he diagnosed a banking panic and called for an aggressive response by the Federal Reserve, it might have made a difference; but he did not. Sprague’s misdiagnosis had, I argue, two causes. First, the crisis lacked the symptoms of a panic, such as high short-term interest rates in the New York money market, which Sprague had identified from his studies of previous crises. Second, Sprague’s macro-economic ideas led him to conclude that an expansionary monetary policy would be of little help once a depression was underway. Sprague’s main concern was that abandoning the gold standard would intensify the crisis, a concern that led him to resign his position as advisor to the U.S. Treasury to protest Roosevelt’s gold policy.
- Published
- 2021
48. Predict the Timeliness of Customer Credit Payments at Finance Companies Using a Decision Tree Algorithm
- Author
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Yudi, Erwin Ginting, Fithry Tahel, Muhammad Fauzi, Nita Sari Br Sembiring, and Mikha Dayan Sinaga
- Subjects
Finance ,Money market ,business.industry ,Decision tree learning ,media_common.quotation_subject ,Decision tree ,ComputerApplications_COMPUTERSINOTHERSYSTEMS ,Payment ,Credit history ,Bankruptcy ,business ,Capital market ,Financial services ,media_common - Abstract
Different people from different sectors and different organizations need financing for various purposes. Financial services provide financing from various financial institutions which are divided into the capital market and money market. Timeliness of customer credit payments is very important for finance companies. Bad credit payments can make finance companies unhealthy and can even lead to bankruptcy. To be able to avoid this, a good selection of prospective customers is needed so that prospective customers who will receive credit can pay their credit on time. Assessment of the acceptance of prospective customers in receiving credit uses the 4 C principles, namely Character, Capacity, Capital, and Condition. Data mining is often used to predict an event such as a potential customer who can pay his credit on time or not. One of the algorithms that can be used in data mining to predict the timeliness of customer credit payments is a decision tree algorithm. A decision tree is a tree structure like a flowchart, in which each node has an association with other nodes. The result of this research is the creation of a model that can be used to predict prospective customers in receiving credit or not.
- Published
- 2021
49. Essays on banking
- Author
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Dimitrios I. Karanastasis, Αντζουλάτος, Άγγελος, and Σχολή Χρηματοοικονομικής και Στατιστικής. Τμήμα Χρηματοοικονομικής και Τραπεζικής Διοικητικής
- Subjects
Actuarial science ,Financial stability ,Monitoring ,Economics ,Economic crisis ,Transparency (market) ,Bank run ,Monetary economics ,Market discipline ,Shareholder value ,Banking ,Probability of default ,Credit ratings ,Earnings management ,Shareholder ,Financial crisis ,Business ,Shareholders ,Loan-loss provisions ,Money market ,Dow Jones Sustainability Index (DJSI) - Abstract
The work for this thesis was done during the period 2010 to 2016, after the worst financial crisis since the Great Depression, and in the immediate wake of the Eurozone debt crisis that has casted doubts on European integration. With the crisis largely blamed on bank excessive risk-taking and supervisors’ inability to contain it, and with the aim to prevent similar crises in the future, much of the policy discussions and regulatory actions have focused on ways to address both of these failures of market economies. One way concerns the strengthening of market discipline, i.e., strengthening the incentives and capacity of external stakeholders (depositors, shareholders and other holders of bank liabilities) to induce more prudent risktaking behavior by bank managers. Thus motivated, this thesis focuses on the channels and effectiveness of market discipline. Said differently, it explores whether, and how, market forces could be trusted to do a better job in containing risk-taking behavior by banks and thus effectively support and supplement supervisors’ efforts. From a policy-making point of view, the thesis explores whether market discipline can promote financial stability. The thesis comprises of three empirical papers. The first explores whether the expected government support of banks, implicit or explicit, weakens market discipline. The second explores whether the intrusive external monitoring by knowledgeable and influential external stakeholders fosters more prudent loan-loss provisions and, hence, more prudent accounting practices by banks. The third paper extends the second, taking into account the role of the institutional and social environment in an international setting. The results from all three papers are supportive of the notion that market discipline can promote financial stability. Details follow. The first paper explores whether expected government support weakens market discipline by bank shareholders, especially after the eruption of the global financial crisis in 2008. Two counter-veiling forces are at work. On the one hand, as it is suggested by the related literature, the expected support may give banks greater leeway to undertake risks, for it reduces the monitoring incentives of depositors and other bank creditors. Shareholders, recognizing the resultant higher probability of default as well as the possibility that they might be wiped out in case of bank default, have an incentive to intensify monitoring and exercise stronger market discipline. On the other hand, the expected support may also reduce the possibility of a bank run, weakening as a result the need for monitoring by bank shareholders and, hence, market discipline on their part. Expected support is measured as the difference of two bank credit ratings from Moody’s: an all-in rating, which encompasses expected support, and a stand-alone rating, which does not. We estimate a model in which a forward-looking measure of shareholder value, the market-to-book ratio, is the dependent variable and the measure of expected support is one of the explanatory variables. A negative coefficient of the expected support would be consistent with market discipline for it would indicate that shareholders are willing to pay less for banks with higher expected support The results, from a sample of about 250 banks worldwide, indicate that, far from weakening market discipline by shareholders, the expected support strengthens it, and more so for the riskier banks – i.e., those with lower stand-alone rating. The results also highlight the two counter-veiling effects of the expected support on market discipline. Specifically, as the size of the expected support increases, its negative effect on the market-to-book ratio decreases. The second paper sheds light on earnings management via loan-loss provisions (LLPs) and the associated trade-off between financial-statement transparency and financial stability, by exploiting time and cross-sectional variation. The time variation pertains to the welldocumented shift towards more forward-looking LLPs after the crisis of 2008. The working hypothesis is that the rules concerning LLPs effectively shifted in favor of forward-looking provisions. This shift is expected to be associated with stronger income smoothing and signaling, and more so for banks subject to weaker market discipline. The cross sectional variation pertains to the intrusive external monitoring by funds that are members of the US Sustainability Investment Forum (USSIF). The working hypothesis is that this process amounts to stronger monitoring and, hence, stronger market discipline. Thus, it is expected that income smoothing and signaling will be weaker for the banks in which USSIF funds invest relative to the remaining banks. Moreover, after the said shift in supervisory and regulatory preferences, income smoothing and signaling will increase by less for banks in which USSIF funds invest. The results, from a sample of more than 300 publicly-held US bank holding companies, over the period 1999 – 2014, confirm that the banks under the intrusive monitoring exhibit less earnings management. Since, however, this differential behavior got more pronounced after the regulatory shift, the results further suggest that USSIF funds induce provisioning behavior that goes well beyond the stricter application of the existing accounting and supervisory rules, thus ameliorating the aforementioned trade-off. The third paper explores whether the inclusion of a bank in the Dow Jones Sustainability Index (DJSI) reduces bank managers’ incentives for earnings management through loan-loss provisions. The inclusion in the DJSI depends on a rigorous bank assessment, conducted each year. The working hypothesis is that being included in the DJSI constitutes a credible signal to outside stakeholders of prudent behavior. An aspect of such behavior is less earnings management through loan-loss provisions. The results from a sample of 297 banks around the globe, over the period 2004 – 2010, indicate that banks included in the DJSI engage in less earnings management relative to the banks that were assessed but not included. This more prudent provisioning behavior persists when we control for the strength of private sector monitoring with country-level indices for private sector monitoring and the quality of external audits. Yet, it largely diminishes when we control for the strength of supervisory power and capital regulation. The last result poses an interesting question: Is stronger supervision a substitute of market discipline? Or, is the DJSI assessment process geared towards accepting more banks from countries with stronger supervision; All in all, the papers in this thesis highlight the important and decisive role market discipline plays in the financial system. They suggest that shareholders, probably driven by the objective difficulty of accurately assessing banks’ true condition and prospects, appreciate credible signals of prudent behavior. The results are also supportive of the power of external monitoring as a restraining factor in bank-managers’ risk-taking.
- Published
- 2021
50. Impact of e-money on money supply: Estimation and policy implication for Bangladesh
- Author
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Ahmed Mehedi Nizam
- Subjects
History ,Money market ,Bangladesh ,Multidisciplinary ,Polymers and Plastics ,media_common.quotation_subject ,Money supply ,Monetary policy ,Money multiplier ,Monetary economics ,Payment ,Industrial and Manufacturing Engineering ,Interest rate ,Electronic money ,Policy ,Mobile payment ,Humans ,Business ,Business and International Management ,Cell Phone ,media_common - Abstract
With the rapid proliferation of mobile telephony and the establishment of an IT-enabled payment and settlement system, Bangladesh, nowadays, is experiencing a meteoric rise in the usage of mobile financial services (MFS). As more and more people are opting to use this service, a huge number of mobile accounts are opened every day and a substantial amount of money is deposited, withdrawn and transferred frequently through the mobile network. This ever-increasing amount of mobile money flowing through the network may have a sizeable impact on the overall money supply of the country. Thus far, no systematic study has been conducted to quantify the impact of the mobile money on the conventional money supply of Bangladesh. In this study, we attempt to quantify the contribution of mobile money on the money supply which is an important quantity-based anchor of monetary policy in Bangladesh. Apart from quantifying the impact of digital (mobile) money on the money supply, we also qualitatively discuss its implication on another price-based nominal anchor of monetary policy in Bangladesh, i.e., interest rate. Moreover, in recent times, the government of Bangladesh has capped market interest rate with an intent to boost up business activities and in doing so, it (the government) has irrevocably broken the money market equilibrium which may result into dead-weight loss according to economic theory. Here, we qualitatively argue that financial inclusion through MFS has the potential to substantially reduce market interest rate without any manual intervention by significantly adding to the money supply which is supposed to be resulted into a reduced interest rate as an eventual consequence.
- Published
- 2021
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