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AbstractThe emergence of financial technology (Fintech) has greatly impacted the financial landscape in Sub-Saharan Africa (SSA) in recent years. The impact on bank funding and economic growth in the region cannot be ignored. This paper examines the extent to which Fintech has affected bank funding and economic growth in the region by utilizing data from 56 banks across 19 SSA economies between 2010 and 2020. The analysis was conducted using a covariance-based structural equation modeling method. The results show that Fintech disruptions have triggered an increase in equity funding for banks, while having negligible effects on deposit and long-term debt financing. The study also outlines that Fintech’s limited size within the financial system has ultimately restricted its effects on economic growth in SSA. Furthermore, the study did not find evidence of Fintech mediating the impact on economic growth via the bank funding channel, suggesting that SSA banking systems are capable of resisting Fintech disruptions for financial stability. Overall, these findings highlight the resilience of bank funding structures to Fintech disruptions, emphasizing the importance of prudent funding management and continued investment in Fintech for sustained economic growth in Sub-Saharan Africa. However, as Fintech continues to evolve and grow, policymakers should remain vigilant and monitor its impact on the financial system and economic growth in the region. By understanding the implications of Fintech on bank funding and economic growth in SSA, this paper contributes to the ongoing discussion on the potential benefits and challenges of technological innovations in the financial sector.

In recent times, businesses have been dealing with a multifaceted mix of social, environmental, and technical trends. This necessitates improved sustainability-based management and Corporate Environmental Responsibility (CER) engagement, emphasizing the importance of understanding the influence of Corporate Environmental Performance (CEP) on innovation performance and economic consequences. The current study investigates this relationship by looking at how banks funding and government subsidies in China affect the relationship between innovation performances and financing constraints through a quantitative analysis from 2008 to 2017. The findings not only revealed a statistically significant association and influence of CEP on Chinese business innovation performance and financing restrictions, they also confirm the mediating role of bank funding on innovation performance and financing constraints. All CER's CEP indicators had a favorable and significant impact on innovation performance, although the mediation of banking finance was particular to innovation performance and financing restrictions. They also reveal a negative significant influence of CEP on budgetary restrictions. Since a proactive environmental strategy has no negative economic effects, the report advises Chinese listed companies to incorporate CER participation to boost innovation and ease financing limitations. [ABSTRACT FROM AUTHOR]

The emergence of financial technology (Fintech) has greatly impacted the financial landscape in Sub-Saharan Africa (SSA) in recent years. The impact on bank funding and economic growth in the region cannot be ignored. This paper examines the extent to which Fintech has affected bank funding and economic growth in the region by utilizing data from 56 banks across 19 SSA economies between 2010 and 2020. The analysis was conducted using a covariance-based structural equation modeling method. The results show that Fintech disruptions have triggered an increase in equity funding for banks, while having negligible effects on deposit and long-term debt financing. The study also outlines that Fintech's limited size within the financial system has ultimately restricted its effects on economic growth in SSA. Furthermore, the study did not find evidence of Fintech mediating the impact on economic growth via the bank funding channel, suggesting that SSA banking systems are capable of resisting Fintech disruptions for financial stability. Overall, these findings highlight the resilience of bank funding structures to Fintech disruptions, emphasizing the importance of prudent funding management and continued investment in Fintech for sustained economic growth in Sub-Saharan Africa. However, as Fintech continues to evolve and grow, policymakers should remain vigilant and monitor its impact on the financial system and economic growth in the region. By understanding the implications of Fintech on bank funding and economic growth in SSA, this paper contributes to the ongoing discussion on the potential benefits and challenges of technological innovations in the financial sector. [ABSTRACT FROM AUTHOR]

Technological innovation and its paradigm, that is, the Fourth Industrial Revolution-4IR, have shown strong impact on income levels of adopters across the globe. To this end, this analysis examines the impact of bank funding and institutional quality on technological advancement. This study adds additional variables such as high-technology exports and foreign direct investment (FDI) as control variable. Our study period spans from 2000 to 2018 on an annual frequency for E7 economies (Brazil, Indonesia, Mexico, India, Turkey, Russia, and China). This study leverages on cross-sectional ARDL, Augmented Mean Group (AMG), and Common Correlated Effects Mean Group Estimates (CCEMG) estimation techniques to examine long-run relationship between the outlined variables. Empirical findings show that institution quality, bank finance, income, high-technology exports, and foreign direct investments exert a positive effect on advancements in technology. Furthermore, the interaction between bank finance and institution quality on technological advancement is also positive and statistically significant. Based on the findings, it is concluded that large-scale funding is crucial for businesses to leverage revolutionary technology. Likewise, access to large capital sources if made easier encourages technology affordance as well as innovation and operational excellence. Thus, economies with established legal and financial systems stand to offer businesses such security, which encourages business innovation. Consequently, E7 economies ought to improve their financial and legal systems to boost financial security, creativity, and competitiveness of businesses. [ABSTRACT FROM AUTHOR]

The banking system, which has been the fulcrum of funding for Nigeria’s economy, is plagued by instability in the face of a growing amount of non-performing loans. This is examined in the current milieu of the need for funding the Sustainable Development Goals (SDGs). Using a number of proxies for SDGs 8 and 9, annual time series data covering 1992 to 2019 were used with variables such as GDP per capita, commercial banks’ loans to small-scale enterprises, banking system stability indicators and liquid assets to total assets of banks. The study utilized the Autoregressive Distributed Lag. Findings showed that banking system stability has a significant positive effect on funding the SDGs 8 and 9 beyond the five per cent level of significance within the study period. Non-performing loans remained negative throughout the study. The result suggests that banking stability would enhance funding of the SDGs, and banks would be stable if they finance the SDGs. The policy implication explains the importance of banks actively pursuing opportunities to build sustainable enterprises and developing strategies that will enable their core banking business to be more venture-driven rather than consumer-oriented. In conclusion, there is a need to completely eliminate or reduce the quantum of non-performing loans from the system and establish a regulatory framework that will facilitate its expected role of intermediation in the economy profitably and successfully. AcknowledgmentThe authors would like to appreciate Covenant University for financial support to publish this paper.

The study examined the determinants of bank stability within the South African banking sector. By controlling for individual bank characteristics and market characteristics, the study determined possible determinants of solvency, a proxy for bank stability, measured by z-score within the South African financial sector. The South African financial sector is highly concentrated but with a significantly large number of banks, the greater portion being foreign owned banks. The business models of some of the financial intermediaries differ from the big four and therefore the influence of the type of business model is of great interest in this study, as it highlights a unique feature of the South African financial sector. The study’s investigation used panel data estimation techniques and found that among the specific bank characteristics, lending activity and capitalization do significantly affect solvency of banks and at sector level concentration was significant. The crisis dummy also revealed that the presence of a financial crisis heightened insolvency. The results have implications for financial institutions and therefore are of interest to regulators, bank management and researchers. Policy prescription in the form of Prompt Corrective Action framework is made to ensure proactive reaction to trends likely to cause instability.

This case presents students with a real situation faced by Blue Ridge Bank in the year 2015. The bank is considering whether to offer a novel prizelinked savings account following the recent enactment of The American Savings Promotion Act. Prize-linked savings (PLS) accounts provide a unique savings experience that combines the thrill of playing the lottery with the practical benefits of regularly saving money. Will the new account attract the low-cost deposits needed to fuel the bank's rapid expansion? If so, how should the bank design the product? The bank has a fleeting opportunity to benefit as the industry's first mover, and it needs to act quickly. The case study provides a novel setting for students to explore topics of commercial bank funding, cost-benefit analysis, and incremental cash flow reasoning. It is best suited for undergraduate or graduate students enrolled in a course on (or related to) commercial banking. It may also be used in finance capstone courses as a unique setting for students to apply foundational skills in cost-benefit analysis and incremental cash flow reasoning. [ABSTRACT FROM AUTHOR]

This study uses a large panel dataset of Western European banks to examine the determinants of bank funding stability. Banks are divided into three categories by bank ownership type; the ownership types in this study are commercial banks, cooperative banks and savings banks. Three sources of stable bank funding are investigated: customer deposits, equity, and long‐term liabilities. Furthermore, the sum of these funding components is used as a proxy variable for a bank's total available stable funding (ASF). A special focus is on the temporal evolution of these funding types. The regression results show that commercial banks' funding became much more stable in the period 2005–2017. However, that funding remains, on average, less stable than does cooperative and savings banks' funding. In addition, funding stability has remained at the pre‐crisis level in cooperative and savings banks, despite a steep dip in cooperative banks' ASF during the sovereign debt crisis. Furthermore, banks substantially decreased financing from long‐term liabilities after the financial crisis, replacing it with customer deposits and equity. [ABSTRACT FROM AUTHOR]

Abstract Next to deposits, European banks have historically largely used bank obligations such as covered bonds. Their US counterparties, on the contrary, heavily rely on securitization to fund mortgages. We assess how banks' liquidity and funding position during and after the Global Financial Crisis (GFC) affects the decision to issue (private label) mortgage backed securities (MBS), covered bonds (CB) or senior unsecured bonds (SUB). Since the decisions to issue either instrument are not necessarily independent from each other, we estimate conditional probit and tobit models in order to account for the simultaneous nature of the issuances. We see that neither instrument plays any role in liquidity management during the GFC. In the post-GFC period, banks reach out to issuing MBS when facing short-term illiquidity. Banks could issue MBS as a way to comply with Basel III liquidity regulations. In turn, a bank's decision to issue CB is not affected by bank's liquidity and liquidity management occurs instead through managing the amount of CB. The issuance of SUB is also not affected by liquidity. Overall, the paper shows that only MBS have actively been issued as a response to liquidity shortages of banks' balance sheets and shows that MBS and CB, which often are seen as alternative instruments, serve different purposes. [ABSTRACT FROM AUTHOR]

This study aims to show the application of game theory on the funding strategy of PT. Bank Syari'ah Mandiri and PT. Bank BNI Syari'ah in facing competition of syariah banking industry in Indonesia. The approach used is descriptive quantitative by using payoff matrix analysis technique in game theory between PT. Bank Syari'ah Mandiri and PT. Bank BNI Syari'ah as research subject and funding strategy as object of research and DPK, hajj fund, number of customer as indicator of payoff. The results showed that the Nash Ekuilibrium and the Prisoner's Dilemma were not found in this game. Dominant strategy that get the highest payoff from each banks is a strategy to increase the promotion and marketing of haji cheap more aggressive to increase core deposit in anticipation of the decrease of funds due to the establishment of Hajj Financial Management Agency (BPKH) with 32,1 score for PT. Bank Syari'ah Mandiri and mass-funding strategy in partnership with BNI in the form of agency cooperation / Sharia Services Bank and synergize with micro outlet for marketing DPK with 25,4 score for PT. Bank BNI Syari'ah. [ABSTRACT FROM AUTHOR]

Existing literature has identified domestic restrictive monetary policy and deteriorating funding conditions as the predominant factors explaining the increase in net interoffice accounts of global banks, that is, the net liabilities of parent offices due to their related foreign offices. The purpose of this research is twofold. Firstly, it quantifies the responsiveness of net interoffice accounts to variations in different types of domestic funding. Secondly, the paper assesses whether the relationship between net interoffice accounts and domestic policy-steered rates depends on cross-sectional differences in the funding structure of global banks. Using US banks’ balance sheets data collected by the Federal Financial Institutions Examination Council, the results highlight the importance of domestic repo borrowings in explaining net interoffice accounts, especially for larger banks during the crisis. On the other hand, a negative relationship between policy rates and net interoffice accounts is observed only for those global banks with a relatively higher share of repo borrowings.

Dependence of the bank income statement indicators on its capital structure is in the focus of this paper. The dynamic panel data analysis encompasses 28 commercial banks from the Republic of Croatia in a pre-recession period i.e. 2003-2008 with a goal of estimating whether heterogeneity of capital structures among banks in Croatia explains differences seen in their profitability. In comparison to the existing empirical background on the capital structure and bank financial performance nexus, the novelty of this research is in the operating margin which is being defined as a dependent variable, among the other usually employed proxies of the bank profitability.

I study rollover risk in wholesale funding markets when intermediaries hold liquidity ex ante and fire sales may occur ex post. Multiple equilibria exist in a global rollover game: intermediate liquidity holdings support equilibria with both positive and zero expected liquidation. A simple uniqueness refinement pins down the private liquidity choice, which balances the forgone expected return on investment with reduced fragility and costly liquidation. Due to fire sales, liquidity holdings are strategic substitutes. Intermediaries free ride on the holdings of other intermediaries, causing excessive liquidation. To internalize the systemic nature of liquidity, a macroprudential authority imposes liquidity buffers. [ABSTRACT FROM AUTHOR]

Purpose -- This paper aims to identify gaps and critical issues in policy framework for infrastructure debt fund (IDF) to become financially viable in the Indian context. Growth of any economy is dependent on successful implementation of infrastructure projects. However, infrastructure development is linked to availability of equity and debt funds to finance these projects. IDF is an instrument which aims at enabling financing of infrastructure. Design/methodology/approach -- The exploratory research adopted is qualitative and based on secondary data related to infrastructure needs, challenges, factors influencing infrastructure financing and options available for infrastructure financing in the Indian context. It investigates the relationship between external factors, internal factors and viability of IDF and provides recommendations to policy makers to roll-out an enabling policy and regulatory environment. Findings -- Findings show that issues such as entry barriers for banks, insufficient tax incentives, restrictions on type of projects to be considered for funding and meeting the expectation of low-cost funds need to be addressed so that IDFs can contribute toward funding requirement of the infrastructure sector. Research limitations/implications -- IDFs have been recently introduced in India and the use of primary and secondary data has been limited. Comparison of IDF guidelines in India with guidelines for similar instruments in developed countries has been left for a later stage. Originality/value -- Value of this study is that it identifies the issues in current guidelines of IDF through the understanding of the policy and regulatory framework that governs IDF. The study also makes recommendations to the government and regulators which would enable IDF to become a viable instrument. [ABSTRACT FROM AUTHOR]

Purpose: The goal of this paper is to show that among the different ways of reporting sustainability information, there is a majority acceptance of voluntary initiatives to establish a homogeneous framework for transparency. Design/methodology/approach: This paper analyses the non financial reporting disclosed in two years (2010 and 2011) by all the companies listed on the Spanish IBEX 35 in 2010. The methodology is based on the study of non financial reporting available on the websites of the companies analysed. Findings: The conclusions highlight that the Global Reporting Initiative sustainability reporting framework has been widely adopted by the firms studied as a global accepted standard in this non financial reporting and as the most important guidelines in this field. From this same descriptive point of view, we conclude that non financial entities which disclose have improved or maintained their banks' balance sheet positions. Research limitations/implications: This study is based on acceptance as a first step although it needs to be completed with a deeper analysis of the content and its suitability to the stakeholders' information requirements. This descriptive analysis is therefore a first step in continuing research in this field. Originality/value: Disclosure of non financial information has been a miscellany of different practices depending on multiple variables. This paper sheds some light on this subject specifically in the comparability of non financial reporting and its relationship with other characteristics of firms. [ABSTRACT FROM AUTHOR]

We examine how bank funding structure and securitization activities affect the currency denomination of business loans. We analyze a unique data set that includes information on the requested and granted loan currency for 99,490 loans granted to 57,464 firms by a Bulgarian bank. Our findings document that foreign currency lending is at least partially driven by bank eagerness to match the currency structure of assets with that of liabilities. Our results also show that loan currency, as well as loan amount and maturity, are adjusted to make loans eligible for securitization. [ABSTRACT FROM AUTHOR]

We use data on the 48 largest multinational banking groups to compare the lending of their 199 foreign subsidiaries during the Great Recession with lending by a benchmark of 202 domestic banks. Contrary to earlier and more contained crises, parent banks were not a significant source of strength to their subsidiaries during 2008-09. When controlling for other bank characteristics, multinational bank subsidiaries had to slow down credit growth almost three times as fast as domestic banks. This was in particular the case for subsidiaries of banking groups that relied more on wholesale funding. [ABSTRACT FROM AUTHOR]

This paper investigates the implications of market power and funding strategies for bank-interest margins, using a sample of 978 banks in 55 emerging and developing countries over an eight-year period, 2000–2007. We provide additional insight by examining the complex interlocking of three key variables that are important for regulators: the degree of market power, funding sources and bank performance. The results show that market power increases when banks use internal funding to diversify into non-interest income-generating activities. We also find that the high net-interest margins of banks in emerging and developing countries can be explained by the degree of market power, credit risk, and implicit interest payments. In addition, our results suggest that interest margins among banks with market power are significantly more sensitive to internally generated funds than they are to deposit and wholesale funding. [ABSTRACT FROM PUBLISHER]

High values of implicit guarantees for bank debt can be taken as signalling the market's expectation that public authorities will rescue the institution in question in times of severe financial distress. By the same token, declines in the measure would suggest a drop in the perceived likelihood of such a bailout, perhaps reflecting the availability of more effective failure resolution tools (although they could also reflect other factors such an improvement in the asset quality of banks). The observed decline in the value of implicit guarantees over the past few years is at least consistent with the view that current efforts to establish more effective resolution regimes have been credible. The difficulty with this interpretation is that, as shown in previous CMF work, observed declines in the value of implicit guarantees tend primarily to reflect declining credit strength of the sovereign. The present report suggests, however, that the recently observed reduction in the value of implicit guarantees is in some cases beyond what would be expected on the basis of declining credit strength of the sovereign alone. Rather, part of the drop in value reflects the effects of changes in resolution regimes and related practices. In particular, holders of unsecured bank debt in some countries have actually incurred losses, although these events have tended to be rare and have occurred typically in the context of the failures of rather small banks. And where such losses occurred, however, there is clear evidence of a decline in implicit bank debt guarantees, especially but not exclusively in the case of smaller banks. In fact, in countries where legal changes were made to establish more effective resolution regimes and where, subsequently, actual failure resolutions involved losses of the part of at least some holders of unsecured bank debt, noticeable declines in the value of implicit guarantees were observed. Such cases remain isolated, however, among other things because there is the perception that no first-mover advantage exists from being tougher on creditors than other jurisdictions. Such course of action would put domestic banks at a finding disadvantage compared to international peers from jurisdictions where no such stance was adopted. This situation puts a premium on internationally co-ordinated efforts to reign in implicit guarantees, including those pursued within the European Union to develop an effective cross-border bank failure resolution framework. [ABSTRACT FROM AUTHOR]

The global financial crisis and the policy response to it have placed a sharp spotlight on the issue of implicit guarantees for bank debt This report discusses the incidence of implicit government guarantees for bank debt, their determinants, and estimates of their value. It shows i) that the extent of implicit guarantees differs from one banking sector to another and, within a given banking sector, from one bank to another, ii) that implicit guarantees are higher the lower the bank's stand-alone credit worthiness, the higher the credit worthiness of its sovereign and the relatively bigger the bank in its domestic context, iii) that the incidence of implicit guarantees increased since the beginning of the financial crisis, but has decreased more recently, iv) that this recent decrease can be explained to a large extent by declining sovereign strength and hence a reduced capacity of on the part of many sovereigns to provide for such guarantees, but is also consistent with ongoing efforts in many OECD countries to make bank failure resolution regimes and practices more effective, and v) that implicit guarantees persist. Implicit guarantees imply an undesirably close link between the value of bank and sovereign debt. They also imply significant funding cost advantages for the banks that benefit from them, thus implying competitive distortions and an invitation to beneficiary banks to use them and, perhaps, take on too much risk. [ABSTRACT FROM AUTHOR]

Abstract: The paper examines evidence for a bank-lending channel in Ukraine. We use a panel of bank balance sheet data to estimate the response of bank lending to changes in monetary policy between 1998 and 2003. In particular, we segregate banks according to their asset size, capitalization and liquidity standing to test whether lending responses differ depending on the strength of a bank. The main result is that undercapitalized banks are more affected by a monetary policy change than is an average bank, which is consistent with the bank lending channel hypothesis, suggesting that monetary policy can affect deposits of commercial banks forcing them to change lending, which influences the amount of investment in the economy. [Copyright &y& Elsevier]

[Display omitted] • We examine the working of the bank liquidity creation channel. • Banks expand liquidity creation after the central bank relaxes monetary policy. • Greater market power weakens the bank liquidity creation channel. • Banks with more diversified funding patterns are less sensitive to monetary shocks. The paper analyzes the effects of bank funding structure and market power on the bank liquidity creation channel in an emerging market as well as the extent of monetary policy transmission. Using a panel of Vietnamese banks during 2007–2019, we find that banks may expand liquidity creation more aggressively after the central bank relaxes monetary policy through cutting policy interest rates or injecting money into the market. Further analysis reveals that not all banks are equally driven by monetary policy changes. First, greater market power weakens the monetary policy transmission via the bank liquidity creation channel. Second, banks with less reliance on customer deposits or having a more diversified funding pattern may be less sensitive to monetary policy shocks while creating liquidity. These findings hold across alternative liquidity creation measures (including and excluding off-balance sheet items) and various monetary policy indicators (based on both interest- and quantitative-based instruments). [ABSTRACT FROM AUTHOR]