Factors affecting bank loan quality: a panel analysis of emerging markets

This study investigates the factors affecting the loan quality of banking sector in seventeen emerging and developing markets using quarterly panel dataset covering period of 2010–2019 and utilising feasible generalised least square methodology. Our empirical analysis suggests that inflation and lending rates negatively affect the banks’ loan quality measured by non-performing loans. On the contrary, economic growth and capital adequacy show a positive impact on banks’ loan quality. The inclusion of the ratio of net open position in foreign exchange to capital and its’ lagged values, as an additional factor, has marked out this research from other studies. Our results reveal that the ratio has a significant negative impact on loan quality in banking. This finding, as it was also seen in Asian crises of 1997, indicates that the higher the ratio net open position in foreign exchange to capital cause moral hazard problem leading to the higher non-performing loans in banking sectors.

     

The determinants of the currency ratio,the time deposit ratio,and the savings deposit ratio: An econometric analysis for the West-German Economy

Zusammenfassung Die Determinanten der Bargeld-, Terminguthaben- und Sparguthaben-Quote: Eine ?konometrische Analyse für die westdeutsche Wirtschaft. —Obwohl die Geldangebotstheorie in den letzten 15 Jahren einen stürmischen Aufschwung genommen hat, beschr?nkt sich ihr Interesse bislang vor allem auf das Verhalten der Zentralbank und der Gesch?ftsbanken, w?hrend den Verhaltensweisen des Nicht-Bankensektors nach wie vor meist nur in Form von stark vereinfachenden Modellannahmen Rechnung getragen wird. Der vorliegende Beitrag reiht sich in die bislang nicht allzu gro\e Zahl von Versuchen ein, die sich zum Ziel gesetzt haben, diesem Mangel nach M?glichkeit abzuhelfen. Die hier zur Diskussion gestellte Theorie der Bargeld-, der Terminguthaben- und der Sparguthaben-Quote stützt sich im wesentlichen auf die keynesianische Kassen-haltungsanalyse, insbesondere auf den Gedanken, da\ ein Teil der geplanten Kassenbest?nde prim?r Transaktionszwecken und ein anderer Teil prim?r der Verm?gensanlage dient. Da Bargeldbest?nde ausschlie\lich und Sichteinlagen überwiegend als Zahlungsmittel Verwendung finden, Termin- und Spareinlagen hingegen haupts?chlich als Wertaufbewahrungsmittel fungieren, l?\t das keynesianische Geldnachfrage-modell vermuten, da\ die zu beobachtenden Schwankungen der fraglichen drei Quoten auf Ver?nderungen des Einkommens, des Verm?gens, der Marktzinss?tze und bestimmter Preisrelationen zurückgehen. Diese Annahme wird für die Bundesrepublik Deutschland durch einen Hypothesentest best?tigt, dem Quartalsdaten für den Zeitraum 1968 I–1974 IV zugrunde liegen.

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Résumé Les déterminants de quotient de monnaie, du quotient d’argent à terme et du quotient d’épargne en dép?t: Une analyse économétrique pour l’économie d’Allemagne de l’Ouest. —Bien que la théorie d’offre d’argent ait repris tempétueusement pendant les dernières 15 années son intérêt se borne à la conduite de la banque centrale et des banques commerciales pendant qu’on considère les conduites du secteur non-bancaire le plus souvent de manière des suppositions de modèle très simplifiantes seulement. La contribution présente se joint au nombre pas considérable des essais ayant le but d’éliminer ce défaut si c’est possible. La théorie mise ici en discussion du quota d'argent en caisse, du quota de dép?t à terme et du quota de dép?t d’épargne base principalement sur l’analyse Keynesienne de caisse, particulièrement sur la pensée qu’une part des stocks de caisse projetés principalement sert aux buts de transaction et qu’une autre part principalement sert au placement de la fortune. Comme les stocks d’argent en caisse exclusivement et les dép?ts à vue pour la plupart sont utilisés comme moyen de paiement pendant que les dép?ts d’épargne servent au moyen de conservation de valeur, le modèle Keynesien de demande d’argent laisse supposer qu'on peut dériver les fluctuations observées des trois quotas correspondants des changes du revenu, de la fortune, des taux d'intérêt de marché et des relations des prix spécifiques. Cette suppositions se confirme par un test de hypothèse pour l’Allemagne de l’Ouest basant sur des données trimestrielles pour la période 1968 I–1974 IV.

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Resumen Los déterminantes de los coeficientes de liquidez, los depósitos a plazo y los ahorros: Un análisis econométrico para la economía de Alemania Occidental. —A pesar del rápido desarrollo que ha experimentado la teoría de la oferta del dinero durante los últimos 15 a?os, su interés se concentra en el comportamiento del banco central y de los bancos comerciales; el comportamiento del sector nobancario generalmente se tiene en cuenta únicamente mediante supuestos simplicados. E1 presente estudio, como otros anteriores a él, tiene por finalidad la de remediar esta insuficiencia. La teoría de los coeficientes de liquidez de depósitos a plazo y de los ahorros, que se presenta aquí, está basada fundamentalmente en el análisis keynesiano de liquidez de caja y especialmente en la idea de que el dinero mantenido en calidad de reserva sirve en parte para efectuar transacciones y en parte para formar un patrimonio. Dado que el papel de moneda junto con los depósitos a la vista se utiliza primordialmente como medio de pago mientras que depósitos a plazo y ahorros más que nada cumplen la función de conservar activos, el modelo keynesiano de la demanda de dinero hace pensar que fluctuaciones de los tres coeficientes mencionados provienen de variaciones de la renta, del patrimonio, de los tipos de interés de mercado y de relaciones de precios determinadas. Esta hipótesis queda confirmada mediante un test realizado para la República Federal de Alemania, en el que entran datos trimestrales correspondientes al período 1968I–1974IV.

     

Growth and Welfare Distribution in an Ageing Society: an Applied General Equilibrium Analysis for the Netherlands

This paper studies the effects of the imminent ageing of the population on economic growth and the distribution of welfare in the Netherlands. It shows that with the current system of social security ageing leads to a substantial increase of the tax burden and an estimated welfare loss for future generations of approximately 4% of lifetime wealth. It discusses the effect of reform measures in the pay-as-you-go social security system. It shows that a cut in PAYG pensions is efficiency-improving, but hurts the lower income groups of current generations. This effect can be ameliorated by a debt-financed cut in indirect taxes.     

Bank-moneylender linkage as an alternative to bank competition in rural credit markets

This paper proposes a new method in which banks and moneylenderscan link in rural credit markets. Banks and moneylenders, twoof the major lenders in rural credit markets, differ in theirinformation on borrowers and costs of funds. Due to informationconstraints, banks must deny further loans to borrowers whocannot repay a certain amount. In the linkage, these borrowersobtain loans from moneylenders, repay the banks, and have continuingaccess. We then evaluate conditions under which the linkagewould be preferred to bank competition and find that the linkagedominates for a wide range of parameters. In light of recentproposals to liberalize Indian banking, the analysis providesa cautionary note to the limits of introducing banking competitionin rural credit markets and provides an alternative.     

Intellectual property rights and licensing: An econometric investigation

Intellectual Property Rights and Licensing: An Econometric Investigation. — Licensing has been virtually ignored in the econometric literature on intellectual property rights (IPRs). We discuss theoretical effects of IPRs on decisions to license technology internationally. Based on a theoretical model we specify a reduced-form econometric equation relating the volume of U.S. licensing to measures of technology protection and other variables in licensee nations. The model is applied to data for 23 countries in a panel covering 1985, 1990, and 1995. The results indicate that countries with stronger patent rights attract larger arm’ s-length volumes of licensed technology, though we are unable to distinguish between licensing quantities and values.     

土地使用制度改革的又一创新——土地按揭出让

银行向企业贷款是有条件的，抵押是最普通的条件之一。一般地说，如果企业已有足够的自有物业（包括土地）向银行抵押贷款，所贷款项又足以支付新购土地的地价，问题就自然迎刃而解了，但实际情况恰恰不是这样。一是许多企业起步第一件事就需购置土地，而且又没有任何资产可以抵押；二是有些企业虽然有一定资产，但往往也已抵押了出去。假如一个企业购置一块土地，该企业只有能力支持部分地价（比如30％），它想向银行申请其余70％地价的贷款用于付给国土部门，然后再把取得的土地使用权抵押给银行，以作为其今后向银行分期还款的保让，这种方式就是本文所要介绍的“土地按揭出让”。     

Information and communication technologies as an incentive for improving relationships in Business to Business markets

The managerial theory as well as the practice of the industries consider the relationships of collaboration between enterprises, the most important resources for business strategy, contributing in the creation of value and economic capital, sustainability of the competitive advantage and also in the definition of innovative ways of enterprise development.
The management of these capacities could improve from the sustaining information and communication technologies （ICT）. The impact that ICT may have in the relations between clients and suppliers, is not entirely elaborated. The use of ICT, based also in the intense connectivity through Internet remains limited when speaking of some activities that generate value. The effects of interconnecting Internet technologies are even now partially unexplored.
This paper will analyze how ICT affect the collaboration relationships between clients and suppliers and related processes of creating value, focusing on the value drivers in Business to Business （B2B） markets, value process in the supply chain and client-supplier relationships and B2B E-marketplaces in the processes of creating and delivering value in the supply chain. Examples of European companies as well as the stage of Albanian companies in relation with these concepts illustrate the ideas throughout the paper.     

Housing markets and the economy: the assessment

Housing markets have multiple interactions with the rest ofthe economy and these are surveyed in this paper. The driversof house prices include income, the housing stock, demography,credit availability, interest rates, and lagged appreciation,the latter a potential mechanism for overshooting. There israther less agreement on the determinants of new construction,though planning constraints are widely seen as a major issueand one of the causes of the UK housing affordability problem.The paper argues that housing collateral and downpayment constraintsare the key to understanding the role of house-price variationsin explaining medium-term consumption fluctuations. Institutionalvariations between countries and over time account for majordifferences in linkages between house prices and economic activity.This illuminates debates about how monetary and other policyshould react to house-price variations. The paper also discussesthe role of housing markets in explaining regional migrationand location decisions, intergenerational inequality, and restrictingaccess of the less affluent to public goods, such as good schools,which are capitalized in local house prices.     

Income distributions in an international perspective--the case of Hungary and the Netherlands

"This article describes the comparison of the income distributions of Hungary and the Netherlands. In this comparison harmonised micro-data have been used to reach a high degree of comparability. The empirical results show that the inequality of household incomes was the same in both countries in the early eighties. After adjustments for differences in size and composition of households the income distribution was less equal in the Netherlands than in Hungary. The equivalence scales used were based on national budget surveys."     

Interest rate policy of the deutsche bundesbank: An econometric analysis for 1975 to 1992

Summary Internal and external economic targets which a monetary authority tries to achieve make its interest rate policy partly endogenous. This article analyses the Bundesbank's interest rate policy since 1975, the year the Bundesbank published its first intermediate money growth target based on estimates of an inevitable inflation rate and expectations about economic development. Estimation of a discount rate reaction function suggests that German monetary policy responds primarily to the final objective of price level stability and to a smaller extent, to the intermediate money supply target. Moreover, cyclical movements and balance-of payments equilibria are found to significantly influence the Bundesbank's discount rate policy. Both the inflation rate and the current account enter the reaction function in a non-linear way. When inflation is above the targeted rate or when there is a current account deficit, discount rate responses are much stronger than in the case of below target inflation or a current account surplus. Internationally, the Bundesbank discount rate policy is limited by US short-term interest rate movements.     

Paintings and numbers: an econometric investigation of sales rates, prices, and returns in Latin American art auctions

This paper uses a unique data set of Latin American paintingsauctioned by Sotheby's between 1995 and 2002 to investigateseveral puzzles from the recent auctions literature. Our resultssuggest that: (i) the reputation of an artist and the provenanceof the artwork, often omitted variables in previous studies,seem to be more important determinants of the sale price ofa painting than more standard factors, such as medium and size,(ii) the opinion of art experts seems to be of limited use inpredicting whether or not an artwork sells at auction, (iii)there is little supporting evidence for the widespread notionthat the best or more expensive artworks tend to generate aboveaverage returns (the masterpiece effect), although (iv) thereis strong evidence in our data for the declining price anomalyor afternoon effect (that is, when heterogeneous products soldsequentially follow a decreasing pattern of prices.)     

Exports of the manufacturing industry,an econometric analysis of the significance of capacity

Summary Modelling Dutch exports at the Central Planning Bureau and elsewhere leans heavily on the idea that exports are mainly demand-determined. The neglect of supply factors seems unjustified in the light of empirical evidence. Furthermore, fundamental theoretical objections can be made against this approach. In view of these objections a reconsideration is in order. The influence of demand and supply factors on exports are investigated systematically, with special attention paid to the role of capacity. From an econometric analysis it is found that capacity growth is more significant for exports than growth in world trade.I am indebted to Roger Hammer who translated the first version of this paper. The comments of J.M.G. Frijns, H. den Hartog, J.F. Kiviet, S.K. Kuipers, A. Nieuwenhuis and H.S. Tjan are gratefully acknowledged.     

Retail Payments in the Netherlands: Facts and Theory

Summary Over the last decade, the Netherlands observed a rapid shift from cash and paper-based payment instruments toward electronic payment instruments. Banks are well aware that transaction pricing can speed up the shift to low-cost electronic payments. But payment pricing is a complex matter, due to strong network externalities. Recent theory on two-sided markets has led to a better understanding of the payment industry, in terms of optimal payment pricing and payment network competition. Under two-sidedness, it is shown that payment pricing is not just a question of choosing the right price level but rather of choosing the right price structure.The author would like to thank Lex Hoogduin, Rein Kieviet, Carlo Winder and two anonymous referees for critical comments and valuable remarks. Obviously, the usual disclaimer applies. Views expressed are those of the author and do not necessarily reflect official positions of De Nederlandsche Bank or the European System of Central Banks.