Tajik remittance slump will weaken flawed banks

2016 ◽  
Keyword(s):  
Financial Institutions ◽  
Banking Sector ◽  
Banking System ◽  
International Financial Institutions ◽  
Content Type ◽  
Bank Deposits ◽  
The Rich ◽  
The Government ◽  
Main Banks ◽  
Poor Management

Subject Tajikistan's troubled banking sector. Significance Tajikistan's banking system has been in crisis since 2015, as problems in Russia feed through to this remittance-dependent economy. A decline in funds sent home by labour migrants has shrunk bank deposits, and the proportion of non-performing loans has risen sharply. The cash crisis is exacerbated by poor management and cronyism in financial institutions. The main banks, Tojiksodirotbank and Agroinvestbank, have restricted customer withdrawals. Impacts International financial institutions will condition assistance on reforms. However, the government will balk at any reform measures liable to hurt the rich and powerful. The government may seek Chinese support for the banking sector.

scholarly journals Influence of economic freedom and its subcomponents on risk-taking behavior

2019 ◽  
Vol 12 (4) ◽  
pp. 335-356 ◽  
Author(s):  
Rafik Harkati ◽  
Syed Musa Alhabshi ◽  
Salina Kassim
Keyword(s):  
Risk Taking ◽  
Economic Freedom ◽  
Banking Sector ◽  
Banking System ◽  
Islamic Banks ◽  
Content Type ◽  
Economic Freedom Index ◽  
Risk Taking Behavior ◽  
The Government ◽  
Conventional Banks

Purpose The purpose of this paper is to investigate the influence of economic freedom and six relevant subcomponents of it on the risk-taking behavior of banks in the Malaysian dual banking system. It also aims to make a comparative analysis between Islamic and conventional banks operating in this dual banking sector. Moreover, the study is an effort to enrich the existing literature by presenting empirical evidence on the argument that the risk-taking behavior of the two types of banks is indistinguishable given that they operate in the same regulatory environment. Design/methodology/approach Secondary data of all banks operating in the Malaysian banking sector are collected from FitchConnect database, in addition to the economic freedom index from Foundation Heritage for the period 2011–2017. Generalized least squares technique is employed to estimate the influence of economic freedom and the six relevant subcomponents of it on the risk-taking behavior of banks. Findings The level of economic freedom influenced risk-taking behavior within the banking sector as a whole, conventional and Islamic banking sectors negatively during the study period (2011–2017). Risk-taking behavior of conventional and Islamic banks is similar. However, conventional banks turn to be less influenced by economic freedom level as compared to Islamic banks. Practical implications The government and regulators may benefit from the results by rethinking and setting the best economic freedom index that better serves the stability of the banking system, and lessens banks’ risk-taking inclination. Originality/value To the present time, this paper is thought to be of a significant contribution. Given the argument that Islamic and conventional banks behave in the same way. This is one of the first attempts to address this issue in light of the influence of economic freedom and six subcomponents of it on the risk-taking behavior of banks operating in a dual banking system.

Fast growth may avert foreign banks' exit from Hungary

2015 ◽  
Keyword(s):  
Financial Institutions ◽  
Banking Sector ◽  
Prime Minister ◽  
Foreign Banks ◽  
Content Type ◽  
Balance Sheets ◽  
Government Relations ◽  
Local Currency ◽  
Wait And See ◽  
The Government

Subject Prospects for the banking sector. Significance The government is buying a 30% stake in the Austrian lender Erste Bank under a memorandum of understanding (MoU) with the European Bank for Reconstruction and Development (EBRD). The MoU signifies a volte-face by Prime Minister Viktor Orban, whose relationship with foreign-owned banks has been fraught with difficulties since the imposition of a levy on financial institutions in 2010 that drove down earnings and achieved notoriety as one of the highest taxes of its kind in Europe. The government has pledged to reduce the bank tax during 2016-19. Impacts The MoU may not redefine government relations with foreign banks, but could mean more activity on the market by institutional investors. Banks will clean up balance sheets, adopting a 'wait and see' strategy until FX debt relief peters out and the bank tax starts to fall. A return to profitability is unlikely before 2016; much depends on an uptake in corporate and household loans denominated in local currency.

Zimbabwe's opposition will bank on electoral alliance

2017 ◽  
Keyword(s):  
Human Rights ◽  
Food Security ◽  
Financial Institutions ◽  
Public Expenditure ◽  
Fall Armyworm ◽  
International Financial Institutions ◽  
Content Type ◽  
Human Rights Abuses ◽  
The Government ◽  
Ruling Party

Significance With the country mired in a deepening economic crisis and the ruling party engaging in debilitating succession struggles, opposition parties are debating whether they can exploit the government's fiscal woes to contest forthcoming by-elections and national polls or to boycott elections in part or altogether. Impacts A fall armyworm outbreak is likely to devastate crops nationwide, prompting a food security crisis. The government will likely resist pressure from international financial institutions to curb public expenditure ahead of the 2018 elections. Increased human rights abuses by the authorities would prompt international condemnation and possible resumption of broader EU sanctions.

Nationalisation is only start of Ukraine bank reforms

2017 ◽  
Keyword(s):  
Financial Institutions ◽  
Banking Sector ◽  
Financial Intermediation ◽  
International Financial Institutions ◽  
Content Type ◽  
Additional Pressure ◽  
Net Assets

Subject Nationalisation of Ukraine's largest bank. Significance The authorities have presented the nationalisation of Privatbank as the only way to save a systemically important bank and avoid chaos across the banking sector. International financial institutions hailed the takeover as a welcome step to clean up an ailing and largely dysfunctional system of financial intermediation. Impacts The Privatbank nationalisation increases Ukraine’s chances of receiving a delayed IMF tranche, although more reforms are needed for this. The proportion of state-owned banks has shot up from 30% to almost 50% by net assets. Substantial recapitalisation of Privatbank could become an additional pressure for hryvnia depreciation.

Mozambican debt fallout will persist over Kroll report

2017 ◽  
Keyword(s):  
Financial Institutions ◽  
Large Scale ◽  
International Financial Institutions ◽  
Short Term ◽  
State Budget ◽  
Content Type ◽  
Domestic Debt ◽  
Financing Costs ◽  
International Donor ◽  
The Government

Significance Risk firm Kroll was looking into undisclosed state loans worth 2 billion dollars, but it said that the Mozambican government did not collaborate fully with the firm's investigation and that the CEO of the three companies openly blocked attempts to locate futher information. Expectations that the IMF and the international donor community would start talks on new funding agreements with Maputo have subsequently stalled, while mounting domestic loans taken out by the government have further soured relations with international financial institutions. Impacts Lack of transparency over financing of the state budget will preclude large-scale donor budgetary assistance in the short term. The private sector will increase its calls for the government to renegotiate the scheduling of domestic debt repayments. The ongoing debt fallout could raise infrastructure financing costs and delay several liquefied natural gas (LNG) mega-investments.

Fixing Azerbaijani bank may dent sovereign's image

2017 ◽  
Keyword(s):  
Economic Growth ◽  
Sovereign Debt ◽  
Banking Sector ◽  
Banking System ◽  
The State ◽  
Content Type ◽  
The Government

Significance If two-thirds of creditors agree to the scheme by a July 13 meeting, the government will exchange IBA debt for sovereign loans but it has made it clear it does not bear responsibility for the state-owned bank's liabilities. Impacts Banking sector instability has negative implications for confidence and economic growth. The potential increases in sovereign debt appear manageable. Reducing the size of IBA will bring more competition to the banking system.

Sanctions will reinforce Iran’s money supply woes

2018 ◽  
Keyword(s):  
Central Bank ◽  
Money Supply ◽  
Banking Sector ◽  
Banking System ◽  
Content Type ◽  
Better Regulation ◽  
The Government

Significance Inflation has to a great extent been driven by a depreciation of the rial following Washington’s decision to reimpose sanctions, yet deep structural flaws in the banking sector are also to blame. Poor regulation and widespread corruption mean that the Central Bank of Iran (CBI) has for decades created excess money. Impacts Sanctions will distract from the need to enforce better regulation of the banking system. The government will avoid painful reforms, fearing a popular backlash. The CBI will respond to sanctions-related pressures by creating more money.

Russia faces twin hits from COVID-19 and cheap oil

2020 ◽  
Keyword(s):  
Banking Sector ◽  
Oil Prices ◽  
Content Type ◽  
Regulatory Changes ◽  
Rapid Spread ◽  
Additional Funding ◽  
Capital Outflows ◽  
The Rich ◽  
The Government ◽  
To Receive

Significance The steep fall in global oil prices and rapid spread of COVID-19 have ended hopes of economic revival in 2020. The government has allocated 300 billion rubles (4 billion dollars) for immediate use, and Putin has announced hefty taxes on the rich to boost revenues. The Central Bank of Russia (CBR) has no plans for monetary expansion but will provide additional liquidity to the banking sector and relax regulations to encourage credit for badly hit industries. Impacts A temporary hike in inflation is expected due to ruble devaluation and possible price hikes on some products. The government will make regulatory changes to ensure food supplies. The deteriorating economic situation is likely to spur higher capital outflows. Poorer regions are likely to receive additional funding from Moscow.

Pressure on Iran’s banks raises chances of collapse

2022 ◽  
Keyword(s):  
Central Bank ◽  
Interest Rates ◽  
Financial Institutions ◽  
Banking Sector ◽  
Task Force ◽  
Banking System ◽  
Reliable Data ◽  
Content Type ◽  
Bank Managers ◽  
Financial Action Task

Significance However, the signs of strain are becoming more marked. On December 15, the Central Bank of Iran (CBI) issued an official warning to all financial institutions, threatening legal penalties for bank managers who try to compensate for rising inflation by offering savers higher interest rates than is legally permitted. Impacts If US sanctions are not lifted, further economic deterioration will increase pressure on the banking system. Iran’s blacklisting by the Financial Action Task Force will be an ongoing burden for the banking sector. Tight credit will make it hard for consumers to get even small loans, such as those for which newlyweds used to be automatically eligible. There are no reliable data, but comprehensive restructuring of the banking system would likely cost hundreds of billions of dollars.

scholarly journals IMPACT OF THE CORONAVIRUS PANDEMIC ON THE RUSSIAN BANKING SYSTEM

2021 ◽  
pp. 49-55
Author(s):  
Ekaterina Anatolyevna Yagupova
Keyword(s):  
Financial Institutions ◽  
Banking Sector ◽  
Banking System ◽  
Personal Communication ◽  
Current Situation ◽  
Current Crisis ◽  
Banking Business ◽  
The Government ◽  
Economic Nature ◽  
Credit Institutions

The article deals with the current topic of the development of the Russian banking system in the context of the coronavirus pandemic. The current state of the banking sector and the activities of individual credit institutions are analyzed. The threat of a pandemic impact on the state’s banking sector is being studied. Taking into account the current situation, problems arise in the activity of banks, including the lack of full communication between credit institutions and customers– one of the most important factors in the development of banking business. It is quite difficult to operate remotely — most businesses are based on personal communication between employees and customers. The main problem and difference between the current situation and past crises is not the economic nature of the current crisis. Therefore, it is quite difficult to assess its progress and the consequences of the pandemic. The situation will depend on how widespread the COVID-19 pandemic is and how the authorities will respond to it. The consequences of a pandemic are unpredictable in their duration and impact. It is obvious that the country is waiting for a drop in production and this is a serious blow. How fast the economic recovery will be depends on the duration of the pandemic. The measures taken by the government to support the population (issuance of zero loans and registration of credit holidays, etc.), today will cause damage to the banking sector by about 400 billion rubles. If we take into account last year’s net profit of the country’s banks, which amounted to 1.7 trillion rubles, the banking system will withstand this blow. The main risk for banks will be non-repayment of loans by businesses, deterioration of the loan portfolio. This may lead to a crisis in some sectors of the economy, whose enterprises are borrowers. According to the most negative estimates of experts, the losses of the banking sector may amount to about 900 billion rubles. The crisis triggered by the coronavirus pandemic will be felt by the country’s banks in the next six months. Banking organizations will need financial support from the state. Some financial institutions will not survive without state aid. In the current situation associated with the COVID-19 epidemic, banking organizations are still only underperforming. After the pandemic, the country’s banks, as well as their clients, will find themselves in a new reality. The economic situation in the country will be different. Entire sectors of the economy may be transformed. Some banking organizations will close, and the remaining financial institutions will develop remote services, which they switched to during the coronavirus period. It is quite difficult to predict what will happen to the rates of loans and deposits and the ruble exchange rate. This depends on many factors. One thing is clear-the world will not be the same.

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