Russian government hopes to rein in regional debt

2017 ◽  
Keyword(s):  
Financial Management ◽  
Financial Stability ◽  
Central Government ◽  
Regional Level ◽  
Bank Loans ◽  
Budget Deficits ◽  
Russian Government ◽  
Content Type ◽  
High Interest ◽  
Regional Budget

Significance A growing number of regions face insolvency, threatening national financial stability and requiring immediate solutions from central government. Regional indebtedness has spiralled as high-interest bank loans have been used to finance budget deficits. As Golikova noted, the devolution of funding obligations to regional level without additional resources is a major contributing factor. Impacts Persistent regional budget deficits must call into question the logic and viability of current uneven territorial divisions. Financial management requires comprehensive and stable rules delineating federal and regional governments' powers and responsibilities. Redistribution of income from donor regions to poor performers will cause tensions.

The role of the Troika on the Greek central government accounting reforms

2018 ◽  
Vol 31 (3) ◽  
pp. 316-330 ◽  
Author(s):  
Sandra Cohen ◽  
Sotirios Karatzimas
Keyword(s):  
Financial Reporting ◽  
Financial Management ◽  
Central Government ◽  
Case Study Research ◽  
Extreme Case ◽  
Resource Dependency ◽  
Reform Process ◽  
Content Type

Purpose The purpose of this paper is to explore the role of the Troika’s advent played in the progress of the budgeting and the financial reporting systems reform at the Greek central government level. Design/methodology/approach The approach of an extreme country case study is adopted. The data used in the paper have been identified through document analysis performed on the relevant documents produced by the Troika, the Greek Ministry of Finance, and other relevant sources. The reform process is seen through the lens of the neo-institutional theory and the resource dependency theory. Findings Although both reforms targeted the introduction of best international practices – particularly useful in periods of financial distress and scarce resources – the advent of the Troika affected their progress and changed the priorities. As a result, the reform was redirected toward strengthening the cash budgeting system. Research limitations/implications The study is subject to the limitations of an extreme case study research. Practical implications This is a case where resource dependency changes political priorities and directions and affects the evolvement of state budget and accounting reforms under way. Originality/value The role of external fund providers in public sector financial management reform priority-setting, in the case of a developed Eurozone country, is analyzed. The study contributes to the research agenda on accounting practices in times of austerity.

Shadow banking in China: expanding scale, evolving structure

2014 ◽  
Vol 6 (3) ◽  
pp. 198-211 ◽  
Author(s):  
Tong Li
Keyword(s):  
Financial Stability ◽  
Banking System ◽  
Bank Loans ◽  
Data Sources ◽  
Shadow Banking ◽  
Real Economy ◽  
Content Type ◽  
Comprehensive Picture ◽  
Shadow Banking System ◽  
Banking Credit

Purpose – This paper aims to survey available data sources and put China’s shadow banking system in perspective. Although bank loans still account for the majority of credit provided to China’s real economy, other channels of credit extension are growing rapidly. The fast expansion of shadow banking has spurred wide concerns regarding credit quality and financial stability. Design/methodology/approach – This paper explores various data sources, provides an overview of shadow banking activities in China, discusses their close ties with banks and summarizes regulatory issues. Extensive descriptive data are included to provide a comprehensive picture of the nature of shadow banking activities in China. In particular, institutions and products are discussed in great details. Findings – While China’s shadow banking system is by no means simple, it does not (yet) involve the extensive use of financial derivatives. Rather, shadow banking credit is often directly extended to the real economy. In addition, shadow banks are typically interconnected with commercial banks in various ways. The expanding scale and constantly evolving structure of the shadow banking system has posed challenges for financial regulators. Originality/value – This paper attempts to quantify the scale and scope of China’s shadow banking activities and provides a consistent framework as the basis for cross-country comparison of shadow banking systems. This is one of the first scholarly research products that discusses the origin, nature and risks of China’s shadow banking system in a regulatory context.

scholarly journals International donors as enablers of institutional change in turbulent times?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Veronika Vakulenko
Keyword(s):  
Financial Management ◽  
Public Management ◽  
Central Government ◽  
Content Type ◽  
Management Reform ◽  
Public Financial Management ◽  
Turbulent Times ◽  
Local Actors ◽  
Global And Local

PurposeThe purpose is to explore the role of international financial institutions (IFIs) during public financial management reform in a transitional economy. In particular, the study focuses on interaction between external enablers and local actors.Design/methodology/approachThe paper is based on a qualitative study of public financial management reform in Ukraine during 1991–2014. This period is divided into stages corresponding with two projects financed by the World Bank: “Treasury System” and “Public Finance Modernization.”FindingsFirst, IFIs supported a Ukrainian economy weakened by financial crisis and insisted on a comprehensive reform of public financial management to facilitate recovery. By strategically addressing local challenges, eliminating local uncertainties and maintaining stable interactions, IFIs gained support from the central government. Local actors continued the reform by negotiating with other actors and getting quorum support. In the second stage, IFIs could not implement planned changes. Even though the change was well-perceived at the beginning, developed tensions between local actors were overlooked by IFIs, which resulted in loss of commitment of the State Treasury representatives. The continuous political instability in Ukraine constrained interaction between IFIs and the Ministry of Finance and reduced political will for conducting reforms.Originality/valueThe study contributes to the debate on the adequacy of externally driven public management reforms in developing countries by exploring actions and interactions of global and local actors during the change in public sector practices.

China local government debt risk survives reforms

2018 ◽  
Keyword(s):  
Local Government ◽  
Financial Stability ◽  
Central Government ◽  
Arable Land ◽  
Government Debt ◽  
Bond Market ◽  
Municipal Bonds ◽  
Content Type ◽  
Land Prices ◽  
Near Future

Subject Local government debt in China. Significance China in 2015 introduced municipal bonds and launched a debt-swap programme to address the risks that opaque and fast-growing local government debt posed to financial stability. Three years on, the new policy shows signs of old problems. Impacts The authorities will intervene in potential local bond defaults to prevent panic; concerns of moral hazard are secondary for now. The supply of arable land will gradually erode, endangering food security. The central government will retain issuance quotas that prevent the local bond market becoming fully autonomous in the near future. The authorities in cities with high land prices (mostly in China's east) will be at an advantage.

Swiss sovereign money vote points up bank reform

2018 ◽  
Keyword(s):  
Central Bank ◽  
Commercial Banks ◽  
Financial Stability ◽  
Banking System ◽  
Budget Deficits ◽  
Banking Reform ◽  
Content Type ◽  
Economic Agents ◽  
Monetary Systems ◽  
Bank Reform

Significance The Vollgeld (sovereign money) proposal, which claimed to make the banking system safer by preventing commercial banks creating money through requiring thems to keep 100% of their deposits at the central bank, was complex and economically flawed, However, it attracted anti-system and anti-bank votes and has generated debate in Switzerland and abroad on financial stability and monetary systems. Impacts The Vollgeld idea has never been implemented anywhere, posing uncertainty about economic agents' reactions and the overall impact. The reform, if used to finance budget deficits, would challenge the central bank's independence. Even if the proposal is refined, the power that 'Vollgeld' would give the central bank to determine lending will remain unpopular. Pressure for banking reform and awareness of regulation have risen worldwide since the 2008-09 crisis making other initiatives likely.

scholarly journals The influence of parliamentarians on the development of financial management regulations for executive agencies

2020 ◽  
Vol 32 (3) ◽  
pp. 421-438
Author(s):  
Tjerk Budding ◽  
Jos Klink
Keyword(s):  
Financial Management ◽  
Central Government ◽  
Daily Practice ◽  
Legislative Process ◽  
Content Type ◽  
Parliamentary Debates ◽  
General Evaluation ◽  
Members Of Parliament ◽  
Management Techniques ◽  
Executive Agencies

PurposeThe involvement of politicians in the introduction and use of financial management techniques in the public sector deserves more attention. This paper analyses the influence of members of Parliament (MPs) on the development of financial management regulations for Dutch central government executive agencies.Design/methodology/approachThis paper uses desk research and analyses formal evaluation reports, as well as minutes of meetings of Parliament to analyse the influence of MPs on the changes in financial management regulations.FindingsMPs' influence on the change of prescriptions seems to have been small. The authors observe that modifications were most often already formulated in general evaluation reports by the Ministry of Finance, in advance of parliamentary debates. The analysis also reveals that the criteria to be met by the executive agencies became more detailed in the initial years of the agency model and became more global in recent years.Research limitations/implicationsThis paper aims to contribute to the literature on the influence of politicians on financial management regulations.Practical implicationsThe paper shows that the influence of MPs on the prescriptions is quite small in daily practice and therefore, their role in the legislative process, as far as financial management techniques are concerned, is limited.Social implicationsThe results show that politicians are both in charge of, as well as subject to NPM-inspired financial management regulations, whereas their influence on the rules is small. The authors advise to further analyse this, as well as to explore how their role can be enlarged.Originality/valueThe interplay between politicians and financial management techniques in general, and the influence of MPs on the legislative process in specific, is an underresearched area. This paper aims to contribute to this literature and shows that the influence of MPs on the development of financial management regulations is limited. Several changes were made in these prescriptions in a period of more than 25 years, whereas discussions in the Parliament hardly played a role in these modifications.

scholarly journals Analisa Kinerja Keuangan 34 Provinsi Indonesia di Tahun 2018

2019 ◽  
Vol 28 (02) ◽  
pp. 170-197
Author(s):  
Harsono Yoewono
Keyword(s):  
Financial Performance ◽  
Performance Indicators ◽  
Financial Management ◽  
Central Government ◽  
Power Sharing ◽  
Independent Variables ◽  
Regional Budget ◽  
Dependent Variables ◽  
The Difference ◽  
Regional Budgets

Power sharing and delegation is politics in nature. The economic side appears on the regional budget planning and realisation. It is the mechanics and the setting of general policy, priority, and plafond of temporary budget. The latent fiscal gap occurs when revenues collected are lesser than expenditures spent, vice versa. Higher portion of expenditures posted as basic allocation has not been coped well with steady regional income. Supports in terms of better capability and capacity to collect regional revenues appear to be non-existent and meaningless, but the resource-rich regions. Even so, the central government appears to have big and deep impacts on the definition of taxable objects and types, and local retributions. This study is to seek which financial performance indicators that can be well-predicted by a numerous variables and indicators forming the regional budgets (APBD) of 34 provinces in Indonesia in 2018. The data was collected from DJPK website in early May 2019. The research method is quantitative descriptive in nature, and using both the OLS regression and determinant regression analysis. Based on the research of recent studies, a numerous financial performance indicators were derived as dependent variables, along with the variables forming the regional budgets of 34 provinces in Indonesia as independent variables. Sixteen dependent variables were set, whilst the 48 independent variables comprised of 4 groups, that is 4 variables of regional specific (r_#), 23 variables of revenues (y_#), 9 variables of expenditures (c_#), and 12 variables of finance/fiscal (f_#). Upon the results of OLS linear regression, 3 variables of financial performance appeared to be the most significant and appealing than the rest. They were independence (k_08), the ratio of DAU in TKDD to the DAU Formula (k_16), dan decentralisation (k_10). On the contrary, 3 variables of financial performance appeared to have no determining variables. They were PAD growth (k_14), fiscal soundness and regional financial management (k_03), dan effectiveness (k_11). These 3 variables were a part of 4 variables having the least adjusted R2, with infrastructure (k_04) as the remaining one. The heteroscedastic nature that appears in the k_14 estimation equation has suggested that k_14 fails to be used as the benchmark and reference of financial performance of regional budgeting, at least in its definition and operationalisation in this study and research. Likewise the usage of f_07 variable, the fiscal gap 1, the difference of DAU Formula with basic allocation (in basic data source).

The issue of sustainability in a highly centrally regulated fiscal model of local governments: an empirical study

2020 ◽  
Vol 33 (6) ◽  
pp. 669-689 ◽  
Author(s):  
András Bethlendi ◽  
Csaba Lentner ◽  
László Nagy
Keyword(s):  
Financial Management ◽  
Local Governments ◽  
Central Government ◽  
Annual Reports ◽  
Social Characteristics ◽  
Financial Sustainability ◽  
Soft Budget Constraint ◽  
Data Set ◽  
Content Type

Purpose This study aims to assess the sustainability of local governments in a highly centrally regulated fiscal model. Design/methodology/approach This paper uses a novel approach, a broad data set of almost 3,200 local governments and network methods. This paper analyses financial data from annual reports and other socio-economic sources using cluster analysis. Findings Even in this model, local governments show significant differences in terms of long-term sustainability. Investments do not compensate for the depreciation of tangible assets at a significant part of local governments. A specific type of soft budget constraint can be noticed. Heads of local governments do not “play” for subsequent ad hoc bailouts by the central government, but rather engage themselves in political competition for development subsidies. A further finding of this study is that shrinking populations itself does not explain the differences in local governments’ financial management. Research limitations/implications Further directions of research include the application of an extended approach to sustainability that gives an account of the availability and quality of local services, as well as aims to identify the qualitative social characteristics (success criteria) of the local government financial management. Practical implications The findings can be useful for policymakers, state audit offices, auditors, voters, users of public services and other stakeholders. Social implications The paper argues in favour of moving away from the financial balance in its narrow sense to a long-term and broader term of financial sustainability. Originality/value The findings provide new empirical evidence about the accounting-based measurement of financial sustainability in local governments.

Municipal debt will hinder financial reform in China

2015 ◽  
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Central Government ◽  
Government Debt ◽  
Bank Loans ◽  
Municipal Bonds ◽  
Short Term ◽  
Fiscal Stimulus ◽  
Content Type ◽  
Loan Financing

Subject China's local government debt bailout. Significance China's local governments issued 734 billion renminbi (118 billion dollars) last month, accounting for some 35% of total bond issuance. A 1-trillion-renminbi local government debt-swap programme was introduced in March, under a pilot initiative announced in August 2014, and expanded last month by another 1 trillion renminbi. A slowdown in investment and an increasing use of bank loans by local governments to roll over debt may now have forced the central government to act boldly. Impacts Falling fiscal revenues, policy targets and the legacy of the 2008-09 fiscal stimulus will increase the supply of municipal bonds. State-owned commercial banks under the direction of the PBoC will mop up excess supply. Slower investment and lending puts pressure on central government to accelerate infrastructure investment and public-private partnerships. The PBoC will further adjust bank reserve ratios downwards if the slowdown in investment persists. Shifting away from short-term loan financing will shrink bank margins and slow down interest rate reform.

Analysis Financial Ratio of Regional Government Budget in Assessing Financial Management Performance of Regional Government of Gianyar Regency

2021 ◽  
Vol 4 (2) ◽  
pp. 151-159
Author(s):  
N K C Wandari ◽  
◽  
K A Bayu Wicaksana ◽  
P Adi Suprapto ◽  
◽  
...  
Keyword(s):  
Financial Management ◽  
Central Government ◽  
Fiscal Decentralization ◽  
Government Revenue ◽  
Regional Government ◽  
Management Performance ◽  
Financial Ratio ◽  
Financial Capacity ◽  
High Dependency ◽  
Regional Budget

This research sought to assess the performance of regional financial management in Gianyar Regency during 2016-2020, as measured by the degree of fiscal decentralization ratio, the regional financial dependence ratio, the Original Regional Government Revenue effectiveness ratio, the regional financial efficiency ratio, and the regional expenditure compatibility ratio. In addition, this research also determined the regional financial capacity of Gianyar Regency, measured through the calculation of Share and Growth, the mapping of regional financial capacity, and the index of regional financial capacity. The research results revealed that the financial management performance of Gianyar Regency during 2016-2020 on average was in a bad condition. It can be seen from its low regional autonomy and its high dependency on the central government. In addition, the regional government has not been able to streamline the regional finances in which regional expenditures were greater than regional revenues. The distribution of regional budget in Gianyar Regency has not been evenly allocated so that the performance regional financial management was at worse state. However, viewed from the level of regional financial capacity, Gianyar Regency has very good potential, obstructed by its low level of Original Regional Government Revenue use to finance regional expenditures.

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