Group-Decisions, Systemic Risk and Politics: The Case of Asset Management Corporation of Nigeria (AMCON); and the Malaysian and Indian Models of NPL-Resolution

AbstractThe Nigerian Land Use Act (LUA), which governs contemporary Nigerian land law, provides that any disposition of land must have the prior consent of the appropriate authority under the LUA. However, the Assets Management Corporation of Nigeria Act, which regulates the disposition of eligible bank assets, contains provisions that imply that the requisite consent under the LUA is not required for the disposition of an eligible bank asset consisting of land. This article interrogates the propriety of the provisions of the Assets Management Corporation of Nigeria Act in this regard and argues that, in view of the fact that the LUA is a statute with constitutional flavour by virtue of its entrenchment in the Nigerian Constitution, the LUA's provisions supersede the provisions of any conflicting law.

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Review Paper on Composite Leading Index Creation for Forecasting the Bangladeshi Financial Sector

International Journal of Finance & Banking Studies (2147-4486) ◽

10.20525/ijfbs.v9i4.791 ◽

2020 ◽

Vol 9 (4) ◽

pp. 23-32

Author(s):

Maria Afreen

Keyword(s):

Financial Market ◽

Asset Management ◽

Systemic Risk ◽

Stress Test ◽

Financial System ◽

Financial Sector ◽

Hazard Model ◽

Capital Adequacy ◽

Policy Makers ◽

The Impact

In perspective of the economic vulnerability faced by banks in financial sector, this study mirrors the methodology used by Shumway (2001) – the dynamic hazard model that is able to forecast systemic risk in financial market arena. Here, the terminology followed is based on the CAMELS framework variables: capital adequacy, asset, management, earnings, liquidity and sensitivity to market risk. The objective of this study is to construct a macroprudential indicator (MPI) for the case of Bangladeshi financial market. The result will then be tested for robustness with macro-stress test. Lagged independent variables will be used in the simple hazard model to allow early prediction of MPI in the year in which the crisis happens. The empirical findings can be used as a guideline for the Bangladesh Government and policy makers in accessing, examining and forecasting the health of the Bangladeshi financial system and formulate suitable financial system policies for control. MPI generates information about systemic risk allowing the detection of potential economic crises functioning as an early warning indicator. Government and policy makers will be able to make early preparation in cushioning any potential crises by means of the MPI. Thus the impact of the crises could be minimized and eventually reduce its impact on the Bangladesh economy. The specific objectives are to assemble a novel MPI that is able to recommend early signals of financial market vulnerability, to identify the MPI turning points and establish a comprehensive reference chronology for Bangladeshi financial market and to evaluate the predictive performance of newly constructed MPI on characterizing Bangladeshi financial sector.

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Crisis in the Indian Non-Banking Finance Companies (NBFC) Sector

International Journal of Recent Technology and Engineering - 2 ◽

10.35940/ijrte.d8424.118419 ◽

2019 ◽

Vol 8 (4) ◽

pp. 4502-4507

Keyword(s):

Asset Management ◽

Systemic Risk ◽

Housing Finance ◽

Central Issue ◽

Banking And Finance ◽

Finance Industry ◽

Finance Company ◽

Infrastructure Finance ◽

Considerable Impact ◽

The Government

Managing one-fifth of credit in the country, the Non-Banking Finance Company (NBFC) is a vital sector for the Indian economy. A series of problems are hurting the Indian NBFC sector since the default of infrastructure finance major IL&FS in September 2018. What seemed to be a liquidity crisis is looming into a solvency issue. Some major players backed by reputed promoters are going out of business. Though the downgrades & defaults do have a considerable impact on the banking and finance industry as a whole, there is sufficient panic-triggering turbulence in certain pockets of the industry. The Housing Finance Companies (HFCs) and the Asset Management Industry are found to be vulnerable and got highly hurt by the crisis. A central issue that led to the liquidity issues in the industry is the asset-liability mismatch. Regulators prefer tweaking macro-economic variables to curtail the problem rather than providing a special liquidity window. The crisis highlighted the need for much closer interaction and the interplay between regulators such as RBI, IRDA, NHB, and SEBI to avert such possibilities in future failing which bubbles like these could culminate to become a systemic risk. Findings from this paper can help various stakeholders from the NBFC, the regulators, and the Government in better preparedness.

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