Small Bank Lending Amidst the Ascent of Fintech and Shadow Banking: A Sideshow?

Significant variations of bank profitability in Indian commercial banks during the period 2009-2018 motivated the critical need to study the impact of shadow banking on the profitability of commercial banks in India. Shadow banking is defined as any institution that offer bank like activities but not regulated as banks. These institutions seem to be on the rise in India thus this research considered to investigate their implications to traditional banks’ profitability. The secondary data in this analysis covered a period of 10years from 2009 to 2018. The multiple linear panel regression model for the bank profitability measures; Return on Asset (ROA), was used as a dependent variable to analyze the data. Shadow banking ratios, variables were used as independent variables in the model. To measure if the loans given by banks to housing sector decreased as a result of housing finance companies, the net aggregate of loans disbursed by banks to housing sector and net aggregate of loans disbursed by housing finance companies were recorded for the past 5 years and significant analysis was made accordingly looking at the data .Shadow banking ratios were derived from monetary aggregates data that is M3, total bank loans and total bank deposits. Regression results indicated thatShadow banking only completes the banking system and has no significant impact on loans of the commercial banks in the Housing Finance sector.

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Shadow credit and the private, middle market

The Journal of Risk Finance ◽

10.1108/jrf-01-2014-0004 ◽

2014 ◽

Vol 15 (3) ◽

pp. 214-233 ◽

Cited By ~ 2

Author(s):

Craig Anthony Zabala ◽

Jeremy M. Josse

Keyword(s):

Capital Markets ◽

Bank Lending ◽

Shadow Banking ◽

Credit Crisis ◽

Alternative Source ◽

Content Type ◽

Direct Participation ◽

Us Economy ◽

The Us ◽

Middle Market

Purpose – The purpose of this paper is to analyze a particular segment of the US “shadow banking” market and its revival since the recent credit crisis, namely, lending to the private Middle Market, defined as financings of $5-100 million to non-public, unrated operating entities or pools of assets with not more than $50 million in earnings before interest, taxes, depreciation and amortization. Design/methodology/approach – The analysis includes a review survey of a segment of capital markets and primary evidence from direct participation in two examples of actual private, non-bank lending between 2011 and 2012 executed by a Middle Market US investment bank. Findings – While there have been considerable challenges, historically, in providing credit for small-and mid-sized businesses in the USA, private Middle Market capital is (post the recent credit crisis) finding opportunities, notwithstanding, constraints imposed by market and other forces, including systemic crises, cyclical forces and changes in regulatory regimes. Research limitations/implications – Any generalization is limited due to the absence of disaggregated survey data for the US capital markets and the limited examples examined. Practical implications – The capital markets segment and non-bank financial institutions examined in this paper are developing as an alternative source of credit/lending from commercial banks for mid-sized companies. Social implications – The mid-sized firms financed by the shadow credit market are a significant source of job creation in the US economy making non-bank credit a lifeline to job growth in the financial crisis. Originality/value – Direct participation is unique to the firms studied. Value is in developing a general framework to analyze different segments of the capital market.

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Shadow Banking and the Bank Lending Channel of Monetary Policy in China

SSRN Electronic Journal ◽

10.2139/ssrn.3553202 ◽

2020 ◽

Author(s):

Xiaoqiang Cheng ◽

Yabin Wang

Keyword(s):

Monetary Policy ◽

Bank Lending ◽

Shadow Banking ◽

Bank Lending Channel ◽

Lending Channel

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Essays on the european bank lending channel and performance

10.12681/eadd/46950 ◽

2020 ◽

Author(s):

Δέσποινα Ντάικου

Keyword(s):

Bank Lending ◽

Shadow Banking ◽

Bank Lending Channel ◽

Lending Channel ◽

European Bank ◽

And Performance

Αντικείμενο έρευνας της παρούσης διδακτορικής διατριβής είναι η ανάδειξη των αντικρουόμενων ενδογενών και εξωγενών τραπεζικών μεταβλητών, που επιδρούν στην δυναμική του Ευρωπαϊκού Τραπεζικού συστήματος υπό το καθεστώς της Ευρωπαϊκής Τραπεζικής Ένωσης, πριν και μετά την πρόσφατη χρηματοοικονομική κρίση του 2008. Συγκεκριμένα, η διατριβή αυτή φιλοδοξεί να αποδείξει εμπειρικά: α) την μη αποτελεσματική επίδραση της μη συμβατικής νομισματικής πολιτικής της Ευρωπαϊκής Κεντρικής Τράπεζας (ΕΚΤ) στην πιστοδοτική ικανότητα των τραπεζών και την εξέλιξη της κερδοφορίας τους διαχωρίζοντας τες σε «δυνατές» και «περιφερειακές» οικονομίες, αναλόγως που εδρεύουν τα χρηματοπιστωτικά ιδρύματα, β) αναλύεται η επίδραση της αυξανόμενης εποπτείας της Ευρωπαϊκής Τραπεζικής Αρχής (ΕΒΑ) μέσω συγκεκριμένων εποπτικών δεικτών υπό το πλαίσιο του IFRS στην παροχή δανεισμού εκ μέρους των τραπεζών προς την πραγματική οικονομία και γ) λαμβάνοντας υπόψη τα εμπειρικά δεδομένα των α,β αναλύουμε πως οδηγούμαστε στον μετασχηματισμό και την αποδυνάμωση του Ευρωπαϊκού τραπεζικού συστήματος μέσω (και) της ανάπτυξης μη παραδοσιακών ιδρυμάτων-οργανισμών παροχής πιστώσεων (shadow banking).

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Non-Primary Home Buyers, Shadow Banking, and the US Housing Market

IMF Working Papers ◽

10.5089/9781513554433.001 ◽

2020 ◽

Vol 20 (174) ◽

Author(s):

Adrian Alter ◽

Zaki Dernaoui

Keyword(s):

Housing Market ◽

Global Financial Crisis ◽

House Prices ◽

Bank Lending ◽

Shadow Banking ◽

Short Term ◽

Variable Approach ◽

The Us ◽

Run Up ◽

The Global Financial Crisis

This paper studies the US housing market using a proprietary and comprehensive dataset covering nearly 90 million residential transactions over 1998–2018. First, we document the evolution of different types of investment purchases such as those conducted by short-term buyers, out-of-state buyers, and corporate cash investors. Second, we quantify the contributions of non-primary home buyers to the housing cycle. Our findings suggest that the share of short-term investors grew substantially in the run-up to the global financial crisis (GFC), which amplified the boom-bust cycle, while out-of-state buyers propped up prices in some areas during the recession. An instrumental variable approach is employed to establish a causal relationship between housing investors and prices. Finally, we show that the recent rise of shadow bank lending in the residential market is associated with riskier mortgages, and explore its implications for non-primary home buyers and its effects on house prices and rents.

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Agrarian receipts as a tool for the structural transformation of financial and credit relations in the agrarian business of the region

Problems of Innovation and Investment Development ◽

10.33813/2224-1213.18.2019.5 ◽

2019 ◽

pp. 40-53

Author(s):

Yuliia Nehoda

Keyword(s):

Comparative Analysis ◽

Retrospective Analysis ◽

Structural Transformation ◽

Pilot Project ◽

Bank Lending ◽

Economic Benefits ◽

Advantages And Disadvantages ◽

New Instrument ◽

Agricultural Business ◽

Business Entities

The subject of the research – is a set of organizational-economic relations arising in the process of structural transformation of financial and credit relations in the agricultural business. The purpose of the article is a retrospective analysis of structural transformations of financial and credit relations in the agricultural business, evaluation of the effectiveness and feasibility of the introduction of agricultural receipts as a new instrument of lending to the agricultural business of the regions. Methodology of work – system-structural and comparative analyzes (to determine the effectiveness of the crediting mechanism according to the agricultural receipts of the farmers of the region); monographic (when studying the problems of the functioning of the mechanism of lending to agrarians by agrarian receipts) economic analysis (when carrying out a comparative analysis of the mechanism of classical bank lending to the agrarian business and the mechanism of lending to agrarians according to agrarian receipts); modeling and forecasting (when determining ways to overcome the existing deficiencies in the mechanism of lending to agrarian business entities of the region according to agrarian receipts). The results of the work – a retrospective analysis of the structural transformation of financial and credit relations in the agricultural business was carried out. The mechanism of crediting agrarians according to agrarian receipts and the scale of its distribution in the agrarian business of the region are considered. A comparative analysis of the mechanism of classical bank lending to the agrarian business and the mechanism of lending to agrarians according to agrarian receipts was carried out. In the framework of the pilot project “Agrarian receipts in Ukraine” of the international financial corporation (IFC) in partnership with the Swiss Confederation in Ukraine, the example of the Poltava region defined the effectiveness of the crediting mechanism according to the agrarian receipts of the agrarians of the region. The advantages and disadvantages of the mechanism of crediting the subjects of the agrarian business on agrarian receipts are noted. The ways to overcome the existing shortcomings of the mechanism of crediting the subjects of the agrarian business of the region according to agricultural receipts are determined. Conclusions – according to the results of the conducted research, the effectiveness of the mechanism of lending to the agricultural business of the regions according to agricultural receipts was proved, its advantages and disadvantages were noted, and attention was also focused. Proposed in Art. 7 of Law No. 5479-VI clearly delineate cases and restrictions on the debtor’s reimbursement of expenses incurred by the lender with the acquisition of the right to grow and harvest the pledged crop of agricultural products, which will ensure the principle of equality of parties on economic benefits and distribution of credit risks according to agricultural receipts.

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