scholarly journals Impact of the joint-stock reform of commercial banks on the effectiveness of monetary policy in China

2016 ◽  
Vol 63 (3) ◽  
pp. 325-338
Author(s):  
Xianming Fang ◽  
Yu Jiang
Keyword(s):  
Monetary Policy ◽  
Empirical Model ◽  
Ownership Structure ◽  
Commercial Banks ◽  
Chinese Government ◽  
Empirical Results ◽  
The Past ◽  
Effectiveness Of Monetary Policy

Over the past decade, the Chinese government has conducted the joint-stock reform of state-owned commercial banks. The joint-stock reform improves the marketization level of the ownership structure of commercial banks and consequently leads to impacts on the effectiveness of monetary policy. This paper first presents the impacting mechanisms of the joint-stock reform of commercial banks on the effectiveness of monetary policy and then constructs an empirical model to test those impacts. The empirical results show that the increasing degree of joint-stock reform of commercial banks enhances the effectiveness of expansionary monetary policy but weakens the effectiveness of contractionary monetary policy in China.

Determinants of Non-Performing Assets of Commercial Banks in India

2021 ◽  
Keyword(s):  
Monetary Policy ◽  
Panel Data ◽  
Commercial Banks ◽  
Financial Stability ◽  
Policy Effectiveness ◽  
Credit Growth ◽  
Dynamic Provisioning ◽  
The Past ◽  
Economic Slowdown ◽  
Monetary Policy Effectiveness

Banks’ credit growth continues to decelerate in India due to huge non-performing assets (NPAs) overhangs in banks. Using the panel data methodology, this study empirically analyzed the determinants of NPAs of scheduled commercial banks in India during 2009-2020. Results indicated that the excessive credit growth in the past increased the surge in the current NPAS. The economic slowdown also aggravated loan delinquencies in Indian commercial banks. While higher priority sector lending created higher loan delinquencies, higher banks size and higher profitability reduced it. This study suggested that counter capital buffer, dynamic provisioning and a sound credit appraisal NPA improved the financial stability and monetary policy effectiveness. These findings are useful for policymakers, bankers and other stakeholders to make appropriate strategies to resolve the NPA issue in India.

Lässt sich die Geldschöpfung der Geschäftsbanken noch kontrollieren? – Geldpolitik seit der jüngsten Finanzkrise 2007/2008

2018 ◽  
Vol 87 (3) ◽  
pp. 47-63
Author(s):  
Mathias Binswanger
Keyword(s):  
Monetary Policy ◽  
Financial Crisis ◽  
Interest Rates ◽  
Financial Crises ◽  
Commercial Banks ◽  
Central Banks ◽  
The Past ◽  
Monetary Authorities ◽  
Money Creation ◽  
Recent Financial Crisis

Zusammenfassung: Als Folge der jüngsten Finanzkrise ist der Einfluss der Zentralbanken auf die Geldschöpfung weitgehend verloren gegangen. Denn die Kontrolle über Reserven funktioniert nur solange, wie diese knapp sind und deren Bezug an bestimmte Bedingungen geknüpft werden kann. Seither halten die Geschäftsbanken in den ökonomisch wichtigsten Ländern de facto dermaßen viele Reserven, dass sie nicht mehr auf die jeweilige Zentralbank angewiesen sind. Diese Entwicklung lässt sich sowohl für die FED als auch für die EZB aufzeigen. Dies führt zu geldpolitisch neuen Herausforderungen, die bisher kaum beachtet wurden. Die Einflussmöglichkeit der Zentralbanken auf den Geldschöpfungsprozess der Geschäftsbanken wurde noch nie in so großem Stil ausgehebelt. Deshalb müssen Zentralbanken in Zukunft ihr Repertoire an geldpolitischen Massnahmen erweitern. Nur mit dem Drehen an der Zinsschraube wird man den Geldschöpfungsprozess in Zukunft kaum mehr in gewünschter Weise beeinflussen können. Summary: As a result of the recent financial crisis, the influence of central banks on money creation has largely disappeared. Controlling this process only works as long as money creation of commercial banks also leads to a need for additional reserves from the central bank. However, the large asset purchase programs of monetary authorities after the financial crises resulted in an enormous increase in reserves at commercial banks. Therefore, commercial banks have enough reserves to create additional money at large amounts and do not depend on central banks any more. This development is indicative for both the FED and the ECB. Therefore central banks face the challenge how they can restore their influence on the process of money creation. Just lowering or increasing interest rates, which was the major way of conducting monetary policy in the past, will not work anymore in the future.

INTEREST RATE LIBERALIZATION TO BANK’S RISK RESISTANCE: MODERATOR OF STRATEGIC LEADERSHIP AND MEDIATOR OF MONETARY POLICY TRANSMISSION

2020 ◽  
Vol 8 (4) ◽  
pp. 1363-1384
Author(s):  
Zi Jing He ◽  
Sze Ting Chen ◽  
Kai Yin Allison Haga ◽  
Yao Jun Fan
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Commercial Banks ◽  
Strategic Leadership ◽  
Chinese Government ◽  
Monetary Policy Transmission ◽  
Research Results ◽  
Interest Rate Liberalization ◽  
Policy Transmission ◽  
Laws And Regulations

Purpose: Most prior studies on interest rate liberalization focused on banking system reforms and technological reforms, as well as liberalization’s impact on the profitability of commercial banks. Rarely considered were the effects of monetary policy or management’s leadership ability. This paper aims to investigate the influence of these two missing aspects and to explore whether or not such liberalization has had any influence on commercial banks’ risk resistance capacity and, if so, to identify the nature of that influence. Methodology: This article considers 18 commercial banks in China, operating from 2003 to 2018. Analyses include descriptive statistics, the Sobel test, the ADF stationarity test, and the VAR model co-integration test. Main Findings: Our results show that China’s interest rate marketization reform has a net positive effect on reducing bank risk, despite the new risks created by reform. Commercial bank anti-risk capabilities were also found to be improved both by China's monetary policy transmission for interest rate liberalization and by the strategic leadership capabilities of individual bank managers. Results: Based on these research results, this article encourages the Chinese government to strengthen appropriate laws and regulations to reduce the bankruptcy risk of commercial banks during interest rate liberalization. Commercial banks should build competent risk management teams with the ability to anticipate risks to allow their banks to better resist the disadvantages of interest rate liberalization reforms. Application: Based on these research results, this article can provide insights for the Chinese government, showing that appropriate laws and regulations should be strengthened to reduce the risk of bankruptcy that commercial banks may face as a consequence of interest rate liberalization. Originality/Value: This paper contributes to the theory of interest rate liberalization and anti-risk capability of commercial banks, by conceptualizing new constructs from strategic leadership and monetary policy transmission theory. It finds that market-oriented rate reform has increased interest rate risk and complicated the term structure. Commercial banks should, therefore, improve their operational management capabilities and optimize their internal governance decision-making mechanisms.

scholarly journals Some Controversial and Important Issues about Shadow Banking Research

2019 ◽  
Vol 5 (1) ◽  
pp. 119
Author(s):  
Chenqi Li ◽  
Tong Wu
Keyword(s):  
Monetary Policy ◽  
House Price ◽  
The United States ◽  
Policy Response ◽  
Shadow Banking ◽  
Channel Identification ◽  
The Past ◽  
International Financial Crisis ◽  
Effectiveness Of Monetary Policy ◽  
Made In

<p><em>After the outbreak of the international financial crisis in 2008, the concept of shadow banking was first put forward by the financial circles in the United States. In the past ten years, the development of the shadow banking has been a great deal of researches and great achievements made in the academia and the industry. However, there are still some problems that have not been effectively solved or disputed. This paper extracts the periodicity of the CIS and converse of shadow bank, the influence of the shadow banking on the effectiveness of monetary policy, the portrayed “channel identification” of the shadow banking to the monetary policy response, and the discrimination of the influence of the shadow banking on the house price, and through the combing of the related contents. Reflection and re-study, in order to provide a valuable reference for the relevant researchers.</em></p>

Mahmood Hasan Khan. Underdevelopment and Agrarian Structure in Pakistan. Boulder, Colorado: Westview Press. 1981. pp.xviii+ 307.

1981 ◽  
Vol 20 (4) ◽  
pp. 465-468 ◽  
Author(s):  
Douglas H. Perry
Keyword(s):  
Ownership Structure ◽  
Land Reform ◽  
Land Ownership ◽  
Past Century ◽  
The Past ◽  
Ownership Patterns ◽  
Agrarian Structure

Students of the land ownership patterns in Pakistan have always been hampered by extreme lack of data, neither the 1960 census nor the 1972 census reveal anything about the actual ownership structure of land. Khan's book goes some distance in providing numbers on land ownership (for 1971 and 1976), and also documents methods and failures of land reform efforts over the past century in Pakistan, disaggregated to show efforts in this regard in both the provinces of Sind and Punjab. The book actually provides an overwhelming amount of data - some 87 pages of charts and tables document a book of under 200 pages of text.

The Effectiveness of Monetary Policy: Recent British Experience

1957 ◽  
Vol 65 (1) ◽  
pp. 18-39 ◽  
Author(s):  
Warren L. Smith ◽  
Raymond F. Mikesell
Keyword(s):  
Monetary Policy ◽  
British Experience ◽  
Effectiveness Of Monetary Policy

scholarly journals The effectiveness of monetary policy in China: Evidence from a Qual VAR

2017 ◽  
Vol 43 ◽  
pp. 216-231 ◽  
Author(s):  
Hongyi Chen ◽  
Kenneth Chow ◽  
Peter Tillmann
Keyword(s):  
Monetary Policy ◽  
Effectiveness Of Monetary Policy

scholarly journals On the money creation approach to banking

2021 ◽  
Author(s):  
Salomon Faure ◽  
Hans Gersbach
Keyword(s):  
Monetary Policy ◽  
Commercial Banks ◽  
Central Banks ◽  
Capital Regulation ◽  
Bank Deposits ◽  
Central Bank Money ◽  
Money Creation ◽  
Asset Purchases ◽  
Bank Equity ◽  
Bank Money

AbstractWe study today’s two-tier money creation and destruction system: Commercial banks create bank deposits (privately created money) through loans to firms or asset purchases from the private sector. Bank deposits are destroyed when households buy bank equity or when firms repay loans. Central banks create electronic central bank money (publicly created money or reserves) through loans to commercial banks. In a simple general equilibrium setting, we show that symmetric equilibria yield the first-best level of money creation and lending when prices are flexible, regardless of monetary policy and capital regulation. When prices are rigid, we identify the circumstances in which money creation is excessive or breaks down and the ones in which an adequate combination of monetary policy and capital regulation can restore efficiency. Finally, we provide a series of extensions and generalizations of the results.

scholarly journals Does the target market affect bank performance? Evidence from the geographic diversification of city commercial banks in China

2021 ◽  
Vol 15 (1) ◽  
Author(s):  
Xiaonan Li ◽  
Chang Song
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Capital Adequacy ◽  
Bank Performance ◽  
Chinese Government ◽  
Target Market ◽  
Geographic Diversification ◽  
Cross Sectional ◽  
The Impact ◽  
Geographical Diversification

AbstractAfter the opening up of the banking sector to domestic and foreign capitals which is approved by the Chinese government, the China Banking Regulatory Commission (CBRC) has permitted city commercial banks to diversify geographically. Since this deregulation in 2006, city commercial banks began to geographically diversify to occupy the market and acquire more financial resources. To examine the causal relationship between geographical diversification and bank performance, we construct an exogenous geographical diversification instrument using the gravity-deregulation model and a policy shock. We find that bank geographical diversification negatively affects bank performance. Moreover, we conduct some mechanism tests in the Chinese context. We find that the target market with several large- and medium-sized banks and a high level of local protectionism in the target market decreases the performance of city commercial banks. Finally, cross-sectional analyses show that the impact of geographical diversification on banks’ performance is more notable among city commercial banks that are younger, and have a lower capital adequacy ratio and a higher non-performing loan ratio.

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