scholarly journals SYSTEMATIZATION OF THE EFFECTS THAT ARISE IN CONNECTION WITH THE EXPANSION OF TRANSNATIONAL BANK CAPITAL

2018 ◽  
pp. 80-91
Author(s):  
Natalia TKACHENKO ◽  
Olexander MOMOT
Keyword(s):  
Host Country ◽  
Financial Stability ◽  
Banking Sector ◽  
Banking System ◽  
Foreign Bank ◽  
Foreign Banks ◽  
Bank Capital ◽  
Financial Flows ◽  
Banking Systems ◽  
Transnational Bank

Introduction. Openness to transnational financial flows is one of the most important indicators of the development of banking systems. The advocates of openness of banking systems for the entry of transnational banks as positive characteristics indicate increased competition in the banking sector, increased financial stability and efficiency, application of the newest management methods, diffusion of banking innovations, consolidation of both prudential standards and standards of regulation and supervision of banking activities. The purpose. The purpose of the article is to study the signs of globalization of financial space and the main forms of the presence of foreign banks in the territory of the host country and identify a set of risks and effects arising from the expansion of transnational bank capital. Results. The main consequences of the openness of banking systems for the expansion of transnational bank capital are investigated in the article. The main forms of the presence of foreign banks in the territory of the host country are identified, namely: representation of a foreign bank, a branch of a foreign bank, a bank with foreign participation and a subsidiary bank. The factors influencing the choice by a transnational bank of a certain organizational form of presence in foreign markets are determined. The differences in the behavior of branches of transnational banks and subsidiary banks in the financial markets of the host country are examined. A set of risks emerged in the case of the openness of the banking system and the presence of branches of transnational banks is identified. A set of effects generated by the expansion of transnational bank capital is investigated. Conclusions. The removal of barriers to capital flows must be coordinated with certain measures in macroeconomic policy. Failure to comply with this condition can lead to crisis phenomena, growth of external debt, especially short-term, and threaten the financial stability of the state.

scholarly journals Factors Affecting Cost Efficiency in the Banking Sector of Kyrgyzstan

2017 ◽  
Author(s):  
Dastan Aseinov
Keyword(s):  
Economic Efficiency ◽  
Cost Efficiency ◽  
Financial Stability ◽  
Banking Sector ◽  
Banking System ◽  
Foreign Banks ◽  
Data Set ◽  
Factors Affecting ◽  
Domestic Banks ◽  
The Impact

Instabilities in the banking sector have had an adverse effect on the economy as a whole, since the largest share in the financial system and financial intermediation in Kyrgyzstan have been captured by banking sector. Economic efficiency in banking can be viewed as a source of financial stability of banking system. Economic efficiency of the banking is more important challenge not only for shareholders and managers of banks, and also for regulation and supervision authorities, and public and potential investors. The aim of this study is to examine factors affecting the banking cost efficiency for Kyrgyz banks. It is also important to choose the appropriate approach in measurement of banking cost efficiency, since there are many different methods. In this study preferred stochastic frontier approach which assumes random error term which captures sampling, measurement and specification errors. We adopted stochastic cost frontier model proposed by Battese ve Coelli (1995) which also allow to examine investigate the impact of variables on efficiency. We used unbalanced panel data set captured 17-23 Kyrgyz commercial banks for period of 2000-2013. Obtained results suggest that capitalization, foreign ownership, credit risk, liquidity risk and currency risk have most influence on cost efficiency scores of banks calculated averagely at level of 0,766. Overall results indicate that domestic banks more cost efficient than domestic private and foreign banks. Average cost efficiency scores of domestic banks, foreign and separately public banks are 0,848; 0,649 and 0,875, respectively.

scholarly journals Topical Issues of Improvement of Banking System And Legislation In Uzbekistan

2021 ◽  
Vol 04 (06) ◽  
Author(s):  
Prof. Dr Said Gulyamov ◽  
Keyword(s):  
Banking Sector ◽  
Banking System ◽  
Legal Regulation ◽  
State Regulation ◽  
Foreign Banks ◽  
Foreign Direct Investments ◽  
Banking Services ◽  
Banking Systems ◽  
Doing Business ◽  
Banking Business

Banks and banking systems are among the most important mechanisms in the development of a country's economy and the creation of favourable conditions for doing business. The internationalization of the banking business poses new challenges for the scientific community to find optimal solutions that reduce banking risks, strengthen national banking systems and improve banking technologies. Accordingly, today it is important to strengthen the banking system and its legal regulation in Uzbekistan. In this regard, it is important to analyse the development of the domestic banking system, including in terms of its legal support. This article investigates the banking system, bank services and their regulation in Uzbekistan, where the role of foreign banks is not sufficiently regulated and is not attractive for foreign banks. This study identifies the problems of further improvement and liberalization of banking legislation. The focus is on the lack of banking practices and legislation, and on the introduction of new foreign banks in the domestic banking services market. However, the development of the country’s economy and the involvement of foreign direct investments are impossible without a strong banking services market. It is noted that one of the important conditions for the development of a banking system in Uzbekistan is the formation of an effective mechanism of state regulation and improvement of legislation directed at creating favourable conditions for foreign banks to enter Uzbekistan’s domestic market. The article examines the implementation of international best practices in state regulation of the banking system and banking services that will serve to modernize the system of banking services, attract foreign investment in the banking sector, and harmonize banking legislation.

scholarly journals ACCOUNTING PROCEDURES FOR REORGANIZATION OF BANKING INSTITUTIONS

2019 ◽  
pp. 122-135
Author(s):  
Nataliya GUDZENKO ◽  
Natalia KOVAL ◽  
Tetiana KORPANIUK
Keyword(s):  
Portfolio Management ◽  
Financial Stability ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Driving Forces ◽  
Legal Aspect ◽  
Banking System ◽  
Foreign Banks ◽  
Structural Reorganization ◽  
Banking Institutions

The domestic banking sector should become one of the main driving forces of the structural reorganization of the industrial and agricultural sectors. To implement this objective, it is necessary to develop a powerful banking system based on stable banking institutions. In such conditions, the ability to manage the financial stability of banking institutions, identify signs of instability and bankruptcy in a timely manner, and, if possible, try to neutralize or eliminate them is of great significance. The necessity of implement measures aimed to stabilize the banking system in conditions of the instability of the external environment is substantiated. Peculiarities of the reorganization of banking institutions as one of the effective measures intended to avoid bankruptcy and to stabilize the financial situation are revealed, attention is paid to the need to improve the solvency of domestic banks in the conditions of economic and political instability, as well as the global financial crisis. On the basis of statistical data, the analysis of the reasons for the reorganization and termination of the activity of banking institutions is carried out, the domestic banking market and the world tendencies are compared. According to the analysis of the unsatisfactory quality of banking assets, there have been identified 8 types of inadequate practices for portfolio management of loans and investments in bankrupt foreign banks, including liberalism in providing loans, significant shortcomings in financial reporting, excessive lending, incomplete documentation in the field of taxation. According to the results of the study, the possibilities of reorganization of the banking institution and termination of activity are summarized. In particular, preconditions for reorganization, purpose, and methodological principles of reorganization of commercial banks are highlighted. By its content, the form of reorganization can be unifying, distributive and reorganization can be performed through transformation. Unifying forms include mergers and acquisitions. The procedure of reorganization is complicated by the mechanism for implementation and reflection in accounting and depends on what conditions it will be implemented (what status will be obtained by the future financial and credit institution). In practice, there arises a problem of the complexity of combining the balances on the accounts of the legal predecessor and successor. To solve the problem, it is proposed to add additional records into the accounting registers and new subaccounts and analytical accounts for the accounting of assets and liabilities. The types of bankruptcy are characterized according to the classification criteria and their classification is specified in various aspects (legal, control, accounting) taking into account the requirements of accounting, analysis and preparation of the corresponding reporting. The legal aspect covers all proposed types of bankruptcy, since any type of bankruptcy concerns the rights and interests of legal entities and individuals. However, not all types of bankruptcy are inherent in the control or accounting aspects. The article substantiates the list of accounting objects for various types of reorganization (merger, transformation), since the procedure of reorganization includes transactions for the registration of successor companies); the attention is focused on the problems of displaying in the accounting of claim settlements and the need for their analytical detailing, which expands information capabilities of the register of creditors’ claims, increases the transparency of information for external users and reduces the risk of non-payment. A promising direction is the improvement of organization of management accounting using the system approach, so that accounting support for the process of reorganization should be considered together with the formation of the appropriate methodology, effective management and modern information technology. The accounting policy should ensure the possibility of formation of the accounting information for the forecast of risks and possible bankruptcy of the commercial bank.

scholarly journals Pragmatics and problemmatics of the banking sector functioning in Ukraine

2018 ◽  
Vol 2 (1) ◽  
pp. 15-25
Author(s):  
Oksana Redkva
Keyword(s):  
Economic Development ◽  
Financial Literacy ◽  
Financial Stability ◽  
Banking Sector ◽  
Banking System ◽  
The State ◽  
Economic Downturn ◽  
Bank Capital ◽  
Macroeconomic Factors ◽  
Banking Institutions

Introduction. The permanent occurrence of crisis phenomena in the Ukrainian economy requires the state authorities and the National Bank to search for effective and optimal ways to overcome the economic downturn. Among the important elements in building a system of measures to counteract the recession and stimulate stable economic growth is to ensure a high level of financial stability of the banking system of the country. The banking system has key functions in the mechanism of implementation of the state economic policy to counteract the emergence of negative trends in both the real and financial sectors of the economy. In connection with this, the urgency of the issue of ensuring the proper level of functioning of the banking system is violated. Aim and tasks. The purpose of the research is to deepen the theoretical positions regarding the problematic aspects of the activities of banking institutions and to develop practical recommendations for improving the efficiency of their functioning in Ukraine. Research results. The paper examines the current state of functioning of the banking sector. On the basis of the conducted research, the existence of direct and indirect influence on functioning of the banking system in Ukraine was noted. The existence of the relationship between the main macroeconomic factors and functioning of the banking sector has been proved. By means of mathematical tools, a direct correlation between the growth of gross domestic product and the growth of net bank assets was established. The positive foreign experience of countries with transition economies, which managed to ensure the efficient functioning of the banking system has been considered. The promising measures that will promote the improvement of the banking system and stimulate economic development have been outlined. Conclusions. The analysis of the status of banking institutions indicates the need for changes and effective reforms in the banking system. Realization of any type of reforms carries both potential advantages and the possibility of occurrence of certain risk situations. Therefore, it is expedient and consistently to outline a list of measures that will promote the improvement of the banking system and stimulate economic development, namely: a systematic approach to solving the problem of asset quality; increase of the savings base, which will allow to expand lending; strengthening of the requirements for disclosure of information about the financial status, ownership and management structure of banks; increasing financial literacy of the population; provision of corporate governance of banks on the basis of the best world standards; carrying out constant supervision of the degree of concentration of bank capital in terms of the country and its origin.

scholarly journals АNALYTICAL EVALUATION OF INDICATORS OF BANKING SYSTEM CAPITALIZATION AND MACROECONOMIC STABILITY IN UKRAINE

2021 ◽  
Vol 2021 (2) ◽  
Author(s):  
І. Didenko ◽  
A. Yefimenko
Keyword(s):  
Financial Stability ◽  
Banking Sector ◽  
Additive Model ◽  
Banking System ◽  
Exponential Smoothing ◽  
The State ◽  
Bank Capital ◽  
Analytical Review ◽  
High Level ◽  
Macroeconomic Stability

Current trends in economic development of both the state as a whole and its individual sectors lead to a more detailed assessment of indicators of banking sector capitalization as indicators of system financial stability. Also, socio-economic fluctuations at the international level instigate a revision of macroeconomic stability indicators, which will allow analyzing the possibility of further development of Ukraine. It is important to note that a sufficient level of banking system capitalization is the basis for covering potential risks. With a high level of capitalization, the risk of bank default decreases, which has a positive effect on macroeconomic stability. The purpose of the study is to conduct an analytical assessment of capitalization and macroeconomic stability, to determine the forecast values of bank capital and GDP of Ukraine for 2021-2022 and to develop practical recommendations for improving the level of these indicators. The main tools used during the study are: methods of grouping, comparison and generalization, the method of exponential smoothing of time series, construction of an additive model, graphical method. STATISTICA was used for forecasting. The article provides an analytical review of the main indicators of banking system capitalization of Ukraine. Indicators of macroeconomic stability are studied. It is determined that the main indicators of capitalization in Ukraine are: H1 and H2 standards, the amount of balance capital of banks. The forecast of the volume of capital of banks of Ukraine and GDP for 2021-2022 by the method of exponential smoothing is carried out. Forecasting is performed with and without taking into account the seasonal component. The constructed models are adequate, so the results can be used in practice. Having forecast values of capital, banks will be able to adjust their resource policy and determine the deficit or surplus of this indicator. The projected values of GDP will help to adjust the state policy in terms of the formation of the indicator and to develop appropriate measures to further improve its level. Thus, the analytical review should be conducted on an ongoing basis, taking into account changes in the socio-economic policy of the state, fluctuations in the banking sector and changes in the world economy.

EMERGING TRENDS IN BANKING SECTOR - ITS CHALLENGES AND OPPORTUNITIES

2018 ◽  
Vol 6 (26) ◽  
Author(s):  
Karigoleshwar .
Keyword(s):  
Banking Sector ◽  
Banking Industry ◽  
Banking System ◽  
Major Change ◽  
Commercial Banking ◽  
Foreign Banks ◽  
Emerging Trends ◽  
Reserve Bank ◽  
Challenges And Opportunities ◽  
Multiple Regions

In financial sector the banking industry is the largest player, has also been undergoing a major change. Today the banking industry is stronger and capable of withstanding the pressures of competition. Today, we are having a fairly well developed banking system with different classes of banks – public sector banks, foreign banks, private sector banks – both old and new generation, regional rural banks and co-operative banks with the Reserve Bank of India as the fountain Head of the system. In the banking field, there has been an unprecedented growth and diversification of banking industry has been so stupendous that it has no parallel in the annals of banking anywhere in the world. The banking industry has experienced a series of significant transformations in the last few decades. Among the most important of them is the change in the type of organizations that dominate the landscape. Since the eighties, banks have increased the scope and scale of their activities and several banks have become very large institutions with a presence in multiple regions of the country.' The paper examines the new trends in commercial banking. The present era the cashless transactions, E-cheques, mobile wallets. The paper attempts to present the emerging trends and its challenges that recently emerged in the banking sector with special emphasis on digitization. It will be useful to the academicians, banking and insurance personnel, students and researchers. Common readers also know the latest innovations in banking sector

scholarly journals Assessing the Impact of Corporate Governance Index on Financial Performance in the Romanian and Italian Banking Systems

2021 ◽  
Vol 13 (10) ◽  
pp. 5535
Author(s):  
Marco Benvenuto ◽  
Roxana Loredana Avram ◽  
Alexandru Avram ◽  
Carmine Viola
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Banking Sector ◽  
Research Question ◽  
Interactive Effect ◽  
Banking System ◽  
Capital Adequacy ◽  
Banking Systems ◽  
Governance Index ◽  
The Impact

Background: Our study aims to verify the impact of corporate governance index on financial performance, namely return on assets (ROA), general liquidity, capital adequacy and size of company expressed as total assets in the banking sector for both a developing and a developed country. In addition, we investigate the interactive effect of corporate governance on a homogenous and a heterogeneous banking system. These two banking systems were chosen in order to assess the impact of corporate governance on two distinct types of banking system: a homogenous one such as the Romanian one and a heterogeneous one such as the Italian one. The two systems are very distinct; the Romanian one is represented by only 34 banks, while the Italian one comprises more than 350 banks. Thus, our research question is how a modification in corporate governance legislation is influencing the two different banking systems. The research implication of our study is whether a modification in legislation, thus in the index of corporate governance, is feasible for two different banking sectors and what the best ways to increase the financial performance of banks are without compromising their resilience. Methods: Using survey data from the Italian and Romanian banking systems over the period 2007–2018, we find that the corporate governance has a significant, positive and long-lasting effect on profitability and capital adequacy in both countries. Results: Taking the size of the company into consideration, the impact of the Index of Corporate Governance (ICG) on a homogenous banking system is positive while the impact on a heterogeneous banking system is negative. Conclusions: Our study provides evidence of the impact of IGC on financial performance and sheds light on the importance of the size of the company. Therefore, one can state that the corporate governance principles applied do not encourage the growth of large banks in heterogeneous banking sectors, thereby suggesting new avenues of research associated with new perspectives.

scholarly journals EVALUATION OF FUNCTIONAL PERFORMANCE OF THE BANKING SYSTEM OF UKRAINE IN CONDITIONS FINANCIAL INSTABILITY

2021 ◽  
Author(s):  
Nataliia Danik ◽  
Kateryna Novak ◽  
Anastasiia Yakovenko
Keyword(s):  
Economic Crisis ◽  
Financial Stability ◽  
Structural Changes ◽  
Banking Sector ◽  
Synergistic Effects ◽  
Banking System ◽  
Scientific Article ◽  
Financial Instability ◽  
Industrial Complex ◽  
The Impact

The article covers the problems of the functioning of the banking sector of Ukraine during 2018-2021, as one of the main sectors of the financial market and the national economy as a whole. When analyzing the state of the banking sector, regularities and general trends in the functioning of the banking sector of Ukraine have been established, and appropriate calculations have been made. The impact of global financial crises on the activities of banking structures, which must operate in conditions of constant financial instability, is described. Today, the whole world, including Ukraine, is on the verge of a global financial and economic crisis. This raises the question of whether Ukrainian banks have the necessary margin of resilience to vulnerabilities to the financial and economic crisis. In recent years, the functioning and development of the banking system has been characterized by increased financial stability, the level of bank capitalization, liquidity, some improvement in asset quality, reducing risks in banking, as well as the presence of positive structural changes. Today, Ukraine's banking system operates in a complex socio-economic and legal environment, most of which - macroeconomic instability, irrational structure of the industrial complex, the crisis of science and technology, imperfect fiscal and monetary policy, low level of effective demand - complicate sustainable development banking sector and increase competitiveness. In conditions of instability, intensification of turbulent processes, the development of the banking system requires new innovative approaches to determining the mechanisms of effective functioning and stable development based on a system-synergetic approach, which led to the choice and relevance of the chosen topic of this scientific article. Efficiency of banks is a multicomponent, multifaceted, multidimensional system characteristic that depends on many factors and is an effective indicator of performance of functions and achievement of goals and objectives of banks development provided financial stability based on financial stability and dynamic balance, achievement of multiplicative and synergistic effects.

scholarly journals THE ROLE OF THE CENTRAL BANK IN THE FUNCTION OF IMPROVEMENT OF LIQUIDITY OF BANKING SECTOR IN BOSNIA AND HERZEGOVINA

2019 ◽  
Vol 12 (24) ◽  
Author(s):  
Goran Mitrović ◽  
Živko Erceg
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Bosnia And Herzegovina ◽  
Banking Sector ◽  
Banking System ◽  
Policy Instruments ◽  
Foreign Banks ◽  
Dayton Agreement ◽  
The Impact

The monetary policy of Bosnia andHerzegovina is rather limited because it is basedon the principles of a currency boardcharacterized by the impossibility of implementingthe basic monetary policy instruments incomparison with the monetary policy of theEuropean Union. However, the constant presenceof European integrations should point the need fora more drastic change in the monetary policy ofBosnia and Herzegovina. By entering theEuropean Monetary Union (EMU), the monetaryterritory of Bosnia and Herzegovina will becomeone of the branches of the European Central Bank(ECB). In addition, it is not difficult to concludewhy the Law about the Central Bank of Bosnia andHerzegovina has been adopted with the first lawsof the Dayton Agreement, if it is known that thelargest part of the banking system, and thereforethe financial market, is owned by foreign banks.This work will point out the significance of theCentral Bank of Bosnia and Herzegovina, as oneof the most important factors for maintaining thepermanent liquidity of the banking sector inBosnia and Herzegovina. The possibilities andlimitations of the Central Bank of Bosnia andHerzegovina will be determined, with theassumption of macroeconomic sustainability overa longer period of time. The need of reforming thebanking system in Bosnia and Herzegovina will beanalyzed through the constant implementation ofthe Basel standards with the increasingparticipation of foreign banks in the Bosnia andHerzegovina. It will be determined the impact ofthe implementation of the Basel III in the bankingindustry in Bosnia and Herzegovina and itsconsequences on the banking and economicsystem.models, on the ways of financing theelimination of adverse consequences of naturaldisasters.

A Resource-Based Approach to Mergers and Concentration of the Banking System in Mexico post Crisis 1994

2014 ◽  
pp. 22-45
Author(s):  
José G. Vargas-Hernández
Keyword(s):  
Banking Sector ◽  
Banking System ◽  
Foreign Banks ◽  
Competitive Advantages ◽  
Subsequent Generation ◽  
Barriers To Entry ◽  
Global Expansion ◽  
Expansion Strategy ◽  
Foreign Competitors ◽  
Resource Based Theory

The strength of the companies is sustained in the resources that it owns that can be considered like a barrier to the entrance for other companies. The case of the banking sector of these resources was affected by the crisis of 1994, devastated with the anti-crisis measures and the entrance of foreign competitors at the end of the 1990s. Under this environment, this chapter analyzes the acceleration of the concentration at the Mexican banking system based on the resource-based theory. To have competitive advantages in resources and a solid global expansion strategy, foreign banks were able to climb to a position in the Mexican banking system, with the subsequent generation of barriers to entry to maintain its leadership.

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