Determinants of credit risk at Vietnam bank for agriculture and rural developments in Can Tho City

The aim of this study is to investigate factors affecting credit risks of the borrowers (both corporate and individual customers) of Vietnam bank for agriculture and rural development's branch at Can Tho city (lender), thereby proposing several solutions to improve the bank’s operational efficiency in the upcoming years. Simultaneous qualitative and quantitative research methods are applied and secondary data from 102 corporate customers and 2100 individual clients are collected directly from the financial report of the Can Tho branch of Vietnam bank for agriculture and rural development (Agribank) until the end of 2018. A binary logistics model is employed to identify the determinant factors of the credit risk of bank customers. Estimation results reveal that the credit risk of corporate customers is affected by the factors of sales growth, return on sales ratio, Debt to equity ratio, collateral-to-outstanding loan balance ratio, and customer's loan history which are consistent with those of previous studies, whereas the credit risk of individual customers is influenced by the factors of age, educational level, loan purpose, loan maturity, type of collateral, customer income, and customer loan history, which are confirmed by previous studies. The empirical findings of the article imply that the Can Tho branch of Agribank should take precautions in order to limit the credit risk of bank customers. In addition, several governance recommendations are given for bank’s manager to improve the operational efficiency of bank.

Second Thoughts About Central Bank Digital Currencies

Sustained decline in central banks’ monetary liabilities (reserves and currency in circulation), which the emergency of cryptocurrencies may have hastened, has been enabled by technological innovations that over time have allowed financial institutions and their customers to execute transactions and settle their debts without resorting to central bank currency. Policymakers are concerned about their ability to guarantee public’s access to government-backed currency. This has implications for central banks’ balance sheet and income position, which central bank digital currency might reconstitute. But the introduction of central bank digital currency (CBDC) comes with its own risks and could be disruptive for financial markets. We believe that retaining the option to have access to government-guaranteed currency is of utmost importance, despite the sporadic demand for physical currency in the modern society, but it could be addressed within existing institutional structures without the introduction of CBDC. However, policy authorities are right in seeking oversight and regulation for cryptocurrencies to address the destabilizing potential of cryptocurrencies for financial markets, and they should continue modernizing payment infrastructures to bring retail settlement systems at par with cryptocurrencies in terms of settlement speed but without associated liquidity and credit risks. These steps would preserve the status quo and allow private sector to continue innovating while limiting central banks’ footprint in the financial markets.

Problems and Major risks in the Banking Sector of Azerbaijan

Aim. The presented study aims to perform a comprehensive and in-depth analysis of problems and risks in the banking sector of Azerbaijan and to develop recommendations for improving the efficiency and reliability of its functioning in accordance with national interests.Tasks. The author shows the key problems and risks in the country’s banking sector, focusing on dollarization as the main risk; investigates the content and causes of dollarization; examines new trends, particularly the impact of the COVID-19 pandemic on the banking sector of Azerbaijan.Methods. A systems approach to identifying the major factors affecting the development of the banking sector in Azerbaijan serves as the methodological basis of this study. The author also uses the methods of scientific analysis, such as the statistical method, comparative, fundamental, and functional analysis, and expert assessment. The study reflects the ideas set forth in the scientific works of economists on the problems of the institutional development of the banking system in the country under consideration.Results. According to the results of the study, the patterns and current problems in the development of the banking sector of Azerbaijan after the devaluation of 2015 are identified. Its major risks and current state are analyzed, and the reasons for the dollarization of the economy as the main channel of risk for the banking sector of Azerbaijan are determined. In addition, the impact of the COVID-19 pandemic on this sector is analyzed.Conclusions. Positive and negative aspects are identified by performing a risk analysis of the banking sector of Azerbaijan. On the positive side, there are large strategic monetary reserves, a relatively low level of public debt, a single authority for regulating and supervising financial markets, basic risk management elements, and full deposit insurance. The vulnerabilities of the banking sector of Azerbaijan include fragile capital positions of the banking system, high credit risks of banks, low capitalization of banks, lack of legal mechanisms for regulating and selling non-performing assets, lack of effective tools for the rehabilitation and restructuring of banks, weak corporate governance in the financial services sector, low financial literacy, increased monetary and credit risks in the banking sector.

Digital Technologies for Assessing the Credit Capacity of the Bank’s Clients

In modern conditions of global competition and the rapid development of digital technologies, there is a need for new tools for assessing the solvency of bank customers and reducing credit risks, reducing costs and increasing the profitability of the bank. The features and prospects of using big data and predictive analytics are analyzed, theoretical aspects of using Artificial intelligence (AI) technologies are considered and their advantages for banks are analyzed. The goal is to reduce the share of problem loans and quickly determine the solvency of clients.

The Basel III net stable funding ratio and a risk-return tradeoff: Bank-level evidence from Vietnam.

The Net Stable Funding Ratio (NSFR) liquidity rule under Basel III guidelines is designed to handle long-term liquidity risk, promoting the sustainable structures of bank funding. This study estimates the NSFR and analyses the impact of this liquidity ratio on banks according to a risk-return trade-off in Vietnam prior to the Basel III implementation. Using yearly data for commercial banks from 2007 to 2018, I find that banks with higher NSFR gain more potential benefits than banks with lower NSFR. Concretely, a rise in NSFR increases bank profitability and decreases bank funding costs, credit risks and liquidity creation, as evidenced by a comprehensive set of alternative measures. The findings of this study offer insightful implications on the bank policy framework advocating the Basel III liquidity regulation in Vietnam as well as other emerging markets.

Climate protection as an opportunity for banks to increase earnings and consumer trust

Banks are currently facing numerous challenges. In addition to the ongoing cheap money policy of the European Central Bank, a regulated market environment and a rapidly progressive digitization, financial institutions are increasingly confronted with topics such as sustainability and climate protection. From the latter derive not only risks but also chances for banks. Sustainability risks can impact different risk categories such as market risks, credit risks, operational risks, and liquidity risks. Moreover, reputational risks can occur in this context. This is especially important as bank customers constantly develop a greater awareness of ecological issues, and thus, develop increasing expectations on how companies – like banks – deal with issues like climate protection and sustainability. For this reason, we will start with a theoretical explanation of the key words and then present the results of our customer survey to highlight the current expectations of bank customers in the context of climate protection. Based on this, we formulate recommendations for banks on how to generate a competitive advantage by engaging in climate protection and by taking sustainable actions.

Enterprise E-Commerce Marketing System Based on Big Data Methods of Maintaining Social Relations in the Process of E-Commerce Environmental Commodity

Since entering the 21st century, with the rapid development of Internet technology, the network platform of e-commerce has also undergone great changes. With the rapid development of e-commerce economy, the widespread existence of credit risks in the trading process of e-commerce environmental goods has caused great harm to the healthy development of e-commerce, and has gradually become the biggest bottleneck restricting the development of e-commerce in China.Based on the basic model of e-commerce market, and proposes four types of credit mechanism to maintain social relations in the process of e-commerce environmental goods trading: that is, credit mechanism without government intervention; As can be seen from the experimental data, the Alpha coefficient of each potential variable set in the experiment in this paper is above 0.6, which is within the acceptable range, which verifies that the method model proposed in this paper to maintain social relations in the process of e-commerce environmental goods trading is effective in application.

Enterprise E-Commerce Marketing System Based on Big Data Methods of Maintaining Social Relations in the Process of E-Commerce Environmental Commodity

Since entering the 21st century, with the rapid development of Internet technology, the network platform of e-commerce has also undergone great changes. With the rapid development of e-commerce economy, the widespread existence of credit risks in the trading process of e-commerce environmental goods has caused great harm to the healthy development of e-commerce, and has gradually become the biggest bottleneck restricting the development of e-commerce in China.Based on the basic model of e-commerce market, and proposes four types of credit mechanism to maintain social relations in the process of e-commerce environmental goods trading: that is, credit mechanism without government intervention; As can be seen from the experimental data, the Alpha coefficient of each potential variable set in the experiment in this paper is above 0.6, which is within the acceptable range, which verifies that the method model proposed in this paper to maintain social relations in the process of e-commerce environmental goods trading is effective in application.

Credit Risk Assessment of Loan Defaulters in Commercial Banks Using Voting Classifier Ensemble Learner Machine Learning Model

In banking sector credit score plays a very important factor. It is important to find which customer is valid and which is not valid for loan. Now to classify customer’s credit score is used. Based on this credit score of customers the bank will decide whether to approve loan or not. In banks there are major failures due to credit risks. We can automate this by using various Machine learning algorithms to identify loan defaulters. To classify and predict the customers here various Machine learning techniques like gradient boosting, random forest and Feature Selection technique along with Decision Tree are used. Using these algorithms we accurately classify valid and invalid customers for loan. Designed model can classify their customers into good and bad applicants and train the model for getting the better accuracy of the customer data.