Responsible Lending Policy of Green Investments in the Energy Sector in Poland

The paper concerns the issue of responsible involvement of commercial banks in Poland in green financing of the energy sector. The main reason for undertaking this topic is the observed increased interest of domestic banks in green financing of investments on the energy market in Poland. Therefore, the main objective are to explore the determinants of changes in the level and structure of bank loans under the influence of green investments in the energy sector in Poland. The article verifies the research hypothesis which assumes that an increase in financing green investments by bank loans in the energy market in Poland requires strengthening the synergy of responsible financing of sustainable development of the economy. For this purpose, a two-stage concept of the empirical research was adopted. On the first stage, questionnaire surveys were conducted among the largest Polish commercial banks to examine the respondents’ acceptance degree of the concept of sustainable financing and greening the loan portfolio. On the second stage, case studies were analyzed along with the analysis of selected secondary quantitative data. It was proven that commercial banks in Poland increase their commitment to sustainable financing, which is observed in the sectorally progressing process of “greening” the credit offer. There is also a noticeable change in their approach to social responsibility, especially in the context of the energy market, where financing of traditional, ecologically harmful projects is still dominant. However, this trend is slowly being reversed, towards supporting investments in the area of modern, environmentally-friendly energy solutions. However, “greening” of loan portfolios in the native banking sector requires a responsible lending policy based on various complex business decisions. Increasing their pro-ecological awareness of financing the economy is only a prerequisite, albeit inadequate, of further energy transformation in Poland.

Fintech and responsibility: Buy-now-pay-later arrangements

Buy-now-pay-later (BNPL) arrangements have rapidly emerged as a short-term debt option, and like other innovative and disruptive Fintech, challenge existing regulation. BNPL arrangements avoided prescribed ‘responsible lending’ legislative obligations, which applied to similar short-term credit products. Instead, BNPL relies on ‘responsible spending’ in providing a potentially cheaper option than alternatives such as credit cards. We describe the interplay of regulation and responsibility with BNPL. A survey investigates whether a key demographic (young adults) have an appetite or skill for responsible use. We analyse the preference for BNPL relative to credit cards and the role of financial literacy and traits including propensity to plan and save. The findings suggest that financial literacy reduces perceived BNPL benefits and that lower financial literacy is associated with more benefits and less risks. JEL Classification: G53, D14, G51, G41, G18

A System to Support the Transparency of Consumer Credit Offers

The development of financial markets and the low level of financial literacy does not facilitate consumer protection. A significant problem is the lack of information or unclear information regarding financial offers, including consumer credit. Financial protection for consumers can be increased by using systems that support consumers faced with a lack of transparency of consumer credit offers. The theoretical objective of the research is to identify the completeness of information allowing for verifying the annual percentage rate (APR) in the consumer credit offers presented and compared on websites of financial intermediaries and banks as well as the identify of APR calculation methods. After analysis of different credit offers (document analysis), a prototype of the system regarding credit costs measured at the appropriate interest rates (APR and AER) calculated in the correct manner was created. This may facilitate practices for informing consumers about the characteristics of consumer credit and at the same time support the implementation of the concept of responsible lending. The system developed uses a computer to simulate human thinking and to augment it with artificial intelligence. It facilitates the elimination the behavioral biases during the taking of financial decisions, which are the result of a low level of financial literacy.

RESPONSIBLE LENDING - RESULTS AND PROSPECTS

Research on financial sector activity is especially important for developing countries, including Georgia, as this sector is the main driving force of the country›s economy. Any economic reforms undertaken in the country have a significant impact on the general economic policy and economic growth.Under the new regulation from January 1, 2019 the lending procedure from the financial sector has been tightened. At present time, they operate by the principle of responsible lending, which means, that a potential customer of a bank product should not be subject to a financial obligation that he or she will not be able to pay without financial difficulties.The purpose of this study is to analyze the positive and negative effects of already existing responsible lending regulations, which is directing against indebtedness and to predict the expected future results. At the same time, the task of the research is to identify challenges, risks, results that accompany the reform based on the practices of developed and developing countries.The study uses a combination of quantitative and qualitative methods. Also, in the research are used methods of system analysis, analogy, forecasting, synthesis, processing of statistical data and other methods. The methodological of the research is the fundamental articles of economic science. The paper widely used scientific and popular works by local and foreign authors, scientific studies, methodological publications and articles. In the modern world any banking reform in developing and developed countries is linked to economic and political (often painful) changes, but this reform implementation is inevitable in all states, regardless of their level of development. The main reason for this is the reduction of indebtedness in the public and economic sectors, but this requires the introduction of a proper lending system that should not limit the development of the financial sector and, on the other hand, be an optimal source of replenishment of financial deficits.Interest rate cuts are likely to have a short-term effect, which will not only help tighten lending policy by itself, and will require other macro-prudential decisions, especially when the NBG has raised its refinancing rate from 6.5% to 7%, due to inflation targeting. It implements the monetary policy transmission mechanism and negatively impacts on the interest rate on loans issued by the banking sector and on aggregate demand itself, so economic growth is likely to be adjusted again.

Private Law Duties Deriving From EU Banking Regulation and its Individual Protection Goals

EU regulation both affects private law and increasingly relies on private law mechanisms to ensure its proper enforcement. Prominent examples are competition and capital markets regulation. In contrast, EU prudential regulation of commercial banking predominantly relies on public enforcement via supervisory authorities. This is astonishing given that the protection of individual bank customers emerges as a leitmotiv of EU banking regulation. CRD IV and CRR as the main legislative acts of EU commercial banking regulation strongly promote the goals of depositor and investor protection. More explicitly, the Consumer Credit Directive and the Consumer Mortgage Credit Directive introduced the duty of responsible lending towards consumers. Where the individual bank customer enjoys regulatory attention, but is not protected by public supervisory authorities, private law is best placed to fill the enforcement gap. In light of CJEU guidance, this contribution argues that the current EU banking regulation is open for and even requires private law remedies to enforce individual protection goals. Suitable instruments are contract interpretation, contract nullity and damages.

The Marketing of Consumer and Mortgage Credit as a Responsible Lending Tool: A Comparison of South African, European and Belgian Law: Part 2

The vulnerability of prospective credit consumers to over-committing their resources and the inherent dangers posed by credit advertising in particular necessitate the proper regulation of credit marketing. It is therefore not unsurprising that responsible marketing forms part of the responsible lending (and borrowing) measures of various jurisdictions – including South Africa and the Member States of the European Union – with the aim of preventing the extension of credit to consumers who cannot afford it. In this article the credit marketing laws that the South African, European (mainly in the Consumer Credit and Mortgage Credit Directives) and Belgian legislators have enacted are considered and compared, with a focus on the information to be included in advertising, prohibited advertising and prohibited marketing techniques. The ultimate aim is to determine whether South African law contains sufficient guarantees to protect consumers with respect to credit marketing and its consequences.

The Marketing of Consumer and Mortgage Credit as a Responsible Lending Tool: A Comparison of South African, European and Belgian Law: Part 1

The vulnerability of prospective credit consumers to over-committing their resources and the inherent dangers posed by credit advertising in particular necessitate the proper regulation of credit marketing. It is therefore not unsurprising that responsible marketing forms part of the responsible lending (and borrowing) measures of various jurisdictions – including South Africa and the Member States of the European Union – with the aim of preventing the extension of credit to consumers who cannot afford it. In this article the credit marketing laws that the South African, European (mainly in the Consumer Credit and Mortgage Credit Directives) and Belgian legislators have enacted are considered and compared, with a focus on the information to be included in advertising, prohibited advertising and prohibited marketing techniques. The ultimate aim is to determine whether South African law contains sufficient guarantees to protect consumers with respect to credit marketing and its consequences.

Secured Transactions in Moveable Assets Act, Company Charges and Funding Micro, Small and Medium Enterprises under Nigerian Law

The clamour for the reform of Nigeria's secured transactions’ law has culminated in the recent enactment of the Secured Transactions in Movable Assets Act to stimulate responsible lending to micro, small and medium enterprises (MSMEs), among other objectives. This article evaluates the impact of the act, in particular how it addresses the problems associated with the common law system that made it difficult for small business entities to access loans and other credit facilities. The article further examines the implications of the autonomy the act gives to companies to continue to grant charges pursuant to the old system. The author contends that, despite the act's obvious similarity to reformed systems of personal property security laws (reform now being championed by the UN Commission on International Trade Law), expectations of it meeting its key objective of stimulating credit to MSMEs may be misconceived.

Financial consumer protection and economic growth

Purpose The purpose of this paper is to examine the link between financial consumer protection (FCP) and economic growth. Design/methodology/approach The authors use cross-country data on 114 countries surveyed in the World Bank Global Survey on FCP and Financial Literacy (2013) and endogenous treatment regressions for the estimation. Findings The results indicate that FCP enhances economic growth through fair treatment, responsible lending, enforcement and dispute resolution and recourse regulations. The authors find no evidence to suggest that disclosure and compliance monitoring regulations have an effect on economic growth. Practical implications This study provides rich insight into the important question faced by policy makers, as to which FCP regulatory mechanisms to put in place to enhance economic growth. Originality/value This study provides current, cross-country empirical evidence on the debate as to whether FCP enhances economic growth.