Figure 2 - available via license: Creative Commons Attribution 4.0 International
Content may be subject to copyright.
Source publication
Both economic practice and economic theory are interested in analyzing the role of financial
sector in promoting the economic development and economic growth. Commercial banks are the
most important financial institutions in bank-based economies. The lending activities of
commercial banks are limited by regulatory framework, management decisions an...
Context in source publication
Context 1
... of the distrusts of the financial strength of the financial institutions, the interbank activities and the volume of international assets of international active banks dramatically decreased for the six trillion of USD (Bank for International Settlement, 2013). Opportunities to increase the aggregate demand are exploited, interbank market has adopted new risk taking standards, capabilities of equity growth of financial institutions are limited because of system risk and their asset quality, and new regulatory framework reduced growth of bank lending activities that is clearly illustrated in Figure 2. Deleverage of the real sector because of the negative expectations and new restrictive regulatory changes caused the reduction of the assets of banking industry and decrease of trading and high profitable activities sensible on the cyclical movement of the economy. ...
Similar publications
This study examined the future of banking system and economic development in Nigeria in the context of the demand-following hypothesis. Although, the Nigerian economy has witnessed steady growth, the productive base of the economy is narrow. This therefore requires that banks must engage in an effective financial intermediation process to aid the t...
This paper examines the effect of formal financial intermediation (inclusion) on informal financial intermediation and the use of cash for economic activities. Using data from the Global Findex 2014, we examine whether the use of formal financial intermediaries reduces cash preference and the use of informal financial intermediaries. Our empirical...
Citations
... In this formula, Y 1 refers to the current asset rate, Y 2 represents the undistributed profit rate, Y 3 is the net profit rate, Y 4 is the interest market value debt rate, and Y 5 refers to the income rate. When Z < 1.8, the enterprise bears great risk; when Z > 2.99, the enterprise bears less risk [17]. ...
The financial investment risk management system refers to an analysis and control of the intelligent system to invest in the lower financial situation so that investors quickly understand the situation in the financial industry. The purpose of this article is to use a digital model to evaluate financial investment risk management system. The investment risk value can be better evaluated by building a digital model. This paper first introduces financial investment risks and then elaborates the evaluation system and related digital models. The standards of the evaluation system are also given. The GARCH model is established to analyze the LME copper and LME aluminum case selected by this paper by investigation and analysis of the current status of corporate financial investment risks. The experimental results show that the evaluation results are often close to the reality when using the GARCH model evaluation of financial investment risk management system, and the accuracy is quite high. In addition to the EGARCH-N model, the established model is more accurate at 90% confidence level, which is more accurate and is relatively close to a given significance level.
... The activity of banking industry has procyclical character in lending function and supporting the economic growth and development. Usual financial crisis implicate the changes of assets prices, volume of bank credit activities, high rate of non-performed banking loans, government intervention in financial sector and increase of level of systematic risk (Ercegovac, 2017). Impairment of credit quality of debtors, decrease of interest rates, deflation and reduction of investment activities caused banking industry to reduce the loan supply which enhanced the negative indicators of national economy (Rusek, 2014). ...
Since economic policy has changed its direction and course of action, from the functioning of
market mechanisms and rules to the introduction of regulatory policy, discretion and the state as the main
carrier of economic policy, various economic and development schools have been developed and
changed. The turning point in the functioning of economic policy as well as the replacement of economic
schools was mainly related to the appearance of various economic crises that have affected economic
development. Thus, the appearance of the recent economic crisis again revived the important role of the
state and regulatory policy in the implementation of economic policy. The basis of economic policy is
becoming a fiscal policy and its instruments that affect economic development. Special attention is
dedicated to changes in fiscal indicators, public debt and budget deficit. No less important are monetary
indicators that are also taken into account, with regard to price stability and exchange rate fluctuations.
Also, relations with foreign countries, i.e. payments and trade balances must be taken into account when
discussing about economic policy. On the other side, a responsible economic policy needs to achieve
certain goals and economic development. For indicators of economic development were used indicators
of economic growth, changes in GDP and GDP per capita, unemployment rate and the Human
Development Index as a wider measure of sustainable development. Using the multivariate linear
regression, the effect of economic policy on the indicators of economic development is determined. In this
way, the relationship between the indicators of economic policy and economic development in the
Republic of Serbia in the period 2008-2016 is examined, with special emphasis on the economic crisis
and the economic policy after it. The paper also presents the importance of conducting a responsible
economic policy in order to bring the observed indicators to acceptable reference values. The aim of the
research is to demonstrate the effect of economic policy on overcoming the negative impact of the global
economic crisis in Serbia and creating economic development, where key elements of fiscal and monetary
policy measures taken as well as foreign operations and their direct linkage and activity to indicators of
economic development. Unlike the indicators in which a positive change is observed from year to year in
the observed period, such as a fall in inflation and an increase in the trade and balance of payments,
public debt has recorded growth, which rightfully this period is also characterized as a crisis of public
debt. Bearing in mind that unemployment and inflation in the observed period were not related and that
inflation recorded a positive trend, it was necessary to reduce unemployment to the natural one, but also
to achieve appropriate GDP growth rates so that unemployment would not increase. In addition to all
indicators that do not lag behind much on benchmarks or show improvement from year to year, the effects
of economic policy are omitted on economic activity and employment, which is why the choice between
rules and discretion is the current one.
... Ercegovac (2017) reports that Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) are used for amortizing liquidity shocks. ...
This study aims to analyze the effect of Basel III standards adoption made by 27 countries
included in Basel III adoption reports (including G20 group members) on their credit rating. In
addition, the study tests the impact of some macroeconomic variables on sovereign credit rating.
The data are obtained from BCBS semi-annual adoption reports, along with other macroeconomic
indicators published by IMF and World Bank; however, the basic indicator for credit rating is
Standard &Poor’s credit rating. The period under the study is between 2011 and 2016. The results
of the analysis show that there is a strong statistical significant positive effect of Basel III standards
on 27 countries’ credit rating.
... The incurred costs that entangled the national governments can reach the total value of more than US$ 1 trillion in debts. The 2008 global financial crisis has taught many national governments to restrict and limit the foreign banks' activities, even the US government (Ercegovac, 2017). Its central bank, The Fed, has recently set the final rule for strengthening supervision and regulation of LFBOs. ...
The purpose of this study is to measure the impact of penetration of foreign banks in the
Indonesian banking industry. The measured effects are limited to competition and efficiency
during the years 2000-2011, during which was a recovery from the economic crisis in Indonesia.
Panzar-Rosse measures the competition and Conjectural Variation approaches. The efficiency
is measured by the Standard Profit Efficiency approach. By using panel regression method with
SUR (Seemingly Unrelated Regression), we found that penetration of foreign banks will
increase competition and efficiency of banking in Indonesia, especially to medium and small
banks through spillover effect on domestic banking system. The increase in total assets, total
loans and the amount of third party funds held by foreign banks in Indonesia will increase
competition and efficiency of banks in Indonesia
