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on Banking |
| By: | Jonas Dovern; Carsten-Patrick Meier; Johannes Vilsmeier |
| Abstract: | Macro-stress testing studies often rely on rather short sample periods due to the limited availability of banking data. They may fail to appropriately account for the cyclicality in the interaction between the banking system and macroeconomic developments. In this paper we use a newly constructed data set on German banks’ income and loss statements over the past 36 years to model the interaction between the banking sector and the macroeconomy. Our identified-VAR analysis indicates that the level of stress in the banking sector is strongly affected by monetary policy shocks. The results rationalize the active behavior of central banks observed during periods of financial market crises |
| Keywords: | stress testing, banking, VAR |
| JEL: | C32 E44 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1419&r=ban |
| By: | Achy, Lahcen; Hassani, Aicha |
| Abstract: | The purpose of this paper is to assess welfare effects of regulating the banking sector in Morocco along the European Union lines. The agreement between the EU and Morocco, signed in February 1996 and came into force in March 2000, provides for the gradual establishment of an industrial free-trade zone by 2012 and progressive liberalization of trade in agriculture. The agreement between Morocco and the EU foresees, in addition to that, to start negotiations for a free trade area in services. The agreement contains, however, no binding commitments. But Morocco is expected to deepen further its relationships with Europe within the framework of the Neighboring Policy. The relevance of the issue of banking services’ liberalization goes beyond Morocco’s agreement with the EU. On the one hand, Morocco’s free trade agreement with the US encompasses services, more specifically financial services, in addition to manufactured goods, agricultural products, intellectual property rights, and government procurement. This agreement is expected to come into force in 2006. On the other hand, under GATS, Morocco is projected to increase its commitments and opens up further its banking sector to foreign competition. The last commitments made by Morocco in Uruguay Round were mainly under commercial presence (mode 3) as compared to cross border supply (mode 1) and consumption abroad (mode 2). Except lending to finance investment in Morocco or commercial transactions with Morocco allowed under the mode 1, no commitment has been made in other items (Achy 2002). Hence, there is a real need to understand opportunities and challenges of liberalizing banking services on the Moroccan economy. |
| Keywords: | Banking services; liberalization; Welfare effects; Morocco |
| JEL: | F15 G21 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8674&r=ban |
| By: | Beoy Kui Ng (Division of Economics,School of Humanities and Social Sciences, Nanyang Technological University, Singapore) |
| Abstract: | China has been delaying its adoption of a flexible exchange rate system with free capital flows. The main excuse is that its financial sector is still in its fragile stage and is not able to withstand any external shocks. A big bang approach towards such liberalization will only lead to financial crisis as observed by experiences of many Asia-Pacific countries during the Asian Financial Crisis. With this in mind, this paper attempts to uncover the approach and strategies adopted by China in its banking reform since 1978 and then assess these reform measures in macroeconomic perspective. The paper argues that since China is still lingering on export-oriented strategy in promoting economic growth and monetary independence for demand management is still a long way to go, it is still in China’s best interest not to adopt a flexible exchange rate system at this point of time. As to capital account liberalization, the main focus is to engineer a controlled and systematic capital outflows through outward investment in particular portfolio investment. At the micro level, China should continue its banking reforms until the financial sector is strong enough to withstand the severe pressure of globalization. By then, will China, with its matured financial system be ready to consider the adoption of a flexible exchange system with free capital flows. |
| Keywords: | China, banking reform, non-performing loans, state-owned enterprises, corporate governance, regulation and supervision, financial liberalization |
| JEL: | E44 E5 G2 O16 O5 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:nan:wpaper:0707&r=ban |