nep-ban New Economics Papers
on Banking
Issue of 2023‒09‒11
24 papers chosen by
Sergio Castellanos-Gamboa, Tecnológico de Monterrey

  1. Know your (holding) limits: CBDC, financial stability and central bank reliance By Meller, Barbara; Soons, Oscar
  2. Hot money inflows and bank risk-taking: Germany from the 1920s to the Great Depression By Postel-Vinay, Natacha; Collet, Stephanie
  3. Deposit market concentration and monetary transmission: evidence from the euro area By Stephen Kho
  4. Do Actions Follow Words? How bank sentiment predicts credit growth. By Pablo Pastory y Camarasa; Martien Lamers;
  5. A Novel Credit Model Risk Measure: does more data lead to lower model risk in credit scoring models? By Valter T. Yoshida Jr; Alan de Genaro; Rafael Schiozer; Toni R. E. dos Santos
  6. The effects of two-way lending between financial conglomerates in bilateral repo markets By Carlos Cañón; Jorge Florez-Acosta; Karoll Gómez
  7. Understanding the profitability gap between euro area and US global systemically important banks By Martín Fuentes, Natalia; Di Vito, Luca; Leite, João Matos
  8. Expected Macroeconomic Effects of Issuing a Retail CBDC By Constanza Martínez-Ventura; Julián A. Parra-Polania; Tatiana Mora-Arbeláez; Angélica Lizarazo-Cuéllar
  9. FTX's downfall and Binance's consolidation: the fragility of centralised digital finance By Vidal-Tomás, David; Briola, Antonio; Aste, Tomaso
  10. Inflation stabilization and normal utilization By Michl, Thomas R.
  11. The behavioral finance of MSMEs in the advancement of financial inclusion and financial technology (fintech) By Risman, Asep; Ali, Anees Janee; Soelton, Mochamad; Siswanti, Indra
  12. Inflation: Progress and the Path Ahead: A speech at "Structural Shifts in the Global Economy, ” an economic policy symposium sponsored by the Federal Reserve Bank of Kansas City, Jackson Hole, Wyoming, August 25, 202 By Jerome H. Powell
  13. Modern Monetary Theory: Revising Money Demand and Supply from Umer Chapra's Perspective By Umam Khoirul; Muhammad Atha Mahdi; Alfarid Fedro
  14. Understanding DeFi Through the Lens of a Production-Network Model By Jonathan Chiu; Thorsten Koeppl; Hanna Yu; Shengxing Zhang
  15. Consumers’ Perspectives on the Recent Movements in Inflation By Felix Aidala; Olivier Armantier; Fatima Boumahdi; Gizem Koşar; Devon Lall; Jason Somerville; Giorgio Topa; Wilbert Van der Klaauw
  16. Passive Quantitative Easing: Bond Supply Effects through a Halt to Debt Issuance By Jens H. E. Christensen; Simon Thinggaard Hetland
  18. Can you spot a scam? Measuring and improving scam identification ability By Lisa Spantig; Elif Kubilay; Jana Cahlíková; Lucy Kaaria; Eva Raiber
  19. Quantitative Easing and Safe Asset Scarcity: Evidence from International Bond Safety Premia By Jens H. E. Christensen; Nikola Mirkov; Xin Zhang
  20. Digitalization: Implications for Monetary Policy By Vivian Chu; Tatjana Dahlhaus; Christopher Hajzler; Pierre-Yves Yanni
  21. Factors influencing the deployment of local platform crowdfunding in Sub Saharan Africa: Evidence from West and Central Africa Countries By Pepin Ilonga Nkupo
  22. Credit Card Markets Head Back to Normal after Pandemic Pause By Andrew F. Haughwout; Donghoon Lee; Daniel Mangrum; Joelle Scally; Wilbert Van der Klaauw
  23. Cash for Transactions or Store-of-Value? A comparative study on Sweden and peer countries By Claussen, Carl Andreas; Segendorff, Björn; Seitz, Franz
  24. Information and the Formation of Inflation Expectations by Firms: Evidence from a Survey of Israeli Firms By Gorodnichenko, Yuriy; Melnick, Rafi; Kutai, Ari

  1. By: Meller, Barbara; Soons, Oscar
    Abstract: How do central bank digital currencies (CBDC) impact the balance sheets of banks and central banks? To tackle this question empirically, we built a constraint optimisation model that allows for individual banks to choose how to respond to outflows of deposits, based on cost considerations and subject to the availability of reserves and collateral, within the individual banks and system wide, and for a given level of liquidity risk tolerance. We simulate the impact of a fictitious digital euro introduction in the third quarter of 2021, using data from over 2, 000 euro area banks. That impact depends on i) the number of deposits withdrawn and the speed at which this occurs, ii) the liquidity available within the banking system at the time of the digital euro introduction, iii) the liquidity risk preferences of the markets and supervisors, iv) the bank’s business model, and v) the functioning of the interbank market. We find that a €3, 000 digital euro holding limit per person, as suggested by Bindseil (2020) and Bindseil and Panetta (2020), would have been successful in containing the impact on bank liquidity risks and funding structures and on the Eurosystem balance sheet, even in extremely pessimistic scenarios. JEL Classification: E52, E58, G21
    Keywords: digital currency, financial intermediation, financial stability, liquidity risk
    Date: 2023–08
  2. By: Postel-Vinay, Natacha; Collet, Stephanie
    Abstract: This paper explores the origins of German banks’ risk-taking in the years preceding the 1931 crisis. The 1920s were marked by a large and prolonged increase in capital flows into Germany, chiefly from the United States and the United Kingdom. This coincided, at the individual bank level, with a rise in leverage and a fall in liquidity. We examine possible connections between the two phenomena. Our analysis is based on a combination of historiographical work and statistical modelling based on a newly hand-collected bimonthly dataset on German reporting banks from 1925 to 1935. Bank by bank we examine the effects of foreign inflows on decisions related to leverage, lending, and liquidity. The Dawes Plan of 1924 and the relative absence of a too-big-to-fail (TBTF) environment allow us to mitigate endogeneity concerns. We suggest that while capital inflows did not seem to impact banks’ liquidity decisions, their impact on leverage was non-negligeable.
    Keywords: capital flows; credit; financial crisis; financial development; financial globalization; foreign debt; international lending; money supply; Wiley deal
    JEL: E51 F34 G21 N24 N14
    Date: 2023–07–26
  3. By: Stephen Kho
    Abstract: I study the transmission of monetary policy to deposit rates in the euro area with a focus on the role of banking sector concentration. Using a local projections framework with 2003-2022 country-level and bank-level data for thirteen euro area member states, I find that deposit rates respond symmetrically to unexpected changes in monetary policy. However, more concentrated domestic banking sectors do pass on unexpected monetary tightening (easing) more slowly (quickly) than less concentrated banking sectors, which contributes to a temporary divergence of deposit rates across the euro area. These results suggest that heterogeneity in the degree of banking sector concentration matters for the transmission of monetary policy, which in turn may affect banking sector profitability as well as the macro-economic response to monetary policy.
    Keywords: Monetary transmission; deposit rates; market concentration
    JEL: E43 E52 D40
    Date: 2023–08
  4. By: Pablo Pastory y Camarasa; Martien Lamers; (-)
    Abstract: This paper constructs a forward-looking bank managerial sentiment index by using earnings call transcripts of US, Canadian, and European banks from 2001 to 2021. First, we validate this index through regressions showing its predictive power for positive stock returns and earnings forecast revisions. Second, we analyze whether managerial sentiment predicts bank credit growth. We find that a one standard deviation increase in the index of future sentiment leads to a 1.85% rise in credit growth over the next year. The results remain robust to various controls and competing explanations, including managers catering to analysts’ expectations and macroeconomic expectations.
    JEL: G21 G30 G40 D83 M1
    Date: 2023–08
  5. By: Valter T. Yoshida Jr; Alan de Genaro; Rafael Schiozer; Toni R. E. dos Santos
    Abstract: Large databases and Machine Learning have increased our ability to produce models with a different number of observations and explanatory variables. The credit scoring literature has focused on the optimization of classifications. Little attention has been paid to the inadequate use of models. This study fills this gap by focusing on model risk. It proposes a measure to assess credit scoring model risk. Its emphasis is on model misuse. The proposed model risk measure is ordinal, and it applies to many settings and types of loan portfolios, allowing comparisons of different specifications and situations (as in-sample or out-of-sample data). It allows practitioners and regulators to evaluate and compare different credit risk models in terms of model risk. We empirically test our measure in plugin LASSO default models and find that adding loans from different banks to increase the number of observations is not optimal, challenging the generally accepted assumption that more data leads to better predictions.
    Date: 2023–08
  6. By: Carlos Cañón; Jorge Florez-Acosta; Karoll Gómez
    Abstract: we examine how market structure, market power, and systemic risk respond to close and intense lending relationships between financial conglomerates (FCs) in non-centrally cleared bilateral repo. Using transaction-level data from Mexico, we document persistent and stable funding relationships between FC-affiliated banks and funds with two distinctive features: first, funding transactions are two-way, that is, a given pair of rival FCs provide lending to one another on the same day; second, two-way transactions are executed at lower average rates than one-way transactions. We show that two-way lending between FCs favours both market concentration and market power of FC-affiliated funds, and worsens the terms of trade of independent banks’ and funds’ lending. Furthermore, we find that the bank-level contribution to systemic risk increases with two-way lending. ******RESUMEN: Examinamos cómo la estructura del mercado, el poder de mercado y el riesgo sistémico re sponden a relaciones de financiamiento estrechas e intensas entre conglomerados financieros (CF) en mercados de repos bilaterales descentralizados. Usando datos a nivel transaccional de México, documentamos relaciones de financiamiento persistentes y estables entre bancos y fondos afiliados a CF con dos características distintivas: primero, las transacciones de financiamiento son bidirec cionales, es decir, un par dado de CF rivales proporciona financiamiento mutuo en el mismo día; segundo, las transacciones bidireccionales se ejecutan a tasas promedio más bajas en comparación con las transacciones unidireccionales. Mostramos que los préstamos bidireccionales entre los CF favorecen la concentración del mercado, aumentan el poder de mercado de los fondos afiliados a los CF y empeoran los términos de intercambio de las transacciones de crédito de bancos y fondos independientes. Además, encontramos que la contribución individual a nivel de banco al riesgo sistémico aumenta con los préstamos bidireccionales.
    Keywords: Repo market, Financial conglomerates, Relationship lending, two-way lending, Competition, Concentration, Market power, Financial stability, mercado repo, conglomerados financieros, relación de financiamiento, financiamiento bidireccional, competencia, concentración, poder de mercado, estabilidad financiera
    JEL: G1 G23 G28 L4 L22
    Date: 2023–08
  7. By: Martín Fuentes, Natalia; Di Vito, Luca; Leite, João Matos
    Abstract: This investigation starts with the observation that, over the last decade, profitability rates reported by euro area (EA) banks have remained, on average, persistently below those reported by peer banks in the United States (US). In particular, banks’ return on equity (ROE) has fluctuated around 5% in the EA, but around 10% in the US, indicating a profitability gap of around 5 percentage points. However, while comparisons are frequently made between EA and US banks in academic and political debate, they are not perfect benchmarks, nor should this paper be regarded as aiming for a like-for-like comparison. JEL Classification: G15, G21
    Keywords: Bank profitability, global systemically important (G-SIB) banks, return on equity
    Date: 2023–08
  8. By: Constanza Martínez-Ventura; Julián A. Parra-Polania; Tatiana Mora-Arbeláez; Angélica Lizarazo-Cuéllar
    Abstract: This document reviews the potential macroeconomic effects of issuing a central bank digital currency (CBDC) for the use of individuals and businesses. A careful selection of the architecture, and the economic and technological design aspects of this digital form of central bank money that best suit the needs of Colombian economy is made to frame the analytical approach used to study these issues. The most salient results of the related literature are reviewed to establish the consequences of undertaking this initiative. For the set of selected assumptions, we find that the expected macroeconomic consequences are negligible. ******RESUMEN: Este documento revisa los potenciales efectos macroeconómicos de emitir una moneda digital de banco central (CBDC) para uso de las personas y negocios. Se realiza una selección cuidadosa de la arquitectura, y de los aspectos de diseño económico y tecnológico de esta forma de dinero digital que mejor se ajustarían a las necesidades de la economía colombiana, para enmarcar la aproximación analítica que se usa para estudiar estos temas. Se revisan los resultados más destacados de la literatura relacionada para establecer las consecuencias esperadas de adelantar esta iniciativa. Para el conjunto de supuestos seleccionados, encontramos que los efectos macroeconómicos esperados son muy pequeños.
    Keywords: CBDC, macroeconomic effects, digital money, financial intermediation, efectos macroeconómicos, dinero digital, intermediación financiera
    JEL: E42 E51 E44 E52 E41 G21
    Date: 2023–08
  9. By: Vidal-Tomás, David; Briola, Antonio; Aste, Tomaso
    Abstract: This paper investigates the causes and the consequences of the FTX digital currency exchange's failure in November 2022. Analysing on-chain data, we report that FTX heavily relied on leveraging and misusing its native token, FTT, and we show how this behaviour exacerbated the company's fragile financial situation. To gain further insights into the downfall, we employ state-of-the-art network science instruments to model the evolutionary dependency structures of 199 cryptocurrencies on an hourly basis, and we investigate tick-by-tick public trades at the time of the events. We identify the collapse of the Terra-Luna ecosystem as the pivotal event that triggered a significant decrease in the exchange's liquidity. Results suggest that the crash was actively accelerated by Binance tweets causing a systemic reaction in the cryptocurrency market. Finally, identifying the actors who mostly benefited from the FTX's collapse and highlighting a generalised trend toward centralisation in the crypto space, we emphasise the importance of genuinely decentralised finance for a transparent, future digital economy.
    Keywords: binance; cryptocurrency; FTX; network science; Terra-Luna; ES/K002309/1; EP/P031730/1; Horizon 2020; H2020-ICT-2018-2 825215
    JEL: C1 F3 G3
    Date: 2023–09–01
  10. By: Michl, Thomas R. (Department of Economics, Colgate University)
    Abstract: This paper presents a model of inflation and distribution that examines the relationship between the employment of labor and the utilization of capital. It features a structural difference between the wage Phillips curve and the price Phillips curve that gives rise to persistent changes in the real wage whenever the inflation-neutral level of activity fails to utilize the existing capital stock at its normal level. Assuming an inflation-targeting central bank that is obliged to run the system around its inflation-neutral level, these changes will reduce the gap between the inflation-neutral level and normal utilization by moving the system along a stable wage curve. In the end this implies that the inflation-neutral level of employment and full or normal utilization of capital will tendentially coincide, lending some support to the Duménil-Lévy thesis that monetary policy makes normal utilization a long-run center of gravity.
    JEL: E11 E12 E24 E31 E52
    Date: 2023–08–23
  11. By: Risman, Asep; Ali, Anees Janee; Soelton, Mochamad; Siswanti, Indra
    Abstract: This study aims to determine empirical evidence of the effect of financial inclusion and financial technology (fintech) on the behavioral finance of MSMEs. This study uses a quantitative method with a positivist paradigm approach. The population of this study is all MSMEs in Indonesia. The sample used in this study is 205 respondents (MSME owners) from all over Indonesia. Sampling is carried out using a random technique. Data collection is carried out by distributing questionnaires, both manually and online using Google Forms, and is measured using a 5-point Likert scale. The data processing is carried out using Partial Least Square (PLS) software with a Structural Equation Modeling (SEM) model. The results of this study show that financial inclusion and financial technology (fintech) have a direct positive effect on the behavioral finance of MSMEs. Financial technology (fintech) can mediate and increase the effect of financial inclusion on the behavioral finance of MSMEs.
    Keywords: Financial Inclusion, Financial Technology, Behavioral Finance of MSMEs
    JEL: G02
    Date: 2022–08–28
  12. By: Jerome H. Powell
    Date: 2023–08–25
  13. By: Umam Khoirul (UNIDA Gontor - University of Darussalam Gontor); Muhammad Atha Mahdi (UNIDA Gontor - University of Darussalam Gontor); Alfarid Fedro (UNIDA Gontor - Univerisity of Darussalam Gontor)
    Abstract: The global crisis and the COVID-19 pandemic have intensified the debate surrounding Modern Monetary Theory (MMT), particularly as nations resort to budget deficits. MMT economists argue that the central government, not constrained by fiscal limits, can maintain effective demand to achieve public goals like full employment and economic growth. However, economists remain skeptical about the permissiveness of MMT in generating new money. Extensive research is needed to explore the foundation of money supply and demand, examining if it truly achieves economic goals or leads to failure. Umer Chapra offers a profound monetary perspective, considering the demand and supply of money in the Islamic monetary system that aims for justice. This study aims to examine MMT's money demand and supply from Chapra's viewpoint, incorporating its economic goals. Employing a qualitative approach based on library research, this study finds that the endogenous MMT money demand model requires revision within Chapra's framework. To avoid misallocation and achieve economic objectives, the study suggests adopting Chapra's recommendations, such as eliminating bank interest in credit allocation and controlling unproductive and speculative money demand. This ensures that the MMT idea of endogenous money functions properly. However, further research is needed to address the techniques for avoiding money demand in the speculative sector, an area where Chapra's work lacks detail. Collaboration among Muslim economists can fill this gap and enrich the discussion. By bridging this gap, this study contributes to the ongoing discussion on monetary policy and provides valuable insights for policymakers and economists.
    Keywords: Modern Monetary Theory (MMT), Money Demand, Money Supply, Endogenous Money, Islamic Monetary System
    Date: 2023–12–12
  14. By: Jonathan Chiu; Thorsten Koeppl; Hanna Yu; Shengxing Zhang
    Abstract: Decentralized finance (DeFi) is composed of a variety of heterogeneous sectors that are interconnected through an input-output network of its tokens. We first use a panel data set to empirically document the evolution of the DeFi network across its different sectors. Instead of looking at the misleading measure of total value locked, we then employ a standard, theoretical production-network model to measure the value added and service outputs of the different DeFi sectors. Finally, based on a calibrated version of our model, we study which factors drive DeFi token prices and predict the equilibrium effects when network interconnectedness increases.
    Keywords: Digital currencies and fintech; Payment clearing and settlement systems
    JEL: G G2
    Date: 2023–08
  15. By: Felix Aidala; Olivier Armantier; Fatima Boumahdi; Gizem Koşar; Devon Lall; Jason Somerville; Giorgio Topa; Wilbert Van der Klaauw
    Abstract: Inflation in the U.S. has experienced unusually large movements in the last few years, starting with a steep rise between the spring of 2021 and June 2022, followed by a relatively rapid decline over the past twelve months. This marks a stark departure from an extended period of low and stable inflation. Economists and policymakers have expressed differing views about which factors contributed to these large movements (as reported in the media here, here, here, and here), leading to fierce debates in policy circles, academic journals, and the press. We know little, however, about the consumer’s perspective on what caused these sudden movements in inflation. In this post, we explore this question using a special module of the Federal Reserve Bank of New York’s Survey of Consumer Expectations (SCE) in which consumers were asked what they think contributed to the recent movements in inflation. We find that consumers think supply-side issues were the most important factor behind the 2021-22 inflation surge, while they regard Federal Reserve policies as the most important factor behind the recent and expected future decline in inflation.
    Keywords: expectations; inflation; Fed policy; supply chain; pandemic; monetary policy
    JEL: E52
    Date: 2023–08–17
  16. By: Jens H. E. Christensen; Simon Thinggaard Hetland
    Abstract: This article presents empirical evidence of a supply-induced transmission channel to longterm interest rates caused by a halt to government debt issuance. This is conceptually equivalent to a central bank operated asset purchase program, commonly known as quantitative easing (QE). However, as it involves neither asset purchases nor associated creation of central bank reserves, we refer to it as passive QE. For evidence, we analyze the response of Danish government bond risk premia to a temporary halt in government debt issuance announced by the Danish National Bank. The data suggest that declines in longterm yields during its enforcement reflected both reduced term premia, consistent with supply-induced portfolio balance effects, and increased safety premia, consistent with safe assets scarcity effects.
    Keywords: affine arbitrage-free term structure model; negative interest rates
    JEL: E43 E47 G12 G13
    Date: 2023–08–15
  17. By: triyawan, andi; latifah, hafizah
    Abstract: Sharia monetary instruments incorporate monetary control based on sharia principles to assist Bank Indonesia in developing and implementing monetary policy. That’s way, it is expected that sharia monetary policy will create economic stability in Indonesia, one of which is rupiah value stability or inflation control. The goal of this research was to look at the impact of sharia monetary instruments, specifically Sharia Bank Indonesia Certificates (SBIC), Bank Indonesia Sharia Deposit Facilities (BISDF), and Sharia Interbank Call Money (SICM), on Indonesian inflation from 2011 to 2020. This is a quantitative study that explains the relation between the independent and dependent variables. The inflation percentage is the dependent variable, whereas the number of SBIC, BISDF, and SICM is the independent variable. This study used time series data from 2011-2020. The Vector Autoregressive (VAR) or Vector Error Correction Model (VECM) method is used in the analysis. The VECM estimation results reveal that SBIC has no effect on inflation in the long or short term. In the meantime, the BISDF has a large favorable influence on inflation, but only in the short term. Finally, in the long term, SICM has a negative influence on inflation, although in the short term, SICM has no effect on inflation. Furthermore, according to the Granger causality test, only the SBIC and BISDF variables demonstrate bidirectional causality. Meanwhile, unidirectional causality exists between the BISDF and inflation, SBIC and SICM, so do BISDF and SICM.
    Date: 2023–07–24
  18. By: Lisa Spantig (RWTH Aachen); Elif Kubilay (University of Essex); Jana Cahlíková (University of Bonn); Lucy Kaaria (University of Nairobi); Eva Raiber (Center for Economic Policy Research and Aix Marseille Université Économiques)
    Abstract: The recent expansion of digital financial products leads to severe consumer protection issues such as fraud and scams. As these potentially decrease trust in digital services, especially in developing countries, avoiding victimization has become an important policy objective. In an online experiment, we first investigate how well individuals in Kenya identify phone scams using a novel measure of scam identification ability. We then test the effectiveness of scam education, a commonly used approach by banks and institutions for fraud and scam prevention. We find that common tips on how to spot scams do not significantly improve individuals' scam identification ability, for example, the distinction of scams from genuine messages. This null effect is driven by an increase in correctly identified scams and a decrease in correctly identified genuine messages. We interpret this as an increase in caution. In addition, we find suggestive evidence that genuine messages that contain scamlike features are more likely to be misclassified, highlighting the importance of a careful design of official communication.
    Date: 2023–08–11
  19. By: Jens H. E. Christensen; Nikola Mirkov; Xin Zhang
    Abstract: Through large-scale asset purchases, widely known as quantitative easing (QE), central banks around the world have reduced the available supply of safe assets. We examine the effects of the European Central Bank’s asset purchases in the 2015-2021 period on an international panel of bond safety premia from four highly rated countries: Denmark, Germany, Sweden, and Switzerland. We find statistically significant negative effects for all four countries. This points to a novel and important international spillover channel of QE programs to bond safety premia that operates via changes in the perceived relative scarcity of safe assets across international bond markets.
    Keywords: term structures; convenience yields; Conventional and unconventional US monetary policy; European Central Bank (ECB)
    JEL: E43 E47 G12 G13
    Date: 2023–08–15
  20. By: Vivian Chu; Tatjana Dahlhaus; Christopher Hajzler; Pierre-Yves Yanni
    Abstract: We explore the implications of digitalization for monetary policy, both in terms of how monetary policy affects the economy and in terms of data analysis and communication with the public.
    Keywords: Digitalization; Inflation and prices; Market structure and pricing; Monetary policy; Monetary policy transmission; Monetary policy communications
    JEL: E E32 E52 C4 C8
    Date: 2023–08
  21. By: Pepin Ilonga Nkupo (University of Mons)
    Abstract: The purpose of this study is to show why African countries, in West and Central Africa (WCA) particularly, are not able to exploit the potential of crowdfunding and maintain the activities of local platforms. I use the hypothetico-deductive methodology, and faced with panel data, this study uses logistic regression models (fixed effect, random effect, and mixed effect), covering the period 2010–2019 for 20 WCA countries (West and Central Africa). To my knowledge, this study is among the first to explore the factors upstream of the deployment of local crowdfunding platforms, based on basic infrastructure, technological and communication innovation, education, the legal framework, and financial system. This research contributes to the current debate on the development of crowdfunding in sub-Saharan Africa as well as to the future models to be adopted so that this activity is sustainable at the local level. The study points out that the infrastructure of information and communication technologies, based on the penetration of the Internet and mobile telephony, significantly influences the deployment of the national platform. Nevertheless, the basic infrastructure such as electricity and urbanization variables, a legal framework based on the business creation score, education, and the weakness of the financial development system constitute an obstacle to claiming development in long-term and sustainable local crowdfunding activities. Following these striking results, the study highlights a series of levers on which legislators in WCA countries can act to meet the crowdfunding challenges of tomorrow. By proposing three research levels, this study should promote and support the development of crowdfunding from a pedagogical point of view by emphasizing entrepreneurship and emerging technologies in education at the level of professional or university training, from the infrastructure, access to physical and digital infrastructure by emphasizing the importance of regional partnerships, creating partnerships with traditional African banks, to prevent risks, build trust, and ensure the security of investments, decision makers must establish the law on alternative finance activities (crowdfunding, cryptocurrency).
    Date: 2023–08–11
  22. By: Andrew F. Haughwout; Donghoon Lee; Daniel Mangrum; Joelle Scally; Wilbert Van der Klaauw
    Abstract: Total household debt balances increased by $16 billion in the second quarter of 2023, according to the latest Quarterly Report on Household Debt and Credit from the New York Fed’s Center for Microeconomic Data. This reflects a modest rise from the first quarter. Credit card balances saw the largest increase of all debt types—$45 billion—and now stand at $1.03 trillion, surpassing $1 trillion in nominal terms for the first time in the series history. After a sharp contraction in the first year of the pandemic, credit card balances have seen seven quarters of year-over-year growth. The second quarter of 2023 saw a brisk 16.2 percent increase from the previous year, continuing this strong trend. With credit card balances at historic highs, we consider how lending and repayment have evolved using the New York Fed’s Consumer Credit Panel (CCP), which is based on anonymized Equifax credit report data.
    Keywords: household finance; Consumer Credit Panel (CCP); credit cards
    JEL: D14
    Date: 2023–08–08
  23. By: Claussen, Carl Andreas (Monetary Policy Department, Central Bank of Sweden); Segendorff, Björn (BIS Innovation Hub); Seitz, Franz (Weiden Technical University of Applied Sciences, Germany)
    Abstract: We estimate the demand for transaction and non-transaction cash balances in Canada, Denmark, Iceland, Sweden and Norway over the last decades using the seasonal method. These countries share many features that are relevant for cash demand, but nevertheless show large differences in terms of aggregate cash balances. While Canada, Iceland and Denmark have seen increased aggregate cash balances, Norway and especially Sweden have seen a dramatic decline. We find that transaction balances have decreased somewhat in all of the countries and the differences in aggregated cash balances is due to differences in the development of non-transactional cash balances. We argue that different de facto legal tender status, crisis exposures, foreign demand and cash supply-side policies help explain these findings.
    Keywords: cash; banknotes; seasonal method; transactions; hoarding
    JEL: E41 E51 E58
    Date: 2023–07–01
  24. By: Gorodnichenko, Yuriy (University of California, Berkeley); Melnick, Rafi (Reichman University); Kutai, Ari (Tel Aviv University)
    Abstract: This study analyzes how firms form their inflation expectations during a regime change in monetary policy and a transition to a low-inflation environment. Using the Bank of Israel survey of firms, we document the basic properties of firms' inflation expectations and examine how Israeli firms update their inflation expectations after receiving new information about inflation or monetary policy. We find that even after successful de-dollarization and disinflation a positive inflation surprise leads to a sizable upward adjustment in inflation expectations for the next year and quarter. A surprise hike in the monetary interest rate leads to a downward adjustment in inflation expectations.
    Keywords: monetary policy, surveys, firms, inflation expectations
    JEL: D22 E31 E52
    Date: 2023–07

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