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on Payment Systems and Financial Technology |
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Issue of 2024‒01‒01
27 papers chosen by |
| By: | Asongu, Simplice; Odhiambo, Nicholas |
| Abstract: | This study establishes economic growth needed for supply-side mobile money drivers in developing countries to be positively related to mobile money innovations in the perspectives of mobile money accounts, the mobile phone used to send money, and the mobile phone used to receive money. The empirical evidence is based on Tobit regressions. For the negative net relationships that are computed, minimum economic growth thresholds are established above which the net negative relationships become net positive relationships. The following minimum economic growth rates are required for nexuses between supply-side mobile money drivers and mobile money innovations to be positive: (i) 6.109% (6.193%) of GDP growth for mobile connectivity performance to be positively associated with the mobile phone used to send (receive) money and (ii) 4.590 % (4.259%) of GDP growth for mobile connectivity coverage to be positively associated with the mobile phone used to send (receive) money. |
| Keywords: | Mobile money; technology diffusion; financial inclusion; inclusive innovation |
| JEL: | D10 D14 D31 D60 O30 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:119060&r=pay |
| By: | Sami Ben Naceur; Bertrand Candelon; Mr. Selim A Elekdag; Drilona Emrullahu |
| Abstract: | This paper examines how the growing presence of FinTech firms affects the performance of traditional financial institutions. The findings point to a negative impact on profitability, primarily due to a reduction in interest income and a rise in operational costs. Although established financial institutions have tried to diversify their revenue streams, these efforts have proven inadequate to offset the losses associated with increased competition from FinTech firms. Our study also reveals that various FinTech business models, such as Peer-to-Peer (P2P) lending and Balance Sheet lending, have varying effects on financial institutions. Cooperative banks experience more significant profit deterioration under both models, whereas (larger) commercial banks appear to benefit from partnerships with P2P platforms, as evidenced by an increase in non-interest income. Furthermore, the findings suggest that FinTech presence has a disproportionately larger adverse effect on banks in countries with more competitive, profitable, and developed financial systems. Interestingly, however, traditional financial institutions in countries with stronger regulatory frameworks appear to benefit from the expanding influence of FinTech firms. |
| Keywords: | fintech; bank profitability; competition; business models |
| Date: | 2023–11–17 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2023/239&r=pay |
| By: | Felix F. Simione; Tara S Muehlschlegel |
| Abstract: | Will mobile money render cash less dominant over time in Africa? Can it promote financial inclusion? We shed light on these questions by exploring individual-level and nationally representative survey data for Uganda, a country in a region that pioneered mobile money in the world. We use the Propensity Score Matching method to robustly compare mobile money users and non-users across a range of indicators that capture individuals’ perceptions about cash, and the extent to which they remit, save, and borrow money. We present the first evidence that mobile money users, compared to non-users, are more likely to perceive cash as risky and less likely to prefer carrying large amounts of cash. We also confirm that mobile money users are more likely to receive and send remittances, save, and borrow. They also save and borrow larger amounts. |
| Keywords: | Developing Country; Innovation; Digital Divide |
| Date: | 2023–11–17 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2023/238&r=pay |
| By: | Parth Daxesh Modi; Kamyar Arshi; Pertami J. Kunz; Abdelhak M. Zoubir |
| Abstract: | Bitcoin as a cryptocurrency has been one of the most important digital coins and the first decentralized digital currency. Deep neural networks, on the other hand, has shown promising results recently; however, we require huge amount of high-quality data to leverage their power. There are some techniques such as augmentation that can help us with increasing the dataset size, but we cannot exploit them on historical bitcoin data. As a result, we propose a shallow Bidirectional-LSTM (Bi-LSTM) model, fed with feature engineered data using our proposed method to forecast bitcoin closing prices in a daily time frame. We compare the performance with that of other forecasting methods, and show that with the help of the proposed feature engineering method, a shallow deep neural network outperforms other popular price forecasting models. |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2311.06280&r=pay |
| By: | Filkin, Mikhail; Bozhko, Maksim |
| Abstract: | The article discusses the technology of operation of distributed ledger algorithms (blockchain) and smart contracts as applied to the energy industry. It is shown how the advantages of technology can help optimize the energy industry amid ongoing energy transition. Examples of global projects for implementing blockchain into existing or new energy systems are reviewed, and risks and obstacles associated with the implementation of blockchain platform solutions in energy systems are discussed. |
| Keywords: | energy industry, blockchain, distributed ledger, energy transition, smart contract, electricity, decentralization |
| JEL: | L94 Q40 |
| Date: | 2023–10–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:119244&r=pay |
| By: | Iñaki Aldasoro; Perry Mehrling; IDaniel H. Neilson |
| Abstract: | This paper presents a money view analysis of the recent crypto innovation of stablecoins, which have seen a remarkable rise and more recently some spectacular collapses. By analogizing on-chain with offshore, and developing an extended analogy of stablecoins with Eurodollars, we reveal the primitive character of the existing on-chain liquidity mechanism which supports the promise of par settlement by existing on-chain stablecoin models. Liquidity, not solvency, is the issue confronted by par settlement. |
| Keywords: | stablecoins, Eurodollar, forward market, dealer function, liquidity |
| JEL: | E42 F33 G21 G23 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:1146&r=pay |
| By: | Huifeng Chang; Federico Grinberg; Lucyna Gornicka; Mr. Marcello Miccoli; Brandon Tan |
| Abstract: | Would the introduction of a Central Bank Digital Currency (CBDC) lead to lower deposits (disintermediation) and lending in the banking sector? This paper develops a model where households heterogeneous in wealth allocate between an illiquid asset and assets that can be used for payments: bank deposits, cash, and CBDC. CBDC is more efficient as a means of payment and has lower access cost than deposits. Deposits are offered by an imperfectly competitive banking sector which raises deposit interest rates after CBDC introduction to prevent substitution away from deposits to CBDC. We find that there are two opposing margins of impact on the level of aggregate deposits: (1) the intensive margin gain in deposits by richer households increasing their holdings of deposits because of higher interest rates, and (2) the extensive margin loss of deposits among poorer households who switch from deposits to the CBDC. The extensive margin loss in deposits is more likely to dominate (yielding a fall in aggregate deposits) when the mass of poorer households is large and when it is relatively costly to access bank accounts. This tends to be the case in developing and emerging market economies. However, even when the extensive margin loss of deposits dominates and there is disintermediation, the impact on lending is quantitatively small if banks have access to other forms of funding, such as wholesale or central bank financing. |
| Keywords: | CBDC; banking disintermediation; financial inclusion; monetary policy |
| Date: | 2023–11–17 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2023/236&r=pay |
| By: | Rogalski, Timo |
| Abstract: | The dissertation's central focus lies in investigating the influence of temporal, industry-specific, firm-specific, and project-specific factors on the stock market risk and return associated with corporate blockchain announcements. Structured into three chapters, the research employs theoretical frameworks and empirical analyses to uncover nuanced insights. Chapter 2, anchored in signaling theory, examines the general market impact of corporate blockchain announcements, considering temporal factors, cryptocurrency hype phases, and differences between US and EU-based companies. It reveals significant positive stock market returns associated with blockchain news, amplified by project success, business-relatedness, and cryptocurrency hype periods. Chapter 3 extends the analysis to industry-level factors, revealing that firms in the Information Technology industry benefit more from blockchain announcements. It explores additional project-level effects, such as blockchain partnerships and consortium joinings, and assesses their impact on market risk. The findings suggest that blockchain announcements do not substantially alter a firm's risk profile. Chapter 4 focuses on specific blockchain use cases, emphasizing environmental, social, and governance (ESG) issues. It uncovers significant positive market reactions to ESG-related blockchain announcements and explores shareholder returns in supply chain management and finance-related use cases. The study suggests that shareholders react more favorably to project-specific announcements and less favorably to initiatives involving external IT service providers. By thoroughly analyzing diverse factors, this dissertation contributes to the ongoing academic discourse on the valuation of blockchain technology, offering a comprehensive understanding of the dynamics shaping corporate market value and risk in the era of blockchain adoption. |
| Date: | 2023–12–05 |
| URL: | http://d.repec.org/n?u=RePEc:dar:wpaper:141778&r=pay |
| By: | Yujie Chen, Julie,; Sun, Ping, |
| Abstract: | Abstract. |
| Keywords: | digital labour platforms, employment policy |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ilo:ilowps:995278893002676&r=pay |
| By: | Jiro Sugie (Bank of Japan); Junichiro Hatogai (Bank of Japan) |
| Abstract: | In recent years, central banks of various countries have conducted experiments to distribute wholesale CBDC using DLT. Underlying these developments are the growing momentum for upgrading existing payment systems and efforts by the private sector to provide new payment services. A closer look at the experiments confirms a broadening of the focus areas covered by the experiments, from payments to securities settlement and cross-border settlement. While the findings of these experiments suggest that the introduction of wholesale CBDC has the potential to bring about improvements including the shortening of long transaction chains and the reduction of costs, they also point to further needs, such as adjusting the rules for establishing a distribution platform that spans multiple countries and examining the macroeconomic impact of the introduction of such a platform. Meanwhile, as an approach that does not involve the establishment of a DLT platform or the introduction of wholesale CBDC, there are moves to improve payments by enhancing and utilizing existing payment and settlement systems. It is important to continue to carefully monitor these developments and work closely with relevant parties both at home and abroad |
| Date: | 2023–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:boj:bojrev:rev23e09&r=pay |
| By: | Amalia R. Miller; Kamalini Ramdas; Alp Sungu |
| Abstract: | We measure the impact of the initial Indian national COVID-19 lockdown on digital activity using browser histories of 1, 094 individuals, spanning over 31.5 million website visits on computers and mobile devices. Reflecting the predicted increase in the value of online activity, both men and women in our sample dramatically increased their internet browsing during the lockdown. However, men’s browsing increased by significantly more, causing gender gaps overall and in key browsing categories, and in browsing on mobile devices. Our browser data showed significant relative reductions in women’s online job search, corroborated in aggregate data obtained from a major Indian online job platform, indicating potentially persistent harms to women’s employment. Consistent with increased childcare obligations driving the observed gender gaps, we find that gaps were greatest among parents. Men and women in our sample had similar browsing levels and trends pre-pandemic, which diverged during the lockdown. Our primary findings therefore shed new light on determinants of digital time use, while also highlighting the importance of considering both extensive and intensive margins of digital activity to track the digital divide. In our secondary analysis of time devoted to childcare, we find conflicting survey responses between fathers (who report an increase relative to mothers) and mothers (who report no such increase). While our data cannot directly resolve this conflict, they do show fathers having larger increases in time spent online, with no relative increase in childcare-related browsing. This secondary result demonstrates the value of complementing survey data with digital trace data. |
| JEL: | I18 J13 J16 J22 J24 K39 O15 O33 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31919&r=pay |
| By: | Ferguson, Nathaniel; Seymour, Greg; Azzarri, Carlo |
| Abstract: | Worldwide, cell phones are used by 5.4 billion people. They are becoming increasingly prevalent in the rural areas of low- and middle-income countries (LMICs), providing smallholder farmers with access to agricultural markets. If they reduce information asymmetries between women and men farmers, they can also contribute to closing the gender gap in agricultural productivity. So far, however, digital innovations have had limited success in transforming agricultural systems. This may be due, in part, to the gender gap in cell-phone use. Rural women in LMICs—particularly those with low incomes, low literacy levels, or disabilities—are less likely than rural men to have access to cell phones, the Internet, digital currency, or other digital services. This policy note summarizes research intended to shed light on the impact of cell-phone ownership and use on the gender gap in agricultural productivity in LMICs. |
| Keywords: | KENYA; EAST AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; communication technology; rural areas; smallholders; agriculture; markets; agricultural productivity; gender |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:gcanpn:17&r=pay |
| By: | Jay Pil Choi; Kyungmin Kim; Arijit Mukherjee |
| Abstract: | Platform-run marketplaces may exploit third-party sellers’ data to develop competing products, but potential for future competition can deter sellers’ entry. We explore how this trade-off affects the platform’s referral fee and its own entry decision. We first characterize the platform’s optimal referral fee under full commitment on entry decision and study its economic implications. We then analyze the extent to which the platform’s own information sharing policy substitutes for its commitment to entry. We characterize the platform’s optimal information policy and examine how it interacts with the platform’s fee structure. Our findings highlight the importance of considering the platform’s fee structure as a regulatory response in the policy debates on marketplace regulation. |
| Keywords: | hybrid platforms, referral fee, information design |
| JEL: | D82 D42 L10 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10769&r=pay |
| By: | Ologunebi, John; Taiwo, Ebenezer |
| Abstract: | The research study explores the significance of Search Engine Optimization (SEO) and Search Engine Marketing (SEM) in enhancing brand visibility within the context of the E-commerce industry. In today's competitive digital landscape, having a strong online presence is imperative for E-commerce businesses to succeed and thrive. This study sheds light on the role of SEO and SEM in improving brand visibility for E-commerce companies. SEO refers to the process of optimizing a website's content, structure, and technical aspects to improve its visibility on search engine result pages (SERPs) organically. On the other hand, SEM involves paid advertising strategies, such as pay-per-click (PPC) campaigns, to drive visibility and traffic to a website. Both SEO and SEM play complementary roles in increasing brand visibility, but they differ in terms of their approach and execution. Brand visibility is crucial for E-commerce businesses as it directly impacts their chances of attracting and retaining customers. When a brand is easily discoverable on search engines, it gains credibility and authority within its industry, leading to increased visibility and higher organic traffic. Higher visibility also translates into more potential customers being exposed to the brand, resulting in greater opportunities for sales and revenue generation. The study considers the E-commerce industry as its primary focus due to the unique challenges it faces in terms of brand visibility and selected a few case studies to explore. The online retail sector is highly competitive, with numerous players vying for the attention of potential customers. Therefore, a solid SEO and SEM strategy becomes essential for E-commerce businesses to stand out from the crowd and gain a competitive edge. The research employed secondary data collection methods to gather data and insights. The findings of this research will contribute to the existing body of knowledge on the importance of SEO and SEM in improving brand visibility within the E-commerce industry. |
| Keywords: | Search engine optimization (SEO), earch engine marketing (SEM), pay-per-click (PPC) advertising, email marketing campaigns, social media marketing, KPI, modern marketing |
| JEL: | M0 M21 M3 M30 M31 M37 M38 M39 |
| Date: | 2023–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:119205&r=pay |
| By: | Glatt, Zoe |
| Abstract: | There has been a recent proliferation of scholarly interest in the impacts of platformization on cultural industries and labor. This article draws on a longitudinal ethnographic study of the London- and Los Angeles-based influencer community industries (2017–2022) to consider the ways in which the platformized creative worker marks an intensification of the neoliberal worker subject as theorized in more traditional cultural industries. I argue that this industry marks an escalation of conditions of precarity; this research found that the working lives of most content creators are fraught with stress and burnout, and smaller creators in particular are subject to algorithmic discrimination in an industry where visibility is key to success. Contrary to highly celebratory discourses that position online content creation as more open and meritocratic than traditional cultural industries, this is an advertising-driven industry that propels the most profitable creators into the spotlight, resulting in the closing down of mobility. I conclude by considering the opportunities and challenges for reducing this widespread precarity via collective action and regulation. |
| Keywords: | platformized creative labor; cultural industries; YouTube; online video; social media entertainment; content creators; influencers; Doctoral Training Partnership Studentship |
| JEL: | R14 J01 |
| Date: | 2022–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:115384&r=pay |
| By: | Qionghua Chu |
| Abstract: | In the inverted yield curve environment, whether the sixteen SDGs set up by the United Nations could be realized by 2030 sparks interesting considerations. Meanwhile, as the Reserve Bank of New Zealand is considering the potential issuance of the CBDC, the boost to SDG 8 - decent work and economic growth, as examined from the perspectives of Cobb-Douglas production function, growth accounting relation from Solow, and Theory of Aggregate Demand from Keynes, intrigues further analysis. How twelve targets of SDG 8 could be achieved with the possible issuance of the CBDC in the backdrop is analyzed. Despite the inverted yield curve, bright prospects exist for New Zealand to realize SDG 8 with the issuance of the CBDC in mind. |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2311.06718&r=pay |
| By: | Sumit Agarwal; Wenli Li; Raluca Roman; Nonna Sorokina |
| Abstract: | Using a unique data set of unsolicited credit card offer mailings by banks to consumers, we investigate how opioid abuse affects consumer credit supply in the U.S. To identify causal effects, we employ instrumental variables, propensity score matching, and contiguous counties techniques and control for varying local economic conditions and demographics. We find that banks contract credit supply to consumers in counties highly exposed to opioid abuse by offering higher interest rates, lower credit card limits, and fewer rewards and reducing credit offers overall. Further analyses using the supervisory Federal Reserve Y-14M credit card data set confirm these effects. What is more, the credit contraction disproportionately impacts riskier consumers, minorities (particularly Black people), low-income consumers, and younger individuals. Our examination of various state-level anti-opioid abuse legislation shows that opioid supply-oriented laws are somewhat helpful in curbing opioid overdoses or mitigating the credit supply contraction, but demand-oriented laws are not. Finally, we uncover the real effects associated with the opioid abuse-induced credit contraction: Local consumer spending significantly declines in the highly affected areas, with important macro-policy implications. |
| Keywords: | Opioid Epidemic; Household Finance; Credit Supply; Spending; Risk |
| JEL: | G01 G28 D10 D12 E58 |
| Date: | 2023–11–28 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:97380&r=pay |
| By: | Christian Lessmann (Dresden University of Technology); Ali Sina Önder (University of Portsmouth) |
| Abstract: | We analyze whether the social media popularity of scientists affects the number of academic citations. We use the COVID-19 global pandemic as a quasi-natural experiment exogenously increasing public attention and the demand for expertise. Using social media stars’ and their coauthors’ publications on COVID-related topics prior to the break out of the pandemic, we find that the social media star status added 1.10 citations following the breakout of COVID-19 per year per article, corresponding to 80% of the pre-COVID citation gap between stars and their coauthors. We find no significant treatment effect based on scientists’ Kardashian indexes. |
| Keywords: | Social Media; Expertise; Kardashian index; Citations; Covid |
| JEL: | J24 O33 |
| Date: | 2023–12–04 |
| URL: | http://d.repec.org/n?u=RePEc:pbs:ecofin:2023-09&r=pay |
| By: | Kathleen O'Neill Paese |
| Keywords: | FedNow; payments |
| Date: | 2023–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlps:97359&r=pay |
| By: | Qionghua Chu |
| Abstract: | While the potential issuance of CBDC might enable SDG 8 to be realized in New Zealand, mutual interactions between SDG 8 and other goals attract interesting considerations of if both SDG 8 and other goals could be achieved. SDGs are grouped in terms of the common characteristics that will enable them to be impacted by and impact SDG 8 similarly. Besides, other SDGs could mutually enable each other to be realized. With comprehensive research and analysis of the mutual interactions, a positive outlook exists for both SDG 8 and other goals to be fulfilled, in consideration of the potential issuance of the CBDC as a primary stimulus to achieve decent work and economic growth. |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2311.06716&r=pay |
| By: | Daniel Ershov; Yanting, He; Stephan Seiler |
| Abstract: | We quantify the prevalence of undisclosed influencer posts on Twitter across a large set of brands based on a unique data set of over 100 million posts. We develop a novel method to detect undisclosed influencer posts and find that 96% of influencer posts are not disclosed as such. Despite stronger enforcement of disclosure regulations, the share of undisclosed posts decreases only slightly over time. Compared to disclosed posts, undisclosed posts tend to be associated with younger brands with a large Twitter following and are posted from smaller accounts that generate higher engagement per follower. |
| Keywords: | social media, influencer marketing, advertising disclosure, consumer protection |
| JEL: | C55 M31 M37 M38 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10743&r=pay |
| By: | Ranjula Bali Swain; Aimable Nsabimana |
| Abstract: | We investigate if financial inclusion leads to improved nutrition in rural Rwanda, using Rwandan Integrated Household Living Conditions surveys (2013/14 and 2016/17). Our empirical evidence shows a robust positive impact of financial inclusion efforts undertaken by formal financial institutions, though informal institutions such as tontines are ineffective in improving food expenditure or nutrition. Furthermore, the study reveals heterogeneous marginal effects of financial inclusion in reducing the gender gap between the food demand and nutrition of female- and male-headed households. |
| Keywords: | Financial inclusion, Food security, Nutrition, SDGs, Rwanda |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2023-141&r=pay |
| By: | Bernat Mallén Alberdi (AQR-IREA, Universitat de Barcelona) |
| Abstract: | In this paper, I investigate the effect of the introduction of video-on-demand (VoD) platforms on the preferences for different language versions of movies. By using survey data gathered from 2014 to 2019 in the bilingual region of Catalonia (Spain), I explore whether the exposure to VoD affected the likelihood of preferring the Catalan, Spanish or original versions. I found a negative effect on the preference for Catalan and Spanish versions, although this was not significant in all the specifications. Regarding the impact of VoD exposure on the preference for original versions, I identified a positive, significant and very robust effect in all the specifications. The effect is heterogeneous and varies depending on an individual’s language, education level and age. These results prove that people adapt their preferences to what they experience, so the introduction of a new technology into a market (in the case of this paper, the movie market) can rapidly change the preferences of consumers, who accustom, or accommodate, their preferences to the new paradigm. |
| Keywords: | Multilingualism, Video-on-demand, Dubbing, Original version, Preferences JEL classification: L82, O33, Z13. |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:202316&r=pay |
| By: | Bernat Mallén (AQR-IREA University of Barcelona) |
| Abstract: | In this paper, I investigate the effect of the introduction of videoon-demand (VoD) platforms on the preferences for different language versions of movies. By using survey data gathered from 2014 to 2019 in the bilingual region of Catalonia (Spain), I explore whether the exposure to VoD affected the likelihood of preferring the Catalan, Spanish or original versions. I found a negative effect on the preference for Catalan and Spanish versions, although this was not significant in all the specifications. Regarding the impact of VoD exposure on the preference for original versions, I identified a positive, significant and very robust effect in all the specifications. The effect is heterogeneous and varies depending on an individual’s language, education level and age. These results prove that people adapt their preferences to what they experience, so the introduction of a new technology into a market (in the case of this paper, the movie market) can rapidly change the preferences of consumers, who accustom, or accommodate, their preferences to the new paradigm. |
| Keywords: | Multilingualism, Video-on-demand, Dubbing, Original version, Preferences JEL classification: L82, O33, Z13 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:aqr:wpaper:202308&r=pay |
| By: | Carl White |
| Abstract: | Tightening margins and technology concerns top the list of challenges for community bankers, according to the 2023 CSBS Annual Survey of Community Banks. |
| Keywords: | community banking; cybersecurity |
| Date: | 2023–11–27 |
| URL: | http://d.repec.org/n?u=RePEc:fip:l00001:97373&r=pay |
| By: | Nicola Cetorelli; Saketh Prazad |
| Abstract: | Financial and technological innovation and changes in the macroeconomic environment have led to the growth of nonbank financial institutions (NBFIs), and to the possible displacement of banks in the provision of traditional financial intermediation services (deposit taking, loan making, and facilitation of payments). In this post, we look at the joint evolution of banks—referred to as depository institutions from here on—and nonbanks inside the organizational structure of bank holding companies (BHCs). Using a unique database of the organizational structure of all BHCs ever in existence since the 1970s, we document the evolution of NBFI activities within BHCs. Our evidence suggests that there exist important conglomeration synergies to having both banks and NBFIs under the same organizational umbrella. |
| Keywords: | nonbank financial institutions (NBFIs); conglomeration; benefits; banks |
| JEL: | G2 |
| Date: | 2023–11–27 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednls:97369&r=pay |
| By: | Bo Zhao |
| Abstract: | This paper is the first to empirically examine the impact of a man-made disaster on consumer credit outcomes. It uses the 2018 Merrimack Valley natural gas explosions as a quasi-random natural experiment and shows that the explosions had a temporary negative effect on debt balances, credit limits, and the number of delinquencies, and did not affect credit scores. The decreases in debt balances and credit limits were likely driven by a decline in credit demand when the affected individuals faced severe life disruption, great uncertainty, and negative financial shocks associated with the disaster. It took some time for the explosions to have an impact on delinquencies, suggesting that the affected individuals may have received short-term forbearance or used default as a last resort. The lack of large, long-lasting effects of the explosions likely reflects the critical role that external assistance to the affected communities played in mitigating the disaster’s impact. |
| Keywords: | man-made disasters; household credit; consumer debt |
| JEL: | D14 G51 Q59 |
| Date: | 2023–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbwp:97402&r=pay |