Download or read book The Impact of Credit Information Sharing on Bank Asset Quality written by and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Credit Information Sharing and Hold up written by Thomas Gietzen and published by . This book was released on 2017 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: I study hold-up in bank lending and the effects of information sharing on this adverse selection problem. I derive testable hypotheses by augmenting the model in Gehrig and Stenbacka (2007). For empirical identification, I exploit the introduction of an information sharing system in an African banking market for which banks started to report borrowers to the system more than a year before they began to actively use the data to screen applicants. Thereby, I combine a no-information sharing control situation with a loan-level data source that facilitates tracing borrowers who switch banks. Results lend great support to the idea that information sharing efficiently mitigates hold-up. Successful repeated borrowers can obtain cheaper follow-up loans when information is actively shared and borrowers who switch institutions profit most from the reduction in adverse selection. At the same time, as banks lose their ability to hold-up successful borrowers for their second loan, first-time credit starts to be slightly more expensive.

Download or read book Credit Reporting and Financing Constraints written by Inessa Love and published by World Bank Publications. This book was released on 2003 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: The authors combine firm-level data from the World Bank Business Environment Survey (WBES) with data on private and public credit registries to investigate whether the presence of a credit registry in a country is associated with lower financing constraints, as perceived by managers, and with higher share of bank financing. They find that the existence of private credit registries is associated with lower financing constraints and higher share of bank financing, while the existence of public credit registries does not seem to have a significant effect on these perceived financing constraints. The authors also find that small- and medium-sized firms tend to have a higher share of bank financing in countries where private registries exist and stronger rule of law is associated with more effective private credit registries. Finally, the authors find some evidence that the presence of a public credit registry benefits younger firms relatively more than older firms.

Download or read book Effect of Credit Reference Bureau Services on Non Performing Loan Portfolios in Kenya written by Hilary Omare and published by GRIN Verlag. This book was released on 2019-10-17 with total page 85 pages. Available in PDF, EPUB and Kindle. Book excerpt: Master's Thesis from the year 2016 in the subject Business economics - Investment and Finance, , course: Masters of Business Adminstration, language: English, abstract: The research project sought to examine the effect of listing with Credit Reference Bureau service on non-performing loans of deposit taking microfinance institutions in Kenya. The specific objectives were to assess how loan recoveries as a result of listing with credit reference bureau affects non-performing loans by deposit taking microfinance institutions in Kenya and to assess how write offs as a result of listing with credit reference bureau affect non-performing loans by deposit taking microfinance in Kenya. Furthermore to examine how loan quality as a result of listing with credit reference bureau affect non-performing loan in deposit taking microfinance in Kenya and what effect does listing with credit reference bureau has on non-performing loans levels in Deposit Taking Microfinance in Kenya. This research study adopted a descriptive survey approach on effect of listing with Credit Reference Bureau Service on non-performing loans of deposit taking microfinance institutions in Kenya. Further, this study targeted all registered deposit taking microfinance institutions by the Central Bank of Kenya (CBK). Target population was 12 registered Deposit taking microfinance institutions that have listed with Credit Reference Bureaus in Kenya. This study used primary data that was collected by use of a questionnaire. The data was analyzed by use of Descriptive and inferential statistics to measure interrelationships between the variables. Tables were used to display the information to improve presentation of the analyzed results for ease of interpretation. Regression analysis was used to test the relationship between dependent and independent variable. In light of the research findings, the regression model could only explain 52% in variance of non-performing loans. The study results revealed that there was a statistically significant relationship between loan recoveries and non-performance of loans (p=0.000); there was a statistically significant relationship between write offs and non-performance of loans (p=0.000) and that there was a statistically significant relationship between quality loan portfolio and non-performance of loans (p=0.000). Hence, credit information sharing and level of nonperforming loans are indeed related meaning there is a direct relationship between the number of credit checks done by the CRBs and the level of NPLs.

Download or read book Bank Information Sharing and Liquidity Risk written by Fabio Castiglionesi and published by . This book was released on 2019 with total page 74 pages. Available in PDF, EPUB and Kindle. Book excerpt: We propose a novel rationale for the existence of bank information sharing schemes. Banks may voluntarily disclose borrowers' credit history to maintain asset market liquidity. By sharing such information, banks mitigate adverse selection when selling their loans in secondary markets. This reduces the cost of asset liquidation in case of liquidity shocks. Information sharing arises endogenously when the liquidity benefit dominates the cost of losing market power in the primary loan market competition. We show banks having incentives to truthfully disclose borrowers' credit history, even if such information is non-verifiable. We also provide a rationale for promoting public credit registries.

Download or read book Asymmetric Information and the Market Structure of the Banking Industry written by Mr.Giovanni Dell'Ariccia and published by International Monetary Fund. This book was released on 1998-06-01 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper analyzes the effects of informational asymmetries on the market structure of the banking industry in a multi-period model of spatial competition. All lenders face uncertainty with regard to borrowers’ creditworthiness, but, in the process of lending, incumbent banks gather proprietary information about their clients, acquiring an advantage over potential entrants. These informational asymmetries are an important determinant of the industry structure and may represent a barrier to entry for new banks. The paper shows that, in contrast with traditional models of horizontal differentiation, the steady-state equilibrium is characterized by a finite number of banks even in the absence of fixed costs.

Download or read book Credit Information Sharing and Stock Price Crash Risk written by Chanon Teeranutranont and published by . This book was released on 2018 with total page 160 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper attempts to investigate the impact of credit information sharing on bank-specific stock price crash risk. Using a sample of 1,402 listed-banks in 55 countries for the period 2005-2013, we show that credit information sharing through public credit registries is negatively associated with future crash risk after controlling for other predictors of crash risk. This finding suggests that banks are less likely to experience stock price crash when they share more borrower information through public credit registries. Moreover, the mitigating effect of credit information sharing on crash risk is more pronounced when countries have less transparent information environment and weak regulatory environments in banking sectors. The results are also robust to an alternative crash risk measure, additional control variables, subsample analyses, and an instrumental variable approach.

Download or read book Information Sharing in Credit Markets written by Maria Semenova and published by . This book was released on 2011 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: The introduction of institutions of credit information sharing - private credit bureaus and public credit registries - in the market for bank loans represent one of the possible solutions of information asymmetry problem, - the problem which the creditors tend to face. However the possibility of information sharing influences the bank's incentives in two different ways. While it disciplines the borrowers and, therefore, reduces the share of bad loans, a bank loses the competitive advantage, namely the monopolistic knowledge about the data in its clients' credit histories. Does the bank have an opportunity at its disposal to use the benefits of information sharing without losing its competitive advantage and its clientele? One way to do so is to report false data on borrowers. This paper analyses the bank's incentives for such opportunistic behavior and describes the impact of false information reporting on the characteristics of market equilibrium. The opportunity to get extra profit and to offer less expensive credit to new clients explains why banks prefer the strategy of dishonest behavior. This paper outlines the role of the informational intermediary in quality control for the data, contained in credit reports. Also, it describes the conditions under which verification of a certain share of reports provides that the parameters characterizing the equilibrium are equal to those in no information asymmetry situation.

Download or read book Financial Intermediation and Economic Growth written by Nikola Tasic and published by . This book was released on 2007 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation is an investigation into one of the important functions of the banking system: to transform short-term liquid deposits into long-term illiquid financial assets that can fund long gestation activities and, thus, raise the rate of economic growth. To investigate this function empirically, the dissertation uses two new data sets on the maturity of bank credit to the private sector. First data set contains yearly observations covering 74 countries during the period from about 1990 to 2005, while the second data set contains quarterly observations covering 14 transition countries from about 1995 to 2006. Using the data on a broad set of countries, the dissertation shows that economic growth is enhanced in countries where the financial system extends more long-term credit. This finding is the first empirical confirmation of the theoretical predictions regarding the liquidity transformation function of banks. Furthermore, using the same data set, the dissertation shows that credit maturity depends on a number of institutional and economic factors. The determinants of credit maturity have an impact on economic growth via their influence on the availability of long-term external financing. Credit maturity is longer in countries with strong legal institutions, with low inflation, with deeper financial markets, and with schemes for sharing credit information between financial institutions. From a policy perspective, the institutions for sharing credit information probably present the most interest because their establishment is a policy choice. Findings from the broad set of countries are confirmed in the second data set using several definitions of maturity. Additional results from the second data set suggest that credit maturity is longer in countries at the higher level of economic development, with less liquid stock markets, and with more privately owned domestic banks. Furthermore, the results suggest that credit information sharing mechanisms lengthen the maturity of credit if credit information sharing institutions are privately owned or have greater quality of information.

Download or read book Nonperforming Loans in Sub Saharan Africa written by Hippolyte Fofack and published by World Bank Publications. This book was released on 2005 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: "This paper investigates the leading causes of nonperforming loans during the economic and banking crises that affected a large number of countries in Sub-Saharan Africa in the 1990s. Empirical analysis shows a dramatic increase in these loans and extremely high credit risk, with significant differences between the CFA and non-CFA countries, and substantially higher financial costs for the latter sub-panel of countries. The results also highlight a strong causality between these loans and economic growth, real exchange rate appreciation, the real interest rate, net interest margins, and interbank loans consistent with the causality and econometric analysis, which reveal the significance of macroeconomic and microeconomic factors. The dramatic increase in these loans is largely driven by macroeconomic volatility and reflects the vulnerability of undiversified African economies, which remain heavily exposed to external shocks. Simulated results show that macroeconomic stability and economic growth are associated with a declining level of nonperforming loans; whereas adverse macroeconomic shocks coupled with higher cost of capital and lower interest margins are associated with a rising scope of nonperforming loans. These results are supported by long-term estimates of nonperforming loans derived from pseudo panel-based prediction models. "--World Bank web site.

Download or read book Improving Credit Information Bank Regulation and Supervision written by Andrew Powell and published by World Bank Publications. This book was released on 2004 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Powering the Digital Economy Opportunities and Risks of Artificial Intelligence in Finance written by El Bachir Boukherouaa and published by International Monetary Fund. This book was released on 2021-10-22 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper discusses the impact of the rapid adoption of artificial intelligence (AI) and machine learning (ML) in the financial sector. It highlights the benefits these technologies bring in terms of financial deepening and efficiency, while raising concerns about its potential in widening the digital divide between advanced and developing economies. The paper advances the discussion on the impact of this technology by distilling and categorizing the unique risks that it could pose to the integrity and stability of the financial system, policy challenges, and potential regulatory approaches. The evolving nature of this technology and its application in finance means that the full extent of its strengths and weaknesses is yet to be fully understood. Given the risk of unexpected pitfalls, countries will need to strengthen prudential oversight.

Download or read book Problem Loans in the Caribbean Determinants Impact and Strategies for Resolution written by Ms.Kimberly Beaton and published by International Monetary Fund. This book was released on 2017-11-07 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: The high level of nonperforming loans (NPLs) in the Caribbean has been, in large part, a legacy of the global financial crisis, but their persistence owes much to the weak economic recovery in the region, as well as to structural obstacles to their resolution. A comprehensive strategy is needed to address these impediments to sever the adverse feedback loops between weak economic activity and weak asset quality. This paper finds that NPLs are a drag on Caribbean growth and macro-financial links are strong: a deterioration in asset quality hinders bank lending and dampens economic activity, undermining, in turn, efforts to resolve problem loans. A multifaceted approach is needed, involving a combination of macro- economic policies to support growth and employment; strong supervisory frameworks to ensure macro-financial stability and create incentives for resolution; efforts to address informational gaps and deficiencies in insolvency and debt-enforcement frameworks; and development of markets for distressed loans. The institutional capacity constraints require coordination of reforms within the region and support from international organizations through capacity-building.

Download or read book Credit Reporting Systems and the International Economy written by Margaret J. Miller and published by MIT Press. This book was released on 2003 with total page 484 pages. Available in PDF, EPUB and Kindle. Book excerpt: The first comprehensive review of credit reporting systems worldwide, including their institutional forms and evidence of their impact on financial markets. Credit reporting is a critical part of the financial system in most developed economies but is often weak or absent in developing countries. It addresses a fundamental problem of credit markets: asymmetric information between borrowers and lenders that can lead to adverse selection and moral hazard. The heart of a credit report is the record it provides of an individual's or a firm's payment history, which enables lenders to evaluate credit risk more accurately and lower loan processing time and costs. Credit reports also strengthen borrower discipline, since nonpayment with one institution results in sanctions with others. This book provides the first comprehensive review of credit reporting systems worldwide and documents the rapid growth in the industry. It offers empirical and theoretical evidence of the impact of credit reporting on financial markets, using examples from both developed and developing economies. Credit reporting, it shows, significantly contributes to predicting default risk of potential borrowers, which promotes increased lending activity. The book also covers the role of public policy in the development of credit reporting initiatives, including the role of public credit registries managed by central banks; and the role of legal, regulatory, and institutional factors in supporting credit reporting.

Download or read book The Financial Crisis Inquiry Report written by Financial Crisis Inquiry Commission and published by Cosimo, Inc.. This book was released on 2011-05-01 with total page 692 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Financial Crisis Inquiry Report, published by the U.S. Government and the Financial Crisis Inquiry Commission in early 2011, is the official government report on the United States financial collapse and the review of major financial institutions that bankrupted and failed, or would have without help from the government. The commission and the report were implemented after Congress passed an act in 2009 to review and prevent fraudulent activity. The report details, among other things, the periods before, during, and after the crisis, what led up to it, and analyses of subprime mortgage lending, credit expansion and banking policies, the collapse of companies like Fannie Mae and Freddie Mac, and the federal bailouts of Lehman and AIG. It also discusses the aftermath of the fallout and our current state. This report should be of interest to anyone concerned about the financial situation in the U.S. and around the world.THE FINANCIAL CRISIS INQUIRY COMMISSION is an independent, bi-partisan, government-appointed panel of 10 people that was created to "examine the causes, domestic and global, of the current financial and economic crisis in the United States." It was established as part of the Fraud Enforcement and Recovery Act of 2009. The commission consisted of private citizens with expertise in economics and finance, banking, housing, market regulation, and consumer protection. They examined and reported on "the collapse of major financial institutions that failed or would have failed if not for exceptional assistance from the government."News Dissector DANNY SCHECHTER is a journalist, blogger and filmmaker. He has been reporting on economic crises since the 1980's when he was with ABC News. His film In Debt We Trust warned of the economic meltdown in 2006. He has since written three books on the subject including Plunder: Investigating Our Economic Calamity (Cosimo Books, 2008), and The Crime Of Our Time: Why Wall Street Is Not Too Big to Jail (Disinfo Books, 2011), a companion to his latest film Plunder The Crime Of Our Time. He can be reached online at www.newsdissector.com.

Download or read book Building Resilient Banking Sectors in the Caucasus and Central Asia written by MissMercedes Vera Martin and published by International Monetary Fund. This book was released on 2018-07-06 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: External shocks since 2014—lower oil prices and slower growth in key trading partners—have put financial sectors, mainly banks, in the eight Caucasus and Central Asia (CCA) countries under increased stress. Even before the shocks, CCA banking sectors were not at full strength. Asset quality was generally weak, due in part to shortcomings in regulation, supervision, and governance. The economies were highly dollarized. Business practices were affected by lack of competition and, in most countries, connected lending, which undermined banking sector health. Shortcomings in financial regulation and supervision allowed the unsound banking practices to remain unaddressed. The external shocks exacerbated in these underlying vulnerabilities. Strains in CCA banking sectors intensified as liquidity tightened, asset quality deteriorated, and banks became undercapitalized. These challenges have required public intervention in some cases.

Download or read book Managing Systemic Banking Crises written by Ms.Marina Moretti and published by International Monetary Fund. This book was released on 2020-02-11 with total page 88 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper updates the IMF’s work on general principles, strategies, and techniques from an operational perspective in preparing for and managing systemic banking crises in light of the experiences and challenges faced during and since the global financial crisis. It summarizes IMF advice concerning these areas from staff of the IMF Monetary and Capital Markets Department (MCM), drawing on Executive Board Papers, IMF staff publications, and country documents (including program documents and technical assistance reports). Unless stated otherwise, the guidance is generally applicable across the IMF membership.