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Over the last years, independent central banks were often criticized. Many critics felt that the fatal flaw of the current system lied in its independent nature. Some critics argued that the remedy to such problems was to replace independence with interdependence. Such a drastic measure is completely unnecessary. No more time should be lost discussing further the merits or the weaknesses of central bank independence. But taking central bank independence as a given, one should simply try to equip central bankers with the mandates, the tools, and the values best fitted to help them face future shocks. Deeper checks and balances with other institutions and the fair financing of investment by all economic agents, including startups and SMEs, are urgently necessary to head off financial crises that will inevitably arise in this era of growing wealth inequality, disruptive technologies and climate change.

This paper investigates the interaction between monetary policy and financial stability in the Gulf Cooperation Council (hereafter GCC) countries by introducing a new composite financial stability index to monitor the financial vulnerabilities and crisis periods. To this end, the study estimated monetary policy reaction functions for each of the GCC countries (namely, Bahrain, Kuwait, Saudi Arabia, and the United Arab Emirates) using the Nonlinear Autoregressive Distributed Lag Model (NARDL) over the period from 2006-Q4 to 2020-Q2. Empirical findings indicate that monetary authorities' response to the deviation of inflation from their target level, output gap, or exchange rate movement differ in terms of magnitude, sign, and significance across the GCC countries. The results further explain that monetary authorities react significantly to negative or positive shocks in financial stability, but their reaction is different in the short-run or long run. Overall, an augmented Taylor rule including financial stability as an additional monetary policy objective is more appropriate for the GCC countries.

This study investigates the role of governance quality in maintaining financial stability and enhancing financial inclusion in Asian countries using the stakeholder theory. Composite variables were constructed for the governance quality, financial stability, and financial inclusion dimensions using principal component analysis (PCA). The impact of governance quality on financial stability and financial inclusion was analyzed using dynamic system generalized method of moments (GMM) estimations. Additionally, using Baron and Kenny's approach, the mediating role of financial inclusion in the relationship between governance quality and financial stability was examined. The results obtained were robust to various standardization techniques. This study's findings suggest that governance quality negatively affects financial inclusion but has a positive influence on financial stability. Furthermore, financial inclusion positively affects financial stability in Asia. Finally, based on the results, we conclude that financial inclusion mediates the relationship between governance quality and financial stability.

Purpose of the study: The aim of the article is an analysis of revenues for fees for permits for the sale of alcoholic beverages in the own income of municipalities of the Kielce poviat in 2018-2020. It is to enable the answer to be given about the role of the fee for issuing a permit for the sale of alcohol in the incomes of municipalities' own. Methodology: The work was based on the analysis of RB 27S reports on the implementation of the budget income plan of the surveyed municipalities, analysis of internal materials of these units, normative acts and the Local Data Bank Main findings: The data presented in the paper shows that the share of revenues from fees for the permit to sell alcohol in own income does not exceed 1.7% and has a downward trend. However, the actual revenue from the levy shows slight fluctuations over the period considered. Moreover, it does not matter whether we are dealing with a rural or an urban-rural commune. Application of the study: The following study concerns an important aspect of financing the activities of municipalities. Taxes and fees are the most important revenues in budgets. Each decision of the local government authorities has an impact on the level of income. It may lead to a lack of funds for the implementation of own tasks. The year 2021 may be interesting in terms of income from the fee under study due to the possibility of applying a fee exemption or postponing its payment resulting from the provisions of the Act of March 2, 2020 on special solutions related to the prevention, prevention and combating of COVID-19, other infectious diseases and the resulting crises. It is not an easy decision, because such action reduces the revenues to the commune's budget. Due to the fact that for the implementation of tasks for which the funds from the fee were provided, it will have to be financed with other income. Originality/Novelty of the study: The importance of the financial stability of local government units is an extremely important topic. Topics related to budget planning are essential for the long-term balancing of the demand for funds reported by local governments in relation to the efficiency of funds left at the disposal of local authorities. As a consequence, the subject of the study was the analysis of the dynamics and structure of local authorities' income from the point of view of the selected source of income. The article can inspire further research in the field of local government finance and contribute to other interesting scientific studies.

The 2007–09 financial crisis appeared to demonstrate the need for a strong, supranational EU macro-prudential policy framework to prevent similar future disasters. The implemented framework, however, is neither. It is highly complex, involving many constraints on the use of macro-prudential instruments. It is also one of the principal areas of national discretion in EU banking regulation. To explain this, I build on the ‘financial trilemma’ thesis which holds that there are inherent tensions between pursuing financial stability, financial integration and national financial policies. Supranationalizing macro-prudential policy proved difficult due to a lack of consensus on how to measure systemic risks and because of the distributional consequences involved. This increased the tension between stability and integration, as national macro-prudential policies could constrain cross-border finance and they could be misused for competitiveness considerations. Key policy actors disagreed on which goals to prioritize, with bargaining leading to a convoluted policy framework.

This study aims to empirically prove the influence of financial stability, external pressure, and ineffective monitoring on fraudulent financial reporting. Financial stability was measured using a comparison of total assets. External pressure was measured using leverage. Meanwhile, ineffective monitoring was measured using the ratio of independent commissioners’ number. The dependent variable in this study was fraudulent financial reporting. It was measured using the F-Score Model. The sample in this study were 21 State Owned Enterprises (BUMN) listed on Indonesia Stock Exchange in period of 2017-2019. The data analysis method used in this study was Logistic Regression using SPSS software version 20. The results of this study indicate that financial stability has no influence on fraudulent financial reporting. Meanwhile, external pressure and ineffective monitoring influence fraudulent financial reporting.How to cite:Sari, W. M., & Irawati, A. (2021). Faktor-faktor yang Mempengaruhi Fraudulent Financial Reporting. Akuntabilitas: Jurnal Ilmu Akuntansi, 14(2), 139-152.

As a country affected by the Covid-19 pandemic, it has become a special note for the Indonesian government to make a policy so that the spread of Covid-19 can be overcome. One of the policies made by the Indonesian government is the implementation of PSBB (Large-Scale Social Restrictions) in several affected areas. The impact of the application is none other than attacking various sectors of life, especially on the speed of state finances which are experiencing a decline. Therefore, the presence of the New Normal as a post-PSBB transition is used as an "opening door" for the tourism sector in helping to stabilize state finances. Because the tourism sector is one of the mainstays in generating foreign exchange. Therefore, in this paper, two formulations of the problem are taken, namely First, what is the role of the tourism sector in stabilizing state finances? Second, what is the strategy carried out by the government in opening a new normal as a post-PSSB transition in the tourism sector? The research method in this writing is done by using normative juridical research. The purpose of this paper is to find out the role of the tourism sector in stabilizing state finances in the Covid-19 era.Keywords: New Normal; State Finance; Tourism Sector AbstrakSebagai negara yang terkena dampak pandemi Covid-19, menjadi catatan khusus bagi pemerintah Indonesia untuk membuat kebijakan agar penyebaran Covid-19 dapat teratasi. Salah satu kebijakan yang dilakukan pemerintah Indonesia adalah pemberlakuan PSBB (Pembatasan Sosial Berskala Besar) di beberapa daerah terdampak. Dampak dari penerapan tersebut tak lain menyerang berbagai sektor kehidupan, terutama pada kecepatan keuangan negara yang sedang mengalami penurunan. Oleh karena itu, kehadiran New Normal sebagai transisi pasca PSBB dijadikan sebagai “pintu pembuka” bagi sektor pariwisata dalam membantu menstabilkan keuangan negara. Pasalnya, sektor pariwisata merupakan salah satu andalan dalam menghasilkan devisa negara. Oleh karena itu, dalam tulisan ini diambil dua rumusan masalah yaitu Pertama, apa peran sektor pariwisata dalam menstabilkan keuangan negara? Kedua, bagaimana strategi yang dilakukan pemerintah dalam membuka new normal sebagai transisi pasca PSSB di sektor pariwisata? Metode penelitian dalam penulisan ini dilakukan dengan menggunakan penelitian yuridis normatif. Tujuan dari penulisan ini adalah untuk mengetahui peran sektor pariwisata dalam menstabilkan keuangan negara di era Covid-19.Kata Kunci: New Normal; Keuangan Negara; Sektor Pariwisata

PurposeThis study aims to analyze the impact of cooperation between banking supervisory entities on maintaining financial stability, using Single Supervisory Mechanism evolution and performance as instance. Then banking supervisory cooperation and financial stability in Egypt are reviewed.Design/methodology/approachThe qualitative method is used to study and analyze the practices that contributed to financial instability and raised the need for supervisory cooperation. Descriptive qualitative method is used to study the interrelations between supervisory authorities on various levels and its impact on financial stability.FindingsFindings show that maintaining financial stability through strong, consistent complete or semi unified supervisory framework faces challenges. Providing cooperation between different supervisory authorities, effective information sharing, gained experience in the long run contributes to financial stability.Originality/valueThe originality of this research paper arises from the fact that it encompasses the academic aspect through interpreting the developments that occurred to the cooperation in banking supervision in relation to the financial instability times in the Eurozone that led to the establishment of Single Supervisory mechanism, and the challenges it faced. The supervisory cooperation in Egypt is studied as well at international, regional levels and its role in contributing to financial stability. To the best of the authors' knowledge this is the first study that studies the banking supervisory cooperation between Egyptian supervisory authorities and other international and regional authorities.

Third-party funds at Islamic commercial banks in Indonesia fluctuated. The factors that determine the accumulation of third-party funds are essential for Islamic banks' financial stability and management. This study aims to show and describe the effect of gross domestic product and inflation on third-party funds partially and simultaneously. The research method used is descriptive-associative with a quantitative approach. The population used is Islamic commercial banks in Indonesia. Data analysis using multiple linear regression. The results show that gross domestic product and inflation partially affect third-party funds in Islamic commercial banks in Indonesia. Meanwhile, simultaneously gross domestic product and inflation have a significant effect with a contribution of 85.5% to third-party funds in Islamic commercial banks in Indonesia. The increase in third-party funds depends on Indonesia's macroeconomic conditions, the dominant macroeconomic influencing the collection of third-party funds in Islamic commercial banks in Indonesia.

We examine whether regionally differentiated macroprudential policies can address financial stability concerns and moderate house price differences in the UK. We disaggregate both the household sector and the housing stock in a two-region DSGE model with out of sync subnational housing markets and compare four policy types: standard monetary policy, leaning against the wind monetary policy, national macroprudential policy or one that targets region-specific LTV ratios. In terms of reducing variances of house prices, regionally differentiated macroprudential policy performs best, provided the policy authorities are concerned with stabilising output and house prices rather than simply minimising the variance of inflation.

Research aims: This study aims to examine the influence of fraud pentagon concept on fraudulent financial reporting.Design/Methodology/Approach: This study’s population was manufacturingcompanies listed in Indonesia Stock Exchange and Malaysia Stock Exchange. 120 manufacturing companies in Indonesia and 118 manufacturing companies in Malaysia were involved as samples. The data analysis method used in this study is multiple linear regression.Research findings: The results showed that financial target, financial stability, quality of external auditor, external pressure, and nature of industry variables influenced fraudulent financial reporting. In contrast, personal financial need, ineffective monitoring, change in auditor, change in director, and frequent number of CEO’s pictures variables had no effect on fraudulent financial reporting. For Indonesia, it was found that financial target, financial stability, and the quality of external auditor influenced fraudulent financial reporting. While, in Malaysia, the results showed that financial stability, external pressure, and nature of industry variables influenced fraudulent financial reporting in Malaysia.Theoretical contribution/Originality: These results support the financial target and quality of external auditor hypothesis in Indonesia, financial stability hypothesis in Indonesia and Malaysia, external pressure and nature of industry hypotheses in Malaysia, stating that fraud pentagon factors affect fraudulent financial reporting. It is also proved that there are different levels of fraudulent financial reporting in Indonesia and Malaysia. Indonesia has fraudulent financial reporting cases higher than Malaysia.

Fire sales induced by investor redemptions have powerful spillover effects among funds that hold the same assets, hurting peer funds' performance and flows, and leading to further asset sales with negative bond price impact. A one‐standard‐deviation increase in our fire‐sale spillover measure leads to a 45 (90) bp decrease in peer fund returns (flows) and a two percentage point increase in the likelihood of a large bond price drop. The results hold in a regression‐discontinuity design addressing identification concerns. Timing, heterogeneity, instrumental‐variable, and placebo tests further support the price‐impact mechanism. Model‐based counterfactual and stress‐test analyses quantify the financial stability implications.

This paper aims to examine whether cash holding can enhance the financial stability of firms under the impact of the Covid-19 pandemic. We utilize quarterly data of 285 Vietnamese listed firms from...

Maintaining a stable productivity rate in a construction project is a challenge. Many external and internal factors influence it. Delay in payment is one of the factors representing the project cash flow and mirrors the company’s financial stability status. This study explores the delay in payments effects on the construction productivity of the small and medium construction companies in Oman. Also, it ranks the delay in payment among other productivity factors. Sixty-five small and medium construction companies registered in Oman Tender Board participated in the questionnaire survey. The results showed that delay in payment significantly affects the financial stability of the companies. The delay in payment was ranked third out of 21 influencing productivity factors. The results were compared with a previous study that covered large construction companies in Oman. It was found that the rank of delay in payment in the small and medium construction is significantly higher than what was found in large companies.

How will climate change affect risks to economic activity? Research on climate impacts has tended to focus on effects on the average level of economic growth. I examine whether climate change may make severe contractions in economic activity more likely using quantile regressions linking growth to temperature. The effects of temperature on downside risks to economic growth are large and robust across specifications. These results suggest the growth at risk from climate change is large—climate change may make economic contractions more likely and severe and thereby significantly impact economic and financial stability and welfare.

This study examines the impact of government payment arrears accumulation on the stability of the banking industry, taking into account the role played by institutional quality in 17 selected SSA countries. The study employed a panel threshold regression model using data from World Bank and International Monetary Fund databases between 2005 and 2018. The key finding from the analysis indicates that arrears accumulation adversely affects banking sector stability, but with institutional quality, the effect is reduced. As a result, public policy should aim at clearing arrears and improving the quality of institutions.

The actualization of the study is due to the need for a critical understanding of the capital management of insurance organizations at the present stage. The authors consider the mechanism of state regulation of the formation and strategy of capital management in insurance organizations in Russia, identifies the key parameters of financial stability, and evaluates the dynamics and structure of insurance reserves, as well as the profitability of their investment. The purpose of this study is to identify and analyze the development of the insurance market and its investment potential. The original approach of the mechanism for justifying the optimization of the capital of an insurance organization has been proposed. The authors prove that the expansion of the investment potential of insurers will increase the profitability of the use of capital. The authors rely on the regulatory framework. The empirical basis for the study has been presented from official sources and financial statements of insurance organizations. The article is debatable; the provisions and conclusions require further research.

Islamic banking’s profit-maximising fervour, building upon the use of interest-resembling products, has raised concerns about its Shariah authenticity and financial stability. While early Islamic economists envisioned an industry built on values of mutuality and participation, architects of Islamic banking have chosen to replicate interest-based conventional banking for the purpose of fast growth. This study has two objectives. First, to narrate the history of Islamic banking, from the theories postulated to the beginnings of the industry. This builds an understanding of why ‘Islamic’ banking operates as it does currently, which has implications for Shariah compliance and financial stability. It is suggested that the mimicking of conventional banks may cause instability since unlike commercial banks, ‘Islamic’ banks face Shariah constraints. This leads to the second objective, which is to analyse the cooperative banking model, which has been described as the closest theoretical model to Islamic banking. Specifically, this study focuses on the model in Europe which, despite its challenges, has managed to silence critics in the way it contributes to communal welfare and financial stability, especially during credit crunches when commercial banks are known to retreat from markets. This first study of a functioning cooperative banking model, in the context of Islamic banking, may thus offer lessons for Islamic banking reform.

We explore to what extent official interest rate changes can potentially in a procyclical manner impact different financial cycle indicators (credit/GDP, debt service ratio, house prices and stock market indices). We test this on data covering 1995−2016 in 21 countries and the euro area using the Concordance index and Monetary policy procyclicality ratio. Results show that this was not a widespread phenomenon, but there was significant heterogenenity across countries. The procyclicality of interest rate changes was usually higher when financial cycle gaps were increasing and lower when they were decreasing. On average, central banks in several larger economies were running potentially less procyclical monetary policy than those in the smaller ones. The resulting propensity of conflicts between achieving price and financial stability by central banks was low, as only in 10% of the cases the objectives were conflicting (usually when inflation was below the target and the credit cycle was in an expansion phase).

In the article, the author considers the main aspects of the impact of goodwill on the financial stability of banks. It is substantiated that among the numerous threats that lead to financially unstable development of the banking business, a special place should be given to the support of banks’ business reputation. The main reasons are the phenomena of financial instability caused not only by the cyclical development of the economy, but also the ability to take into account a certain state in which the financial system is able to: effectively allocate resources, assess and manage financial risks, absorb shocks. It is proved that the relationship between business reputation and financial stability is determined by the characteristics of the conceptual apparatus; the system of risks to which they are exposed in the course of their activities; methodical approaches to assessing their level. The author concludes that the key challenges for the banking business in the context of digital transformation should be considered from the standpoint of customer interests, from the standpoint of investors (owners) of the banking business and from the standpoint of the regulator. In today’s realities, when the systemic banking crisis has imposed on a large-scale economic, the decisive factor for success and continued activity in the market is the quality of business reputation. The methods of quantitative assessment of the bank’s business reputation include balance-normative, methods of additional and excess profits, methods of royalties and residual value, the method of rating and comprehensive assessment. It is proved that the level of business reputation is related to the life cycle of banks, which includes the stages of formation, growth, maturity and decline. Measures to ensure business reputation depending on the stage of development of the bank are considered. Both the business reputation and financial stability are affected by the established image of the bank. The article states that a positive image is able to maintain the bank in times of financial instability. It is determined that depending on the group of users (non-financial corporations, households, government agencies or social organizations) the image of the bank should be different and meet all requirements.It is determined that a modern bank is not only an institution of the financial market, but also a financial institution for which social role and reputation in social and economic relations become the primary criteria for ensuring their competitive position.

UPI (Unified Payment Interface) platform has been used especially in India since 2016. This paper is aimed at exploring how UPI is impacting, financial literacy, financial inclusion and the economic development of the poor in India. Structured equation modelling is applied in the paper to explore the path analysis of the relevant construct to establish the relationship. A structured questionnaire of interval scale was administered to gather the data for the study. It is found that UPI is impacting the financial literacy. In addition to that, it is found that financial literacy is significantly impacting financial inclusion which in turn is significantly causing economic development. Moreover, the significant association of financial literacy to financial inclusion is partially mediated by financial stability and the significant association of financial inclusion to economic development is also partially mediated by trust. The main implication of the study is that UPI is helping people in more than one way. It is not only supporting the financial literacy but also contributing to financial inclusion and economic development of the poor, indirectly. Therefore, policy makers can use the findings of this study to frame policies for UPI more effectively in the future. This study is unique as no other study is observed on the linkage of UPI with financial literacy, financial inclusion and economic development of the poor.

The government debt portfolio is usually the largest financial portfolio in the country. It often contains complex and risky financial structures and can generate significant risk to the state budget and the country’s financial stability. Therefore, governments are required to have sound risk management and sound public debt structures to limit exposure to market risk, debt financing or rolling risk, liquidity risk, credit, settlement and operational risk. In recent years, the debt market crises have highlighted the importance of sound public debt management practices and related risks, and the need for an effective and well-developed domestic capital market. This may reduce the vulnerability of the economy to adverse economic and financial shocks. However, it is also important for the government to maintain a macroeconomic policy that ensures sound fiscal and monetary management. The aim of the research is to present the theoretical and practical aspects of extremely important issues such as public debt management and to indicate the most important implications for the financial stability of the country on the example of the Polish economy. The study uses a research method based on literature studies in the field of macroeconomics, economic policy and finance, as well as statistical analysis of the studied phenomenon. Results of research indicate that effective public debt management can reduce the economy’s vulnerability to financial threats, contribute to the financial stability of the country, maintain debt stability and protect the government’s reputation among investors.

This paper analyzes how institutions' quality shapes the relationship between inflation targeting and financial stability in 63 countries over the period 1990–2014. We find that targeters with poor institutions are less financially stable than non-targeters only in Emerging and Developing Countries who use little or no macroprudential policies. As these policies are implemented, this effect works in reverse or becomes nil when institutions' quality improves. Thus, our paper calls for an explicit mandate for central banks in former countries to pursue both inflation and financial stability through macroprudential instruments' moderate use.

Expanding the reach of formal financial services to excluded individuals and businesses is a policy aim in many countries. Research to date has focused on the effect of financial inclusion on the well-being of consumers and overall development and growth. There is much less international evidence on the effect of financial inclusion on financial stability, in particular the banking system, which is the main provider of formal finance. We contend that access to financial services defined too broadly is an imprecise measure for evaluating the influence of inclusion on financial stability. We hypothesize that inclusion through access to payments and savings accounts has a neutral or positive effect on financial stability, while access to credit can weaken financial stability if credit growth occurs without due regard to borrower ability-to-repay. Using comparable cross-country data available since 2011 surveying the demand for different financial services, we find support for adverse effects on bank soundness from credit inclusion only. We also contribute new evidence on the role of the bank market structure in affecting risk-taking incentives by banks. We find that a more competitive structure intensifies the adverse impact of credit inclusion on stability.

In this paper, an index of domestic macroprudential policy tools is constructed and the efectiveness of these tools in controlling credit growth, managing GDP growth and steadying infation is studied using a dynamic panel data model for the period between 2000 and 2017. The empirical analysis includes two panels namely an EU panel of 27 countries and a Latin American panel of 7 countries, the paper also looks at a case study of Japan, Portugal and the UK. Our main results show that a tighter overall macroprudential policy stance would result in lower credit growth as well as lower GDP growth while, a tighter overall macroprudential policy tool stance would lead to higher infation in the majority of cases. Factors such as capital openness and the perception of global market risk play an important role in both the exigency of policy implementation as well as the success thereof. info:eu-repo/semantics/publishedVersion

It is becoming increasingly accepted that lowering interest rates might at some point prove contractionary (the “reversal interest rate”) if lower lending margins cut the supply of bank loans. This paper argues that there are many other reasons to question reliance on monetary policy to provide economic stimulus, particularly over successive financial cycles. By encouraging the issue of debt, often for unproductive purposes, monetary stimulus becomes increasingly ineffective over time. Moreover, it threatens financial stability in a variety of ways, it leads to real resource misallocations that lower potential growth, and it finally produces a policy “debt trap” that cannot be escaped without significant economic costs. Debt-deflation and high inflation are both plausible outcomes.

This paper considers the implications of the counter-cyclical loan-to-value (CcLTV) regulation in a setting where different types of borrowers from distinct sectors of the credit market co-exist. We consider two macro-prudential policy regimes, namely generic and sector-specific. We find that both regimes are more effective than the baseline regime (constant LTV ratios) in stabilising macroeconomic and financial stability, and welfare enhancing. Compared to the generic regime, the sector-specific regime delivers a higher degree of macroeconomic and financial stability. For both regimes there is a clear tradeoff between financial and macroeconomic stability, as the authority adjusts its preference between the two policy objectives. To enhance the effectiveness of the CcLTV regulation, we argue that the regulator should consider borrowers’ heterogeneity, and tailor the regulation according to the specific conditions of each sector of the credit market, rather than to the aggregate credit conditions.

Purpose This study looks into relations between bankruptcy prediction and the quality of accounting income in companies listed on the KOSDAQ. Design/Methodology/Approach With the use of a bankruptcy prediction model that has already been developed and applied;and with each company’s bankruptcy probability and financial stability score (P;Z-Score;K-Score);this study analyzes the relationship of bankruptcy probability to accounting income quality. Findings As a result;the higher a bankruptcy probability;the larger the value of discretionary accruals; the higher the value of the financial stability K-Score ;the lower the value of discretionary accruals; the higher a bankruptcy probability;the higher the level of conservatism; the higher the value of financial stability K-Score;the lower the level of conservatism. Research Implications or Originality The verification of relations with accounting income quality;the usability of the bankruptcy prediction model was proven. Bankruptcy probability P;and the financial stability scores Z-Score and K-Score were in the model sequentially;and comparative analysis was conducted.

Individuals who have very low income and belong to an underprivileged community have a challenging task when managing their financial life, typically due to negative unpredictable events and lack of health and financial services. Cooperation strategies based on savings and credits are becoming a very important option for these communities to address such challenges and to have some level of financial stability. Since designing new cooperation strategies takes a significant amount of time and effort, computational tools have been recently introduced to simulate and evaluate communities that implement these financial cooperation schemes. In this article, based on the theory that underlies these computational tools and theoretical concepts of cooperation, we propose a new cooperation strategy based on donations that are distributed between the members of the community according to the given network topology. Through mathematical and simulation analyses, we show the scenarios where the proposed cooperation strategy, based on altruistic behavior, can potentially improve the resiliency of the community to negative unpredictable events.

We introduce the concept of financial stability real interest rate using a macroeconomic banking model with an occasionally binding financing constraint as in Gertler and Kiyotaki (2010). The financial stability interest rate, r**, is the threshold interest rate that triggers the constraint being binding. Increasing imbalances in the financial sector measured by an increase in leverage are accom- panied by a lower threshold that could trigger financial instability events. We also construct a theoretical implied financial condition index and show how it is related to the gap between the natural and financial stability interest rates.

This paper asks: What are the factors that affect the recruitment sources of the two most senior management functions in banks—the board chairperson and the chief executive officer? Prior research has focused on the factors affecting the recruitment sources of senior management in corporations in general and has accorded less attention to banks. Therefore, research thus far has not fully accounted for the ability of banking regulators to affect the recruitment sources of these managers. The paper applies an in-depth qualitative study to delineate the recruitment sources of the chairpersons and the CEOs, from the inception of the State of Israel in 1948 to 2019, asserting that Israel’s central bank affects the recruitment sources of the banks’ chairpersons and CEOs through both formal and informal measures. This has enabled the banking regulators to wield influence over the banks and maintain their financial stability in the long run. The paper can thus be read as part of a wider effort to demonstrate that even in the neoliberal era, state actors are still key players.

Stability and sustainability of the biggest banks in any country are extremely important When big banks become unstable and vulnerable,‎they typically stop lending The resulting credit squeeze pushes the economy into recession or a slow growth path The present study‎examines the financial stability and sustainability of the 30 large banks operating in the six Gulf Cooperation Council countries These‎banks represent 70% of the GCC banking market Monte Carlo simulation was attempted assuming that key drivers can vary randomly‎by twenty percent on either side of the current values The conclusions are drawn based on 300 simulation trails of the five-year forecast‎balance and income statement of each bank Year 2020 is not favorable for the GCC countries because of the COVID-19 pandemic and low‎oil prices, though the future years may be better The study identifies several banks, which may become financially unsustainable because‎the simulations indicate the possibility of negative profitability, unacceptably low capital ratios and potential for heavy credit losses during‎periods of economic turbulence, which is the current situation due to the COVID-19 pandemic Through simulation the paper is able to‎throw light on which factors lead to bank instability and weakness © 2020 All Rights Reserved

The article presents the results of analysis and evaluation of the effectiveness of financial policy of enterprises based on the developed methodological approach. It is proposed to determine the effectiveness of the company’s financial policy by inequality, according to which financial stability should exceed the reproducibility of financial resources, which in turn should exceed the flexibility of own investments in enterprise development, which should exceed the adequacy of financial resources for unplanned expenses. In accordance with the proposed methodological approach to assessing the effectiveness of the financial policy, its analysis was carried out by a group of surveyed enterprises of the aviation industry of Ukraine with the derivation of generalized results for the section of enterprises of the studied industry. A comprehensive assessment of the financial policy efficiency indicators of Antonov, Kyivaeroproekt LLC, Konotop Aircraft Repair Plant Aviacon, Lviv State Aircraft Repair Plant, Kharkiv Machine-Building Plant (FED) and Motor Sich PJSC was conducted. Integral indicators corresponding to the defined criteria are used, which are aimed at deviation determining of the total value of the effectiveness of regulatory and optimizing financial instruments, which will determine the level of improvement of the enterprise. A methodical approach to determining the effectiveness of financial policy based on the use of a hierarchical model of building an integrated indicator, which contains the basic indicators: indicators of the dynamics of the objects of financial policy. It is determined that in order to increase the efficiency of the financial policy of aviation enterprises, regulatory and optimization tools should be directed to the objects of financial policy, which will increase its level according to the criteria of “turnover” and “sustainability”. It is found that the proposed scientific and methodological approach to assessing the economic results of the financial policy of the aviation industry, will determine its status and adjust the decision-making system, modernizing the system-forming elements of management and economic influence on innovation in the post-crisis period.

Purpose: This study aims to provide empirical evidence of the influence of financial targets, financial stability, external pressure, institutional ownership, ineffective monitoring, quality of external audits, change in auditors, change of director and frequent number of CEO's picture in detecting fraudulent financial reporting. Research methodology: This study proves that financial targets, external pressure, change in auditors, and frequent numbers of CEO's picture have an effect on detecting fraudulent financial reporting while financial stability, institutional ownership, ineffective monitoring, quality of external audit, and change of director are not influential in detecting fraudulent financial reporting. Results: This study proves that financial targets, external pressure, change in auditors, and frequent numbers of CEO's picture have an effect on detecting fraudulent financial reporting while financial stability, institutional ownership, ineffective monitoring, quality of external audit, and change of director are not influential in detecting fraudulent financial reporting. Limitations: This study used logistic regression analysis using a combined model of Beneish M-Score and Altman Z-Score that still contained an inaccurate classification of fraud and non-fraud. In the research, the R-Square value was low which meant that the ability of independent variables to influence the dependent variable was still low. Contribution: This research is expected to enrich the literature and references that can be used as a reference in other studies as well as in the company. The results of this study are expected to provide a deeper understanding of how to predict fraudulent financial reporting using the Beneish M-Score and Altman Z-Score. Keywords: Fraudulent financial reporting, Fraud pentagon, Beneish M-Score, Altman Z-Score

This paper develops a calibrated dynamic stochastic general equilibrium model incorporating a banking sector and some unique features of China’s macroeconomic policies to simulate China’s monetary and macroprudential policies. The quantitative results show, first, that the interest rate is a better instrument for China’s monetary policy than the required reserve ratio (RRR) when the central bank is solely concerned about price stability; second, that the loan-to-value ratio is a very useful macroprudential tool for China’s financial stability, and the RRR could be used as an instrument for both objectives; third, monetary and macroprudential policies could be either complements or substitutes in China, depending on the choices of instruments for the two policies. Our policy experiments recommend three combination choices of instruments for China’s monetary and macroprudential policies. (JEL codes: E52, E61and G18)

This study aims to determine the financial behavior of Muslim families by using the sakinah finance approach which specifically creates the stability of the internal family financial system and in general creates the financial stability of the State. This research method uses a qualitative approach that is descriptive. This study describes the behavior of Islamic family finance by combining the analysis of interview results and observations obtained from family accounting. The results showed that not all of the Muslim families applied the sakinah finance approach in family financial management so that the family's financial stability was often unstable and triggered debt and made a mortgage on their property.

The article analyzes the unstable equilibrium between further developing national monetary systems by means of (private/public) digital currencies while maintaining financial stability as secured by “tangible” store of values like notes/coins. Which are those elements of innovation improving today’s payments system? And, at the same time, which modern trends might destabilize the above-mentioned equilibrium? The paper will identify fundamental monetary principles to be respected, no matter what the innovation level in post-modern economies might soon look like. Cryptocurrencies will be also compared to central bank digital currencies (CBDC), which might soon complement or even replace notes and coins. But, is cash truly a “barbarous relic”? And, which impact might have its legal limitation (as occurring in several European countries)?

The paper presents current state of digital transformation of Russian banks. The author defines the digitalization of banks as the introduction of FinTech technologies, close cooperation with Fintech-companies. Digitalization has both positive and negative consequences: cyber risks are growing, financial stability is decreasing. The analysis allowed the author to draw conclusions that the digital transformation of Russian banks is characterized by: the complex implementation of BCBS scenarios and the interaction between banks and Fintechcompanies, the emergence of neo-banks; increased competition in the banking sector; innovative opportunities for the production and sale of banking services and products, the emergence of new risks; accumulation and use of large amounts of data; the need to significantly change the information systems of banks (growth in demand for the services of IT companies); the emergence of ecosystems in which non-banking organizations are actively involved; large costs of Russian banks, which, as a rule, leads to an improvement in their financial results (as a result, medium and small banks begin to lose in the market).

This article investigates the determinants of non-performing loans for a panel of EEC countries and the implications for the real economy, covering the period 2005-2017. Among the determinants, the paper proposes macroeconomic factors, banking sector variables, and cost and governance indicators. Additionally, the paper explores the extensive use of macroprudential measures in these countries. Using a panel with fixed effects and a dynamic GMM estimator, the results support the existing findings that adverse macroeconomic developments are generally associated with higher non-performing loans, while increases in NPLs have a rather transitory effect on the real economy and credit. NPL ratios increase if macroeconomic conditions deteriorate, while an improvement in the government effectiveness reduces them. A more profitable and better capitalized banking sector generally leads to lower NPLs. Moreover, countries with higher past credit growth rates witnessed higher NPLs in the periods that followed. These results support the use of macroprudential measures for increasing the resilience of borrowers, such as limits on the indebtedness level (such as debt service-to-income, DSTI or loan-to-value, LTV caps), as tools to temper the credit cycle.

This paper studies in detail the changes that took place in the Bank of England’s Restriction era policies governing private sector lending. We find that the Bank was adapting to novel monetary circumstances, created both by the evolution of the English financial system and by the Restriction itself, and that, although the process was far from smooth, the Bank was learning to act as a central bank: during this period the Bank transformed its internal operating procedures to put regulation-based constraints on its private-sector lending, established regular reviews of its policies and their effects on the money market, and adopted a distinct crisis-oriented lending policy. In addition to establishing that these core central bank activities developed over this period, we also find that for 18 months starting in 1809 the Bank’s policies were destabilizing, and that the Bullion Committee likely played a role in a shift in Bank lending policies that took place in mid-1810. Overall, this paper finds that the 1810 crisis was a turning point in the Bank’s understanding of its role in the economy: the Bank directors both acknowledged privately the Bank’s duty to the public, and restructured its discount policies with a view to promoting financial and monetary stability.

ECB officials have recently poured scorn on the notion that the ECB could introduce a central bank digital currency (CBDC) in the Eurozone, with one labelling such an initiative as “economically inefficient and legally untenable.” This article assesses the justifications for these claims from legal and economic perspectives. It finds that, based upon prevailing ECB policies and the myriad options available for CBDC design, such claims are flawed. The article further explains that the ECB’s reticence to consider the introduction of CBDC may impair the development of payments systems and obstruct financial inclusion.

The paper presents an overview of the United Nations Educational, Scientific and Cultural Organization (UNESCO) describing the current standing of this important international organization in terms of its global competences and performance of specialized activities in the fields of culture, cultural heritage, education, science, scientific cooperation and other areas based on international documents. The paper describes the origin and development of UNESCO and the international documents adopted to regulate its standing and operations. It deals in more detail with the historical establishment and development of this global organization and its activities based on international documents such as the United Nations Charter and the UNESCO Constitution. It compares the long-term objectives of the organization concerning respect for human rights, justice and democracy and the arguments of current and former Member States concerning their fulfilment. The paper also considers the organization’s financial mechanism with special regard for the issue of Member States’ membership fees. In addition to the current state of UNESCO funding, it considers the possible impacts on its activities following membership changes and the withdrawal of some states from the organization and the subsequent decrease in the available funding for its activities.

As an effort to achieve sustainable development and increase people’s welfare, financial inclusion has become the policy agenda of many countries. Therefore, the effect of financial inclusion on economic growth, poverty, income inequality, and financial stability in several countries in Asia has become the goal and this is the subject of this study. Financial inclusion is measured by 3 dimensions, namely banking penetration, access to banking services, and use of banking services. Poverty ratio below the national poverty line and the Gini coefficient are used as indicators of poverty and income inequality. Financial stability is measured by Bank Z-Score and bank nonperforming loans. The results from the hypothesis test shows that all dimensions of financial stability simultaneously have significant influence on economic growth, poverty, income inequality, and financial stability. On the other hand, the partial impact of financial inclusion dimension on economic growth, poverty alleviation, income inequality, and financial stability in ten countries of Asia has not been optimal. The derived results of this study is required to be interpreted and considered by the Governments of each country in developing strategies for increasing financial inclusion, so that the policy to achieve sustainable development and enhancement of people’s welfare can be achieved.

Fighting climate change is one of the biggest challenges in the 21st century. Climate change that leads to global warming has been increasingly visible in our environment. Extreme weather conditions such as hurricanes, floods, and droughts have been escalating and their acceleration can be expected in the future. They cause changes in sea levels, epidemics, large fires, etc. Increasingly, we are witnessing minor or major damage caused by these extreme weather conditions. Numerous studies have proven that climate change has negative impact on economic growth and prosperity. However, this paper starts from the premise that in addition to unequivocally identified threats, climate change also creates opportunities. The paper reaches a conclusion that climate change can adversely affect balance sheets of financial institutions. Therefore, climate change is a source of financial risk and thus a part of the mandate of central banks and supervisors in preserving financial stability. This type of risk has not been given enough attention by either supervisors or financial institutions over the past period. This paper develops a model for managing financial risks as a result of climate change.

In this paper, we examine the extent to which financial stability matters for income growth in emerging markets. Using dynamic panel estimation techniques, we explore both the stock market and banking sector dimensions of the financial system to show that both stock market volatility and non-performing loans are detrimental to income growth in these markets. We, however, find the magnitude of the impact to be relatively more pronounced when the underlying source of instability in the financial system is stock market volatility. Overall, we find the impact of financial stability on income growth to be more statistically relevant when measured using the individual indicators of financial instability as compared to their composite indicator.

Purpose: The purpose’s study was to understand whether the three factors of pressure (financial stability, financial target and external pressure) and company size can influence financial statement fraud. Research methodology: The data analysis method used logistic regression analysis, and the analysis tool is SPSS v21. The population in this study were 40 banking companies listed on the IDX with a research time of 3 years, from 2017-2019. The total sample was 99 samples. Results: One of the three pressure factors, namely financial targets, had a positive and significant effect on fraudulent financial statements, while financial stability and external pressure had no positive and significant effect. Company size is not able to influence financial statement fraud. Limitations: This research used only four independent variables and the pressure factor dimensions of fraud theory to predict that effect on fraudulent financial statements and only examines one object, namely banking companies. The period of the study is relatively short, only three years. Contribution: The results of this study are useful for principals to be more selective in choosing companies to invest in. Keywords: Fraudulent financial statements, Financial stability, Financial target, External pressure, Company size

Magyarországon és külföldön egyaránt egyre több felsőoktatási intézmény indít idegen – főképp angol – nyelvű képzést. Ez előnyös az intézmény és menedzsmentje, oktatói, hallgatói és adminisztratív dolgozói számára. Stabil és növekvő bevételt eredményezhet, ami növeli a pénzügy stabilitását és növeli az intézmény, így a munkahely biztonságát is. Az anyagi előnyökön túl a legnagyobb előny a képzés nemzetközi jellegéből fakad. Az intézmény és polgárai nemzetköziesednek, s a szigorú feltételek kifejlesztése és biztosítása valamennyiük számára fejlődési lehetőséget és magasabb minőséget eredményez. Anemzetközi piacon a követelmények magasak, prémium terméket kell kifejleszteni. Ehhez meg kell teremteni a szervezeti kereteket, az infrastrukturális feltételeket és valamennyi résztvevő munkatársat képzésben kell részesíteni. A kis vidéki főiskolák hallgatói létszáma számos ok folytán a hazai piacon nembővíthető, egyetlen kiút a nemzetközi hallgatók képzése.

This study was to examine the influences of the fraud pentagon theory’s factors towards the financial statement fraud on banking listed in BEI for the period of 2014-2018. This study consisted of nine independent variables. Four variables of pressure (financial stability, external pressure, financial targets, personal financial needs). Two variables of the opportunity (nature of industry, ineffectiveness of monitoring). And a variable of rationalization, competence, and arrogance. Based on the results of Beneish M-Model analysis, out of 43 banks, 28 of them were indicated to have manipulated their financial statements during the study period. Meanwhile, the results of logistic regression analysis showed a positive influence of financial stability (ACHANGE), personal financial needs (OSHIP), nature of the industry (RECEIVABLE), ineffective monitoring (IND), competence (DIRCHANGE), and arrogance (CEOPIC) on financial statement fraud, while external pressures (LEV), financial targets (ROA), and rationalization (AUDCHANGE) have a negative effect on financial statement fraud

The aim of this study was to explore the relationship between utilization of energy sources, financial stability and prosperity in the economy of Indonesia. For this purpose this study conducted panel data analysis and gathered data from 1990 to 2018. The study explored the relationship of CO2 emissions and utilization of energy sources per capita as indicators of utilization of energy sources. The indicators for financial stability were real domestic credit to the private sector where the financial information of different financial institutions operating in Indonesia has been collected. The prosperity in the economy indicator for Indonesia was Gross Domestic Product (GDP) per capita and also the labour force that works within different sectors operating in the country. Using descriptive statistics, Unit root analysis, and the autoregressive distributed lag (ARDL) techniques, a panel data analysis was conducted. The results of showed that there is long term relationship between utilization of energy sources, financial stability and prosperity in the economy indictors of Indonesia.Keywords: Financial Stability, Utilization of Energy Sources, Gross Domestic Product, Autoregressive Distributed LagJEL Classifications: B26, O13DOI: https://doi.org/10.32479/ijeep.10242