The article reviews cooperation between the BRICS countries (Brazil, Russia, India, China and South Africa) and their collective efforts to promote reform of international financial institutions, ...shape global financial regulation and improve financial cooperation. The authors focus on the BRICS–G20 engagement for global economic governance reform. To assess the progress so far, the study employs original quantitative data on the BRICS and G20 commitments and compliance, and qualitative analysis of the BRICS and G20 discourse and the transformation of the international economic architecture. The results suggest that, contrary to the common perception of the BRICS as a challenger of the traditional western-dominated international monetary and financial system, it acts in a cooperative manner, seeking to make the international financial architecture and global regulation more representative and responsive to emerging markets and developing economies needs, and strengthen the stability and resilience of international and domestic financial markets.
Central bank digital currency (CBDC) is a digital form of fiat currency. CBDC has the potential to be a game challenger in the international financial system, bringing increased complexities arising ...from technology and regulatory considerations, as well as generating greater currency competition. As more states begin exploring CBDC, the interactions between actors may lead to the emergence of a new CBDC network. What shape would the emerging CBDC network take? What would its network effects be? What would be the impact of the CBDC network on the international financial system, or the global financial network? This article explores these questions by examining the emerging CBDC network and its regulatory implications. It argues that the CBDC network would likely be both decentralized and uncoordinated, making it unlikely to lead to convergence in CBDC regulation. The CBDC network would probably bring policy diffusion effects, with states behaving instrumentally, while shaking up the power balance between different actors, generating both cooperation and conflict. The CBDC network also has the potential to push international financial system toward becoming more decentralized.
Central clearing and collateral demand Duffie, Darrell; Scheicher, Martin; Vuillemey, Guillaume
Journal of financial economics,
05/2015, Volume:
116, Issue:
2
Journal Article
Peer reviewed
Open access
We use an extensive data set of bilateral credit default swap (CDS) positions to estimate the impact on collateral demand of new clearing and margin regulations. The estimated collateral demands ...include initial margin and the frictional demands associated with the movement of variation margin through the network of market participants. We estimate the impact on total collateral demand of more widespread initial margin requirements, increased novation of CDS to central clearing parties (CCPs), an increase in the number of clearing members, the proliferation of CCPs of both specialized and non-specialized types, collateral rehypothecation practices, and client clearing. System-wide collateral demand is increased significantly by the application of initial margin requirements for dealers, whether or not the CDS are cleared. Given these dealer-to-dealer initial margin requirements, mandatory central clearing is shown to lower, not raise, system-wide collateral demand, provided there is no significant proliferation of CCPs. Central clearing does, however, have significant distributional consequences for collateral requirements across market participants.
•Financial capital plays a key role in economic activities around the world, as well as in efforts to avoid climate change.•We develop a methodology that link financial actors to industries modifying ...tipping elements in Earth’s climate system.•We identify “Financial Giants” who through their ownership have considerable influence over climate stability.•We assess the incentives of “Financial Giants” to collaborate and use their influence to help stabilize tipping elements.
Financial actors and capital play a key role in extractive economic activities around the world, as well as in current efforts to avoid dangerous climate change. Here, in contrast to standard approaches in finance, sustainability and climate change, we elaborate in what ways financial actors affect key biomes around the world, and through this known “tipping elements” in the Earth system. We combine Earth system and sustainability sciences with corporate finance to develop a methodology that allows us to link financial actors to economic activities modifying biomes of key importance for stabilizing Earth’s climate system. Our analysis of key owners of companies operating in the Amazon rainforest (Brazil) and boreal forests (Russia and Canada) identifies a small set of international financial actors with considerable, but as of yet unrealized, globally spanning influence. We denote these “Financial Giants”, and elaborate how incentives and disincentives currently influence their potential to bolster or undermine the stability of the Earth’s climate system.
This paper examines the aftermath of postwar financial crises in advanced countries. We construct a new semiannual series on financial distress in 24 OECD countries for the period 1967-2012. The ...series is based on assessments of the health of countries' financial systems from a consistent, real-time narrative source, and classifies financial distress on a relatively fine scale. We find that the average decline in output following a financial crisis is statistically significant and persistent, but only moderate in size. More important, we find that the average decline is sensitive to the specification and sample, and that the aftermath of crises is highly variable across major episodes. A simple forecasting exercise suggests that one important driver of the variation is the severity and persistence of financial distress itself. At the same time, we find little evidence of nonlinearities in the relationship between financial distress and the aftermaths of crises.
Recently, financial performance has been the foremost requirement for the financial institution to survive in the market and this aspect demands the researchers' emphasis. Thus, the present study ...investigates the impact of joint auditing and governance on the financial performance of Iraqi banks. The study also examines the mediating role of a strong financial system among joint auditing, governance and financial performance of the Iraqi banks. The researchers collected the data using survey questionnaires from the audit department of the Iraqi banks. The researchers also checked the association among variables using SPSS-AMOS. The outcomes indicated that joint auditing and governance have a positive association with the financial performance of Iraqi banks. The outcomes also exposed that a strong financial system significantly mediates among joint auditing, governance and financial performance of the Iraqi banks. The study guides the policymakers in developing new policies related to improve the financial performance of the banks using effective joint auditing and governance systems.
This article contributes to the embryonic literature on the relations between Bitcoin and conventional investments by studying return and volatility spillovers between this largest cryptocurrency and ...four asset classes (equities, stocks, commodities, currencies and bonds) in bear and bull market conditions. We conducted empirical analyses based on a smooth transition VAR GARCH-in-mean model covering daily data from 19 July 2010 to 31 October 2017. We found significant evidence that Bitcoin returns are related quite closely to those of most of the other assets studies, particularly commodities, and therefore, the Bitcoin market is not isolated completely. The significance and sign of the spillovers exhibited some differences in the two market conditions and in the direction of the spillovers, with greater evidence that Bitcoin receives more volatility than it transmits. Our findings have implications for investors and fund managers who are considering Bitcoin as part of their investment strategies and for policymakers concerned about the vulnerability that Bitcoin represents to the stability of the global financial system.
This study examines the role of information sharing in modulating the effect of financial access on income inequality in 48 African countries for the period 2004-2014. Information sharing is proxied ...with private credit bureaus and public credit registries. All dynamics of financial development are taken into account, namely: depth (money supply and liquid liabilities), efficiency (at banking and financial system levels), activity (from banking and financial system perspective) and size. The empirical exercise is based on interactive Generalised Method of Moments. It can be established from the findings that: first, a threshold of 18.072 percentage coverage of public credit registries is needed to counteract the unconditional positive effect of banking system efficiency. Secondly, on the role of private credit bureaus in financial depth, both the unconditional and the conditional effects are negative, implying a negative synergy. Overall, the findings show that, contingent on the type of financial development dynamic, credit registries broadly play their theoretical role of decreasing financing constraints in order to ultimately reduce inequality.
Only by adhering to the scientific concept of capital as explained by Marx in Capital, and by drawing a clear line between the two different views of capital based on materialist and idealist ...conceptions of history, can we understand the phenomenon of capital in the real economy of contemporary China. In the real economy of developing commodity production, public and private capital share some common features, but there are differences in their nature. The misunderstanding, created by Western bourgeois economics, of the relationship between public and private capital harms efforts to achieve a scientific regulation of the healthy development of various types of capital, and needs to be clarified. Where the practical work of regulating and guiding the healthy development of capital is concerned, great importance should be attached to restoring and guaranteeing the dominant position of public capital within social capital as a whole; to ensuring that state-owned capital effectively fulfills the dominant role; to strictly governing the otherwise disorderly development of private capital; to strengthening control over the quantity and quality of foreign capital introduced to the economy; and to keeping state-owned capital firmly in control of the national financial system.
In this article, we provide evidence of the dynamic effects of financial development on a group of key macroeconomic variables, namely, output, consumption, investment, inflation, money, the interest ...rate and the exchange rate. As the measure of financial development we use a new broad measure of financial development instead of the narrow measures usually employed in the related literature. Another novelty is that we estimate the dynamic effects of financial development on economic activity in the context of a panel vector autoregressive model, comprising 36 countries observed in the period 1983-2019. Our results suggest that financial development has a positive impact on output, investment, and consumption. The results reported in this article also support the proposition that the benefits from financial development are larger in economies where the financial system is market-based. These results survive a battery of robustness checks.
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