It is high time we rediscovered the role of the financial cycle in macroeconomics. In the environment that has prevailed for at least three decades now, it is not possible to understand business ...fluctuations and the corresponding analytical and policy challenges without understanding the financial cycle. This calls for a rethink of modelling strategies and for significant adjustments to macroeconomic policies. This essay highlights the stylised empirical features of the financial cycle, conjectures as to what it may take to model it satisfactorily, and considers its policy implications. In the discussion of policy, the essay pays special attention to the bust phase, which is less well explored and raises much more controversial issues.
This paper investigates the relevance of non-traditional activities in the estimation of bank efficiency levels using a sample of 752 publicly quoted commercial banks from 87 countries around the ...world, allowing comparison of the impact of such activities under different levels of economic development, geographical regions and other country characteristics. We estimate both cost and profit efficiency of banks using a traditional function that considers loans and other earnings assets as the only outputs, and two additional functions to account for non-traditional activities, one with off-balance sheet (OBS) items and the other with non-interest income as an additional output. Controlling for cross-country differences in regulatory and environmental conditions, we find that, on average, cost efficiency increases irrespective of whether we use OBS or non-interest income, although the results for profit efficiency are mixed. Our results also reveal that while the inclusion of non-traditional outputs does not alter the directional impact of environmental variables on bank inefficiency, regulations that restrict bank activities and enhance monitoring and supervision provisions improve both cost and profit efficiency.
We find that central bank reserves injected by QE crowd out bank lending. We estimate a structural model with cross-sectional instrumental variables for deposit and loan demand. Our results are ...determined by the elasticity of loan demand and the impact of reserve holdings on the cost of supplying loans. The reserves injected by QE raise loan rates by 7.4 basis points, and each dollar of reserves reduces bank lending by 7.7 cents. Our results imply that a large injection of central bank reserves has the unintended consequence of crowding out bank loans because of bank balance sheet costs.
Research Questions: As an output of double-entry bookkeeping practices, when were the balance sheets first seen in Ottoman Empire? What factors (people, legislation, internationalization, etc.) ...impacted the layout or format of the balance sheets until the Capital Markets Law was enacted in 1982 in Turkey? When were the classified balance sheets first seen in Turkey before 1982? Motivation: The study is inspired by country-specific financial reporting history studies. Idea: This study investigates the history of the classified balance sheets in Turkey before 1982 regarding changes, developments, and evolutions and aims to explore the development of classified balance sheets in the Ottoman and Turkey. Data: For the study, secondary sources such as accessible textbooks adopted by higher education institutions by 1982 in Turkey are scanned and examined. Findings: The study argues that classified balance sheets in Turkey before 1982 evolved by translating from French, German, and American sources. This could be observed in the accounting textbooks published by different authors with different educational backgrounds. Contribution: The findings may help interested researchers pursue comparative studies or explore such developments and evolutions in their jurisdictions.
International Comparative Household Finance Badarinza, Cristian; Campbell, John Y; Ramadorai, Tarun
Annual review of economics,
01/2016, Letnik:
8, Številka:
1
Journal Article
Recenzirano
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This article reviews the literature on international comparative household finance. It presents summary statistics on household balance sheets for 13 developed countries and uses these statistics to ...discuss common features and contrasts across countries. It then discusses retirement savings, investments in risky assets, unsecured debt, and mortgages.
We study empirically the effect of growth in real economic activity on the strength of the bank credit channel of monetary policy in the United States using quarterly commercial bank-level panel data ...between 1986 and 2018, and bank-firm matched administrative data on loan volumes and terms between 2012 and 2018. We find that monetary policy is significantly more effective through the bank credit channel in spurring activity during periods of low economic growth than in cooling the economy when growth is high. Our results also suggest that the channel operates through a broader range of loan categories and banks than previously documented, that it is stronger for business than household lending, and that for some of the major loan categories it only operates in a low economic growth environment.
Insolvency of Companies in Romania Iulia Cristina Iuga; Ionela Cornelia Cioca; Teodor Hada
"Ovidius" University Annals. Economic Sciences Series (Online),
02/2024, Letnik:
XXIII, Številka:
2
Journal Article
Recenzirano
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The purpose of the paper is to analyze the main aspects regarding the insolvency of companies in Romania. The main objectives considered were the theoretical presentation of the concept of ...insolvency, the principles of insolvency, legislative regulations, the report of the judicial liquidator. In the case study presented for the company X SRL, we presented some accounting records, the statement of payments and receipts, as well as information related to the liquidation balance sheet.
The concept of creative accounting is often mistakenly referred to as accounting manipulations in the field of valuation of the company's assets, the possibility of concealing facts from the economic ...life of an individual, or as an attempted fraud (Jones 2011 and Stolowy, Breton 2000). Creativity should be assessed positively in the eyes of the recipients of financial statements and classified as a manifestation of in-depth knowledge of balance sheet law, tax law and, moreover, as the ability to apply the applicable normative acts. However, research conducted among professional accountants and statutory auditors in the period from September 2013 to February 2015 showed that only 20% of the respondents described creative accounting as a manifestation of the lack of data manipulation (Hołda, 2016).The aim of the article is to review the literature in the field of defining the concepts related to accounting manipulation and creative accounting. The study of the issue will present popular examples used in economic practice, which will be part of the empirical part and an attempt to evaluate the concepts by the author. The added value of the article is the possibility of developing research on the benefits of using creative accounting.
One of the top priorities of the Chinese government's oversight is to address the conflicts between economic growth and resource consumption and between economic development and ecological damage. In ...this regard, the advocacy and compilation of the natural resources balance sheet can boost the efficiency of the government's oversight and improve the quality of resource management. However, China's natural resources balance sheet is still at an exploratory stage, lacking the theoretical framework of balance sheet preparation, preparatory ideas, and a reporting system, which must be established urgently. First, the study states the purpose of compiling the natural resources balance sheet, and, subsequently, analyzes the theoretical basis, framework system, preparatory ideas, and sample sheet format, thereby offering theoretical and methodological support for its preparation. Moreover, the development, functions, deficits, and future development of the balance sheet are analyzed in the context of the Chinese system, which provides theoretical and methodological support for the preparation of the natural resources balance sheet and government oversight.
•National resources balance sheet has information disclosure function.•National resources balance sheet can enhance management and supervision.•National resources balance sheet can reverse ecological damage.
Recent years have seen a sharp decline in the use of balance sheet-based covenants in private debt contracts. I hypothesize that changes in accounting standards can explain part of this decline. ...Standard setting has shifted towards a “balance sheet approach”, which I predict has made the balance sheet less useful for contracting. I measure the effect of the balance sheet approach on specific borrowers using a volatility ratio. I find that borrowers with greater volatility ratios are less likely to have balance sheet-based covenants. This evidence is consistent with reductions in the contracting usefulness of the balance sheet being associated with reductions in balance sheet covenants.
▶ In recent years, balance sheet covenants are used less frequently in debt agreements. ▶ I consider the role of accounting standards in this decline. ▶ Specifically, I examine whether the shift to the “balance sheet approach” has influenced covenants. ▶ I find that accounting standards are associated with balance sheet covenant use. ▶ The same is not true of income statement covenant use, which has not changed.
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