The South Asia region faced extremely difficult economic challenges from the Coronavirus (COVID-19) pandemic. Almost two billion people living in South Asia were affected by the pandemic. The unprecedented shock in South Asia disturbed the pace and pattern of development and increased the vulnerabilities of the region. The region faced the problems of inequality, high inflation, rising fiscal deficit, disrupted growth, and environmental challenges further increasing the region’s vulnerabilities. Traditional macroeconomic policies are not enough to cope with this problem. In the face of these shocks, South Asian countries need to build robust fiscal and monetary policies and efficient use of remaining resources to build a more resilient economy for the protection of the population. Economic resilience might be effective to overcome such external shocks and support the recovery of all countries especially South Asian countries. Post-pandemic action in South Asian countries thus has become moreimportant, especially with restrained scope of fiscal and monetary stimulus. This examines the impact of COVID-19 on South Asian countries. The paper addresses the economic challenges faced by South Asian Countries in the pre- and post-pandemic period. It also briefly discusses the fiscal stimulus packages released by the South Asian countries to build stronger economies.
{"title":"INCREASING FISCAL AND ECONOMIC RESILIENCE POST PANDEMIC: EVIDENCE FROM SOUTH ASIAN COUNTRIES","authors":"Jamil Ahmad, Dastgir Alam","doi":"10.21098/jcli.v3i2.184","DOIUrl":"https://doi.org/10.21098/jcli.v3i2.184","url":null,"abstract":"The South Asia region faced extremely difficult economic challenges from the Coronavirus (COVID-19) pandemic. Almost two billion people living in South Asia were affected by the pandemic. The unprecedented shock in South Asia disturbed the pace and pattern of development and increased the vulnerabilities of the region. The region faced the problems of inequality, high inflation, rising fiscal deficit, disrupted growth, and environmental challenges further increasing the region’s vulnerabilities. Traditional macroeconomic policies are not enough to cope with this problem. In the face of these shocks, South Asian countries need to build robust fiscal and monetary policies and efficient use of remaining resources to build a more resilient economy for the protection of the population. Economic resilience might be effective to overcome such external shocks and support the recovery of all countries especially South Asian countries. Post-pandemic action in South Asian countries thus has become moreimportant, especially with restrained scope of fiscal and monetary stimulus. This examines the impact of COVID-19 on South Asian countries. The paper addresses the economic challenges faced by South Asian Countries in the pre- and post-pandemic period. It also briefly discusses the fiscal stimulus packages released by the South Asian countries to build stronger economies.","PeriodicalId":292753,"journal":{"name":"Journal of Central Banking Law and Institutions","volume":"196 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-05-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141013451","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study investigates the impact of corporate social responsibility (CSR) strategy on corporate cash policy in emerging markets, with a specific focus on the COVID-19 pandemic period. By analysing data from 7,731 firm-years across 30 developing countries during the period 2002-2021, the study finds that CSR has a negative effect on cash holdings. In other words, firms with lower CSR investment tend to hold more cash. However, an interesting finding is that the negative impact of CSR on cash holdings lost its significance during the COVID-19pandemic. This suggests that during this unprecedented period of economic uncertainty and disruption caused by the pandemic, firms with higher CSR were more inclined to hoard cash as a precautionary measure. In contrast, in normal times, the dominant motive for holding cash appears to be related to agency concerns. Furthermore, the study identifies countryspecific variations in the relationship between CSR and cash holdings. For instance, firms in Brazil and Saudi Arabia tend to use cash retention as a response to higher CSR, while firms in Argentina, Malaysia, Mexico, Poland, Taiwan, and Turkiye exhibit the opposite behaviour, using higher CSR as a signal for reduced cash holdings. Additionally, the study sheds light on industry-specific differences in the relationship between CSR and cash holdings. Beverage, construction and material, industrial material, oil, gas, and coal, technology hardware and equipment, telecommunications service provider, and travel and leisure firms are more likely to use cash holdings as a substitute for CSR, while alternative energy and media firms show the opposite pattern, using higher CSR as a signal for reduced cash holdings.
{"title":"HOW DOES CSR STRATEGY IMPACT CORPORATE CASH POLICY IN EMERGING MARKETS? EVIDENCE FROM THE COVID-19 OUTBREAK","authors":"A. Polat, Hasan Tekin","doi":"10.21098/jcli.v3i2.181","DOIUrl":"https://doi.org/10.21098/jcli.v3i2.181","url":null,"abstract":"This study investigates the impact of corporate social responsibility (CSR) strategy on corporate cash policy in emerging markets, with a specific focus on the COVID-19 pandemic period. By analysing data from 7,731 firm-years across 30 developing countries during the period 2002-2021, the study finds that CSR has a negative effect on cash holdings. In other words, firms with lower CSR investment tend to hold more cash. However, an interesting finding is that the negative impact of CSR on cash holdings lost its significance during the COVID-19pandemic. This suggests that during this unprecedented period of economic uncertainty and disruption caused by the pandemic, firms with higher CSR were more inclined to hoard cash as a precautionary measure. In contrast, in normal times, the dominant motive for holding cash appears to be related to agency concerns. Furthermore, the study identifies countryspecific variations in the relationship between CSR and cash holdings. For instance, firms in Brazil and Saudi Arabia tend to use cash retention as a response to higher CSR, while firms in Argentina, Malaysia, Mexico, Poland, Taiwan, and Turkiye exhibit the opposite behaviour, using higher CSR as a signal for reduced cash holdings. Additionally, the study sheds light on industry-specific differences in the relationship between CSR and cash holdings. Beverage, construction and material, industrial material, oil, gas, and coal, technology hardware and equipment, telecommunications service provider, and travel and leisure firms are more likely to use cash holdings as a substitute for CSR, while alternative energy and media firms show the opposite pattern, using higher CSR as a signal for reduced cash holdings.","PeriodicalId":292753,"journal":{"name":"Journal of Central Banking Law and Institutions","volume":"95 6","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-05-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141014634","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study assesses the MSME financing practices of Islamic banks in Bangladesh during the COVID-19 pandemic. The study examines the annual reports of Bangladeshi Islamic banks between 2020 and 2021. This study found Islamic bank financing for cottage, small and medium enterprises (CMSME) through agent banking was effective during the pandemic. Banks also launched various programs, products, and schemes easily accessible to CMSMEs in the country, including special programs supporting women entrepreneurship and CMSMEs in rural areas. Overall, the performance of MSME financing of Islamic banks in the country was impressive and effective measured by the amounts disbursed to CMSMEs, the number of beneficiaries, new branches opened, and employment of bank staff to handle the enterprises’ financial requests over the period. The findings can help the government and regulatory agencies, particularly Bangladesh Bank, during the revision of regulations to enhance CMSME financing by scheduled banks in the country.
{"title":"EVALUATING MSME FINANCING PRACTICES DURING COVID-19: EVIDENCE FROM ISLAMIC BANK ANNUAL REPORTS","authors":"Umar Habibu Umar, Auwalu Isah Darma","doi":"10.21098/jcli.v3i2.176","DOIUrl":"https://doi.org/10.21098/jcli.v3i2.176","url":null,"abstract":"This study assesses the MSME financing practices of Islamic banks in Bangladesh during the COVID-19 pandemic. The study examines the annual reports of Bangladeshi Islamic banks between 2020 and 2021. This study found Islamic bank financing for cottage, small and medium enterprises (CMSME) through agent banking was effective during the pandemic. Banks also launched various programs, products, and schemes easily accessible to CMSMEs in the country, including special programs supporting women entrepreneurship and CMSMEs in rural areas. Overall, the performance of MSME financing of Islamic banks in the country was impressive and effective measured by the amounts disbursed to CMSMEs, the number of beneficiaries, new branches opened, and employment of bank staff to handle the enterprises’ financial requests over the period. The findings can help the government and regulatory agencies, particularly Bangladesh Bank, during the revision of regulations to enhance CMSME financing by scheduled banks in the country.","PeriodicalId":292753,"journal":{"name":"Journal of Central Banking Law and Institutions","volume":"3 6","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-05-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141014208","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Bank Indonesia as the central bank in Indonesia has financial independence in which Bank Indonesia has the authority to manage its assets separately from the State Budget. However, in carrying out its roles and duties, Bank Indonesia often faces demands or lawsuits, which result in execution of judgments against assets of Bank Indonesia. This can clearly disrupt the financial stability of Bank Indonesia, affecting Bank Indonesia’s ability to carry out its roles and duties effectively. Currently, there has been an argument put forth to assert Article 50 of the treasure law in an effort to protect for Bank Indonesia’s finances. However, the application of this article as a legal basis for protection of Bank Indonesia’s finances is inappropriate because it is not in accordance with Bank Indonesia’s financial independence, separating from the State Budget. Departing from these problems, based on data collected through document studies in the form of primary, secondary, and tertiary legal materials, this study examines how the policies of financial independence of Bank Indonesia, legal protection of Bank Indonesia’s finance, and ideal arrangements for legal protection of Bank Indonesia’s finances considering the attention to the independence of Bank Indonesia. The conclusion of this research is that there is still disharmony in regulations regarding Bank Indonesia’s financial protection in the State Finances Law and the State Treasury Law which creates legal uncertainty regarding Bank Indonesia’s financial protection.
{"title":"LEGAL PROTECTION OF BANK INDONESIA’S FINANCIAL INDEPENDENCE","authors":"Ayu Deviana","doi":"10.21098/jcli.v3i2.186","DOIUrl":"https://doi.org/10.21098/jcli.v3i2.186","url":null,"abstract":"Bank Indonesia as the central bank in Indonesia has financial independence in which Bank Indonesia has the authority to manage its assets separately from the State Budget. However, in carrying out its roles and duties, Bank Indonesia often faces demands or lawsuits, which result in execution of judgments against assets of Bank Indonesia. This can clearly disrupt the financial stability of Bank Indonesia, affecting Bank Indonesia’s ability to carry out its roles and duties effectively. Currently, there has been an argument put forth to assert Article 50 of the treasure law in an effort to protect for Bank Indonesia’s finances. However, the application of this article as a legal basis for protection of Bank Indonesia’s finances is inappropriate because it is not in accordance with Bank Indonesia’s financial independence, separating from the State Budget. Departing from these problems, based on data collected through document studies in the form of primary, secondary, and tertiary legal materials, this study examines how the policies of financial independence of Bank Indonesia, legal protection of Bank Indonesia’s finance, and ideal arrangements for legal protection of Bank Indonesia’s finances considering the attention to the independence of Bank Indonesia. The conclusion of this research is that there is still disharmony in regulations regarding Bank Indonesia’s financial protection in the State Finances Law and the State Treasury Law which creates legal uncertainty regarding Bank Indonesia’s financial protection.","PeriodicalId":292753,"journal":{"name":"Journal of Central Banking Law and Institutions","volume":"174 1‐2","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-05-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141013264","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
CBDC has gained popularity in many countries as a result of technological development. Central banks in a number of nations have been experimenting, piloting, launching, and promoting CBDC. Therefore, this study maps CBDC-related literature using a bibliometric approach and content analysis of the Scopus database. The Biblioshiny R Package was used in this study to analyse 190 documents with the keywords “central bank digital currency”. The analysis focuses on the main information about all documents, analysis of scientific production by areas (journals, authors, and countries), document and keyword analysis, and policy recommendations from the previous literature. The results show that CBDCs have had profound effects on monetary and payment systems, and their development could set the stage for a global central bank. The review also addresses the motivations and advantages of issuing a CBDC, including increasing financial inclusion, enhancing monetary policy, andpromoting efficient digital payments. The analysis also reveals that numerous central banks are investigating the possibility of issuing CBDCs due to the numerous advantages of this form of money. There is a lot of potential for theoretical expansion, contextual coverage, and methodological contributions. Furthermore, some policy recommendations from previous literature and directions for future studies are provided in this study.
{"title":"MAPPING CENTRAL BANK DIGITAL CURRENCY LITERATURE: LESSONS FOR GOVERNMENTS AND RESEARCH","authors":"Ririn Riani, Nashr Akbar","doi":"10.21098/jcli.v3i2.164","DOIUrl":"https://doi.org/10.21098/jcli.v3i2.164","url":null,"abstract":"CBDC has gained popularity in many countries as a result of technological development. Central banks in a number of nations have been experimenting, piloting, launching, and promoting CBDC. Therefore, this study maps CBDC-related literature using a bibliometric approach and content analysis of the Scopus database. The Biblioshiny R Package was used in this study to analyse 190 documents with the keywords “central bank digital currency”. The analysis focuses on the main information about all documents, analysis of scientific production by areas (journals, authors, and countries), document and keyword analysis, and policy recommendations from the previous literature. The results show that CBDCs have had profound effects on monetary and payment systems, and their development could set the stage for a global central bank. The review also addresses the motivations and advantages of issuing a CBDC, including increasing financial inclusion, enhancing monetary policy, andpromoting efficient digital payments. The analysis also reveals that numerous central banks are investigating the possibility of issuing CBDCs due to the numerous advantages of this form of money. There is a lot of potential for theoretical expansion, contextual coverage, and methodological contributions. Furthermore, some policy recommendations from previous literature and directions for future studies are provided in this study.","PeriodicalId":292753,"journal":{"name":"Journal of Central Banking Law and Institutions","volume":"25 11","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-05-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141014180","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper elucidates the intricate relationship among bank performance, political connections, and the democratic environment. The existing body of evidence is notably limited in illustrating the impact of a democratic environment on bank performance. Our study examines a sample of 397 banks spanning 14 countries and districts, encompassing both politically affiliated and non-politically affiliated banks in both democratic and non-democratic settings. The empirical findings reveal a reduction in non-performing loans but an escalation in loan loss provision within a democratic environment. This phenomenon may be attributed to the diminished level of financial constraints prevalent in democratic settings. Furthermore, our investigation revealsthat political connections exert a deleterious effect on the non-performing loans (NPL) ratio, coupled with a salutary impact on loan loss provision. Conclusively, our research identifies that the stock return of politically connected banks in democratic environments is inferior to their counterparts in non-democratic environments. Additionally, the non-performing loans ratio (NPL) of politically connected banks in democratic environments tends to be higher compared to their non-democratic counterparts. Conversely, the loan loss provision of politically connected banks in democratic environments tends to be lower than that in non-democratic environments. This nuanced analysis contributes to a more comprehensive understanding of the interplay between democratic environments, political connections, and bank performance.
{"title":"DO POLITICALLY CONNECTED BANKS PERFORM BETTER IN A DEMOCRATIC ENVIRONMENT?","authors":"Rashedul Hasan, M. K. Hassan, Jiayuan Tian","doi":"10.21098/jcli.v3i2.173","DOIUrl":"https://doi.org/10.21098/jcli.v3i2.173","url":null,"abstract":"This paper elucidates the intricate relationship among bank performance, political connections, and the democratic environment. The existing body of evidence is notably limited in illustrating the impact of a democratic environment on bank performance. Our study examines a sample of 397 banks spanning 14 countries and districts, encompassing both politically affiliated and non-politically affiliated banks in both democratic and non-democratic settings. The empirical findings reveal a reduction in non-performing loans but an escalation in loan loss provision within a democratic environment. This phenomenon may be attributed to the diminished level of financial constraints prevalent in democratic settings. Furthermore, our investigation revealsthat political connections exert a deleterious effect on the non-performing loans (NPL) ratio, coupled with a salutary impact on loan loss provision. Conclusively, our research identifies that the stock return of politically connected banks in democratic environments is inferior to their counterparts in non-democratic environments. Additionally, the non-performing loans ratio (NPL) of politically connected banks in democratic environments tends to be higher compared to their non-democratic counterparts. Conversely, the loan loss provision of politically connected banks in democratic environments tends to be lower than that in non-democratic environments. This nuanced analysis contributes to a more comprehensive understanding of the interplay between democratic environments, political connections, and bank performance.","PeriodicalId":292753,"journal":{"name":"Journal of Central Banking Law and Institutions","volume":"204 5","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-05-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141013283","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The growth of digitalisation presents the possibility for Central Bank Digital Currency (CBDC) to emerge as a secure and efficient payment method. However, despite the benefits, CBDC implementation needs to be adapted to the capabilities and needs of each country. This study uses meta-strength, weakness, opportunity, and threat (meta-SWOT) analysis to assess the internal strengths and weaknesses, as well as the external opportunities and threats, to determine the most optimal CBDC design for emerging economies. In analysing internal aspects, CBDC allows for an efficient payment system, followed by a more effective monetary policy. Furthermore, the technology creates the possibility to boost financial inclusion and trace many illicit activities. However, to achieve that, high investment costs and privacy issues must be accommodated, followed by technological risks such as the digital divide and electrical outages. Turning to external aspects, growing technology, the network effect, enthusiasm for CBDC, and the impracticality of cash usage have become catalysts for CBDC development. Despite these opportunities, central banks should be wary of the threat of cyberattacks, quickening bank disintermediation, legal issues within their respective countries, and competition with private crypto companies. Altogether, the most optimal CBDC design in emerging economies is retail and wholesale coverage, interest-bearing (wholesale) and noninterest-bearing (retail) remuneration, account-based and token-based paymentsystems, a traceable degree of anonymity, hybrid architecture, a Decentralised Ledger Technology (DLT) ledger system, and domestic and cross-border scope. These results are supported by rigorous examination of global CBDC research and development.
{"title":"OPTIMAL CENTRAL BANK DIGITAL CURRENCY DESIGN FOR EMERGING ECONOMIES","authors":"Ferry Syarifuddin","doi":"10.21098/jcli.v3i2.194","DOIUrl":"https://doi.org/10.21098/jcli.v3i2.194","url":null,"abstract":"The growth of digitalisation presents the possibility for Central Bank Digital Currency (CBDC) to emerge as a secure and efficient payment method. However, despite the benefits, CBDC implementation needs to be adapted to the capabilities and needs of each country. This study uses meta-strength, weakness, opportunity, and threat (meta-SWOT) analysis to assess the internal strengths and weaknesses, as well as the external opportunities and threats, to determine the most optimal CBDC design for emerging economies. In analysing internal aspects, CBDC allows for an efficient payment system, followed by a more effective monetary policy. Furthermore, the technology creates the possibility to boost financial inclusion and trace many illicit activities. However, to achieve that, high investment costs and privacy issues must be accommodated, followed by technological risks such as the digital divide and electrical outages. Turning to external aspects, growing technology, the network effect, enthusiasm for CBDC, and the impracticality of cash usage have become catalysts for CBDC development. Despite these opportunities, central banks should be wary of the threat of cyberattacks, quickening bank disintermediation, legal issues within their respective countries, and competition with private crypto companies. Altogether, the most optimal CBDC design in emerging economies is retail and wholesale coverage, interest-bearing (wholesale) and noninterest-bearing (retail) remuneration, account-based and token-based paymentsystems, a traceable degree of anonymity, hybrid architecture, a Decentralised Ledger Technology (DLT) ledger system, and domestic and cross-border scope. These results are supported by rigorous examination of global CBDC research and development.","PeriodicalId":292753,"journal":{"name":"Journal of Central Banking Law and Institutions","volume":"214 6","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-05-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141013060","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
R. Natamiharja, Febryani Sabatira, O. Davey, Yuga Narazua Khanza
Bank Indonesia as the primary agent for maintaining state financial stability plays an essential role in combatting corruption through preventive and repressive measures. However, considering the poor state of corruption management, Indonesia requires a more strategic and measurable framework. In this case, The World Bank Group (WBG) has numerous methods for combatting corruption through structured initiatives. The overall goal of the programs is to achieve a high level of transparency as the central bank’s fundamental premise in dealing with corruption. Thus, by adopting the WBG guidelines and initiatives, Indonesia can gradually scale up its corruption eradication efforts. This study will further highlight three areas, namely: (i) the World Bank alternatives for controlling corruption; (ii) the role of Bank Indonesia in eradicating corruption; and (iii) adoption of the World Bank’s alternatives in strengthening Bank Indonesia’s efforts to eradicate corruption. The study uses normative legal research using a regulatory approach with secondary data collection. The results of the study show that Bank Indonesia has thoroughly adopted the World Bank’s initiatives. Nevertheless, BI still needs to optimise technology-based public transparency, enhance public involvement, and strengthen supervision of sectoral-based corruption risk in the future.
{"title":"BANK INDONESIA’S ROLE IN ERADICATING CORRUPTION: ADOPTING THE WORLD BANK INITIATIVES","authors":"R. Natamiharja, Febryani Sabatira, O. Davey, Yuga Narazua Khanza","doi":"10.21098/jcli.v3i1.32","DOIUrl":"https://doi.org/10.21098/jcli.v3i1.32","url":null,"abstract":"Bank Indonesia as the primary agent for maintaining state financial stability plays an essential role in combatting corruption through preventive and repressive measures. However, considering the poor state of corruption management, Indonesia requires a more strategic and measurable framework. In this case, The World Bank Group (WBG) has numerous methods for combatting corruption through structured initiatives. The overall goal of the programs is to achieve a high level of transparency as the central bank’s fundamental premise in dealing with corruption. Thus, by adopting the WBG guidelines and initiatives, Indonesia can gradually scale up its corruption eradication efforts. This study will further highlight three areas, namely: (i) the World Bank alternatives for controlling corruption; (ii) the role of Bank Indonesia in eradicating corruption; and (iii) adoption of the World Bank’s alternatives in strengthening Bank Indonesia’s efforts to eradicate corruption. The study uses normative legal research using a regulatory approach with secondary data collection. The results of the study show that Bank Indonesia has thoroughly adopted the World Bank’s initiatives. Nevertheless, BI still needs to optimise technology-based public transparency, enhance public involvement, and strengthen supervision of sectoral-based corruption risk in the future. ","PeriodicalId":292753,"journal":{"name":"Journal of Central Banking Law and Institutions","volume":"61 10","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139455047","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Credit growth related to production, consumption, investment, exports, and imports is considered crucial for economic growth. The Covid-19 pandemic has had a major impact on the economies of countries in the world, as seen from a significant decline in credit growth. This study examines the effects of Economic Growth, Exchange Rate, Inflation, BI Rate, Third Party Funds (TPF), and Non-Performing Loans (NPL) on Banking Credit Growth in Indonesia during the COVID-19 Pandemic Period and regulations issued during that period. Analysis using multiple linear regression method using EViews 10 software with data type in the form of time series. The results of this study showed that only TPF growth had a significant effect. Simultaneously, the variables of Economic Growth, Exchange Rate, Inflation, BI Rate, NPL and Deposit Growth have a significant effect. The most dominantinfluencing variable is deposit growth.
{"title":"BANK CREDIT GROWTH IN INDONESIA DURING THE COVID-19 PANDEMIC AND ITS REGULATIONS","authors":"Abdul Aziz, Sri Maulida","doi":"10.21098/jcli.v3i1.47","DOIUrl":"https://doi.org/10.21098/jcli.v3i1.47","url":null,"abstract":"Credit growth related to production, consumption, investment, exports, and imports is considered crucial for economic growth. The Covid-19 pandemic has had a major impact on the economies of countries in the world, as seen from a significant decline in credit growth. This study examines the effects of Economic Growth, Exchange Rate, Inflation, BI Rate, Third Party Funds (TPF), and Non-Performing Loans (NPL) on Banking Credit Growth in Indonesia during the COVID-19 Pandemic Period and regulations issued during that period. Analysis using multiple linear regression method using EViews 10 software with data type in the form of time series. The results of this study showed that only TPF growth had a significant effect. Simultaneously, the variables of Economic Growth, Exchange Rate, Inflation, BI Rate, NPL and Deposit Growth have a significant effect. The most dominantinfluencing variable is deposit growth.","PeriodicalId":292753,"journal":{"name":"Journal of Central Banking Law and Institutions","volume":"99 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139454165","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Countries’ digital transformation continues and yet the impact on the banking sector is unknown. This uncertainty might become even worse if banks start to compete among themselves to get ahead of digital lending and payment platforms. Competition among banks leads to lower lending rates and increased deposit rates. These smaller margins might lead to instability in the banking sector. We address the impact of digital transformation and bank competition on banking sector stability by looking at country-level data from 48 Asian economies. We integrate the moderating role of bank competition into the picture. The findings suggest that digital transformation leads to banking sector stability while bank competition results in banking sector fragility. During high competition within the banking sector, digital transformation lessens the overall banking sector stability and as competition declines, the relationship moves towards insignificance after falling below a moderate level of competition. These findings carry important policy implications. Countries should have control over banking sector competition and should at the same time move towards digital transformation to achieve larger goals like financial inclusion. Lower competition helps to avoid any negative impacts from digital transformation in a country.
{"title":"DIGITAL TRANSFORMATION AND THE BANKING MARKET: FRIEND OR FOE? A COUNTRY-LEVEL STUDY","authors":"Noureen A. Khan, Mudeer Ahmed Khattak","doi":"10.21098/jcli.v3i1.167","DOIUrl":"https://doi.org/10.21098/jcli.v3i1.167","url":null,"abstract":"Countries’ digital transformation continues and yet the impact on the banking sector is unknown. This uncertainty might become even worse if banks start to compete among themselves to get ahead of digital lending and payment platforms. Competition among banks leads to lower lending rates and increased deposit rates. These smaller margins might lead to instability in the banking sector. We address the impact of digital transformation and bank competition on banking sector stability by looking at country-level data from 48 Asian economies. We integrate the moderating role of bank competition into the picture. The findings suggest that digital transformation leads to banking sector stability while bank competition results in banking sector fragility. During high competition within the banking sector, digital transformation lessens the overall banking sector stability and as competition declines, the relationship moves towards insignificance after falling below a moderate level of competition. These findings carry important policy implications. Countries should have control over banking sector competition and should at the same time move towards digital transformation to achieve larger goals like financial inclusion. Lower competition helps to avoid any negative impacts from digital transformation in a country.","PeriodicalId":292753,"journal":{"name":"Journal of Central Banking Law and Institutions","volume":"17 23","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139457982","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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