No Man, No Cry? Gender Equality in Access to Credit and Financial Stability

This study investigates the main factors driving the evolution of the securitization of loans to Italian small and medium-sized enterprises (SMEs). The value of securitization increased in last two years, even though it has not been used as collateral for central banks. The disposal of non-performing loans (NPLs) may have been rather triggered by increasing attention of the international institutions to such an issue, within the general purpose of financial stability. The purpose of this paper is to interpret such a phenomenon focusing on Italian banks and restricting the analysis to the case of securitizations backed with loans to small and medium-sized enterprises (SMEs). The interesting result that emerges, supported by econometrically tested empirical evidence, is that given the orientation of international financial institutions, such as the ECB and the EBA, and reacting to incentives coming from the fiscal policy authorities for the public guarantee of loans, banks have been using securitization to reduce the burden on their bad balance sheets due to (NPLs). It was found that the public guarantee had a positive impact on SME securitization, whereas securitization in other sectors has not been affected significantly. Such evidence suggests that, in the absence of a public guarantee, the financial stability target would have been at risk, and the effectiveness of collateral-based policies in the recent past must be improved to enhance access to credit for SMEs.

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Financial stability: does social activism matter?

Journal of Financial Regulation and Compliance ◽

10.1108/jfrc-08-2018-0118 ◽

2019 ◽

Vol 28 (2) ◽

pp. 183-214

Author(s):

Peterson K. Ozili

Keyword(s):

Gender Equality ◽

Financial Institutions ◽

Environmental Sustainability ◽

Financial Stability ◽

Social Protection ◽

Social Activism ◽

Financial System ◽

System Stability ◽

Content Type ◽

The Impact

Purpose This study investigate the impact of social activism on financial system stability. Design/methodology/approach Financial stability was analysed from two complementary perspectives: bank-led financial stability and financial system stability driven by sector-wide credit supply. Social activism was analysed from three perspectives: gender equality advocacy, environmental sustainability advocacy and social protection advocacy. Findings The findings reveal that gender equality and environmental sustainability advocacy have significant positive effects for financial stability, whereas social protection advocacy has a significant negative effect for financial stability. In addition, social activism has negative effects for financial stability in the post-2008 financial crisis era. Finally, there are differential effects for country-groups, for instance, social activism strongly improves bank-led financial stability in African countries and for BLEND countries (countries that are eligible for International Development Association (IDA) borrowing based on per capita income levels and are also creditworthy for some borrowing from the International Bank of Restructuring and Development). The findings are relevant for the on-going debate about whether social inclusivity and activism has any economic value for the stability of businesses and the financial system. The findings have implications. Research limitations/implications The implication for policy-making is that the pressure on, or commitment of, financial institutions to be socially inclusive in all social matters such as gender equality, environmental sustainability and social protection does not guarantee stability in the financial system – whether bank-led financial stability or sector-wide financial stability. Therefore, regulators should ensure that financial institutions exercise careful discretion when adjusting their risk models to include all “social risk” factors amidst the recent pressure on corporations to be socially inclusive. Practical implications Another implication for business practice is that business leaders in financial institutions should identify the optimal level of social inclusivity that improves the stability of their corporations, because it would seem counterproductive if business leaders adopt full-scale social inclusion (or considerations) that subsequently make their corporations financially unstable which could lead to loss of shareholders wealth. Originality/value This study is the first attempt to investigate the impact of social activism on financial stability to determine whether greater social activism promotes stability or instability in the financial system.

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FINANCIAL CONSTRAINTS OF NON-FINANCIAL CORPORATIONS AS A FACTOR OF FINANCIAL STABILITY OF THE BANKING SYSTEM

Economic Analysis ◽

10.35774/econa2019.02.005 ◽

2019 ◽

pp. 5-14

Author(s):

Olena Benzar ◽

Aleksandra Laktionova

Keyword(s):

Financial Stability ◽

Financial Constraints ◽

Mutual Influence ◽

Supply And Demand ◽

Banking System ◽

Economic Relations ◽

Access To Credit ◽

Credit Cycle ◽

Business Entities ◽

Scientific Results

Introduction. Under the conditions of an active development of financial sector and the demand for expanding its capabilities by business entities there is a need to attract additional capital. It is a reason for finding a certain balance and arrangement of mutually beneficial economic relations. The phenomenon of financial constraints as the company's low ability to attract additional external capital plays a crucial role in modern non-perfect market. The searching for ways of expansion of access to credit by the non-financial corporate sector under the requirement of financial stability support of the banking system is a basis for building sustainable economic ties on the financial market and safe growth of the country's economy without propagating the asymmetric credit cycle. For such a cycle, the stage of recovery of supply and demand in the market is faster and more stable. Purpose. The justification of theoretical basis of the phenomenon of financial constraints and its key channels of interaction with the financial performance of the banking system and its financial stability. Results. The scientific results of work are the detection of the main channels of mutual influence of the financial constraints of non-financial corporations and the financial stability of banks, identification of directions for reducing financial constraints among economic entities in order to expand the possibilities for activating their economic development, that allows to increase the comprehensiveness of decisions on expansion of access to capital of banks and determine their impact on systemic financial risks and financial stability of the banking system in overall.

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