The politicisation of the European Central Bank and its emergency credit lines outside the Euro Area

Is the European Central Bank (ECB) increasingly acting on political – rather than technocratic – considerations? This question is of a central concern to students of European Union (EU) political economy. This article contributes to this debate by studying the ECB's credit lines to the central banks of EU member states outside the Euro Area during the Global Financial Crisis and the COVID-19 crisis. Both times the ECB accorded selectively better borrowing conditions to some central banks. The article finds that its selection of who gets favourable borrowing terms has indeed become more political. In 2008, the ECB decided the credit terms based on technocratic criteria, but twelve years later, it granted better lending conditions to countries that were close to adopting the euro. How the ECB balances its mandate for price stability in the Euro Area and its role as a supranational EU institution decides whether it will become more politicised. [ABSTRACT FROM AUTHOR] Copyright of Journal of European Public Policy is the property of Routledge and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Predicting the mediating effect of resource orchestration on the relationship between leadership strategy and the resilience of Kenyan Listed Banks

The objective of this study was to quantitatively assess the mediating effect of resource orchestration on the relationship between leadership strategy and organisational resilience of banks listed in the Nairobi Securities Exchange with an objective to contribute to knowledge production in the Global South using Kenya as the vantage point. The study applied a correlation research design, and data was gathered from a stratified random sample of 184 senior managers drawn across the 12 listed banks, wherein Likert-scale questionnaires were administered to the research participants online. Partial Least Squares Structural Equation Modelling was deployed for data analysis using SmartPLS software. Results showed that the mediated path explained 79.1% of the variance in organisational resilience (R2=0.791). The results were validated with a Sobel test that found a significant partial mediation in the model with Z=6.380 (p<0.05). The study inferred a strong and statistically significant mediation power of resource orchestration in the leadership strategy-organisational resilience nexus. Resource Orchestration Pecking Order was proposed as an outcome of the empirical analysis, and future research directions were suggested.

Lender financial reporting incentives and loan prioritization during the Paycheck Protection Program

Purpose>This study contributes to a growing body of literature on the Paycheck Protection Program (PPP) by examining how lender incentives affected prioritization of large borrowers. In addition, this study separately examines incentives for commercial banks and credit unions during the program.Design/methodology/approach>Using 2020 PPP loan data, the authors create a proxy for lender loan prioritization by comparing the skewness statistics of large and small loan distributions. A regression model is used to examine lender reporting incentives and loan prioritization.Findings>Results show that larger borrowers were prioritized in receiving PPP loans earlier. Lenders with financial reporting concerns and commercial banks favored large borrowers to a greater extent.Practical implications>This study may inform social planners and regulators about the benefits and costs of delegating emergency funding loan decisions to financial institutions.Originality/value>The authors believe this paper is the first to examine financial institution reporting incentives in relationship to PPP lending practices. It adds novelty by examining lender incentives, while prior research has focused heavily on the economic consequences of the program and how borrower–lender relationships affected loan practices during the program.

Formal Micro-Credit for Refugees: New Evidence and Thoughts on an Elusive Path to Self-Reliance

The provision of formal micro-credit for refugees has been promoted as a dignified way to improve their ability to generate income through small-scale enterprises and reduce poverty. As humanitarian funding declines in protracted displacement situations, such approaches are sought to transform refugees into self-reliant, resilient, entrepreneurial agents who are no longer dependent on aid and can overcome a crisis with their own resources and financial confidence. The paper in hand questions this claim on the basis of new, comprehensive empirical insights on the financial lives of refugees in non-camp settings in Jordan. By applying the perspective of the credit users, not the suppliers, our evidence shows that the pervasive use of debt (mostly informal) does not signify latent demand for formal micro-credit. In a context where refugees face restrictions on right to work, move, set up businesses, and imagine a future in the host country, formal credit cannot improve self-reliance. The paper sheds light on a larger variety of sources of debt that are crucial for refugees to manage their lives. In conclusion, the paper argues that the rhetoric around micro-credit as a path to refugee self-reliance has to be re-visited as problematic, even damaging, and humanitarian actors should push this agenda with caution.

Corporate Capital Structure and Firm Value: International Evidence on the Special Roles of Bank Debt

We contribute to the corporate capital structure and bank specialness literatures by studying the effects of bank debt on corporate value. We apply novel methodology to almost 60,000 firms in 110 countries over 17 years – over 300,000 total observations. We find that bank term loans and credit lines are strongly positively associated with firm value, but only when employed very intensively – at 90% or more of total corporate debt. These effects are consistent with bank specialness at high-intensity levels. These findings support previously untested theoretical predictions that bank specialness would be stronger or exist only at high bank debt intensities. Our results hold broadly, but are stronger for credit-constrained firms – small firms and those in low-income countries. Channel analysis suggests that term loans boost short-term firm performance more, while credit lines better promote long-run growth. The findings suggest future research topics and have policy implications, particularly during the COVID-19 crisis.

How does bank liquidity creation affect non-performing loans in the MENA region?

Purpose>The study aims to empirically examine the effect of bank liquidity creation on non-performing loans (NPLs) in the Middle East and North Africa (MENA) region.Design/methodology/approach>Berger and Bouwman's (2009) three-step methodology was employed to calculate the level of liquidity creation of a selected sample of 111 commercial banks in ten MENA countries from 2010–2017. Next, the two-step system generalized method of moments (GMM) estimator was used to investigate the linkage between bank liquidity creation and NPLs.Findings>The results demonstrated a significant negative effect of bank liquidity creation on NPLs in the short and long term, implying that liquidity creation through both on- and off-balance sheet activities decreases NPLs. These findings accord with the “economic-enhancing” view. Furthermore, regression analysis investigated whether this relationship remained similar for Islamic and conventional banks. The results showed that liquidity creation diminishes Islamic and conventional bank NPLs.Research limitations/implications>The empirical findings raise several significant policy implications. Bank liquidity creation may decrease rather than increase NPLs, although the process of liquidity creation is viewed as risky by rendering banks more illiquid. Therefore, policy-makers should encourage bank liquidity creation to stimulate the economy. In a robust economy, borrowers are more likely to repay their debts, consequently diminishing banks' NPLs.Originality/value>To the best of the author's knowledge, the current study is the first to provide empirical evidence on the effect of bank liquidity creation on NPLs in MENA countries.

El microcrédito como instrumento para reducir la pobreza y desempleo en Ecuador

The aim of the article is to describe microcredit in Ecuador, to contrast it with unemployment and poverty, since it is considered an instrument for the reduction of these economic problems, with a methodology that consists of the deductive-inductive method, it is also descriptive and basic research, with secondary and longitudinal data, on the variable's microcredit, poverty, and unemployment. The conclusions are: the nature of microcredit works with the logic of generating income through entrepreneurship, with presence from 2000 to 2007 under the modality of the Grameen Bank initiative, however, the Constitution of Ecuador in 2008 reorganizes the state administration and regulation extends to the financial sector, increasing the amounts and lines of credit, microcredit, and cost of money, but even so the levels of poverty and unemployment remain at high levels, aggravated by the health crisis due to the pandemic COVID-19.Alternate :El objetivo del artículo busca describir el microcrédito en Ecuador, para contrastarlo con el desempleo y la pobreza, dado que se considera instrumento para la reducción de estos problemas económicos, con metodología que consiste en el método deductivo-inductivo, además es una investigación descriptiva y básica, con datos secundarios y longitudinales, sobre las variables microcrédito, pobreza y desempleo. Las conclusiones son: la naturaleza del microcrédito funciona con la lógica de generar ingresos por medio del emprendimiento, con presencia desde el año 2000 hasta el año 2007 bajo la modalidad de la iniciativa del Grameen Bank, sin embargo, la Constitución del Ecuador en 2008 reorganiza la administración estatal y la regulación se extiende al sector financiero, haciendo que aumenten los montos y líneas de crédito, microcrédito y costo del dinero, pero aun así los niveles de pobreza y desempleo se mantienen en niveles altos, agravados por la crisis sanitaria por la pandemia COVID-19.Alternate :O objetivo do artigo é descrever o microcrédito no Equador, a fim de contrastá-lo com o desemprego e a pobreza, já que é considerado um instrumento para a redução destes problemas econômicos, com uma metodologia que consiste no método dedutivo-indutivo, além de ser uma pesquisa descritiva e básica, com dados secundários e longitudinais, sobre as variáveis microcrédito, pobreza e desemprego. As conclusões são: a natureza do microcrédito trabalha com a lógica de gerar renda através do empreendedorismo, com uma presença de 2000 a 2007 sob a modalidade da iniciativa do Banco Grameen, entretanto, a Constituição do Equador em 2008 reorganizou a administração e a regulamentação do Estado foi estendida ao setor financeiro, aumentando os montantes e as linhas de crédito, o microcrédito e o custo do dinheiro, mas mesmo assim os níveis de pobreza e desemprego continuam altos, agravados pela crise sanitária devido à pandemia da COVID-19.

What, Me Worry? Financial Knowledge Overconfidence and the Perception of Emergency Fund Needs

We examined the association between financial knowledge overconfidence and the perception of emergency fund needs using the 2016 Survey of Consumer Finances (SCF) dataset. Only 28% of respondents reported a perceived amount of emergency funds needed that would cover at least three months of estimated spending. We conducted an OLS regression analysis on the log of the ratio of perceived emergency fund needs to household monthly expenditure. Overconfident respondents perceived a ratio 21.4% lower than those who had objective and subjective financial knowledge above median levels. Overconfident respondents might be underestimating emergency fund needs, suggesting the importance of not only increasing objective financial knowledge but also making consumers aware of the limitations of their financial knowledge.

MACROECONOMIC POLICY AS RESPONSE TO THE PANDEMIC COVID - 19

The financial crisis triggered by the pandemic of COVID-19 significantly curtailed the activities of world financial systems. With the onset of the crisis in 2020, there has been a deterioration in macroeconomic indicators: a drop in GDP, an increase in the unemployment rate and an increase in public debt. Unlike the previous, expected debt crisis of 2008, the sudden corona crisis was welcomed by financial systems with significantly higher liquidity and capitalization. Despite positive expectations based on better performance of financial systems, uncertainty and the need for financial stability were present. Therefore, the highest expectations were directed towards economic policymakers, regulation and supervision of the financial systems. The impact of the emerging crisis is particularly pronounced in small and open economies such as Republic of Croatia, where there is a strong dependence on international market trends and thus a sensitivity to crises and external shocks. With the onset of the COVID-19 crisis, Republic of Croatia faced the problem of depreciation pressure on the domestic currency. It was stopped rapidly by the interventions of the Croatian National Bank, which achieved monetary and macroeconomic stability and provided assistance to the economy. Although central banks and other financial system supervisors and regulators have played an important role in overcoming the crisis and supporting the economy, uncertainty about macroeconomic stability remains. Following the COVID-19 lockdown of economies and their reopening in mid-2021, demand for goods and services has increased, leading to rising prices and inflation in Europe and the United States of America. The aim of this paper is to present the effects of the crisis caused by COVID-19 and to analyze the measures introduced to financially stabilize and support the economy.

THE EFFECTS OF THE PANDEMIC CRISIS ON TOURISM. A QUALITATIVE SURVEY ON THE OPINIONS OF TOUR OPERATORS IN SICILY

The COVID-19 pandemic crisis has had direct effects on social relationships. Tourism activities are by definition linked to the interaction among human beings, beginning with a physical movement of a person from a habitually-frequented environment to one or more destinations. Any denial of mobility, therefore, negates the tourist experience. After briefly discussing the effects of the COVID-19 crisis on the tourism system and hospitality, this work presents a qualitative survey by means of a thematic analysis approach. The study investigates tourism professionals operating in Sicily, across different tourism sectors and in various segments of the market (cultural, luxury, nautical, rural, and slow tourism). The operators were asked questions about their experiences of the pandemic, with its negative impact, and their expectations and prospects. The abilities to adapt to the new normal and build resilience are often related to offering sustainable products and services, which are characterized by a more robust relationship with the territory and local economy.

Research on Default Prediction for Credit Card Users Based on XGBoost-LSTM Model

The credit card business has become an indispensable financial service for commercial banks. With the development of credit card business, commercial banks have achieved outstanding results in maintaining existing customers, tapping potential customers, and market share. During credit card operations, massive amounts of data in multiple dimensions—including basic customer information;billing, installment, and repayment information;transaction flows;and overdue records—are generated. Compared with preloan and postloan links, user default prediction of the on-loan link has a huge scale of data, which makes it difficult to identify signs of risk. With the recent growing maturity and practicality of technologies such as big data analysis and artificial intelligence, it has become possible to further mine and analyze massive amounts of transaction data. This study mined and analyzed the transaction flow data that best reflected customer behavior. XGBoost, which is widely used in financial classification models, and Long-Short Term Memory (LSTM), which is widely used in time-series information, were selected for comparative research. The accuracy of the XGBoost model depends on the degree of expertise in feature extraction, while the LSTM algorithm can achieve higher accuracy without feature extraction. The resulting XGBoost-LSTM model showed good classification performance in default prediction. The results of this study can provide a reference for the application of deep learning algorithms in the field of finance.