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The Impact of Monetary Policy on Assets Management of Deposit Money Banks in Nigeria
Olofinlade Samuel Oluwapelumi,
Aremu Olusegun Samuel,
Ogunwole Cecilia Oluwakemi Aina
Issue:
Volume 9, Issue 3, May 2021
Pages:
60-66
Received:
15 February 2021
Accepted:
2 March 2021
Published:
14 May 2021
Abstract: The study investigated the impact of monetary policy on assets management of banks in Nigeria which has been an issue that has gained momentum among scholars of repute. Different relevant empirical reviews were carried out. The study specifically addressed the effect of monetary policy rate, liquidity rate and cash reserve requirement on banks asset management for the period of 37 years which spanned from 1981 through 2017. While secondary data were sourced from the Central bank of Nigeria Statistical bulletin and National Bureau of Statistics. However, Vector Error correction (VECM) econometric techniques approach was applied on the secondary data. It employed this econometric technique on unit root test to establish the stationarity of the variables and the macroeconomic variables used were not stationary at level hence the study proceded to first difference where the macroeconomic variables used became stationary at the first order. The result from Johansen Co-integration reveals that monetary policy rate and cash reserve requirement have significant and positive effect on bank asset management while liquidity rate had an insignificant negative effect on bank asset management. The study concluded that monetary policy has a significant effect on bank asset management in Nigeria. It was recommended that Central Bank of Nigeria (CBN) should adjust the monetary policy rate by reducing the cash reserve ratio which will increase liquidity to enable the commercial banks to discharge their lending and investment duties effectively to the public.
Abstract: The study investigated the impact of monetary policy on assets management of banks in Nigeria which has been an issue that has gained momentum among scholars of repute. Different relevant empirical reviews were carried out. The study specifically addressed the effect of monetary policy rate, liquidity rate and cash reserve requirement on banks asse...
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Analysis and Research on Factor Differences in Abnormal Conditions of Indicators
Liu Yun,
Shuping Luo,
Xiaoyun Zhang
Issue:
Volume 9, Issue 3, May 2021
Pages:
67-79
Received:
28 April 2021
Accepted:
Published:
24 May 2021
Abstract: In factor variance analysis, the index values of the reporting period and the base period usually appear in the following five situations: the reporting period and the base period are both positive; the reporting period is positive, and the base period is negative; the reporting period is negative, and the base period is positive; Both the reporting period and the base period are negative, and the negative numerator is less than the negative denominator; the negative numerator is greater than the negative denominator. In the first case, the problem has been solved; the latter four cases have not been paid attention to by scholars. In the last four situations encountered in factor variance analysis, we call it indicator anomalies. Based on the factor analysis "index logarithmic ratio" method, we try to use the variation range (variation difference/base period number) logarithmic ratio method to solve. In order to show the reality of the research, we use the ZXGS financial data indicators as the blueprint, use the case method to study the financial analysis of abnormal indicators, and carry out the event analysis procedure anatomy based on the new method of factor analysis and variance analysis. Through the study of these several situations, we hope that the exponential logarithmic ratio method of factor analysis and difference analysis will be more pertinent, complete, adaptable, and scientific, and can be correctly applied in a wide range of social practices.
Abstract: In factor variance analysis, the index values of the reporting period and the base period usually appear in the following five situations: the reporting period and the base period are both positive; the reporting period is positive, and the base period is negative; the reporting period is negative, and the base period is positive; Both the reportin...
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Innovative Thinking on Development of Internal Audit of Commercial Banks in the New Era
Issue:
Volume 9, Issue 3, May 2021
Pages:
80-86
Received:
22 February 2020
Accepted:
1 April 2020
Published:
26 May 2021
Abstract: In the new era, Internal audit of Commercial Banks is facing more risk challenges, This paper analyze the difficulties and shortcomings encountered by internal audit in the process of innovation development, On the one hand, Internal audit function is facing unprecedented challenges, with arising business involvement and regional cooperation, cross-business and cross-region risks are growing even complex, the regulatory requirements turning much strict by enhancing comprehensive supervision on more penetrated aspects, together with the self strategic transformation of commercial bank. On the other hand, Internal audit encountered more difficulties, with limited information and communication from the regulators, talents needs to be improved both structurally and professionally, concepts and methods is on the urgent need of upgrading. This paper also explores the development direction and ideas of internal audit to actively respond to complex risks and regulatory changes, further clarifies the path of internal audit to promote innovative development in the future period, and realizes mutual promotion and effective integration of risk prevention and control with the function of internal audit by exploring more paths for internal audit to realize concurrent innovative development, finding more methods for self improvement in order to meet the fast development of banking business, building a strong mechanism for system standardization and team operation.
Abstract: In the new era, Internal audit of Commercial Banks is facing more risk challenges, This paper analyze the difficulties and shortcomings encountered by internal audit in the process of innovation development, On the one hand, Internal audit function is facing unprecedented challenges, with arising business involvement and regional cooperation, cross...
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A New Measurement of Systemic Risk in China's Banking System
Issue:
Volume 9, Issue 3, May 2021
Pages:
87-92
Received:
20 April 2021
Accepted:
4 June 2021
Published:
10 June 2021
Abstract: At present, the measurement of systemic risk is still a worldwide challenge. The complex network theory provides a new perspective for the study of this problem. Based on the correlation coefficient between the banks calculated using their default probabilities, this paper builds China's banking networks for the periods of 2008-2019, and analyzes systematically the topological structure of the networks, and determine the size of the systemic risk from the perspective of network topology by using the corresponding characteristics of complex network with the feature of systemic financial risk. It is found that the systemic risk of China's banking industry has a declined tendency before 2018, and the main cause is due to the eigenvector centrality and clustering coefficient declined rapidly. However, after 2018, systemic risk showed a litter upward trend, and the increase of clustering coefficient and eigenvector centrality was the main reason for that upward trend. Before 2018, risk transmission was mainly taken place from local banks and joint-equity commercial banks to state-owned banks, which were the main risk bearers. After 2018, risk contagion mainly occurred among local banks, and some local banks role as systemically important ones. Therefore, dissolving the systemic financial risk in China should strengthen the regulation of local banks. In particular, the high-risk leverage operations and excessively innovative business should be strictly supervised so as to prevent the expansion and spread of the negative effects stemmed from maturity mismatch, maturity transformation and credit transformation.
Abstract: At present, the measurement of systemic risk is still a worldwide challenge. The complex network theory provides a new perspective for the study of this problem. Based on the correlation coefficient between the banks calculated using their default probabilities, this paper builds China's banking networks for the periods of 2008-2019, and analyzes s...
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Share Pledging and Corporate Default Risk: Evidence from the Chinese Stock Market
Issue:
Volume 9, Issue 3, May 2021
Pages:
93-100
Received:
29 March 2021
Accepted:
17 May 2021
Published:
21 June 2021
Abstract: In this paper, we assess the economic impact of share pledging by focusing on corporate debt default risk, the most disruptive events in the life of a corporation. Using Instrumental Variables and a regulatory change that increasing the possibility of share pledging as a quasi-exogenous shock, we establish that increased share pledging decreases corporate default risk. The baseline results are robust by eliminating the effect of financial crises, adding other control variables, constructing new PSM samples and use other proxies for default risk. Further tests show that the relation is attenuated in higher ownership concentration and lower ex-ante institutional ownership firms. Our results indicate that share pledging can be beneficial to shareholders and important stakeholders like creditors by reducing the likelihood of corporate default. Our paper throws additional light on the economic impact of share pledging. Although several studies argue that share pledging incentivizes corporate insiders to use corporate resources for private benefits and destroy firm value on the Taiwanese stock market, our findings indicate that share pledging facilitates external monitoring and enables creditors to protect themselves. Our overall findings are consistent with prior literature which shows that share pledging improves market value of Chinese A-share listed firms. We believe that as strong government intervention during market downturns may limit A-share listed firms’ exposure to downside risk associated, share pledging can play a more positive role in our setting.
Abstract: In this paper, we assess the economic impact of share pledging by focusing on corporate debt default risk, the most disruptive events in the life of a corporation. Using Instrumental Variables and a regulatory change that increasing the possibility of share pledging as a quasi-exogenous shock, we establish that increased share pledging decreases co...
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Accounting Software in Computerized Business Environment and Quality of Corporate Reporting
Omotilewa Oluwatoyin Olufemi,
Adegbie Folajimi Festus,
Adesola Munir Adekunle
Issue:
Volume 9, Issue 3, May 2021
Pages:
101-110
Received:
22 April 2021
Accepted:
29 May 2021
Published:
21 June 2021
Abstract: The basic objective of financial reporting is provision of information useful for assessing a company performance and prospect. Low quality financial reporting contains inaccurate, misleading information that may result in losses and reduced confidence in corporate governance mechanism. Emerging globalization requires business entities to develop means of processing financial information accurately and speedily for users decision making. Therefore, this study was conducted to find out the effect of accounting software on the quality of corporate reporting. The study adopted cross-sectional survey research design and used structured questionnaire to collect primary data. The research instrument was validated using Cronbach Alpha to test the reliability of the instrument which showed coefficient of 0.704 for accounting information system and 0.806 for corporate reporting. The data collected were analyzed using descriptive and inferential statistics. The result of multiple regression analysis of hypotheses 1 showed that accounting software has a positive significantly effect on the reliability of corporate reporting (R = 0.594, Adj. R2 = 0.627, F (3, 485) = 208.685, p = 0.000 < 0.05) while the result of hypothesis II showed that accounting software has a positive significant effect on the accuracy of corporate reporting with a efficient of multiple correlation (R = 0.629, Adj. R2 = 0.390, F (3, 485) = 80.180, p = 0.000 < 0.05). The study concluded that accounting software are effective in gathering and processing data and information to produce quality corporate reports. The study recommended that accounting software should be made more users friendly since it provides easier environment for businesses to manage financial reporting procedures and processing.
Abstract: The basic objective of financial reporting is provision of information useful for assessing a company performance and prospect. Low quality financial reporting contains inaccurate, misleading information that may result in losses and reduced confidence in corporate governance mechanism. Emerging globalization requires business entities to develop m...
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