Business Success Indicators in Banking the Case of Raiffeisen Bank International (RBI)

Author(s): Aleksandra Gajdobranski,Olja ARSENIJEVIĆ,Vera Krmpot / Language(s): English Issue: 16/2016

For the international economy one of the basic assumptions of the organization and the business success is the existence of financial institutions i.e. presence of banks which allows for confrontation of supply and demand in the sphere of finance. Banks collect and place funds, perform payment transactions within the country and between the various operators in other countries, provide guarantees, provide loans, carry out various forms of financing by stimulating exports, determine exchange rates, provide the level and extent of liquidity with foreign countries and carry out many other important affairs. The main objective of this paper is to show the net balance-sheet assets, the net profit before tax and return on equity.

Determinants of the evolution of Asian financial centres

Author(s): Magdalena Markiewicz / Language(s): English Issue: 2/2016

Financial centres are places of high level of capital concentration and dynamic activity of financial institutions. The aim of the article is to analyse the development of Asian financial centres and their position in the global financial system by analysing the ranking of the main financial centres in the world. To achieve this goal, specific economic indicators obtained by the Z/Yen Institute and published in a form of a recurring ranking of the key financial centres in the world, namely the Global Financial Centres Index (GFCI), were analysed. The thesis of the article states that contemporary changes in the global financial systems are driven by globalisation and enhanced liberalisation of capital flows in the countries which were not counted among the main global financial centres, but since they have begun to experience dynamic economic growth, they increasingly perform as significant economic actors and places of capital accumulation and transfer, and trade. The analysis concerns particularly the financial centres in Hong Kong, Singapore, and China (Shanghai, Beijing, and Shenzhen), which are influenced greatly by China‘s active role in the financial market.

Financing of European infrastructure investments through the bond market

Author(s): Magdalena Mosionek-Schweda / Language(s): English Issue: 2/2016

The aim of this article is to evaluate the Project Bond Initiative, which is one of the main elements of the Connecting Europe Facility for financing priority infrastructure projects in transport, energy and ICT. In 2012–2016, the pilot phase of the initiative was conducted, qualifying eight projects to receive support. The essence of this initiative is to divide the debt bonds issued in connection with the financing of the project into a senior tranche and a subordinated tranche, and then for the European Investment Bank to grant financial support or a guarantee to the subordinated tranche. This guarantee is to improve the credit quality of the senior debt to the level expected by institutional investors, thereby facilitating the raising of funds for infrastructure investments through the bond market. The results of the pilot phase confirm that the Project Bond Initiative may be an effective tool to stimulate investment in infrastructure and commitment of long-term investors to such projects, however, it has weaknesses to be considered before its full implementation. The article is based on literature studies, examination of the EU legislation and case studies of projects supported under the pilot phase of the initiative.

DECLINE OR DEVELOPMENT OF THE ATM SERVICES AND THEIR SOCIAL ACCEPTABILITY

Author(s): Jacek Binda / Language(s): English Issue: 4/2016

The paper is focused on the still growing market of ATM devices and presents the growth of this market against the background of rapidly developing risks associated with electronic banking services. The paper also lists changes related to the progress in this particular channel of contact and presents alternative forms of communication between a bank and its clients. The paper also highlights the efforts undertaken by the banking sector towards reducing the presence of cash in the financial turnover and lowering the costs of cash transactions due to development of high-tech ATM devices. A growing number of available services, crucial for the ATM functionality and the level of ATMs social acceptability, however multiply the number of risks accompanying this process. Understanding various attack vectors and crimes is crucial to win the race with digital criminals and reduce the number of thefts. The paper quotes data obtained from the Polish National Bank, the Polish Banks Association and EAST.

Macroeconomic and industry-specific determinants of Greek bank profitability

Author(s): K. Zampara,M. Giannopoulos,D. N. Koufopoulos / Language(s): English Issue: 1/2017

Purpose: The purpose of this paper is to investigate the external factors that influence the profitability of a typical Greek systemic bank over the period 2001 – 2014. Design/Methodology/Approach: A conceptual framework incorporating two fundamental groups of constructs, namely, macroeconomic forces and industry related factors, was developed. Two constructs were examined in the former: GDP growth rate and unemployment rate, whilst two attributes were explored in the latter; the bank's market share, both in terms of deposits and in terms of assets, and the banking market growth, also both in terms of the market's total assets and total deposits. In order to isolate the effects of the ongoing financial crisis, the research was undertaken for two periods, firstly 2001 to 2014 and secondly, the period 2001 - 2011, which excluded the deep recession. Consequently, multiple regression analysis was conducted and linear models were specified by means of OLS. Findings: The empirical analysis revealed that both macroeconomic forces and industry-related factors affect bank profitability. As far as the macroeconomic factors are concerned, unemployment rate has a negative impact, whereas the GDP growth rate has a positive impact on bank profitability. The industry-related factors, rate of growth of the industry's deposits and bank's assets market share have a positive impact on the financial performance of the bank. Finally, the rate of growth of the industry's assets and the bank's deposits market share have a negative effect on bank profitability. Originality/Value: This study reveals the mechanism determining bank profitability over a recent period that includes the financial crisis. Moreover, understanding the impact of macroeconomic forces as well as industry related attributes on bank profitability may enable banks to focus on the most critical factors in their decision process.

On Risk Induced by Technical Change

Author(s): Burak Ünveren / Language(s): English Issue: 1/2017

Purpose: The purpose of this paper is to analyze the efficiency loss due to incomplete financial markets when risk is induced by technological uncertainty. Design/methodology/approach: A worker-capitalist general equilibrium model is developed. It is assumed that future technical change is a stochastic event, causing uncertainty in future relative prices. Then the model is calibrated to the US data. Findings: Our first finding is theoretical: The competitive equilibrium is Pareto-inefficient. Then we numerically calculate the taxes that make all individuals better-off at the calibrated parameter values. The results clearly show how the burden of taxation should be shared among workers and capitalists when the government uses redistribution of income as a tool of mitigating the loss of efficiency due to technological shocks. Research limitations/implications: The model is obviously a stripped-down version of reality, and hence, the results should be taken with a grain of salt as the numerical computations would be definitely sensitive to certain rich details of real life that are neglected in this study. Originality/value: The results show that the total amount of employment and production are not affected by optimal taxation, which is a surprising result. Indeed, the inefficiency is primarily caused by the distribution of labor supply among individuals. The optimal taxes are also numerically computed.

Wpływ zmian standardów opcji na rynek opcji indeksowych na giełdzie papierów wartościowych w Warszawie

Author(s): Katarzyna Królik-Kołtunik / Language(s): Polish Issue: 1/2017

Options are derivative financial instruments that allows the construction of a number of investment strategies. The condition of the building is adequate variety of instruments and liquidity. The authorities of the Warsaw Stock Exchange modify the standard options responding to the needs of investors. The aim of this study is to verify if the actions in this area resulted in increased interest in index options on the Warsaw Stock Exchange. The studies analyzed the various parameters of options market include the number of series, the volume and value of trading and the number of open positions.

Testing uncovered interest parity in the PLN/JPY foreign exchange market: a Markov-switching approach

Author(s): Katarzyna Czech / Language(s): English Issue: 1/2017

Cross Market Dependencies. The Analysys of Selected Investment Strategies

Author(s): Liwiusz Wojciechowski / Language(s): Polish Issue: 102/2017

The relationship between capital markets is important topic both from a theoretical and practical point of view. This problem is usually considered on the basis of market efficiency theory and ability to predict future price of financial instruments basing on historical data. In this article we verify the hypothesis states the higher susceptibility and predictability of capital markets in emerging economies compared with developed countries against the situation on the world’s largest stock exchanges. The impact of changes on American Stock Exchange (DJIA) and Japanese (NIKKEI) on the German (DAX) as well as Polish (WIG) stock exchange is investigated. Empirical research in the period 2012–2014 includes, among others, correlation, Granger causality analysis and co-integration in order to determine short-term and long-term relationship between individual time series. We proposed 6 investment strategies based on interdependencies between these markets and rated them in terms of effectiveness in predictive ability meaning.

CUSTOMER SATISFACTION WITH ELECTRONIC BANKING IN THE REPUBLIC OF MACEDONIA

Author(s): Lidija Pulevska Ivanovska,Renata Pavlovska / Language(s): English Issue: 17/2017

Modern society and the fast technological development are pushing the traditional banking towards electronic access. There is a growing number of consumers who replace the old approach of using banking services, with a new one i.e. with electronic banking. In order to examine the degree of consumer satisfaction with the use of electronic banking in the Republic of Macedonia, a research was conducted on a total of 154 respondents that were considered for the statistical analysis of data. The empirical research lead to the conclusion that most respondents use electronic banking, half of which are completely satisfied with the services. In terms of bank care for consumer satisfaction, there is a great deal of gridlock and negligence by banks in the country and they need to initiate more care.

Structural Reforms of the Banking Sector - Regulatory Approaches and Implications

Author(s): Jelena Radojičić,Borko Krstić / Language(s): English Issue: 2/2017

This paper analyzes alternative regulatory approaches for structural reforms of the banking sector, triggered by the global financial crisis. The structural bank regulation measures proposed or adopted in several jurisdictions are based on the Volcker Rule in the United States, Vickers Commission's proposals in the United Kingdom and Liikanen Report in the EU. Despite the different approaches by legislaturess, structural reforms have the same goal – a more resilient financial system. Their common element is to draw a line between commercial banking and certain investment banking activities,, whose combination is seen as a source of systemic risk. Structural reforms are designed to reduce the implicit government guarantees and moral hazard of banks.

Business combinations under common control in International Financial Reporting Standards – is authoritative accounting guidance needed?

Author(s): Magdalena Janowicz / Language(s): English Issue: 93/2017

The purpose of the article is to answer the question if a separate standard (IFRS) is needed for business combinations under common control (BCUCC), which are not governed by any IFRS as the moment. In such cases, the approach resulting from IAS 8 should apply to them, which allows the use of national regulations to account for BCUCC. The authoress shortly described the theoretical issues related to the subject and presented the results of empirical research that verified the practical aspects of the problem. The research methodology involves a literature and legal act analysis, content analysis of financial statements, as well as deductive and inductive reasoning. On the basis of the gathered data the authoress concluded that even the existence of necessary regulations in national GAAPs does not guarantee that all the requirements related to the qualitative characteristics of the reported information are met and, as such, the main objectives for which IFRS were developed may not be met. As such, the authoritative guidance proves necessary. Very little research on the subject was published, thus, this paper may provide some additional guidance as to what issues related to BCUCC should receive particular attention.

The usefulness of fair value estimates for financial decision making – a literature review

Author(s): Alfreda Šapkauskienė,Sergej Orlovskij / Language(s): English Issue: 93/2017

The objective of this discussion is to answer the fundamental question: ‘Are Fair Value estimates current-ly useful for financial decision making?’ Through a systematic review we analyse the qualitative second-ary data from dedicated scientific articles, based on the relevance and reliability of Fair Value estimates, and find out that there are still ongoing problems with reliability of information mainly because of the managerial estimation process and the ‘human factor’ in general. We identify 3 problem areas that are closely interconnected: (1) the business entity, (2) auditing, and (3) financial regulators and accounting academics. Each area has its own set of challenges and several suggestions are given to improve the reliability and relevance of Fair Value estimates, but a lot of those propositions require dedicated attention from accounting academics, financial regulators, and standard-setters. All in all, there is a clear trend that the situation with Fair Value estimates (especially those of Level 3) has been improving recently, and Level 3 estimates can indeed be used in the current financial decision process, but with some level of scepticism.

Finansowe modele input-output w analizie powiązań międzysektorowych

Author(s): Łucja Tomaszewicz,Joanna Trębska / Language(s): Polish Issue: 1/2017

The aim of the study is to build the tables of individual financial instruments’ flows between institutional sectors. These tables were estimated using input-output methods and presented graphically as maps of intersectoral linkages. They enabled the assessment of sectors’ significance in the flows of financial instruments in Poland in 2003–2015 and changes in the scale and structure of these linkages. The analysis of intersectoral linkages confirms the hypothesis about the growing role of financial institutions as the main financial intermediary in the Polish economy, mainly in terms of an increase in flows of currency, deposits and loans. Simultaneously, the hypothesis of the growing role of the foreign financial sector in meeting the demands of the Polish economy for funds (acquisition of capital market’s instruments – equity and debt securities) is confirmed. An additional aim, naturally derived from the availability of the estimated tables of intersectoral financial flows by instruments, is the construction of an input-output model, which can be used in various empirical analyses, in particular in projection and simulation analyses of demand for financial instruments and their supply.

Bankowość centralna w świetle doświadczeń dekady 2007-2016.

Author(s): Magdalena Szyszko / Language(s): English,Polish Issue: 02/2017

Prior to the financial crisis that erupted in 2007 in the United States, monetary policy had been conducted according to theoretical (new neoclassical synthesis) and practical consensuses (Jackson Hole consensus). These consensuses were combined into the central banks’ strategic frameworks. Monetary strategy goal was established together with reaction function and communication strategy. After eruption of the crisis, the central bank mandate was augmented with the explicit support of financial stability. Most central banks gained a new responsibility –macroprudential policy. The conduct of monetary policy and macroprudential policy under one roof creates a new challenging quality. The article’s goal is to assess the redefinition of monetary policy strategy – or more broadly – central banks’ strategy in the light of their newly acknowledged mandate. Up to 2016 central banks did not present a framework of such an enlarged strategy. This situation seems to be temporary. Modern monetary policy which is still central banks’ mandate must shape economic agents’ expectations. Therefore, a state of affairs when central banks avoid a declaration on their own priorities and possible conflict of goals is dissatisfying.

Soft lex, sed lex? O nowych formach regulacji rynku finansowego Unii Europejskiej

Author(s): Tomasz Nieborak / Language(s): English,Polish Issue: 02/2017

The aim of the article is to analyze new forms of the EU financial market regulation with special attention to the so called soft law. Although it has long been in use in international law regulations, soft law continues to spark heated debate among representatives of legal science who differ on such issues as whether soft law can at all be recognized as law, its binding character, and the effectiveness of its implementation. The specificity of the financial market and its regulations render the use of soft law a “third way” that alongside legal and extra-legal norms can allow the employer and participants in the market to develop optimal solutions resulting in security and stability of the financial sector.

Pomiar efektywności inwestycyjnej funduszy akcyjnych w latach 2004-2014 przy użyciu miar obsunięcia kapitału

Author(s): Dorota Żebrowska-Suchodolska / Language(s): Polish Issue: 56/2017

In the paper measures related to the drawdown ie. Martin and Pain indicators are applied. The research concerned equity funds in the period 2004-2014, which was divided into sub-periods of the length of two, three, four and five years. Martin and Pain ratios were assigned for monthly units of equity funds. The results for the funds were compared with the values obtained for the benchmark, which was the WIG index. The stability of the rankings funds using the Spearman rank correlation coefficient between each subperiods was examined and its significance was verified. Equity funds in the years 2004-2014 in the majority achieved werse results than the benchmark (which was WIG index). Lengthening the time horizon deteriorates stability funds.

Inwestycje portfelowe w XXI wieku – przegląd literatury i analiza kierunków przepływu

Author(s): Magdalena Broszkiewicz / Language(s): Polish Issue: 14/2017

The subject of portfolio investment seems particularly significant given that the current fluctuations on international financial markets make it necessary to perform an analysis of their causes and effects. It seems reasonable to make considerations regarding the direction of the flow of portfolio investment in the twentieth and twenty-first century. This article presents theoretical considerations concerning the characteristics and effects of the flow of portfolio investment in the global economy and an analysis of flow directions in the years 1960-2015. These considerations are based on data of the International Monetary Fund and the World Bank, which collate net inflows of the portfolio investment to particular countries in the indicated period. Our considerations show the links between the financial markets of countries and regions, together with the general tendencies of movements of capital at the time of crisis and the stabilization periods of global financial markets. The article shows the link between the financial markets of individual countries, together with the general trend of movement of capital in the period of crisis and the stabilization of financial markets.

Wpływ wskaźników finansowych na ratingi kredytowe banków z krajów strefy euro

Author(s): Patrycja Chodnicka-Jaworska / Language(s): Polish Issue: 3 (28)/2016

The aim of the article is to analyze the determinants affecting the banks’ credit ratings from the Eurozone. Therefore, a literature review was made on the basis of which a hypothesis was put: asset quality, profitability, liquidity and capital adequacy indicators have statistically significant effect on the banks’ credit ratings. To verify the hypothesis there were used logit panel data models. For the research information was collected on the publication of the long-term issuer banks’ credit ratings in 1998-2015 period of time. Credit ratings were decomposed linearly on the numeric varibales. Financial indicators were used as independent variables. The study used quarterly data. Necessary data were obtained from the Thomson Reuters database.

Обзор на емпиричните изследвания на връзката „конкурентност – стабилност“ в банковия сектор

Author(s): Nedyalko Valkanov / Language(s): Bulgarian Issue: 3/2017

The article presents some post-crisis projections focused on the theme “competitiveness – stability” in banking sector by systematising the main approaches and indicators for testing this interconnection. The purpose of the study is to form a conclusion whether the application of standardised set of quantitative indicators is a reliable method for analysis in this direction or there is a necessity for a separative selection according to the specifics of the examined banking system. The main finding in the study is the need to form different combinations of indicators as in researches covering more than one country these combinations include a larger number of metrics. In addition, the trend for imposition of several key indicators for measurement the market behaviour and stability when examining contemporary banking systems is confirmed.