...MP A R Munich Personal RePEc Archive Impact of Interest Rates on Islamic and Conventional Banks: The Case of Turkey Erge¸ Etem Hakan and Arslan Bengul Gulumser c ¨ ¨¨ January 2011 Online at http://mpra.ub.uni-muenchen.de/29848/ MPRA Paper No. 29848, posted 4. April 2011 06:17 UTC Impact of Interest Rates on Islamic and Conventional Banks: The Case of Turkey Etem Hakan Ergeça* and Bengül Gülümser Arslanb Abstract Identifying the impact of the interest rates upon Islamic banks is key to understand the contribution of such institutions to the financial stability, designing monetary policies and devising a proper risk management applicable to these institutions. This article analyzes and investigates the impact of interest rate shock upon the deposits and loans held by the conventional and Islamic banks with particular reference to the period between December 2005 and July 2009 based on Vector Error Correction (VEC) methodology. It is theoretically expected that the Islamic banks, relying on interest-free banking, shall not be affected by the interest rates; however, in concurrence with the previous studies, the article finds that the Islamic banks in Turkey are visibly influenced by interest rates. JEL classification: G21; E52 Keywords: Interest-free banking, monetary policy I. Introduction Islamic banks1 are defined as financial institutions that rely on the principle of Profit and Loss Sharing (PLS) with the entrepreneurial partners in their relevant banking...
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...Monetary policy Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability.[1][2] The official goals usually include relatively stable prices and low unemployment. Monetary theory provides insight into how to craft optimal monetary policy. It is referred to as either being expansionary or concretionary, where an expansionary policy increases the total supply of money in the economy more rapidly than usual, and contractionary policy expands the money supply more slowly than usual or even shrinks it. Expansionary policy is traditionally used to try to combat unemployment in a recession by lowering interest rates in the hope that easy credit will entice businesses into expanding. Contractionary policy is intended to slow inflation in hopes of avoiding the resulting distortions and deterioration of asset values. Monetary policy differs from fiscal policy, which refers to taxation, government spending, and associated borrowing.[3] Overview Monetary policy rests on the relationship between the rates of interest in an economy, that is, the price at which money can be borrowed, and the total supply of money. Monetary policy uses a variety of tools to control one or both of these, to influence outcomes like economic growth, inflation, exchange rates with other currencies and unemployment. Where currency is under a monopoly of issuance...
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...CASE I NAVEEN FISHERIES LTD. The managing director of Naveen Fisheries Ltd. (NFL) received a message from one of the members of the crew that their mechanized boats had sunk at sea off Paradeep Port Trust due to unfavorable weather. The other directors of NFL ascertained the detailed information regarding the incident. All the promoters were fresh graduates. Naveem, Praveen, Nagain, Ravi and Chandra were the promoters of the organization (NFL at Vishakhapattanam) with a capital contribution of Rs. 25 lakh each. Three of them had an engineering background. The other two were commerce graduates. They had thought of designing the vessels themselves so that the cost each mechanized boat would be reduced from Rs. 30 lakhs (if they bought them) to Rs. 22 Lakh. They designed three boats and these were sent out with a newly – appointed crew. Two vessels were sent to Paradeep and the third to Kakinada. Unfortunately, the weather was unfavourable. All the vessels sank. The crew also did not have experience. Two workers were injured and the rest arrived sagely. There was significant damage to the vessels and the residue was considered scrap. The cost of scrap of the vessels was nominal. As their working capital was scarce, and they were unable to invest more capital, they were in a dilemma whether to continue the business or not. Case I Questions: 1. What were the reasons for the sinking of the vessels? 2. How could they reorganize the businesses? CASE II MNC CORPORATION ...
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...(MMC) today announced its sales and financial results for the first quarter of the 2013 fiscal year (FY) ending March 31, 2014. 1. Performance overview MMC posted a consolidated net sales of 409.4 billion yen for the first quarter of fiscal year 2013 (April 1, 2013 through June 30, 2013), a 2% or 9.9 billion yen decrease over the first quarter of fiscal 2012, showing a decrease in wholesale volume. MMC posted an operating income of 16.0 billion yen, a 7% or 1.1 billion yen increase over the same period last fiscal year. The increase was due mainly to favorable exchange rates as well as reductions in material and other costs which together overcame such negative factors as decreases in wholesale volume and increases in sales expenses including advertising costs. Along with the increased non-operating income from factors including foreign exchange gains MMC posted an ordinary income of 22.3 billion yen, a 57% or 8.1 billion yen increase year-on-year. Net income for the term amounted to 16.4 billion yen, an 18% or 3.6 billion yen decrease year-on-year without the benefit of a 11.4 billion yen in extraordinary income from the sale of stock in affiliates like what was recorded in the first quarter of last fiscal year. 2. Sales volume (Retail) Global retail sales volume for the first quarter of fiscal year 2013 totaled 249,000 units, a 4% or 10,000-unit increase over the same period last fiscal year. Sales volumes by region were as follows: Japan: Sales volume totaled 28,000 units...
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...Determinants of Banking Instability in Malaysia Final Year Project Proposal – April 2015 Submitted By: Name & Roll Number Submitted To: Supervisor’s Name: This proposal is submitted to SEGi UNIVERSITY on 10/04/15, in partial fulfillment of the requirement for the degree BBM. EXCLUSIVE RIGHTS ALL RIGHTS RESERVED. No part of this paper may be reproduced, stored in a retrieval system or transmitted in any form or by any means without the prior consent of the author. DECLARATION I hereby declare that: * This undergraduate research project is the end result of my own work / research and that due acknowledgement has been given in the references. * No portion of this research project has been submitted in support of any application for any other degree or qualification of this or any other university. * The word count of this research proposal is 10,276 words. Name of the Student Signature Date ACKNOWLEDEMENTS I would like to thank my Final year project’s supervisor [NAME], who has been an inspiration and provided me information regarding banking instability, which proved to be very useful in completing this project. I also appreciate the hard work and efforts of my friends and former colleagues who has provided me with useful information / data which helped me choose this topic. PREFACE This research paper is submitted in partial fulfillment of the requirement for Bachelor of Business Administration (HONS)...
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...------------------------------------------------- A Report On Comparative Performance Study of Conventional and Islamic Banking in Bangladesh Course Title: THEORY AND PRACTICES OF BANKING IN BANGLADESH Course Code: FBK 312 Submitted To: Md. Nur Nabi Assistant Professor Department of Finance and Banking Faculty of Business Administration and Management Patuakhali Science and Technology University Dumki, Patuakhali- 8602 Submitted by: Group: C (Level: 3, Semester: I) Session: 2012-2013 Faculty of Business Administration and Management Patuakhali Science and Technology University Dumki, Patuakhali- 8602 Date of Submission: 09th May 2015 ------------------------------------------------- Roll No | Registration No | Name of the Students | Signature | 1203051 | 03596 | Nusrat Jahan Rupa | | 1203053 | 03598 | Nusrat Yesmin | | 1203054 | 03599 | Nisath Salsabil Urmi | | 1203056 | 03601 | Mehedi Hasan | | 1203057 | 03602 | Hasan Shahria Nayeem | | 1203060 | 03605 | Khondokar Tanveer Ahsan | | 1203061 | 03606 | Sume Akter | | 1203062 | 03607 | Rased Amer Sohag | | 1203065 | 03610 | Nusrat Jahan Pinki | | 1203067 | 03612 | Rasel Miah | | ------------------------------------------------- Group Member Details ------------------------------------------------- ------------------------------------------------- ATTENDANCE REPORT 1) Level : 3 2) Semester : I 3) Course Code : FBK-312 4) Course Title : THEORY AND PRACTICES...
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...Basel Committee on Banking Supervision Basel III: The Liquidity Coverage Ratio and liquidity risk monitoring tools January 2013 This publication is available on the BIS website (www.bis.org). © Bank for International Settlements 2013. All rights reserved. Brief excerpts may be reproduced or translated provided the source is cited. ISBN 92-9131- 912-0 (print) ISBN 92-9197- 912-0 (online) Contents Introduction ............................................................................................................................ 1 Part 1: The Liquidity Coverage Ratio ..................................................................................... 4 I. Objective of the LCR and use of HQLA......................................................................... 4 II. Definition of the LCR ..................................................................................................... 6 A. Stock of HQLA ..................................................................................................... 7 1. 2. Operational requirements ........................................................................... 9 3. Diversification of the stock of HQLA.......................................................... 11 4. B. Characteristics of HQLA ............................................................................. 7 Definition of HQLA .................................................................................... 11 Total net cash outflows...
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...Done By: Maggie Bilal Bawab Instructor: Mohammad El-Haj Senior Project: Fall 2014-2015 Feasibility Study for Clothes Manufacturing Dedication I dedicate this project to my deceased father. He was always an inspiration to me, spiritually, personally and professionally. He has been the backbone to my achievement and accolades in all endeavors. He has constantly taught me the value of prayer, time, life, friends, school and work… Through the years I have learned many lessons from him, specifically: patience and credibility. I also dedicate this project to my instructor. He was base and the peak of my enclosed pyramid like studies. Acknowledgement I would like to thank all my friends throughout my study years. I studied with them, enjoyed free time together, and helped one another. I also thank all my instructors for teaching us new information and new studies. Also, for learning from them life experiences and knowledge. In addition, I would like to thank my parents and my family for raising me, teaching me and standing beside in every level in my life. Table of Contents Abstract ……………………………………………………………………………………..10 Executive Summary …………………………………………………………………………11 Chapter1: Introduction……………………………………………………………………….12 1.0 Background ………………………………………………………………………….12 1.1 Brief Description of the project………………………………………………………12 1.2 Objectives ……………………………………………………………………………13 1.3 Mission ……………………………………………………………………………...
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...World retail Banking report 2012 Contents 3 4 7 Preface Key Findings Chapter 1: 8 12 21 Unlocking Pathways to Greater Customer Loyalty Customers Express Conflicting Sentiments toward Banks The Need for a Customer Experience Index The Growth of Mobile Banking 25 Chapter 2: At a Crossroads, Retail Banks Must Identify and Prioritize Core Strengths The Ground Beneath Banks Is Shifting Traditional Tactics Are Less Effective in the Current Environment The Way Forward: Extreme Measures for Extreme Times 26 28 32 40 41 Methodology About Us Preface Capgemini and Efma are pleased to present the 2012 World Retail Banking Report. Retail banks around the world are struggling to maintain their competitiveness in the face of severe external challenges. Massive debt loads are threatening the global economy, while stringent regulations put in place as a result of the financial crisis of 2008 are staunching traditional revenue streams. Customers, still distrustful of the industry, have become increasingly accepting of nonbank alternatives, and social media is giving them an opportunity to publicly explore them. More than ever, retail banks must strive to create stronger bonds with their customers. The 2012 World Retail Banking Report addresses this imperative by establishing a new framework for identifying and measuring success in retail banking. Specifically, our Customer Experience Index (CEI) offers a mechanism for accurately taking stock of the critical...
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...A Paper Presentation on EQUILIBRIUM EXCHANGE RATE Theme: International Finance & Trade Institute Name: Symbiosis Institute of International Business (SIIB), Pune Student Name: 1) Swapnil Rathi 2) Kuldeep Joshi Contact No: Swapnil – 9860222020 Kuldeep – 9028029154 Email id: swapnilrathi@siib.ac.in kuldeepjoshi@siib.ac.in 1 ABSTRACT The exchange rate is the rate at which the supply for a currency meets the demand of the same currency. As foreign exchange rates are affected by a number of factors, the equilibrium exchange rate in turn, are also influenced by its supply and demand. Hence equilibrium is achieved when a currency's demand is equal to its supply. Analysing the equilibrium levels of the exchange rates plays a crucial role in the policy making decisions of the policymakers. Exchange rates have a major influence on the prices faced by the consumers and producers throughout the world and the consequences of misalignments can be extremely costly to the nations involved. Therefore economists have developed number of methodologies for calculating the exchange rates. Each methodology involves conceptual explanations and/or imprecise estimates of key parameters and different methodologies which generate different calculated values for equilibrium exchange rates. This makes it difficult to have much confidence in estimates derived from any single methodology on its own. By the same token, it suggests that, ideally, policymakers should inform their judgments through...
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...T e c h n i c a l n o T e s a n d M a n u a l s Operational Risk Management and Business Continuity Planning for Modern State Treasuries Ian Storkey Fiscal Affairs Department I N T e r N A T I o N A l M o N e T A r y F U N D INTerNATIoNAl MoNeTAry FUND Fiscal Affairs Department Operational Risk Management and Business Continuity Planning for Modern State Treasuries Prepared by Ian Storkey Authorized for distribution by Sanjeev Gupta November 2011 DISCLAIMER: This Technical Guidance Note should not be reported as representing the views of the IMF. The views expressed in this Note are those of the authors and do not necessarily represent those of the IMF or IMF policy. JEL Classification Numbers: Keywords: H12, H60, H63, H83 business continuity, disaster recovery, business continuity and disaster recovery plan, operational risk, operational risk management, treasury operations ian@storkeyandco.com Author’s E-Mail Address: TECHNICAL NoTEs ANd MANUALs Operational Risk Management and Business Continuity Planning for Modern State Treasuries Prepared by Ian Storkey This technical note and manual (TNM)1 addresses the following main issues: • What is operational risk management and how this should be applied to treasury operations. • What is business continuity and disaster recovery planning and why it is important for treasury operations. • How to develop and implement a business continuity and disaster recovery plan using a six practical-step...
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...financial reporting incentives. Only by understanding differences in firms’ business strategies is it possible to assess how much to rely on a firm’s accounting information. 2. Strategy analysis highlights the firm’s profit drivers and major areas of risk. An analyst can then use this information to evaluate current firm performance and to assess the firm’s likelihood of maintaining or changing this performance based on its business strategy. 3. Strategy analysis also makes it possible to understand a firm’s financial policies and whether they make sense. As discussed later in the book, the firm’s business economics is an important driver of its capital structure and dividend policy decisions. In summary, understanding a firm’s business, the factors that are critical to the success of that business, and its key risks is critical to effective financial statement analysis. 2. What are the critical drivers of industry profitability? Rivalry Among Existing Firms. The...
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...A Summer Training Project Report on “RISK MANAGEMENT BY INDUSIND BANK LTD.” Undertaken at INDUSIND BANK, AGRA 10th April to 10th June 2009 Submitted by SUBODH AGARWAL Enrollment no. : 4108163163 Management of Business Finance INDIAN INSTITUE OF FINANCE CORPORATE GUIDE: MR. ASHOK SHARMA ASST. MANAGER AGRA BRANCH, AGRA UTTAR PRADESH. ACKNOWLEDGEMENT Expressing gratitude is not just an exercise of formality rather doing so evokes the memories of my association with my mentors and mates. I thank Chairman Prof. J. D. Agarwal and Director Aman Agarwal for allowing me to carry out this project. I wish to express my sincere gratitude to my corporate guide, Mr. Ashok Sharma for guiding me to understand the concepts those were not clear to me. I learnt a lot from his professional sknowledge. SUBODH AGARWAL 4108163163 Management of Business Finance Preface As a part of Management of Business Finance (MBF) programme, a student has to pursue a project duly approved by the Director of the Indian Institute of Finance. I had the privilege of undertaking a project on “Risk Management by INDUSIND BANK LTD.” My project report is divided into seven chapters and they are given as under: Chapter 1 INTRODUCTION Chapter 2 Review of literature Chapter 3 Research Methodology Chapter 4 Analysis Chapter 5 Consist of Findings, Conclusion, Suggestions, Limitations SIGNATURE: Name: SUBODH AGARWAL Enrollment No.: 41O8163163 Management of Business Finance CERTIFICATE This...
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...UNCTAD/OSG/DP/132 THE CAUSES OF FINANCIAL DISTRESS IN LOCAL BANKS IN AFRICA AND IMPLICATIONS FOR PRUDENTIAL POLICY Martin Brownbridge No. 132 March 1998 The author thanks Samuel Gayi, Andrew Cornford, Richard Harrington, Charles Harvey and Saqib Jafarey for valuable comments, but accepts sole responsibility for all errors and the views expressed in the paper. UNCTAD/OSG/DP/132 - ii - The opinions expressed in this paper are those of the author and do not necessarily reflect the views of UNCTAD. The designations and terminology employed are also those of the author. UNCTAD Discussion Papers are read anonymously by at least one referee, whose comments are taken into account before publication. Comments on this paper are invited and should be addressed to the author, c/o Editorial Assistant*, Macroeconomic and Development Policies, GDS, United Nations Conference on Trade and Development (UNCTAD), Palais des Nations, CH-1211 Geneva 10, Switzerland. Copies of the UNCTAD Review, Discussion Papers and Reprint Series may also be obtained from this address. New Discussion Papers are available on the web site at: http://www.unicc.org/unctad/en/pressref/prdis.htm * Tel. 022-907.5733; Fax 907.0274; E.mail: nicole.winch@ unctad.org JEL classification: G280 - iii - CONTENTS Chapter Page INTRODUCTION I. II. III. GROWTH AND CHARACTERISTICS OF LOCAL BANKS IN AFRICA MORAL HAZARD, ADVERSE SELECTION AND FINANCIAL FRAGILITY THE CAUSES OF FINANCIAL DISTRESS...
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...Co-Creating Our Future on Planet Earth Creating Unity from our human diversity. Skip to content * Home * About * Last 2000 Posts in Order ← Civil war up, humanism down: Pepe Escobar, by Pepe Escobar The Oracle Report, Monday, April 13, 2015 → :) :) :) Iceland Stuns Banks: Plans To Take Back The Power To Create Money Posted on April 13, 2015 by Jean By Raúl Ilargi Meijer Zero Hedge April 1, 2015 Submitted by Raul Ilargi Meijer via The Automatic Earth blog, Who knew that the revolution would start with those radical Icelanders? It does, though. One Frosti Sigurjonsson, a lawmaker from the ruling Progress Party, issued a report today that suggests taking the power to create money away from commercial banks, and hand it to the central bank and, ultimately, Parliament. Can’t see commercial banks in the western world be too happy with this. They must be contemplating wiping the island nation off the map. If accepted in the Iceland parliament , the plan would change the game in a very radical way. It would be successful too, because there is no bigger scourge on our economies than commercial banks creating money and then securitizing and selling off the loans they just created the money (credit) with. Everyone, with the possible exception of Paul Krugman, understands why this is a very sound idea. Agence France Presse reports: Iceland Looks At Ending Boom And Bust With Radical Money Plan Iceland’s government is considering a revolutionary monetary proposal...
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