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In the article the essence of behavioral finance is considered, the special attention is paid to the comparative analysis of the theoretical foundations of traditional and behavioral finance. The main principles of the behavioral approach concerning the process of financial decisions making are highlighted. The structure of the behavioral finance theory is described and its tools are systematized.
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The purpose of the article is to determine the impact of maintaining and changing credit ratings formulated by the Moody’s rating agency on the credit spread on the Polish debt market in the period 2010–2017. It seeks to draw conclusions on the efficiency of the Polish debt market with respect factors including raising, maintaining at the current level or lowering the rating. The methodology used in the paper is based on the standard procedure for studying events. The results of the conducted research are not unequivocal. While they indicate a correct response of the credit spread to changes in the credit ratings, the results obtained are not confirmed by statistical significance tests.
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Regardless of supporting or challenging balance analysis as reliable indicators of borrower solvency, a legal obligation exists, to keep record of each borrower’s balances in the past three years and the intersecting balance at the time of loan application. Balance sheet data from the last official annual income of the borrower is the basis of balance sheet classification of assets and creating indicators for banks. Regardless of the regulations prescribed by the NBS and indicators that are observed in the balance sheets of the Borrower, each bank decides how to evaluate individual balance indicators which makes the basis of credit risk management. Balance data cannot provide a reliable insight in the quality of borrower’s business without the analytical analysis of balance sheet items. The need for engagement in the analysis of balance sheet items is increasing with the growth of loan maturity, but for loans with maturity over 5 years, the balance sheet analysis is meaningless because it is a long enough period in which the quality of business cannot be predicted on the basis of history and the present balance sheet indicators.
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The subject of this research in broader terms involves the activities of credit institutions, the prudential requirements and their relation and dependence on the accounting methodology in banks. The broader subject of research serves as a basis for transition to more specific exploration regarding the subject of research – the capital and capital adequacy of banks. The major aim of this paper is to reveal strategies that the banks have been using since the beginning of the latest financial crisis to achieve higher capital adequacy levels. An empirical research of the capital components and capital adequacy dynamics of the banking system in Bulgaria over the period 2007-2016 has been conducted to see the actual reflection of the latest capital framework on the capital adequacy of the banking system, and, based on research results, to make conclusions about the existing internal policies and accounting practices that would have an effect on improving the equity of commercial banks and the banking system as a whole.
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This paper empirically investigates the difference between Islamic and conventional banks in terms of business dynamics, cost structure, credit quality, and stability. It also examines the difference in the response of two types of banks during peak and trough phases of the business cycle. The analysis is carried out for a sample of 280 banks in 20 countries over the 1995–2014 period. The results reveal that Islamic banks are more involved in fee-based business, are less cost-efficient, have higher credit quality, and have higher capitalization than conventional banks. We also find that Islamic banks outperformed conventional banks with regard to their credit quality and stability indicators during the trough phase of the business cycle. The improved performance seems to be due to the differences in the provisioning strategies of the two types of banks, the non-aggressive lending profile of Islamic banks, and investment in real assets. Finally, based on the empirical findings, the paper also highlights potential lessons that conventional banks in Baltic States, which were severely hit by the 2007–2008 global financial crisis, can draw from Islamic banking principles.
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The paper deals with the identification of time-frequency regions describing cyclicality of bank loans before, during and after the 2008 crisis via wavelets. We bring new methods and findings about the short and medium cycles of loans provided to corporates and households in the Euro Area in 2000–2017 using seasonally unadjusted monthly data. We have recognized an impact of the crisis on data volatility which further influences the type of significance testing of wavelet spectrograms. To avoid this influence we propose: (1) an adaptive spectrogram testing based on Torrence and Compo approach and (2) robustness analysis via enhanced spectrogram modelling tested by the MC simulations. Both cross-checked approaches prove the sensitivity of standard wavelet tests on data volatility. The results confirm the usability of the new approaches and show that the crisis in 2008 influenced the cyclical behaviour of both categories of economic sectors, but in a different way.
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Non-adopters of internet banking is not a homogenous group. In this study, non-adopters are divided into two groups: prospective adopters and persistent non-adopters. The aim of this paper is to analyse how the two non-adopter groups differ with regard to usage, image, tradition, risk and value barriers. Factor analysis is used to categorize the data into five barriers. Independent samples t-tests are used to reveal the differences between prospective adopters and persistent non-adopters of internet banking. The results of this study reveal that persistent non-adopters show more resistance to internet banking in relation to usage, image, tradition, risk and value barriers. The p-values indicate that the value barrier differentiates the groups the most, followed by usage, image, risk and tradition barriers. The results highlight the fact that psychological barriers are a greater cause of resistance than functional barriers.
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Audit and credit rating agencies have a significant responsibility in assessing company creditworthiness and giving opinions on the client’s ability to continue business in the future, most often the next fiscal year. Responsibility is even greater when it comes to banks and their creditworthiness. The financial crisis of 2007 and the bankruptcy of a number of banks and other financial institutions imposed a need to seek accountability for the “delayed” reaction of regulatory bodies and significant fiscal consequences of the crisis. The aim of the paper is to evaluate the efficiency of credit rating agencies and external audit in assessing the creditworthiness of companies and banks, not for the purpose of finding their individual responsibilities, but to look at possible coordinated and joint actions to prevent future crisis events.
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This study examines insurance claims fraud in homeowner’s insurance with its empirical findings from the Nigerian insurance industry. In this study, a descriptive research design was employed while purposive sampling method was adopted for information selection. A structured questionnaire was used for data collection. 221 participants were drawn from 31 insurance companies, which were basically general insurance companies that represent 61% capacity of the industry in terms of market structure. Major statistical techniques employed in the study were simple frequency percentage and T-test statistics. While five relevant research questions were stated and to which verbal interpretation were provided, added with supporting evidence, two hypothetical statements were made. The study recommends that effective fraud deterrent should be in place so as to promote stable, confidence-based, result-oriented and trustworthy market environment, and government on its own part must not fail to exhibit the will-power to drive the anti-fraud strategy designed, built and modeled for the operational efficiency of insurance companies and effective service delivery in the heart of the insuring public. This research work contributes to existing knowledge in that it helps broaden the scope of the regulatory bodies on the need to continually engage academia, insurance practitioners, IT experts and other stakeholders in designing and building a more sustainable anti-fraud strategy in improving insurance market penetration and density.
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This essay theoretically investigates symmetric types of auctions and provides simulation for the different types of statistical distributions that bidders follow in order to determine the maximum bid, Expected revenue for the auctioneer, Expected payment by bidders, Expected utility of the bidders, probability that item is unallocated. In addition, the subject of interest of this paper are three types of auctions: FPA (first price auction, Dutch type, SPA (Second price auction, English auction, Vickrey auction), APA (all-pay auctions).
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Credit activity is considered one of the most important tasks of the bank, both from the point of view of himself, as well as from the perspective of customers and the entire national economy. The banks transform the funds obtained from depositors and then transfer them to the borrowers. Before doing so, however, they carry out numerous analyzes and studies that make up credit procedures. The purpose of this article is to analyze and evaluate the methods of calculating the profitability of interest products for a bank in terms of the validity of their application.
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In this financial engineering research, we study the behaviour of an option premium of a call/put option which is embedded in a typical fixed coupon bond with finite maturity. The contribution of the research is the conclusion about the dynamics of premium changes; represented by direction and sensitivity; with respect to the changes in credit rating and also risk-free interest rate development. The aim of the research is also to clearly demonstrate this theoretically complicated topic to the financial practitioners using a practical example. We are about to consider a 3-dimensional process where the dimensions are: time, rating development process and risk-free interest rate development. We use Standard & Poor’s rating transition matrix to create rating tree and Hull-White model for modelling of risk-free interest rate development. We add embedded call/put option to the bond structure and assume the call/put option to be exercised in case of interest rates decline/rise or rating worsening/improvement. For valuation, we use the risk-neutral concept. Using a numerical solution on the 3-dimensional tree (implemented in MATLAB), we avoid problems that appear while analytical solving of partial differential equations.
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The phrase globalization grasps the attention of everyone and especially economic development researchers. However, in spite of the prior prosperity promises of globalization, trade and the benefits of an information accessing society, the subsequently benefits arguably have not been said to universal and global inequality has increased. Some studies reveal that globalization has widened the gap between rich and poor countries in its persistent progression while others are uncertain about its effect. Although the idea of globalization had steadily been developed since the Second World War, its impact gained energy in the early 1990s; Africa has not been spared from the implication of this experience. The purpose of this article is to examine the impact and salient issues concerning globalisation and trade on African countries. Despite liberalisation of trade which has many negative issues as well as the positive ones. This paper is of the opinion that and controlled liberalisation must be seen as the only way forward.
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The study presented a critical examination of the effects of capital flight on exchange rate in the Nigerian economy over a period of 30 years (1986-2015). An Ordinary Least Square (OLS), Augmented Dickey-Fuller unit root test and Co-integration tests were adopted to carry out an extensive analysis of such variables as Gross Domestic Product, Capital Flight and Exchange Rate. The results revealed that the variables have a significant effect in the positive direction with a coefficient of 0.007421 and probability value at 0.05. This implies that capital flight encourages increasing demand for foreign currency which tends to exert pressure on exchange rate at 0.74 percent, thereby increasing the rate, among other factors. Based on the empirical findings, the study recommended that decayed infrastructure and utilities should be rehabilitated; monetary authorities should seriously regulate the activities of premium currency marketers; and foreign firms should be encouraged to make use of local skills and raw materials available in the domestic economy, rather than importing them. This will save foreign exchange, improve technical skills of Nigerian citizens, reduce unemployment and limit the flight of capital from the economy.
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The paper is aimed at classification of bank account agreements. There has recently been a tendency to increase in the number of their types. The Concept of the Development of Civil Legislation of the Russian Federation (2009) stated that the requirements of civil turnover in various financial services mean both expansion of the range of possible bank accounts and development of the regulation of bank account types that are already provided by legislation. Based on the obtained results, it has been suggested that significant changes should be made to Chapter 45 “Bank Account” of the Civil Code of the Russian Federation. Currently, new types of bank accounts can be distinguished. However, there is no classification in the Civil Code of the Russian Federation, which raises problems both of their theoretical and practical nature. It is also difficult to determine the location of individual types in the general system of bank account agreements. The paper considers the classifications of bank account agreements based on different grounds. Analyzing the current legislation on bank account agreements, the conclusion has been made that it is possible to classify them depending on the functions implemented. It has been suggested to differentiate between three groups of contracts: the first group includes the contracts that have common functions for all bank account agreements; the second one covers the contracts that have some specific functions that distinguish certain types of bank account agreements from each other; and the last one comprises the bank account agreements that have strictly specific functions that include contracts for special bank accounts. In accordance with this classification, the systematization of bank account agreements by determining the position of each agreement in the suggested classification has been performed.
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The main objective of this paper is to provide an overview of relevant literature in the field of enterprise resource planning (ERP) systems and their correlation with business performance. The research questions are: Is there any correlation between the use of ERP systems and the improvement of business performance? How business performance correlate with the use of ERP systems?For the research, 47 scientific papers, from the field of ERP systems and their correlation with business performance, were analysed. Analysed papers were published in the period from 2002 to 2018. The results of the literature research show that the use of ERP systems in business processes does not guarantee their positive impact on business performance. Also, it is not enough just to consider the success of the ERP project implementation and to relate it to the performance of the enterprises. Actually, the continuous use of the ERP systems primarily contribute to the performance, and that type of contribution can be evaluated only through the perspective of the end users of ERP systems. The analysis shows that there is a lack of research that investigates the correlation between ERP systems and business performance from an end users perspective, as well as a comparison of this correlation between different companies; so further research should be more focused to this topic.
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We wprowadzeniu do sprawozdania finansowego jednostki gospodarcze stwierdzają, czy zasada kontynuacji działalności została zachowana. W przypadku większych podmiotów stwierdzenie to musi zostać zweryfikowane przez biegłych rewidentów, którzy powinni wykorzystać do tego narzędzia analizy finansowej. Celem artykułu jest ocena stopnia wykorzystania tych narzędzi przez biegłych rewidentów w badaniu zagrożenia kontynuacji działalności spółek notowanych na rynku podstawowym Giełdy Papierów Wartościowych w Warszawie. Wykorzystano do tego metodę analizy dokumentów opartą na rocznych raportach okresowych za lata 2014-2015, a także metodę statystyczną w postaci analizy struktury do określenia stopnia wykorzystania narzędzi analizy finansowej oraz metodę wnioskowania logicznego do jego oceny. Z przeprowadzonych badań wynika, że stopień wykorzystania narzędzi analizy finansowej jest bardzo niski, co może wskazywać na zagrożenie, że zasada kontynuacji działalności przez biegłych rewidentów nie została należycie zweryfikowana przy wykorzystaniu narzędzi analizy finansowej.
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Kapitał własny stanowi podstawową kategorię ekonomiczną związaną nierozerwalnie z prowadzeniem działalności gospodarczej. Z ekonomicznego punktu widzenia odgrywa on rolę zapewaniającą zwrot powierzonych środków względem wierzycieli jednostki (realność zwrotu powierzonych środków finansowych) oraz zabezpieczającą względem samej jednostki i prowadzonej działalności (m.in. zabezpieczenie możliwości kontynuowania działalności gospodarczej). Powstaje zasadnicze pytanie, i tym samym wskazany zostaje przedmiot zainteresowania, analizy, jak należy rozumieć kapitał w ujęciu ekonomicznym (gospodarczym), w tym na gruncie nauki i praktyki rachunkowości oraz jak spółki na GPW z indeksu WIG30 radzą sobie z zachowaniem kapitału.
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Celem artykułu jest przedstawienie wyników badań empirycznych dotyczących graficznej prezentacji ofert usług finansowo-księgowych zamieszczonych na stronach internetowych międzynarodowych centrów outsourcingu oraz lokalnych biur rachunkowych prowadzących działalność na terenie Polski. Za podstawę teoretyczną opracowania, a zarazem jako punkt wyjścia do przeprowadzenia badań empirycznych posłużyła koncepcja wartości dla klienta oraz powiązany z nią trójelementowy model atrybutowy produktu. Uzyskane wyniki badań pozwoliły na identyfikację powiązań między sposobem graficznej prezentacji oferty usług a atrybutami stanowiącymi wartość dla potencjalnego klienta.
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Tradycyjnie kluczowym źródłem dostarczania aktywów bezpiecznych na globalnych rynkach finansowych była emisja długu publicznego przez kraje rozwinięte. Istotną rolę w popycie na ten dług odgrywał sektor oficjalny krajów rozwijających się w ramach polityki akumulacji rezerw walutowych. Spadek długu rządowego postrzeganego jako bezpieczny, wraz ze spadkiem innych źródeł kreacji długu bezpiecznego w okresie pokryzysowym, przy wciąż silnym popycie na niego powoduje istotne wyzwania dla stabilności międzynarodowego systemu walutowego (MSW). Problem w nierównowadze podaży i popytu na safe assets jest o tyle trudny do rozwiązania, że w dużej mierze wiąże się z przekształceniami roli krajów emerging markets i rozwiniętych w gospodarce globalnej. Celem artykułu jest syntetyczne naświetlenie tego złożonego związku i próba identyfikacji możliwych rozwiązań. Zastosowaną metodą badawczą jest przegląd literatury światowej w tym zakresie.
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