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Conceptual Issues in Calibrating the Basel III Countercyclical Capital Buffer.

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Using a newly-compiled dataset of state-owned enterprises in Sub-Saharan Africa, we present aggregate information about profitability, liquidity and leverage. We find that 40 percent of the close to 300 surveyed SOEs are unprofitable, while larger firms also tend to be illiquid and overleveraged. In cross-sectional regressions we find that SOE debt stock sustainability is impacted by firms’ profitability and liquidity, while macroeconomic factors cannot be shown to matter, expect for some governance variables. Based on these findings and citing country examples, we also illustrate that weak SOE performance may have a macrofinancial impact affecting bank soundness through delinquent loan exposures.

Macroeconomics --- Economics: General --- Exports and Imports --- Finance: General --- Accounting --- Firm Performance: Size, Diversification, and Scope --- Public Enterprises --- Public-Private Enterprises --- Economic History: Government, War, Law, and Regulation: Africa --- Oceania --- Nonprofit Organizations and Public Enterprise: General --- International Lending and Debt Problems --- Portfolio Choice --- Investment Decisions --- Public Administration --- Public Sector Accounting and Audits --- Economic & financial crises & disasters --- Economics of specific sectors --- Public ownership --- nationalization --- International economics --- Finance --- Financial reporting, financial statements --- Public enterprises --- Economic sectors --- Debt sustainability --- External debt --- Liquidity management --- Asset and liability management --- Financial statements --- Public financial management (PFM) --- Arrears --- Currency crises --- Informal sector --- Economics --- Government business enterprises --- Debts, External --- Liquidity --- Finance, Public

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Financial inclusion in Nigeria has had undeniable successes, with the onboarding of residents to the banking sector consistently progressing. But the overall exclusion rates continue to exceed official targets, not least due to low financial literacy. Going forward, Nigeria’s financial inclusion strategy should more systematically leverage rapidly developing digital instruments. Uptake of digital financial services, notably mobile money, is still lower than in peer countries, and overcoming this would require improving digital financial literacy, upgrading digital infrastructure, and promoting incubation and sound practices of fintech firms. Nigeria’s CBDC also has an enabling potential if accompanied by a comprehensive package of supportive policies.

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This paper investigates the efficiency of domestic and foreign banks in the Central American region during 2002-07. Using two main empirical approaches, Data Envelopment Analysis and Stochastic Frontier Analysis, the paper finds that foreign banks are not necessarily more efficient than their domestic counterparts. If anything, the regional banks that were acquired by global banks in a wave of acquisitions during 2005-07 can keep up with the local institutions. The efficiency of these acquired banks, however, is shown to have dropped during the acquisition year, recovering only slightly thereafter. Finally, it is important to account for the environment in which banks operate, as country-, sector- and firm-specific characteristics are found to have a considerable influence on bank efficiency.

Banks and banking --- Investments, Foreign --- Finance --- Finance. --- Funding --- Funds --- Economics --- Currency question --- Capital exports --- Capital imports --- FDI (Foreign direct investment) --- Foreign direct investment --- Foreign investment --- Foreign investments --- International investment --- Offshore investments --- Outward investments --- Capital movements --- Investments --- Agricultural banks --- Banking --- Banking industry --- Commercial banks --- Depository institutions --- Financial institutions --- Money --- Banks and Banking --- Budgeting --- Production and Operations Management --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Macroeconomics: Production --- Taxation, Subsidies, and Revenues: Other Sources of Revenue --- Macroeconomics --- Budgeting & financial management --- Foreign banks --- Productivity --- Tax expenditures --- Banks and banking, Foreign --- Industrial productivity --- Budget --- El Salvador

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This paper assesses the resilience of Panamanian banks to (i) a very severe short-term, and (ii) a significant long-lasting liquidity shock scenario. Short-term liquidity buffers are evaluated by approximating the Liquidity Coverage Ratio (LCR) defined in the Basel III accord. The risk of losing a substantial part of foreign funding is analyzed through a conventional liquidity stress test scrutinizing several layers of liquidity across maturity buckets. The results of this study point to some vulnerabilities. First, our approximations indicate that about half of Panamanian banks would need to adjust their liquid asset portfolios to meet current LCR standards. Second, while most banks would be able to meet funding outflows in the stress-test scenario, a number of banks would have to use up all of their liquidity buffers, and a few even face a final shortfall. Nonetheless, most banks displaying sizable liquidity shortfalls have robust solvency positions.

Banks and banking --- Liquidity (Economics) --- Liquid assets --- Near money --- Money --- Assets, Frozen --- Frozen assets --- Finance --- Agricultural banks --- Banking --- Banking industry --- Commercial banks --- Depository institutions --- Financial institutions --- Financial risk management --- E-books --- Risk management --- Banks and Banking --- Finance: General --- Investments: General --- Financial Institutions and Services: General --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Financial Institutions and Services: Government Policy and Regulation --- Portfolio Choice --- Investment Decisions --- General Financial Markets: General (includes Measurement and Data) --- Financial services law & regulation --- Investment & securities --- Liquidity requirements --- Liquidity --- Liquidity stress testing --- Financial regulation and supervision --- Asset and liability management --- Financial sector policy and analysis --- Securities --- State supervision --- Economics --- Financial instruments --- Panama