The effects of credit risk transfer on bank monitoring and firm financing

This paper examines the efects of the transfer of credit risk associated with bank loans. We are interested in (a) whether the transfer of credit risk has any impact on the intensity with which banks monitor their borrowers and (b) whether credit risk transfer infuences the amount of financing that is provided to firms in an economy. Our model first develops conditions under which bank finance is available to firrms, mainly in the spirit of Holmstrom/Tirole (1997). We then introduce projects with uncorrelated pay-offs and argue that one possible economic rationale for credit risk transfer is diversi¯cation. We analyze whether and how within this scenario the transfer of the credit risk of loans changes a bank's incentives to monitor its debtors. Finally we investigate whether and what kind of impact this may have on the amount of ¯nancing available to firms in an economy. Our results indicate that the monitoring incentives are being eroded indeed and that credit risk transfer can increase the overall amount of obtainable funds in an economy.

Bank relationships: effect on the availability and marginal cost of credit for firms in Argentina

The paper provides evidence on what affects at the margin the cost and availability of bank credit for firms in Argentina. We study in particular how banks use different pieces of private and public information to screen firms and overcome informational asymmetries in the credit market. Some private information is transferable, like balance sheet data. Private information generated in relationships is not. To capture the closeness of bank relationships, we resort to the concentration of bank credit and the number of credit lines in a bank. We also consider public information available in the Central de Deudores. The cost of credit is measured using overdrafts, the most expensive line of credit, at the bank that charges the highest rate for overdrafts. We find that the cost of credit is smaller for a firm with a close relationship to the marginal bank. Firms with large assets, a high sales/assets ratio, and a low debt/assets ratio pay a lower interest rate at the margin. A good credit history (no debt arrears and no bounced checks) and collateral also reduce the marginal interest rate. The availability of credit is measured by unused credit lines as a proportion of total liabilities with the main bank. The availability of credit depends positively on a close relationship with the main bank. Large assets, a high return over assets, a high sales/assets ratio, a low debt/assets ratio, a good credit history, and collateral lead to higher credit availability. Our measure of unused credit lines is less ambiguous than traditional measures like leverage, which may indicate financial distress rather than availability of credit.

Creditor's protection and bank loans: lack of competition hamprers bankruptcy reform's effects

This dissertation investigates how credit institutions’ market power limits the effects of creditor protection rules on the interest rate and the spread of bank loans. We use the Brazilian Bankruptcy Reform of June/2005 (BBR) as a legal event affecting the institutional environment of the Brazilian credit market. The law augments creditor protection and aims to improve the access of firms to the credit market and to reduce the cost of borrowing. Either access to credit or the credit cost are also determined by bank industry competition and the market power of suppliers of credit. We derive a simple economic model to study the effect of market power interacting with cost of lending. Using an accounting and operations dataset from July/2004 to December/2007 provided by the Brazilian Central Bank, we estimate that the lack of competition in the bank lending industry hinders the potential reducing effect of the BBR on the interest rate of corporate loans by approximately 30% and on the spread by approximately 23%. We also find no statistical evidence that the BBR affected the concentration level of the Brazilian credit market. We present a brief report on bankruptcy reforms around the world, the changes in the Brazilian legislation and on some recent related articles in our introductory chapter. The second chapter presents the economic model and the testable hypothesis on how the lack of competition in the lending market limits the effects of improved creditor protection. In this chapter, we introduce our empirical strategy using a differences-in-differences model and we estimate the limiting effect of market power on the BBR’s potential to reduce interest rates and on the spread of bank loans. We use the BBR as an exogenous event that affects collateralized corporate loans (treatment group) but that does not affect clean consumer loans (control group) to identify these effects, using different concentration measures. In Chapter 3, we propose a two-stage empirical strategy to handle the H–Statistics proposed by Panzar and Rosse as a measure of market competition. We estimate the limiting effects of the lack of competition in replacing the concentration statistics by the H–Statistics. Chapter 4 presents a structural break test of the concentration index and checks if the BBR affects the dynamic evolution of the concentration index.

Bank transactions tax: pathway to the single tax ideal: a modern tax technology, the Brazilian experience with a bank transactions tax (1993-2007)

Lançado por Marcos Cintra nos EUA, é mais uma contribuição ao debate envolvendo os impostos e a ideia do Imposto Único.

Determinantes de rentabilidade de empresas apoiadas pelo Programa BNDES de Desenvolvimento da Indústria de Software - BNDES PROSOFT Empresa

Este estudo objetiva analisar fatores que impactam a lucratividade de companhias beneficiadas com o Programa para Desenvolvimento da Indústria Nacional de Software e Serviços de TI – BNDES PROSOFT. A análise da lucratividade permeia diversos estudos no país e no exterior e é de suma importância para a realização de políticas públicas de qualidade. Para a avaliação, foram elencados diferentes aspectos microeconômicos, incluindo informações contábeis, de emprego, localização da empresa, segmento de atuação, entre outros, utilizando a metodologia de dados em painel. Dentre os resultados obtidos, pode-se destacar o impacto positivo do nível da escolaridade da equipe, lucratividade observada no exercício anterior, maior retorno das empresas menores frente às de maior porte. Houve penalidade no lucro daquelas companhias voltadas para fabricação de hardware, com equipes maiores. Constatou-se, também, um decréscimo no lucro de empresas no ano em que contrataram financiamentos com o BNDES, estas que foram posteriormente beneficiadas, no momento da implantação do projeto.

O papel da tecnologia da informação e comunicação na inclusão financeira da população ribeirinha da Ilha de Marajó: o caso Agência Barco

O desafio de ofertar infraestrutura de serviços públicos nas regiões menos desenvolvidas do Brasil, geralmente mais afastadas dos grandes centros urbanos, mobiliza setores da sociedade na busca de abordagens novas e criativas que possam diminuir as grandes disparidades inter-regionais. Uma das carências vivenciadas por parte da população brasileira é a falta de acesso ao sistema financeiro, comprometendo a capacidade de plena participação dessas pessoas na economia, dificultando a geração e acúmulo de riqueza, situação essa presente na Ilha de Marajó, no estado do Pará, cuja maioria de seus dezesseis municípios apresenta Índice de Desenvolvimento Humano (IDH) baixo ou muito baixo. Para mudar essa realidade, uma iniciativa inovadora é a agência bancária itinerante instalada em barco, para atendimento a populações ribeirinhas de regiões com vasta extensão territorial, baixa densidade demográfica, dificuldades de transporte e limitações na oferta de tecnologia da informação e comunicação (TIC). Assim, essa pesquisa, com propósito exploratório e descritivo, tem como objetivo principal identificar, sob o ponto de vista das TIC, como os indicadores de inclusão financeira são influenciados pela atuação da Agência Barco na Ilha de Marajó. Além do estudo teórico, foi realizada investigação empírica, por meio de observação direta e entrevistas semiestruturadas com clientes e funcionários da Agência Barco, realizadas ao longo de quatro dias, em duas cidades da Ilha de Marajó. Para análise dos dados, foram aplicadas técnicas de análise de conteúdo às entrevistas, com objetivo de identificar a presença de elementos de inclusão financeira, transpondo os resultados para um modelo heurístico de infoinclusão dinâmica (2iD), o qual foi adaptado para contemplar constructos de inclusão financeira. O resultado da pesquisa demonstra que a Agência Barco consegue suprir as necessidades de acesso a serviços e produtos financeiros pela população da Ilha de Marajó, ao mesmo tempo em que se identifica oportunidades para ampliação de aspectos relacionados à educação financeira, possibilitando fortalecer os componentes dinâmicos do processo de inclusão financeira, com aumento da conscientização e consequente aumento da demanda por serviços e produtos financeiros.

The corporate financial effects of corporate social responsibility, as executed by, and impacted upon, Prime Bank Limited, Bangladesh

Corporate Social Responsibility (CSR) is being implemented in the corporate world at an ever increasing rate, benefitting societies around the world. Several theories have been proposed that contend that the corporations who are implementing CSR programs also benefit financially, making the relationship a symbiotic one. This paper analyzes the financial health of Prime Bank Limited, Bangladesh, (PBL) over a period of a decade in order to determine if PBL has indeed benefited financially from implementing its CSR program. The analysis focuses on examining PBL’s internal and external financial indicators over an extended period of time to determine what the net effect, if any, that the CSR program has had on them. This analysis concludes that the evidence does not support the claim of a causal relationship between CSR spending and positive effects upon PBL, as measured by PBL’s financial indicators.

Bank networks and firm credit: an agent based model approach

Starting from the idea that economic systems fall into complexity theory, where its many agents interact with each other without a central control and that these interactions are able to change the future behavior of the agents and the entire system, similar to a chaotic system we increase the model of Russo et al. (2014) to carry out three experiments focusing on the interaction between Banks and Firms in an artificial economy. The first experiment is relative to Relationship Banking where, according to the literature, the interaction over time between Banks and Firms are able to produce mutual benefits, mainly due to reduction of the information asymmetry between them. The following experiment is related to information heterogeneity in the credit market, where the larger the bank, the higher their visibility in the credit market, increasing the number of consult for new loans. Finally, the third experiment is about the effects on the credit market of the heterogeneity of prices that Firms faces in the goods market.

The trajectory of social housing policy in Brazil: From the National Housing Bank to the Ministry of the Cities

This paper discusses social housing policy in Brazil since the 1990s by analyzing government programs’ institutional arrangements, their sources of revenues and the formatting of related financial systems. The conclusion suggests that all these arrangements have not constituted a comprehensive housing policy with the clear aim of serving to enhance housing conditions in the country. Housing ‘policies’ since the 1990s – as proposed by Fernando Collor de Mello, Itamar Franco, Fernando Henrique Cardoso and ´ Luis Inacio Lula da Silva’s governments (in the latter case, despite much progress towards subsidized investment programs) – have sought to consolidate financial instruments in line with global markets, restructuring the way private interests operate within the system, a necessary however incomplete course of action. Different from rhetoric, this has resulted in failure as the more fundamental social results for the poor have not yet been achieved.

O Trabalho e o labirinto da responsabilidade socioempresarial:a experiência da cidadania empresarial do Banco do Brasil

In the current systemic crisis, economic policy is directed to correct the consequences of the functioning of this metabolism, but within the limits of the capital. From this perspective, decision makers propose trade policies, agricultural and industrial to ensure conditions for economic growth. However, as a dead end, there is failure of the State in giving efficacy to the operation of all segments of the economy, especially given the budget constraint. Public managers are forced to seek external resources, resuming the cycle of political allegiance to the interests of international financial and banking representatives, installed in so-called multilateral. The complex ideological capital comes into play in trying to convince society that the paths taken by governments are inevitable, and that capitalism can be "humanized", even with the realization of the growing inequalities caused by historical irrationalism of the production process of capital . In this sense, emerging concepts that attempt to demonstrate the compatibility of the system to real human needs. This ideological offensive is intended to legitimize the capital. The so-called third sector has a special highlight with the concept of corporate social responsibility. It creates a political environment in which the inevitable mix-up with new illusions offered by and often funding the metabolism of capital in order to perpetuate this system. In this context, political elites, and considerable portions of the academy, embark on "waves of capitalist optimism," while the sociometabolismo capital expands its historical limits, driving forces postponing their collapse, but that cause human suffering and ecological stress. Wars are disseminated to strengthen the deadly war industry and the automobile industry; and devastating the environment of which depends the capital system. In this scenario disassemble, propositions emerge around a "new social pact" in order to minimize the adverse effects of the dynamics of reproduction of capital. The business class is called to exercise its role through the discourse that appeals to social responsibility programs, in order to intervene directly in the "social question". The core of this research is precisely this point. Although there is considerable scholarship on the phenomenon of Social Responsibility and Corporate Citizenship, there is also an evident lack of this approach focused on the banking sector in Brazil. The importance of rentier capital increased ownership of shares in the wealth produced by all of Brazilian society, justifies a sociological research project on Social Responsibility in the domestic financial sector. In this sense, it was decided to perform a dynamic approach to the "Corporate Citizenship" in the banking industry, specifically in the Bank of Brazil. As this is a key institution, is important analyze of the impacts of this strategy fetish of capitalist reproduction, in order to evaluate the social legitimization of rentier capital in Brazil. In this scenario of the abundance of the discourse on social responsibility there exist a progressive impoverishment of professional work in this segment in Brazil. There is a dramatic mismatch between rhetoric and practice because of the trend of deepening vulnerability of the working conditions of the Brazilian bank worker, from the 1990's. In the specific case of the Bank of Brazil, the first initiative of the institution was to conform to the principles of the UNO and the Ethos Institute, aiming to align their domestic policies to this new strategy of domination of capital. The purpose is to place the Bank in the ideological sphere of corporate social responsibility, just as with its partners in the private financial intercapitalist competition. Indeed, in the internal ambit of the Bank of Brazil, there is a policy to adjust its functional segments to the doctrine of Social Corporate Responsibility. The concepts of this doctrine is presented as something inexorable. There are no alternatives. The Bank of Brazil operates in a highly competitive market, the segment featuring the dominance of financial capital accumulation today. For this reason it can not fail to incorporate the technological advances organizational. For employees there is no alternative but to adapt to this new set of ideas proposed by the metabolism of capital

Estado desenvolvimentista e o Nordeste :o BNB na busca de um modelo de desenvolvimento regional

This research tried to follow up with the way of intervention that a developing State promotes it regional development, once its action departs from a quantitative conception until its acting focused in maintenance, like the strategy of local development input in the Northeastern of Brazil in the 90 s. particularly, the attention was focused onto Banco do Nordeste which, between 1995 and 2002, achieved a organization changing process to get fit itself to the new conception of development and State, that advocates the maintenance and the participation of the society in its accomplishment, becoming itself the main agent of the Federal Government in the Region. By taking over the strategy of local development, Banco do Nordeste starts, at least in speech, to be less of a bank to become more of a development agent , representing some development and hope to overcome the social and economical inequalities of the Region. The hypothesis that surrounds this essay is that this reorientation experienced at Banco do Nordeste is related to three factors: timing; the Institution of a project of international technical cooperation with PNUD; the unrest of an employees group, who used to fight for the acting increase of the Bank to beyond the credit acting; and, above all, the juncture created in Ceara from the second half of the 80 s, expressed, mainly, for the political rise of a group of businessmen, who took over and modernized the standards of public management in the State, transforming the cearense experience into reference in Brazil and the world. The research was developed from information got through the use of semi-structured interviews and documental research and, as complementary resource, field observation. The interviews were done with BNB managers between 1995 and 2003, some of them current administrators (2003-2006), plus one of CAPEF directors and the present president of AFBNB. The research revealed that strategic place taken by BNB in the period studied did not come to represent a rupture in its organizational culture, being strongly attached to factors that allows its operation. When some of these elements stopped existing, it was observed a retracing in the pattern of state intervention in the Region. This conclusion restates the vision of State that guided this thesis, identified as relationships field, of different interests; space where social conflicts are established; incarnated through the institutions

Terceirização versus agenda do trabalho decente : estudo de caso a partir do Banco do Brasil s.a. na Paraíba

This Dissertation examines outsourcing in Bank of Brazil SA, the state of Paraiba. The central research question is to what extent this flexibility of labor relations incorporates items claimed by ´recent´ Decent Work Agenda of the International Labour Organization (OIT) or, on the contrary, the ´epidemic´ of outsourcing makes it even more challenging the world of work in the third millennium. The research hypothesis is that the Bank of Brazil has a growing subcontracting / outsourcing of labor (companies and individuals) and that not only contributes to the deterioration of working conditions, but also opposes the Work Agenda decent. Aiming to prove or disprove the hypothesis, the study includes a survey and secondary field. The literature review focuses on the trend towards casualization of labor in capitalism, and yet, in an effort to systematize data and analysis on ´outsourcing´ from the viewpoint of different actors. This theoretical framework is anchored in important classical sources and present that address the topic in the world and in Brazil. The field research was conducted with the actors related to the theme of ´outsourcing´ the Bank of Brazil - Paraiba, precisely branch managers, permanent employees of the bank, union representatives (bank workers), union bank and outsourced. The results confirm, in part, the study hypothesis, by demonstrating that there are several meanings and forms of precariousness that the contractors surveyed are submitted, highlighting the issue of salaries, the work environment, union representation and health worker. All these themes, each for himself, are contemplated by the Decent Work Agenda of the ILO and show, according to field research, rather fragile