Bank Borrowing and Financing of Medium-sized Firms in Indonesia

The improvement of financial intermediation functions is crucial for a robust banking system. When lending, banks have to cope with such problems as information asymmetry and adverse selection. In order to mitigate these problems, banks have to product information and improve their techniques of lending. During the 1998 financial crisis, Indonesia's banking system suffered severe damage and revealed that the country's banking intermediation functions did not work well. This paper examines the financial intermediation functions of banks in Indonesia and analyzes the importance of bank lending to firms. The focus is on medium-sized firms, and "relationship lending", one of the bank lending techniques, is used to examine financial intermediation in Indonesia. The results of logit regressions show that the relationship between a bank and a firm affects the probability of bank lending. The amount of borrowing and collateral are also affected by a firm's relationship with a bank. When viewed from the standpoint of relationship lending to medium-sized firms, Indonesian banks cannot be criticized for any malfunction of financial intermediation.

Real exchange rate appreciation, resource boom, and policy reform in Myanmar

In the five-year period from 2006 to 2011, the real exchange rate of the Myanmar kyat appreciated 200 percent, signifying that the value of the US dollar in Myanmar diminished to one third of its previous level. While the resource boom is suspected as a source of the real exchange rate appreciation, its aggravation is related to administrative controls on foreign exchange and imports. First, foreign exchange controls prevented replacement of the negotiated transactions of foreign exchange with the bank intermediation. This hampered government interventions in the market. Second, import controls repressed imports, aggravating excess supply of foreign exchange. Relaxation of administrative controls is necessary for moderating currency appreciation.

Distribution of microservices for hardware interoperability in the Smart Grid

Due to the significant increase of population and their natural desire of improving their standard of living, usage of energy extracted from world commodities, especially shaped as electricity, has increased in an intense manner during the last decades. This fact brings up a challenge with a complicated solution, which is how to guarantee that there will be enough energy so as to satisfy the energy demand of the world population. Among all the possible solutions that can be adopted to mitigate this problem one of them is almost of mandatory adoption, which consists of rationalizing energy utilization, in a way that its wasteful usage is minimized and it can be leveraged during a longer period of time. One of the ways to achieve it is by means of the improvement of the power distribution grid, so that it will be able to react in a more efficient manner against common issues, such as energy demand peaks or inaccurate electricity consumption forecasts. However, in order to be able to implement this improvement it is necessary to use technologies from the ICT (Information and Communication Technologies) sphere that often present challenges in some key areas: advanced metering infrastructure integration, interoperability and interconnectivity of the devices, interfaces to offer the applications, security measures design, etc. All these challenges may imply slowing down the adoption of the smart grid as a system to prolong the lifespan and utilization of the available energy. A proposal for an intermediation architecture that will make possible solving these challenges is put forward in this Master Thesis. Besides, one implementation and the tests that have been carried out to know the performance of the presented concepts have been included as well, in a way that it can be proved that the challenges set out by the smart grid can be resolved. RESUMEN. Debido al incremento significativo de la población y su deseo natural de mejorar su nivel de vida, la utilización de la energía extraída de las materias primas mundiales, especialmente en forma de electricidad, ha aumentado de manera intensa durante las últimas décadas. Este hecho plantea un reto de solución complicada, el cual es cómo garantizar que se dispondrá de la energía suficiente como para satisfacer la demanda energética de la población mundial. De entre todas las soluciones posibles que se pueden adoptar para mitigar este problema una de ellas es de casi obligatoria adopción, la cual consiste en racionalizar la utilización de la energía, de tal forma que se minimice su malgasto y pueda aprovecharse durante más tiempo. Una de las maneras de conseguirlo es mediante la mejora de la red de distribución de electricidad para que ésta pueda reaccionar de manera más eficaz contra problemas comunes, tales como los picos de demanda de energía o previsiones imprecisas acerca del consumo de electricidad. Sin embargo, para poder implementar esta mejora es necesario utilizar tecnologías del ámbito de las TIC (Tecnologías de la Información y la Comunicación) que a menudo presentan problemas en algunas áreas clave: integración de infraestructura de medición avanzada, interoperabilidad e interconectividad de los dispositivos, interfaces que ofrecer a las aplicaciones, diseño de medidas de seguridad, etc. Todos estos retos pueden implicar una ralentización en la adopción de la red eléctrica inteligente como un sistema para alargar la vida y la utilización de la energía disponible. En este Trabajo Fin de Máster se sugiere una propuesta para una arquitectura de intermediación que posibilite la resolución de estos retos. Además, una implementación y las pruebas que se han llevado a cabo para conocer el rendimiento de los conceptos presentados también han sido incluidas, de tal forma que se demuestre que los retos que plantea la red eléctrica inteligente pueden ser solventados.

Avaliação de eficiência das cooperativas de crédito no Brasil: um estudo com base na intermediação financeira e na prestação de serviços

As cooperativas de crédito são instituições financeiras que têm como finalidade principal a prestação de serviços bancários e de intermediação financeira voltando-se para a geração de benefícios ao cooperado, através de benefícios econômicos encontrados sob a forma cooperativada. Considerando o objetivo destas organizações, o presente trabalho teve por objetivo avaliar a eficiência das mesmas considerando duas vertentes: 1) a atividade de intermediação financeira; e 2) a atividade de prestação de serviços bancários, a partir de variáveis contábeis. A técnica utilizada para a avaliação da eficiência foi a Análise Envoltória de Dados e foram analisados os determinantes da eficiência por meio de regressões do tipo Tobit. A amostra é composta por 315 cooperativas singulares listadas na base de dados do Banco Central do Brasil e foram utilizados os dados dos balancetes anuais e semestrais (soma dos semestres para as contas de resultado de cada ano) apresentados para período de 2007 a 2014. Os resultados indicaram baixa eficiência das cooperativas na prestação de serviços bancários, com 73% da amostra apresentando ineficiência ao longo de todos os anos do período em análise. Na atividade de intermediação financeira 20 cooperativas foram eficientes ao longo do período completo, com as demais apresentando graus de ineficiência abaixo de 16% em todos os anos. Quanto aos determinantes da eficiência, verificou-se como principais fatores na atividade de intermediação financeira a Imobilização, a Insolvência, o Descasamento Passivo e as Despesas Administrativas, enquanto na atividade de prestação de serviços os principais determinantes foram a Captação por Floating e as Despesas Administrativas. Os resultados da eficiência na intermediação financeira indicaram baixos graus de ineficiência, enquanto os altos graus de ineficiência na prestação de serviços bancários alertaram para a pouca importância dada ao fornecimentos destes serviços e para a importância de se utilizar dois modelos distintos para a avaliação da eficiência em cooperativas de crédito, dado o comportamento desvinculado entre as duas atividades avaliadas.

Price formation in commodities markets. Financialisation and beyond. Report of an ECMI/CEPS Task Force

This report attempts to demystify the sphere of commodities markets worldwide by providing an in-depth examination of the major commodity groups, focusing on product characteristics, supply chains, pricing, liquidity, financial intermediation, industry players and the interplay between derivatives markets and the underlying physical goods. In so doing, the report contributes to the international debate with important information about the diverse market structures across commodities, including supply and demand elasticities, concentration of ownership, infrastructure organisation and layers of financial participation. While describing the endogenous factors, it also examines the increasing role of exogenous factors now impacting commodities. Finally, it assesses the drivers of the growth of derivatives markets and their impact on price formation. This report is a draft of the final version presented at a meeting at CEPS on 9 July 2013. A final version will be uploaded at the end of the summer when the book will be available in print.

The neglected side of banking union: reshaping Europe’s financial system. Bruegel Policy Contribution, 14 September 2013

This Policy Contribution...discusses how Europe's financial system could and should be reshaped. It starts from two basic points: First, the banking system needs to be credibly de-linked from the sovereigns and banks should operate across borders. Europe needs fewer national champions. Second, other forms of financial intermediation need to be developed. Both steps require a significant stepping up of the policy system, including a single resolution mechanism. Together, this will render Europe’s financial system more stable, more efficient and more conducive to growth.

Improving the role of equity crowdfunding in Europe's capital markets. Bruegel Policy Contribution Issue 2014/09, August 2014

Crowdfunding is a growing phenomenon that encompasses several different models of financing for business or other ventures. Despite the hype, equity crowdfunding is still the smallest part of the crowdfunding market. Because of its legal framework, Europe has been at the forefront of equity crowdfunding market development. Equity crowdfunding is more complex than other forms of crowdfunding and requires proper checks and balances if it is to provide a viable channel for financial intermediation in the seed and early-stage market in Europe. It is important to explore this new channel of funding for young and innovative firms given the critical role these start-ups can play job creation and economic growth in Europe. We assess the potential role of equity crowdfunding in the overall seed and early-stage financing market and highlight the potential risks of equity crowdfunding. We describe the current state of play in this nascent industry, considering both the innovations introduced by market operators and existing regulation. Currently in Europe there is a patchwork of national legal frameworks related to equity crowdfunding and this should be addressed in a harmonised way.

Defining Europe's Capital Markets Union. Bruegel Policy Contribution Issue 2014/12, 13 November 2014

The new European Commission has signalled that it will work to create a ‘capital markets union’. This is understood as an agenda to expand the non-bank part of Europe’s financial system, which is currently underdeveloped. The aim in the short term is to unlock credit provision as banks are deleveraging, and in the longer term, to favour a more diverse, competitive and resilient financial system. Direct regulation of individual non-bank market segments (such as securitisation, private placements or private equity) might be useful at the margin, but will not per se lead to significant capital markets development or the rebalancing of Europe’s financial system away from the current dominance by banks. To reach these goals, the capital markets union agenda must be broadened to address the framework conditions for the development of individual market segments. Six possible areas for policy initiative are, in increasing order of potential impact and political difficulty: regulation of securities and specific forms of intermediation; prudential regulation, especially of insurance companies and pension funds; regulation of accounting, auditing and financial transparency requirements that apply to companies that seek external finance; a supervisory framework for financial infrastructure firms, such as central counterparties, that supports market integration; partial harmonisation and improvement of insolvency and corporate restructuring frameworks;and partial harmonisation or convergence of tax policies that specifically affect financial investment.

Banking Sector Soundness, Innovation, and Development: Emerging Europe and South Asia. ACES Working Papers, 2012

While most academic and practitioner researchers agree that a country’s commercial banking sector’s soundness is a very significant indicator of a country’s financial market health, there is considerably less agreement and substantial confusion surrounding what constitutes a healthy bank in the aftermath of 2007+ financial crisis. Global banks’ balance sheets, corporate governance, management compensation and bonuses, toxic assets, and risky behavior are all under scrutiny as academics and regulators alike are trying to quantify what are “healthy, safe and good practices” for these various elements of banking. The current need to quantify, measure, evaluate, and compare is driven by the desire to spot troubled banks, “bad and risky” behavior, and prevent real damage and contagion in the financial markets, investors, and tax payers as it did in the recent crisis. Moreover, future financial crisis has taken on a new urgency as vast amounts of capital flows (over $1 trillion) are being redirected to emerging markets. This study differs from existing methods in the literature as it entail designing, constructing, and validating a critical dimension of financial innovation in respect to the eight developing countries in the South Asia region as well as eight countries in emerging Europe at the country level for the period 2001 – 2008, with regional and systemic differentials taken into account. Preliminary findings reveal that higher stages of payment systems development have generated efficiency gains by reducing the settlement risk and improving financial intermediation; such efficiency gains are viewed as positive financial innovations and positively impact the banking soundness. Potential EU candidate countries: Albania; Montenegro; Serbia

Capital Markets Union: a vision for the long term. Bruegel Policy Contribution ISSUE 2015/05 April 2015

Capital Markets Union (CMU) is a welcome initiative. It could augment economic risk sharing, set the right conditions for more dynamic development of risk capital for high-growth firms and improve choices and returns for savers. This offers major potential for benefits in terms of jobs, growth and financial resilience. • CMU cannot be a short-term cyclical instrument to replace subdued bank lending, because financial ecosystems change slowly. Shifting financial intermediation towards capital markets and increasing cross-border integration will require action on multiple fronts, including increasing the transparency, reliability and comparability of information and addressing financial stability concerns. Some quick wins might be available but CMU’s real potential can only be achieved with a long-term structural policy agenda. • To sustain the current momentum, the EU should first commit to a limited number of key reforms, including more integrated accounting enforcement and supervision of audit firms. Second, it should set up autonomous taskforces to prepare proposals on the more complex issues: corporate credit information, financial infrastructure, insolvency, financial investment taxation and the retrospective review of recent capital markets regulation. The aim should be substantial legislative implementation by the end of the current EU parliamentary term.

The Digital Market for Local Services: A one-night stand for workers? An example from the on-demand economy. CEPS Special Report, No. 133/April 2016

This case study provides a snapshot of the dynamics in the digital market for locally provided personal services. Based on a case study for a Belgium platform with 14,113 identified workers and 9,459 posted tasks, the findings suggest that the current intermediation is inefficient. Only a limited share of the tasks posted on the platform are being completed, whereas the characteristics of the not-completed tasks are fairly limited. Moreover, just a small share of the workers participating in the platform is actually performing the completed tasks. Their average earnings per hour are in most cases above the minimum wage and even above the median wage in the offline market. At the present time, however, the limited earnings for individual workers prevent this mode of working from becoming an alternative to a conventional job. In addition to the standard determinants of workers’ earnings (e.g. gender, age, occupation, etc.), the characteristics and evaluation mechanism of the platform have a large influence on the distribution of tasks and earnings.

The Business Models and Economics of Peer-to-Peer lending. ECRI Research Report No 17, May 2016

This paper reviews peer-to-peer (P2P) lending, its development in the UK and other countries, and assesses the business and economic policy issues surrounding this new form of intermediation. P2P platform technology allows direct matching of borrowers’ and lenders’ diversification over a large number of borrowers without the loans having to be held on an intermediary balance sheet. P2P lending has developed rapidly in both the US and the UK, but it still represents a small fraction, less than 1%, of the stock of bank lending. In the UK – but not elsewhere – it is an important source of loans for smaller companies. We argue that P2P lending is fundamentally complementary to, and not competitive with, conventional banking. We therefore expect banks to adapt to the emergence of P2P lending, either by cooperating closely with third-party P2P lending platforms or offering their own proprietary platforms. We also argue that the full development of the sector requires much further work addressing the risks and business and regulatory issues in P2P lending, including risk communication, orderly resolution of platform failure, control of liquidity risks and minimisation of fraud, security and operational risks. This will depend on developing reliable business processes, the promotion to the full extent possible of transparency and standardisation and appropriate regulation that serves the needs of customers.

Who Is Influential and Why? The Determinants of Reputational Power

Power is one of the most fundamental concepts in political science, and it is a crucial aspect of decision-making structures. The distribution of power between political actors and coalitions of actors informs us about who is actually able to influence decision-making processes. It is thus no surprise that power is a centerpiece of our assessment of political decision-making in Switzerland. In line with the main argument of this book, Chapter 3 has uncovered important changes in decision-making structures, which resulted in a rebalancing of power between governing parties, interest groups and state executive actors. Conjecturing about the reasons that may account for these changes, we pointed to factors of an organizational and institutional nature. For example, we put forward the decline of pre-parliamentary procedures oriented towards corporatist intermediation as a possible explanation for the weakening of interest groups. More generally, in several chapters it has been suggested that there is a relationship between the institutional design of a decision-making process, the related importance of decision-making phases and an actor's participation in these phases on the one hand, and the power of actors (and coalitions of actors) on the other. In addition, the analyses carried out in Chapters 2 to 5 draw our attention to the differences in power structure across decision-making processes or types of processes.

A Matriz Filosófica do Presbiterianismo no Brasil

Os missionários protestantes presbiterianos que vieram para o Brasil no início da segunda metade do século XIX trouxeram uma interpretação calvinista da bíblia, pois permaneceram fieis à formação princetoniana que efetivou uma síntese entre ortodoxia calvinista e pietismo. Estes pricetonianos tinham como base epistemológica a filosofia de Thomas Reid, conhecida como o Realismo do Senso Comum. Essa filosofia é utilizada como uma epistemologia reformada, ou calvinista. Ela é compreendida em sua formação escocesa e consequentemente americana, via Princeton, como a Epistemologia Providencial. Desta forma, quando ela é assimilada pelos brasileiros por meio da pregação e da formação teológica, a mesma se torna parte do perfil presbiteriano brasileiro como doutrina filosófica. A Filosofia do Senso Comum se gesta como crítica à filosofia empirista de David Hume que, para Reid, convergiria para um possível aniquilamento da religião e para uma visão pessimista da ciência, afetando o empirismo, por conseguinte, causando uma nova formulação mais próxima do ceticismo. Por isso, Reid formulou a filosofia que para ele contrapõe-se a Locke e Berkeley e depois a David Hume, afirmando que a realidade é independente de nossa apreensão. Ou seja, na percepção do mundo exterior não há interferência do sujeito cognoscente sobre o objeto do conhecimento. A nossa relação com os objetos é direta e não deve ser desvirtuada por intermediações. Na implantação do protestantismo no Brasil, via missionários de Princeton, não houve uma defesa intransigente dos princípios calvinistas por parte de missionários como Fletcher e Simonton e sim uma continuidade da leitura das escrituras sagradas pelo viés calvinista, como era feito no Seminário de Princeton. Não havia uma ênfase acentuada na defesa da ortodoxia porque o tema do liberalismo teológico, ou do conflito entre modernismo e fundamentalismo não se fazia necessário na conjuntura local, onde predominava a preocupação pela evangelização em termos práticos. O conceitos da Filosofia do Senso Comum eram próximos do empirismo mitigado de Silvestre Pinheiro e do Ecletismo de Victor Cousin. Por isso, no Brasil, o local em que mais se vê a utilização da filosofia do Senso Comum é nos debates entre intelectuais, em três pontos interessantes: 1ª) O Senso Comum ficou restrito ao espaço acadêmico, na formação de novos pastores, sendo que as obras de Charles Hodge e A. A. Hodge são as principais fontes de implantação desta mentalidade ratificadora da experiência religiosa e, desta forma, delineiam o rosto do protestantismo entre presbiterianos, uma das principais denominações protestantes do final do século XIX; 2ª) Nos debates entre clérigos católicos e protestantes em polêmicas teológicas;. 3º) No aproveitamento utilitarista da assimilação cultural estrangeira pelos protestantes nacionais, não por último, facilitada pela simpatia dos liberais brasileiros pelo protestantismo, ao mesmo tempo que mantinham uma linha filosófica mais próxima do empirismo mitigado e do ecletismo. Assim, nossa hipótese pretende demonstrar que os protestantes trouxeram em seu bojo as formulações epistemológicas que foram passadas para um grupo de intelectuais, que formaram o quadro dos primeiros pastores presbiterianos da história desta denominação. Eles foram convertidos e assimilaram melhor as novas doutrinas por meio de mais do que simples pregações, mas pela sua forma filosófica de encarar os objetos estudados, e que tais informações vêm por meio da base epistemológica do Realismo do Senso Comum, que encontra espaço nos ideais republicanos brasileiros do século XIX.

Interest groups in multiple streams:specifying their involvement in the framework

Although interests inhabit a central place in the multiple streams framework (MSF), interest groups have played only a minor role in theoretical and empirical studies until now. In Kingdon’s original conception, organized interests are a key variable in the politics stream. Revisiting Kingdon’s concept with a particular focus on interest groups and their activities—in different streams and at various levels—in the policy process, we take this argument further. In particular, we argue that specifying groups’ roles in other streams adds value to the explanatory power of the framework. To do this, we look at how interest groups affect problems, policies, and politics. The influence of interest groups within the streams is explained by linking the MSF with literature on interest intermediation. We show that depending on the number of conditions and their activity level, interest groups can be involved in all three streams. We illustrate this in case studies reviewing labor market policies in Germany and chemicals regulation at the European level.