Banking Regulation

Hyper-personalized banking, fueled by AI and data analytics, promises to revolutionize customer experiences. However, its successful implementation in Kuwait faces unique challenges. This research uncovers a crucial tension: Kuwaiti customers desire the benefits of hyperpersonalization but demand stringent data privacy and control. We find that while Kuwaiti banks possess the technological capabilities, regulatory clarity and strategic focus are needed to fully leverage this potential. Through in-depth interviews and comparative case studies, we identify critical success factors, including transparent data practices, customer empowerment, and proactive financial guidance. Our findings offer actionable insights for Kuwaiti banks to navigate the complexities of hyper-personalization, build customer trust, and gain a competitive edge in an evolving financial landscape.

Operation Choke Point was created by the Justice Department to "choke out" companies the Administration considers a "high risk" or otherwise objectionable, despite the fact that they are legal businesses. The goal of the initiative is to deny these merchants access to the banking and payments networks that every business needs to survive.  Operation Choke Point has forced banks to terminate relationships with a wide variety of entirely lawful and legitimate merchants. The initiative is predicated on the claim that providing normal banking services to certain merchants creates a "reputational risk" sufficient to trigger a federal investigation. Acting in coordination with Operation Choke Point, bank regulators labeled a wide range of lawful merchants as "high-risk" -including coin dealers, firearms and ammunition sales, and short-term lending. Operation Choke Point effectively transformed this guidance into an implicit threat of a federal investigation.  The Department is aware of these impacts, and has dismissed them. Internal memoranda on Operation Choke Point acknowledge the program's impact on legitimate merchants. Senior officials informed Attorney General Eric Holder that as a consequence of Operation Choke Point, banks are exiting entire lines of business deemed "high risk" by the government.  The Department lacks adequate legal authority for the initiative. Operation Choke Point is being executed through subpoenas issued under Section 951 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989. The intent of Section 951 was to give the Department the tools to pursue civil penalties against entities that commit fraud against banks, not private companies doing legal business. Documents produced to the Committee demonstrate the Department has radically and unjustifiably expanded its Section 951 authority.  Contrary to the Department's public statements, Operation Choke Point was primarily focused on the payday lending industry. Internal memoranda and communications demonstrate that Operation Choke Point was focused on short-term lending, and online lending in particular. Senior officials expressed their belief that its elimination would be a "significant accomplishment" for consumers.

One major driver of efficiency in logistics within the forestry sector is the introduction of Artificial Intelligence (AI) applications. This is a sector that heavily relies on logistics for managing forests sustainably and then moving resources obtained from forests. AI technologies hold the promise to optimise these processes. New regulations related to AI should be taken into consideration. Several conditions must be met, including higher security, transparency, and protection of data and logistics in the forestry sector. This study aims to explore the challenges, opportunities, and readiness of logistics companies in the forestry sector to adopt new AI regulations. The study is constructed based on a Likert scale survey, which measures the level of difficulty faced by logistics companies in meeting the new requirements, as well as their readiness to meet these standards and the resource requirements necessary to adhere to them. It, therefore, shows that, notwithstanding the undoubted benefits proven in AI deployment, logistics companies encountered sizable difficulties in harmonizing the AI solutions with the new regulatory requirements. The challenges stem from the technological barrier, the need for specialised training, and the investment required for new infrastructure upgrades. The study distinguishes between different degrees of readiness to adopt change and the provision of resource support, primarily in the form of training and consulting, to facilitate the transition to compliance. The
study also provides specific and practical guidance for businesses involved in forest logistics.

This paper is aimed at finding an explanation for fluctuation in Indonesian CDS spread during the period from January 2007 to July 2010. The analysis focuses on macroeconomic variables and market sentiment. For the purpose of selecting the variables and revealing relationships among them, the Symmetric Diagonal VECH GARCH model and the Granger causality test are conducted. The final model proposes that Indonesian credit risk fluctuation can be explained by variability of exchange rates and global market sentiment. It also suggests that financial shock from the developed countries was transmitted to the Indonesian economy in a direct way, resulting in changes to market sentiment, rather than from trade channels.

H μελέτη πραγματεύεται τις νομικές προκλήσεις και κινδύνους που αντιμετωπίζουν τα χρηματοπιστωτικά ιδρύματα από την ανάπτυξη καινοτόμων εφαρμογών χρηματοοικονομικής τεχνολογίας και την ανταγωνιστική επέκταση των δραστηριοτήτων πανίσχυρων τεχνολογικών επιχειρήσεων στην παροχή χρηματοοικονομικών υπηρεσιών. Για την αντιμετώπιση των πολυεπίπεδων συγκρούσεων συμφερόντων, με πρωταγωνιστικό σημείο αναφοράς τον αναφυόμενο «τεχνολογικό κίνδυνο», εντοπίζεται η ανάγκη ενίσχυσης του παραδοσιακού πλαισίου διακυβέρνησης όλων των οντοτήτων του «χρηματοπιστωτικού οικοσυστήματος», που συγκροτείται από δεσμευτικούς κανόνες δημόσιου και ιδιωτικού δικαίου. Εξετάζονται ιδιαίτερα οι πρόσφατες νομοθετικές και νομοπαρασκευαστικές πρωτοβουλίες της Ε.Ε. για τη ρύθμιση του «ψηφιακού χρηματοοικονομικού τομέα», με προσανατολισμό σε διακριτές εμπορικές δραστηριότητες και έμφαση στους όρους λήψης διαχειριστικών αποφάσεων, στην οργανωτική λειτουργία και σε απαιτήσεις για την αντιμετώπιση κατ’ ιδίαν τεχνολογικών κινδύνων και τη διαχείριση των συστημάτων πληροφορικής και επικοινωνιών. Προτείνεται η συμπλήρωση των νομοθετικών κανόνων με πρόσθετα εσωτερικά μέτρα διακυβέρνησης, ελέγχου, διαφάνειας και λογοδοσίας, που κρίνονται δικαιολογημένα λόγω της παράλληλης διεύρυνσης τόσο των ρυθμιστικών και εποπτικών ρόλων των κεντρικών τραπεζών,  όσο και των καθηκόντων των χρηματοπιστωτικών ιδρυμάτων και πολυμερών συστημάτων πληρωμών έναντι των εν γένει αντισυμβαλλομένων τους, επιχειρήσεων και καταναλωτών. - Abstract: This study examines the legal challenges and risks faced by financial institutions, arising from the proliferation of innovative financial technology (“Fintech”) applications and the competitive advance of dominant technology corporations into the provision of financial services. In addressing the complex and multilayered conflicts of interest, with the central focus being the emerging “technology risk”, the analysis underscores the need to strengthen the traditional governance framework applicable to all entities operating within the “financial ecosystem.” This framework is grounded in binding rules of both public and private law. Of particular focus are the recent legislative and regulatory initiatives undertaken by the European Union aimed at regulating the “digital financial sector”. These initiatives are oriented toward distinct commercial activities, with specific emphasis on decision-making processes, organizational operations, and critical requirements for mitigating specific technology risks, as well as information and communication systems’ management. The study proposes supplementing the relevant statutory provisions with enhanced internal governance measures, control mechanisms, transparency provisions, and accountability frameworks. Such additional measures are considered legally justified and necessary in light of the simultaneous expansion of both the regulatory and supervisory roles of central banks and the duties and obligations of financial institutions and multilateral payment systems toward their various counterparties, including businesses and consumers.

The Shariah Committee is entrusted with the duties and responsibilities to ensure that the Islamic banking and takaful institutions comply with the Shariah principles in its operations and business activities. The procedures of appointment and cessation are among the important points that should be discussed in relation to the Shariah Committee. Such elements reflect the effectiveness, objectivity and independence of the Shariah Committee in discharging their duties. In Malaysia the appointment, re-appointment and cessation of the member of the Shariah Committee are regulated by legislations governing Islamic financial business. With the objective to scrutinize the procedures prescribed by legislations, this study adopted legal research method. By using content analysis, the study found that several loopholes existed in the existing legislations which should be addressed by relevant authoritative. This is significant in order to strengthen the legal framework as well as to avoid any...

The study aimed to assess how credit and liquidity risks influence the profitability of banks, focusing on 29 Pakistani banks from 2010 to 2022. Mismanagement of asset-backed securities led to the worldwide financial crisis of 2008, which had far-reaching consequences, especially for Pakistan, where the banking industry is vital to the country's economy. Panel regression was applied to assess the objective. In order to compare fixed and random effects, the study also used the Hausman Test, which finally favored fixed effect models. The findings highlight how crucial it is to manage credit and liquidity risks in order to preserve Pakistani banks' stability and profitability. The findings of the study reveal a positive correlation between liquidity risk and Return on Assets (ROA), indicating that as liquidity risk increases, ROA also tends to increase. Conversely, a negative relationship was observed between credit risk and ROA, suggesting that as credit risk rises, ROA tends to decline. The study benefits to managers, regulators, and investors, as they highlight the need to manage liquidity and credit risks effectively to maintain profitability. This study contributes to the existing body of knowledge on the impact of credit risk and liquidity risk on bank profitability, providing a foundation for future research.

he qualified as a chartered accountant with Arthur Andersen (London) and then moved to Price Waterhouse (Paris), where he became a partner in Management Consultancy Services. Professor Archer has written and contributed to a number of publications and academic articles on international accounting, as well as corporate governance and related issues in Islamic financial institutions. He has also been involved in Islamic finance-related consultancy projects.

Climate risk is no longer a far-off environmental issue; it is now a proximate and systemic hazard to financial stability. As central banks, regulators, and investors start to wake up to the consequences of climate change as regards economic systems, banks are being pressed to factor in environmental Risk in credit decisions. Nonetheless, the current credit risk models are not highly sensitive to the intricacy of climate variables, especially in bank lending to corporations. The paper under research examines the ways financial institutions are incorporating environmental Risk, in particular transition and physical risks, in credit allocation, both in terms of methodological advances and institutional issues. A specific focus is made on emerging economies, where vulnerability to climate change is combined with weak regulatory capacity and a lack of data. This paper proposes a flexible model for incorporating climate risk into credit risk analysis and examines its policy implications for sustainable financing and credit portfolio stability.

FSI Briefs are written by staff members of the Financial Stability Institute (FSI) of the Bank for International Settlements (BIS), sometimes in cooperation with other experts. They are short notes on regulatory and supervisory subjects of topical interest and are technical in character. The views expressed in them are those of their authors and not necessarily the views of the BIS or the Basel-based standard-setting bodies. Authorised by the Chairman of the FSI, Fernando Restoy.

Der fünfzehnte von neunundzwanzig Irrtümern, die Helmut Creutz rund ums Geld verortet hat, lautet »Mit Bankkrediten wird Geld geschöpft!«
Die hier vorgebrachte Kritik bezieht sich ausschließlich auf diesen Text - keinesfalls auf sein Gesamtwerk.
Die Kritik besteht darin, dass ein oft vorgebrachtes Argument für die Geldschöpfung zu Recht als falsch aufgewiesen wird, daraus aber unzulässigerweise geschlossen wird, eine Geldschöpfung finde nicht statt, ja könne gar nicht stattfinden und wenn, wäre sie eine Sache für den Staatsanwalt.

This study investigates the effect of household lending on consumption growth in Nigeria. It specifically examines the extent of the effects of secured and unsecured lending to households as well as lending rates on the growth of household consumption expenditure. Quarterly time series data (with a 9-year periodic coverage, from the second quarter of 2013 to the last quarter of 2021) generated from the Central Bank of Nigeria (CBN) Quarterly Statistical Bulletins and Credit Conditions Survey Reports, were utilized in a bid to empirically establish the link between household lending and consumption growth. The findings of the study, derived through the instrumentality of the Autoregressive Distributive Lag (ARDL) estimation technique, revealed the existence of a dynamic long-run relationship between household lending and consumption growth in Nigeria. In addition, both secured and unsecured household credits were found to have significant positive effects on consumption growth; while lending rate also had a positive, howbeit, weak influence on consumption growth. Consequently, we conclude that an increase in household credit, ceteris paribus, will stimulate consumption growth in Nigeria. We therefore advocate that the CBN should persuade banks in Nigeria to institute a more liberal credit policy for households, especially for capital purchases, to stimulate economically sustainable consumption expenditure.

This thesis examines the association between regulatory capital requirements and the management buffers of European banks. The management buffers are the surplus capital buffers, which banks hold on top of the capital levels required by regulators. I examine unbalanced semi-annual multi-country panel data of 57 European banks during the period from 2016-2020. I collect public information on bank-specific capital requirements to assess their role in setting management buffers. I show that higher capital requirements are associated with lower management buffers, but the sensitivity is less than one to one. Moreover, the sensitivity is particularly low (yet significant) if fully loaded capital requirements are taken into consideration rather than the phase-in requirements. Overall, it appears that banks tend to adjust capital ratio levels in response to changes in applicable formal capital requirements, but only slightly reduce management buffers, thus keeping them relatively stable. However, banks tend to hold additional buffers to cover expected long-term requirements e.g., requirements applicable after phase-in periods.

In the pursuit of new forms of coexistence that respond to society’s transition needs, the economic world is expected to make a significant contribution. The renewed regulatory framework of finance contributes to the transformation of the paradigm by favoring investments oriented towards the realization of environmental, social, and governance values. The result is an updated system of rules, a new meaning to be attributed to the “know your customer rule” (KYC), and a reinterpretation of the key provision in the field of financial transactions, Article 21 of the Consolidated Law on Finance. On the other hand, the current structure poses challenges for the protection of the non-economic interest of retail investor and for hierarchies between financial and non-financial suitability.

The Jamaican economy and the financial sector, in particular, suffered a liquidity and confidence crisis in the late 1990s, the repercussions of which are still being felt. Although the impact has largely been negative, the crisis highlighted the need for and has been the impetus for fundamental reform in the Jamaican financial sector. The Jamaican financial sector crisis of the late 1990s has been rationalised by reference to several historical and other events. Notwithstanding the level and type of analysis, the crisis remains a significant point of reference and in this paper it forms the fulcrum against which the pre-existing and current frameworks for regulation and supervision of the Jamaican financial sector are examined. In particular, the paper includes an overview of significant legislative, macroeconomic, social and other factors which impacted the crisis. It also highlights aspects of the theoretical and other principles which ought to be considered in financial sector law reform.

The paper investigates the impact of IAS 19 on the disclosure and recognition of long-term employee benefits, including pensions and post-employment obligations. It reviews actuarial assumptions, present value calculations, and remeasurement components, showing how the standard supports transparency and comparability. The study highlights the standard's value in improving accountability and long-term liabilities assessment. However, it notes complexity in actuarial evaluations and data gathering. Overall, IAS 19 is credited with enhancing financial clarity in employee compensation reporting.

This study assesses IFRS 7's contribution to improving risk-related disclosures in financial statements, especially for institutions managing diverse financial instruments. It highlights how IFRS 7 requires entities to provide both quantitative and qualitative disclosures concerning credit, market, and liquidity risks. The research finds that while compliance initially varied, regulatory enforcement increased adoption quality. Through case analysis, it concludes that IFRS 7 promotes transparency, accountability, and better stakeholder decision-making. The paper also recommends stricter regulatory supervision and standardized enforcement mechanisms to mitigate disclosure inconsistency across jurisdictions.

Shadow banking, which was a marginal part of the global financial system, is now an essential part of contemporary finance, as it provides alternative funding and liquidity. This article discusses the development of shadow banking, how it came to be after the post-World War II period to its current significant presence in the 21st century. We decompose the main factors that led to the emergence of shadow banking, such as regulatory arbitrage, financial innovation, demand of flexible credit solutions and globalization impact. The paper also focuses on implications of shadow banking, especially its effect on the global credit markets and financial stability and its involvement in the financial crisis of 2007-2008. Lastly, we explain the regulatory issues presented by the shadow banking, where we examine the attempts to deal with the systemic risks and the dynamic future of financial regulation. The article ends with a thought of future direction of shadow banking and the challenge of balancing innovation and financial stability.

Provisions of the Dodd-Frank Act increase the transparency of real estate transactions between financial institutions and consumers. The Act imposes substantial compliance costs on all financial institutions. In non-metro areas, cooperative lenders may be the only source of real estate loan products. In this study, we investigate whether compliance with the Act has caused some cooperative financial institutions to bear heavier compliance burdens than others and to deduce the subsequent consequences for consolidation and corporate governance. Using a dataset of non-metro credit unions and all agricultural credit associations, we observe that compliance costs have decreased cooperative financial institution financial performance and likely caused the exit or failure to enter smaller institutions. Cooperative financial institutions have redistributed control and operations management instead of wealth.

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Cette étude examine l'efficacité de l'approche de gestion actif-passif (ALM) dans l'amélioration de la rentabilité
des banques marocaines pendant la crise de la COVID-19. Face aux défis sans précédent posés par la pandémie,
le secteur bancaire marocain a dû s'adapter rapidement pour maintenir sa stabilité financière et sa rentabilité. Notre
recherche se concentre sur la période 2019-2022, englobant les phases pré-crise, crise aiguë et post-crise
immédiate. Utilisant la méthode des équations structurelles, nous avons analysé un ensemble complet de données
financières et opérationnelles collectées auprès des huit principales banques marocaines, représentant plus de 80%
du marché bancaire national. Nos résultats suggèrent que l'ALM a joué un rôle crucial dans la stabilisation de la
rentabilité bancaire durant cette période turbulente, avec une corrélation positive significative entre l'efficacité de
l'implémentation de l'ALM et plusieurs indicateurs de performance, notamment la marge nette d'intérêt, le
rendement des actifs (ROA) et le rendement des capitaux propres (ROE). Les banques ayant adopté des approches
ALM plus sophistiquées ont démontré une meilleure capacité à gérer les risques de liquidité et de taux d'intérêt,
les grandes banques ayant particulièrement bénéficié de leurs systèmes ALM. Ces résultats soulignent l'importance
de l'ALM dans la gestion des risques et l'optimisation des performances financières, particulièrement en période
de crise.

Central bank digital currencies (CBDC) have been implemented by some countries and trialled by many more. The consumer has an increasing range of financial services to choose from including decentralised blockchain-based cryptocurrencies. A CBDC may use blockchain technology, but it is centralized, so the institutions that support it play an important role. Despite the centralised top-down nature of this financial technology, it still needs to be adopted so the consumer’s perspective, particularly their trust in it, is very important. Each CBDC implementation can be different, and each country’s context can be different, therefore it is important to understand each case separately. This research models the Brazilian consumer’s trust in their two-tier CBDC, where the central bank and the retail banks retain their current role. The six ways to build trust in a CBDC, identified by previous research in a different region, are supported for this case also. These are: (a) Trust in government and central bank offering the CBDC, (b) expressed guarantees for those using it, (c) the favourable reputation of other active CBDCs, (d) the CBDC technology, the automation and limited human involvement necessary, (e) the trust building features of the retail bank’s CBDC wallet app, and (f) the privacy features of the retail bank’s CBDC wallet app and back-end processes.

This study examines the strategic disparity in Environmental, Social, and Governance (ESG) practices and their effects on bank performance in emerging economies during the post-COVID-19 period. Banks particularly those financing SMEs faced increased institutional pressure following the pandemic to integrate ESG into their operational strategies. However, the allocation of resources across the ESG pillars often varied significantly. This disparity, defined as the uneven commitment to the E, S, and G pillars, is considered a strategic response to institutional and financial constraints. The objective of this study is to examine, specifically in terms of return on assets (ROA) and return on equity (ROE). Employing a panel dataset of 398 publicly listed banks across 35 emerging countries from 2020 to 2023, many of which provide financing to SMEs, the study uses fixed-effects regression and multiple robustness checks to explore this relationship. The results suggest that banks with greater ESG disparities may yield higher returns, indicating that selective investment in specific ESG pillars may lead to greater returns. Meanwhile, the positive impact is less pronounced in countries with high climate risk. Subsample analyses further indicate that banks subject to mandatory ESG disclosures and more substantial commitments to environmental and social components outperform those that are not. The governance pillar, in contrast, has a relatively minor impact on ESG disparity and bank performance. These findings emphasize that ESG disparity is a deliberate strategy banks employ to optimize resource allocation and enhance performance outcomes in response to external.

Wenn ich einen Untertitel für diese Rezension wählen müsste, würde ich diesen wählen: "Band VI des Handbuchs (zum Thema ,Verwaltungsrecht und Privatrecht') aus der Sicht eines ausländischen Verwaltungsrechtlers". Die vom Herausgebergremium dieser Zeitschrift gefundene Lösung, einen Ausländer für die Arbeit heranzuziehen, wird natürlich ihre Folgen haben. Es ist mir nicht möglich, das Buch so zu besprechen, als ob ich ein Mitglied der deutschen Verwaltungsrechtsgemeinschaft wäre. Meine Darstellung wird deswegen eine überwiegend rechtsvergleichende Perspektive einnehmen. Ich werde außerdem die Reihenfolge der Kapitel entsprechend den Ideen ändern, die ich für die Darstellung aus der erwähnten Sicht für nützlich halte.

Sustainable digital finance is a topic of growing interest among sustainability advocates who are seeking ways to influence digital financial services providers to offer sustainabilityoriented digital finance services. This study defines sustainable digital finance, identifies some characteristics of the emerging sustainable digital finance sector and forecasts what sustainable digital finance should be in the future. The study shows the emergence of digitalisation policies, digital finance policies, sustainability and climate change policies, a low interest in sustainable digital finance, a general reluctance towards sustainable digital finance, the rise of green washing by digital finance providers, and the growing interest in sustainable digital finance information among members of the public. The study also shows what sustainable digital finance should be in the future. It forecasts a future where there are environmental, social and governance (ESG)-compliant digital finance laws and regulations, a well-developed sustainable digital finance sandbox to develop sustainability-oriented digital financial services, the emergence of international standards for sustainable digital finance, an ecosystem where digital finance tools are used to promote environmental sustainability, and a self-regulatory environment where the industry takes the lead in developing sustainable digital finance initiatives.

Does IFI funding provide support to SMEs receiving such funding? We assess the impact of funding by the European Investment Bank (EIB) on the performance of 5,223 SMEs in eight countries of Central and Eastern Europe (CEE) during 2008-2014. Our results, derived from propensity score matching and difference-in-difference estimation exercises, indicate that EIB lending has a positive effect on employment, revenues and profitability. This positive effect holds irrespective of the economy entering a prolonged crisis or a seeing a recovery in the years following EIB funding. Overall, our results provide support to the view that IFI funding makes a difference in a period characterized by financial and economic turmoil. JEL classification: G01, H81, L25

Does IFI funding provide support to SMEs receiving such funding? We assess the impact of funding by the European Investment Bank (EIB) on the performance of 5,074 SMEs in eight countries of Central and Eastern Europe (CEE) during 2008-2014. Our results derived from a propensity score matching and difference-in-difference estimation exercises indicate that EIB lending has a positive effect on employment, revenues and profitability. We also find that the positive impact of EIB funding on employment and revenues is significantly higher when it is provided in a crisis year and firms face a prolonged crisis. Treated firms also record an even larger advantage in terms of profitability. Overall, our results provide support to the view that IFI funding makes a difference in a period characterized by financial and economic turmoil. JEL classification: G01, H81, L25

En Tunisie, comme dans de nombreux pays, les banques sont tenues de respecter un certain nombre de ratios prudentiels : ratio de solvabilité, ratio Tier 1, ratios de division des risques, ratio de liquidité, ratio Crédits/Dépôts, ratios relatifs aux positions de change et ratios relatifs aux participations dans le capital des entreprises. Ce travail cherche à savoir si les banques en Tunisie respectent les ratios prudentiels. Les résultats montrent que, pour l'année 2022, la quasi-totalité des banques étudiées montrent une grande discipline en ce qui concerne le respect des ratios de solvabilité, Tier 1, de liquidité et Crédits/Dépôts. De plus, la totalité des banques étudiées montrent une grande discipline en ce qui concerne le respect des ratios de division des risques.

Dans la littérature financière plusieurs contributions ont étudié la performance bancaire et les principaux indicateurs de son évaluation. En général, le but de chaque banque est de pouvoir assurer une rentabilité pérenne dans un contexte de plus en plus caractérisé par des turbulences économiques et financières. L'objectif du présent article est d'analyser l'évolution de la performance financière de trois grandes banques marocaines, pour la période 2005-2018, en se basant sur trois indicateurs fondamentaux à savoir : le ROE, le ROA et le coefficient d'exploitation. Notre analyse fait ressortir l'existence d'un lien empirique de cause à effets entre la performance financière des banques et la conjoncture économique nationale et internationale.

La previsione del principio/criterio del “do no significant harm” (DNSH) nel diritto europeo segna l’avvio di una “rivoluzione silenziosa” potenzialmente in grado di rinnovare non solo il diritto dell’ambiente e le politiche ambientali, ma l’ordinamento nel suo complesso. Invero, nonostante l’applicazione del DNSH ponga questioni interpretative ancora di difficile soluzione, appare evidente il progressivo allargamento del suo campo di applicazione: da garanzia di trasparenza per la c.d. “finanza sostenibile”, esso è divenuto un parametro dirimente per l’incentivazione delle attività economiche c.d. “green”. Dunque, in vista del raggiungimento della neutralità climatica del continente europeo, non è escluso che il percorso avviato potrebbe in futuro giustificare un ulteriore passaggio verso la disincentivazione o il divieto delle attività economiche ritenute in contrasto con la conformazione ecologica dell’economia.

Heightened risk governance standards have become increasingly prevalent in financial institutions following the global financial crisis, apportioning greater responsibilities upon board directors. One such responsibility of the board is the requirement to formally articulate and monitor firm-wide risk appetite. For the first time, this study probes the risk appetite practices of global financial institutions, collected through a series of semi-structured interviews with risk governance actors. We find that the practice of establishing firm-wide risk appetite has a profound impact upon firms' activities. Before the crisis, many boards lacked a clear understanding of risk profiles, limiting effective internal monitoring. Following the adoption of risk appetite, firms appear to improve monitoring and take into account aggregate risk levels. Moreover, there are signs that the cascading of risk appetite may contribute to improved risk conduct levels. This research is relevant to academics, providing insight for research into this emerging board-level practice. For practitioners, this study offers a unique lens to benchmark their monitoring activities for the first time.

Shariah compliance is fundamental to the operations of Islamic banks (IBs), ensuring that all activities conform to Islamic law (Shariah). To maintain Shariah compliance, IBs must establish a Shariah committee (SC), which plays a key role in providing guidance, oversight, and approval for Islamic banking products and services. The aim of this study is to investigate whether IBs in Malaysia effectively comply with the regulatory requirements for SC composition, with a particular focus on SC size and member qualifications. The findings reveal that, despite a few instances of non-compliance, most IBs in Malaysia have adhered to the stipulated requirements for SC composition. The conclusions of this study are beneficial to the regulators, IBs, and researchers.

This study sought to examine the repercussions of the adoption of the International Financial Reporting Standard 9 (IFRS 9) on the performance of commercial banks in Tanzania, with a focused inquiry into CRDB Bank. The objectives of the research encompass evaluating the impacts of these regulatory changes on financial performance, assessing alterations brought by IFRS 9 in risk management strategies, and evaluating provisioning practices implemented by CRDB Bank in response to IFRS 9. Employing a methodical approach, the study utilizes both descriptive and trend analyses to dissect data sourced from questionnaires and an exhaustive review of CRDB Bank's annual reports spanning from 2014 to 2023. The research sample is composed of 10 respondents, strategically selected to offer clear insights into the subject matter. The findings of this study found the significant impacts of IFRS 9 adoption on CRDB Bank's operational landscape. Financial performance metrics exhibit discernible shifts, reflecting the intricate interplay between compliance with IFRS 9 guidelines and overarching business objectives. Moreover, the analysis underscores notable advancements in risk management practices, indicative of a proactive approach towards mitigating potential liabilities. Additionally, the study sheds light on the provisioning practices, underscoring CRDB Bank's adaptability in response to evolving regulatory mandates where the NPL keep on becoming efficient over years since adapting IFRS 9. In light of these findings, the study recommend for strategic reformation within CRDB
Bank's operational framework to optimize alignment with the requisites of IFRS 9. Recommendations include the augmentation of risk management frameworks to enhance resilience in the face of regulatory fluctuations. Furthermore, enhancing a culture of continuous learning and adaptation can bolster CRDB Bank's capacity to navigate the complexities of IFRS 9 while concurrently optimizing financial performance., By embracing these recommendations, CRDB Bank can position itself as a trailblazer in the Tanzanian banking sector, not only in adherence to global accounting standards but also in fostering a culture of innovation and resilience amidst regulatory transformations.

The last decade's development and implementation of non-financial reporting culminated in the approval of the Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS). These have become mandatory for large companies, but it is estimated that in the future all companies will have to consider environmental, social, and governance (ESG) factors in the management process. The CSRD, effective from January 2024, aligns sustainability reporting with financial reporting, requiring standardized disclosures on ESG issues. This paper explores the challenges and opportunities of the future implementation of ESG standards in agricultural companies. Key issues include data collection, compliance costs, and the need for sector-specific reporting. Despite these challenges, ESG reporting offers potential benefits such as improved reputation, risk management, and market access. The paper assesses current practices and future directions for integrating ESG in agriculture, highlighting the need for improved reporting frameworks and methodologies.

The study measures financial stress index for Malaysian economy. We aggregate the identified financial and economic factors into a single index using the principal component analysis. The result shows that Malaysian Financial Stress Index (MFSI) increases as a result of increase in Banking Sector Fragility Index, credit stress, external debt, stock market volatility and Exchange Market Pressure Index. Moreover, the weights of the variables reveal that the magnitude of the Malaysian financial stress is mainly driven by the fragility of the banking sector. The combine variables explain about 53% of the total variation in the MFSI. Thus, the financial stress is determined to be the key player in the co-movement of the components used in the construction process. Furthermore, the aggregated components practically capture the known key aspects of financial stress in Malaysia. The implication of the finding is that authorities should focus more on banking sector stability than other compo...

Through the adoption of a balanced regulatory approach that promotes technological advancement while mitigating risks, Singapore has become a global leader in fintech innovation. The Monetary Authority of Singapore (MAS) plays a crucial role in forming the ecosystem as this paper examines Singapore's fintech regulatory framework, governance mechanisms, and risk management tactics. Singapore has shown its dedication to innovation and financial stability through important initiatives like the Payment Services Act, Fintech Regulatory Sandbox, and cross-border payment links. Along with discussing new developments in green fintech and central bank digital currencies (CBDCs), the paper also discusses issues like consumer protection, cybersecurity, and decentralized technologies. Singapore offers a model for promoting inclusive and sustainable growth in the fintech industry through global cooperation and flexible policymaking.

Le conseil d'administration est investi d'un rôle important dans le cadre de la transition écologique. La dernière version du code de l'AFEP-MEDEF 1 , paru en décembre 2022 l'érige en garant de la mise en oeuvre des stratégies environnementales de la société, et ce au regard des pouvoirs et des compétences qui sont les siens. Organe clé, le conseil d'administration organise, avec le directeur général, les grandes orientations stratégiques, économiques, financières, sociales ou technologiques de l'entreprise.

Net zero transition plans are a promising additional instrument for prudential supervisors to assess, address and bring distant financial risks into the present. To date, transition plans have primarily emerged as non-financial disclosure requirement and as such, their prudential application has been limited. In this article, we discuss the role that transition plans can play as a new regulatory tool in banking supervision. The article outlines steps towards incorporating transition plans into prudential policy, thereby enabling supervisors to effectively use transition plans as a forward-looking instrument to better manage and overcome some of the challenges associated with climate transition risks.

Corporate Governance (C.G) is not an abstract goal. However, it exists to serve the Bank's purpose by giving a framework through which investors, directors, and the top management can efficiently follow the banks' objectives. Subsequently, it boosts the financial performance of the Bank for its shareholders. This paper explores and analyzes C.G and its impacts on financial performance from the evidence collected from selected commercial banks (C.B) in China. The data sample for this research comprises selected C.Bs in China for the period from 2008 to 2019. Applying selection standards provides us a data sample of 17 C.Bs. We employ the generalized method of moments (GMM) regression model construct on one hundred seventy observations to identify the variables' relationship. Our findings show that female independent directors positively and significantly affect bank financial performance. Despite the literature review, we found that female directors' existence alone does not positively and significantly improve banks' financial performance. The finding suggests that female directors are more efficient when they are selected as an independent director. The findings show that CEO duality affects bank financial performance positively and significantly. CEO duality strengthens the financial performance of C.Bs because of the solidarity of the order it presents. The results also show that CEO shareholding and financial performance of Chinese C.Bs have a positively significant bond with each other. This result suggests that a blend of C.G instruments is more impressive than depending on one component of C.G.

A key research question that remains largely unanswered especially in the African context is whether the macroeconomic environment and the level of financial development of a country determine the effectiveness of financial reforms. This has important policy implications. We choose Ghana as a case study and carry out an in-depth analysis of its comprehensive set of financial reforms, implemented in the 2000s, which we look at individually. We estimate a stochastic cost frontier to look at efficiency. This is then followed by two different models of competition on the loans market, the main target of the reforms. We find that only the removal of entry restrictions is significant at improving banks efficiency and that private and global foreign, but not regional banks, benefit from it. The results show, however, no improvements in competition, and reveal instead that macroeconomic and institutional weaknesses continue to exert a negative counterbalancing effect. Reforms need to be anchored on stronger macroeconomic fundamentals, institutional initiatives and generally stronger credit environments for their full potential to be revealed in the context of developing financial markets.

A key research question that remains largely unanswered especially in the African context is whether the macroeconomic environment and the level of financial development of a country determine the effectiveness of financial reforms. This has important policy implications. We choose Ghana as a case study and carry out an in-depth analysis of its comprehensive set of financial reforms, implemented in the 2000s, which we look at individually. We estimate a stochastic cost frontier to look at efficiency. This is then followed by two different models of competition on the loans market, the main target of the reforms. We find that only the removal of entry restrictions is significant at improving banks efficiency and that private and global foreign, but not regional banks, benefit from it. The results show, however, no improvements in competition, and reveal instead that macroeconomic and institutional weaknesses continue to exert a negative counterbalancing effect. Reforms need to be anchored on stronger macroeconomic fundamentals, institutional initiatives and generally stronger credit environments for their full potential to be revealed in the context of developing financial markets.

This paper compares the current regulatory capital requirements under the Dodd-Frank Act (DFA) and the 10-percent leverage ratio, as proposed by the U.S. Treasury and the U.S. House of Representatives' Financial CHOICE Act (FCA). We find that the majority of U.S. banks would not qualify for an "off-ramp"option-where regulatory relief is offered to FCA qualifying banks (QBOs)-unless considerable amounts of capital are added, and that large banks are much closer to the proposed leverage threshold and, therefore, are more likely to stand to gain from regulatory relief. The paper identifies an important moral hazard problem that arises due to the QBO optionality, where banks are likely to increase the riskiness of their asset portfolio and qualify for the FCA "off-ramp" relief with unintended effects on financial stability.

This paper compares the current regulatory capital requirements under the Dodd-Frank Act (DFA) and the 10-percent leverage ratio, as proposed by the U.S. Treasury and the U.S. House of Representatives' Financial CHOICE Act (FCA). We find that the majority of U.S. banks would not qualify for an "off-ramp"option-where regulatory relief is offered to FCA qualifying banks (QBOs)-unless considerable amounts of capital are added, and that large banks are much closer to the proposed leverage threshold and, therefore, are more likely to stand to gain from regulatory relief. The paper identifies an important moral hazard problem that arises due to the QBO optionality, where banks are likely to increase the riskiness of their asset portfolio and qualify for the FCA "off-ramp" relief with unintended effects on financial stability.

This paper compares the current regulatory capital requirements under the Dodd-Frank Act (DFA) and the 10-percent leverage ratio, as proposed by the U.S. Treasury and the U.S. House of Representatives' Financial CHOICE Act (FCA). We find that the majority of U.S. banks would not qualify for an "off-ramp"option-where regulatory relief is offered to FCA qualifying banks (QBOs)-unless considerable amounts of capital are added, and that large banks are much closer to the proposed leverage threshold and, therefore, are more likely to stand to gain from regulatory relief. The paper identifies an important moral hazard problem that arises due to the QBO optionality, where banks are likely to increase the riskiness of their asset portfolio and qualify for the FCA "off-ramp" relief with unintended effects on financial stability.

Dans un contexte africain où les désidératas environnementaux et socio-économiques sont des plus criards, la présente recherche se propose d’analyser l’influence des pratiques de la finance verte sur la performance des groupes bancaires implantés sur ce continent. Cette étude s’appuie sur les rapports annuels de 42 banques multinationales originaires de six régions et une période allant de 2005 à 2014. Au terme d’une régression en données de panel, il apparaît qu’en Afrique, l’adoption des normes et procédures de gestion vertes, la parité hommes/femmes au niveau de l’équipe dirigeante et les investissements philanthropiques sont positivement corrélés à la performance économique et financière des holdings bancaires. Par ailleurs, les produits et services financiers verts, la proportion de crédits accordée aux investissements nocifs à l’environnement, la qualité de la politique de crédits verts, la parité au sein du conseil d’administration, l’actionnariat salarial, la pratique de la finance solidaire, la transparence bancaire et les activités bancaires offshores influencent négativement la rentabilité financière et économique des organisations bancaires à vocation internationale sur le continent. Au final, on peut dire que la pratique de la finance verte est une opportunité d’affaires certaine que les banquiers et les États africains gagneraient à s’en approprier ou à créer un cadre propice.

BIS Bulletins are written by staff members of the Bank for International Settlements, and from time to time by other economists, and are published by the Bank. The papers are on subjects of topical interest and are technical in character. The views expressed in them are those of their authors and not necessarily the views of the BIS. The authors are grateful to Jimmy Shek for excellent analysis and research assistance, and to Louisa Wagner for administrative support. The editor of the BIS Bulletin series is Hyun Song Shin. This publication is available on the BIS website (www.bis.org).

The time has come to simplify European regulation; it is a matter of competitiveness, as emphasised by the Letta and Draghi reports, to such an extent that the European Commission has made it a programme priority. At the same time, member states, Members of the European Parliament, and even central banks and supervisors are calling for a rationalisation of the rules.

Undoubtedly, the process of drafting rules applicable to the financial sector within the European Union is extremely complex. Even more concerning, the regulatory machinery has spiralled out of control, producing thousands of pages of highly technical texts, pushing the system to saturation. There is an accumulation of directives and regulations, a multiplication of delegated and implementing acts, as well as an abundance of soft law issued by European supervisory authorities or the European Central Bank. This soft law is only "soft" in name, as guidelines, handbooks, and Q&A documents often form the core of the regulation.

The current regulatory framework ("millefeuille normatif") has become unreadable and no longer allows for sufficient political oversight over the balance of regulations. Directives and regulations are increasingly voluminous and detailed, granting a growing number of mandates to the European Commission and European supervisory authorities. Crucial elements requiring political decisions are no longer in the hands of the co-legislators.

A clear example is the recent “banking package”, published in spring 2024, which implements the latest version of the Basel agreements. This package comprises 1,000 pages and assigns 139 mandates to the European Banking Authority for drafting technical standards and guidelines—more than double compared to the previous “package” from 2019.

How can legislators effectively control all these rules?

This regulatory inflation creates legal uncertainty, additional costs for economic actors, and confusion for citizens overwhelmed by such complexity. In the absence of genuine political and judicial control, the institutional balance of the European Union is undermined, and the values of the rule of law and democracy are eroded.

The European report “Less is More”, the result of over two years of work by experts from numerous EU countries, analyses the causes and consequences of this situation and puts forward a series of proposals aimed at simplifying and, above all, improving the European regulatory process in the field of financial services. The report does not, under any circumstances, advocate for deregulation.

The proposed measures are structured around four main pillars:

Stabilising and simplifying the regulatory framework;
Strengthening consultation and transparency regarding implementing texts;
Revising the founding regulations of European supervisory authorities;
Enhancing control over implementing acts.
As recently stated by the central banks of Germany, France, Spain, and Italy: “It is necessary to take a step back and ensure that the complexity of overlapping regulatory layers in Europe does not become an obstacle to achieving our objectives.”

Europe’s competitiveness is not determined solely by the financial sector. However, by reforming its regulatory framework, the European Union can send a clear message: it is ready to reform itself to remain a state governed by the rule of law and a major player in the global economy.