Financial Intermediary

This paper studies the differences between traditional financial intermediaries (commercial banks, saving banks and credit cooperatives) and ethical banks that focus on positive social and ethical values. The credit crisis calls into question the functionality and good performance of traditional banks. The full incorporation of ethical values and principles by traditional financial intermediaries might be a form to solve their misleading financial situation. We have analyzed four factors that theoretically mean ethical differences: information transparency, placement of assets, guarantees and participation. These four factors are grouped in an index called Radical Affinity Index (RAI). The paper is focused on the study of RAI using a sample of 119 European banks. The evidence shows, that transparency of information and placement of assets are factors that differentiate ethical banks and the rest of financial intermediaries. The guarantees and participation, which seemed to be useful factors to differentiate ethical aspects of banks, do not support clear evidence to the analysis. In sum, RAI is a functional and useful index to show the ethical policy of financial intermediaries.

This paper studies the differences between traditional financial intermediaries (commercial banks, savings banks and cooperative banks) and ethical banks based on property rights, in which the owner decides the ideology, principles, standards and objectives of the organisation. In ethical banking, affinity centres on positive social and ethical values. The paper consequently focuses on an index proposed both to differentiate ethical banks from other types of banks, and also to pinpoint the differences between the various ethical banks themselves. This is the Radical Affinity Index (RAI), which groups banks together in terms of their stance on ethical commitment, concentrating on ethical ideology and principles (information transparency, placement of assets, guarantees and participation) and using a sample of 114 European banks. The evidence shows that transparency of information and placement of assets are factors that differentiate ethical banks from other financial intermediaries. Guarantees and participation are characteristics specific to ethical banks; these variables, however, do not offer clear evidence to our analysis.

Bank and its member governments in the Africa Region. It is published periodically by the Knowledge Networks, Information and Technology Center on behalf of the Region. What role can informal financial institutions play in financial development in African countries? A study of both informal and formal financial markets in Ghana, Malawi, Nigeria and Tanzania, Financial Market Fragmentation and Reform in Sub-Saharan Africa, shows that informal institutions use specialized methods to serve broad segments of the population that lack access to banks. Although they have responded positively in a liberalized environment, fragmentation into isolated market segments persists. Greater efforts are needed to integrate informal institutions into financial development strategies.

A well-developed banking system is prerequisite for a fast-growing economy. The introduction of financial instruments is a collaborative effort that pits the results of analysis of the banking sector's development and impact on the economy against basic regulatory standards and approaches to state regulation of the financial system's development and banking subsystem. Banking sectors, according to economic literature, play an intermediation role by enabling money transfers between fund-suppliers and fund-demanders. This can be accomplished by attracting savings and then directing those funds into loans to fund various economic activities, resulting in economic growth (EG). Every bank has its own internal component that affects financial performance in a particular way the more efficient a country's financial sector develops, the more likely its limited resources will be channeled to the most productive use. Openness in the banking sector may have a direct impact on growth by enhancing access to financial services and indirectly by improving the efficiency of financial intermediaries, both of which lower the cost of financing and, as a result, encourage capital accumulation and economic growth. A variety of macroeconomic links, notably the one between financial development and long-run growth, have been studied using cross-country regressions. Microeconomic explanation differs from the traditional perspective, which sees financial intermediaries as a bridge between borrowers and lenders' differing interests in terms of the size, maturity, and risk of a financial investment.

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In this paper, we propose a theoretical model in which a banking crisis (or bank distress) causes declines in the aggregate productivity. When borrowing firms need additional bank loans to continue their businesses, a high probability of bank failure discourages ex ante investments (i.e., "specialization") by the firms that enhance their productivity. In a general equilibrium setting, we also show that there may be multiple equilibria, in one of which bank distress continues and the borrowers' productivity is low, and in the other equilibrium, banks are healthy and the borrowers' productivity is high. We show that the bank capital requirement may be effective to eliminate the bad equilibrium and may lead the economy to the good equilibrium in which the productivity of borrowing firms and the aggregate output are both high and the probability of bank failure is low. * We thank Kengo Nutahara for excellent research assistance.

This study investigates the causal relationship between financial development and economic growth in Sri Lanka over the period 1955 to 2005. After considering the time series characteristics of six measures of financial development, Johansen cointegration and the appropriate Error Correction Model are used to investigate the causal relationship between financial development and economic growth. The findings suggest that broad money causes economic growth with two-way causality. The major finding of this study does not strongly support the view that financial development boosts economic growth.

show that the constrained efficient allocations of endowment economies with complete markets and limited commitment can be decentralized with endogenous borrowing limits on the Arrow securities. In a model with capital accumulation, aggregate risk and competitive intermediaries, we show that such a decentralization is not possible unless one imposes an upper limit on the intermediaries' capital holdings. Since there is no empirical evidence of such restrictions, we also characterize the equilibrium with no capital accumulation constraints. We show that this allocation solves a similar system of equations to the one of the constrained optimal solution, a result which considerably simplifies the equilibrium computation. In addition, capital accumulation is higher in this case, since the intermediaries do not internalize that fact that a higher aggregate capital increases the incentives to default. Finally, this also implies that agents may enjoy a higher welfare in the long run in spite of the fact that this allocation is not constrained efficient.

In recent past, there has been upward movement of bank frauds in Nigeria. For instance, the figure rose to N8 309.83billion in 2004 as against N 3399.39 billion in 1994 representing an increase of over 350%. This no doubt has lowered the confidence of the public and bank customers and hence the need for this research. The banking system is the medium through which funds flow into and out of the country. Some factors were identified as causes of fraud and illegitimate acquisition of wealth. This study empirically tested if there is no significant relationship between deposits on the one hand, and the following explanatory variables-fraud, actual/expected loss and MLA between 1989 -2004. The Ordinary Least Square method (OLS) was employed in the study. Furthermore, correlation coefficient, t-test, F-test and the standard error were used in testing the relationship between the variables formulated in the hypotheses. From the four tests carried on the fitted regression model, three of them show that the regression is very useful in explaining variability in deposits.

Few issues in economics have experienced such a grandiose revival as the role of institutions in economic change. With the beginning of the transition process in Central and Eastern Europe and the former Soviet Union, optimal sequencing and timing of reforms in the transformation process became a focus of scholarly research. Clearly, the success of the reform efforts in transition economies depends to a considerable extent on the existence of adequate institutions. Financial systems are institutions. The objective of financial system reforms is to expand the volume and efficiency of financial intermediation. This work analyses the sequencing and timing patterns of structural and institutional reforms in the financial systems and the macro-economic empirical evidence of financial system reforms in six transition countries. These are Bulgaria, the Czech Republic, Hungary, Poland, Romania, and the Slovak Republic.

This review puts a corporate finance lens on microfinance. Microfinance aims to democratize global financial markets through new contracts, organizations, and technology. We explain the roles that government agencies and socially minded investors play in supporting the entry and expansion of private intermediaries in the sector, and we disentangle debates about competing social and commercial firm goals. We frame the analysis with theory that explains why microfinance institutions serving lower-income communities charge high interest rates, face high costs, monitor customers relatively intensively, and have limited ability to lever assets. The analysis blurs traditional dividing lines between nonprofits and for-profits and places focus on the relationship between target market, ownership rights, and access to external capital.

This paper proposes to organize thinking about the opportunities for improving and extending financial markets and safety nets for the poor, by focusing on factors that may explain why the linkage of local financial networks and safety nets with the larger economy often fails or is incomplete. Understanding the nature of these impediments is the first step in proposing policies to help promote more effective linkage and intermediation. We propose four explanations for the slowness of adoption of intermediation (high costs of delegated monitoring aggravated by limited intermediary capital; lock-in and crowding out effects from local insurance arrangements, social norms against cooperation with intermediaries; and political resistance to new institutions that shift the balance of power in local polities). Of course, financial repression and weak legal systems remains important as cause of lack of intermediation. We conclude with a review of public policy for more effective intermediation.

FinTech financial technology operates as a revolutionary sector that implements critical changes to service delivery mechanisms for unbanked and underbanked groups throughout the United States. The research evaluates FinTech advancement as a method to enhance financial technology while assessing its ability to remove obstacles faced by disadvantaged groups. The research examines recent FinTech solutions through case studies and statistical data and theoretical frameworks while evaluating mobile banking and peer-to-peer lending in their role to extend financial access across the United States. The research analyses quantitative banking and payment and lending data to demonstrate how FinTech tools reduce financial exclusivity. The evaluation of digital wallet success and online lender market growth along with mobile payment adoption establishes critical relationships illustrating these technological approaches to financial accessibility enhancement. The study demonstrates how FinTech solutions make banking products more accessible and affordable to low-income groups and rural dwellers and diverse communities for superior financial services delivery. The innovations demonstrated dual benefits by reducing transaction costs at the same time they raised credit availability and improved reading skills so new groups entered traditional financial networks. The research indicates that government financial regulation works alongside FinTech service growth to protect the consumer while the expansion occurs. The research findings demonstrate how FinTech brings transformative changes to financial technology making sure that all groups with past financial service barriers become part of the formal financial system. The need exists to continuously enhance FinTech solutions while guaranteeing they can be used safely and equally by people from all walks of society.

Financial intermediation can be performed by certain types of financial agents or financial brokers in selected European countries. Using primarily analysis and the comparison, the authors focus on certain legal aspects of distribution of financial services in selected Member States of the EU and the EEA, providing a comparative legal analysis. In Slovakia, it is being focused on the subordinate financial agent. The subordinate financial agent is an entrepreneur entitled to perform financial intermediation. The subordinate financial agent belongs under the delegated supervision of the independent financial agent. The paper deals with a consideration de lege ferenda, a change to the relevant legislation according to which the subordinate financial agents could belong to the supervised financial market entities. The authors provide pros and cons regarding the direct supervision of this entity realized by the National Bank of Slovakia. The paper is being prepared by using analysis, syn...

This study considers a world where it is possible to attain full financial inclusion where full financial inclusion means achieving a 100% level of financial inclusion in whichever way financial inclusion is measured. It was argued that increasing the level of financial inclusion is a priority for policymakers in developing countries while many developed countries have already attained a high level of financial inclusion. After the highest possible level of financial inclusion has been attained, countries that have achieved such a feat will think about what next can be done about financial inclusion. This article addresses this issue and offers insights into the course of action that countries can take after achieving full financial inclusion in whichever way financial inclusion is measured. This study also explores the philosophical nature of this question by casting some light into whether attaining full financial inclusion is a worthwhile goal for policymakers to focus on. The insights offered in this study are useful to scholars, policymakers and those responsible for increasing financial inclusion in their countries.

Credit markets around the world are undergoing digital transformation which has led to the rise in FinTech and BigTech lending. FinTech and BigTech lending is the provision of credit by FinTech and BigTech providers who have more capital, cutting-edge IT systems, worldwide recognition, greater online presence and are able to handle more big data on computers and mobile phones than traditional banks. FinTech and BigTech lending is growing in importance, but the determinants of FinTech and BigTech lending have received little attention in the literature. This study investigates the determinants of FinTech and BigTech lending. The study focused on the effect of financial inclusion and financial development on FinTech and BigTech lending. Using data for 18 countries from 2013 to 2019 and employing the difference-GMM and 2SLS regression methods, the findings reveal that financial inclusion and financial development are significant determinants of FinTech and BigTech lending. Financial development is a positive determinant of FinTech and BigTech lending while financial inclusion has a significant effect on FinTech and BigTech lending. Also, FinTech and BigTech lending lead to greater banking sector stability and also poses the risk of rising nonperforming loans. There is also a significant positive correlation between financial development and FinTech and BigTech lending. These findings add to the emerging literature on the role of FinTech and BigTech in financial intermediation. This research is significant because it provides insights into the role of financial inclusion and financial development in the digital transformation of credit markets.

This study examines the relationship between country-level non-performing loans (NPLs) and financial development. In the full country analysis, the findings indicate that financial development measured as private credit to GDP ratio is positively associated with NPLs. Also, NPLs are inversely associated with bank efficiency, loan loss coverage, banking competition and banking system stability; and is positively associated with foreign bank presence, banking crises and bank concentration. We also find that efficient and stable banking sectors experience higher NPLs. In the regional analysis, NPLs are observed to be negatively associated with regulatory capital and bank liquidity while the graphical analysis show that NPLs are inversely related to financial development and profitability across regions. The findings have implications.

In this paper, we estimate a six-state common factor model from sixty-…ve monthly and quarterly macroeconomic time series. The six Many thanks to Nick Bloom and William Dunkelberg for supplying their data. We also thank Tim Fuerst, Kundan Kishore, and Peter VanderHart as well as seminar participants at the June 2010 Western Economic Association Meetings and the February 2011 Eastern Economic Association Meetings for helpful comments and suggestions. The views expressed in this paper are solely those of the authors and not those of the Federal Reserve Bank of Dallas or the Federal Reserve System.

Purpose ─ This paper investigates the effect of commercial bank regulations, namely the price, product, and geographic regulations, on the intermediation function of commercial banks in Nigeria. Methods ─ Using secondary data from 1986 to 2017 from the Central Bank of Nigeria (CBN) and the World Bank, this study employs the Autoregressive Distributive Lag (ARDL) model and Granger causality framework. Findings ─ This paper provides evidence of a long-run relationship between commercial bank regulation and intermediation function represented by private sector credit to RGDP (regional gross domestic product). It also finds that commercial banks' regulation index through price, product, and geographic regulation has a positive relationship with intermediation function. Furthermore, the long-run relationship between commercial bank regulation and intermediation function described by private sector credit to RGDP is affirmed. Implication ─ The Central Bank of Nigeria (CBN) needs to relax the product regulation to allow commercial banks to engage in various conventionally non-banking activities. Originality ─ The paper contributes to the literature by ascertaining the commercial banks' intermediation function to Nigeria's economic growth and development.

Objective- The purpose of this study is to compare the effectiveness of monetary policy transmission through conventional and Islamic instruments through the interest rate channel and profit loss sharing / margins channel, to control the price level (inflation) and economic growth (output) Method – Methodology used in this study is the Vector Auto Regressive (VAR) / Vector Error correction model (VECM) to see the effect of shock and long-term effects on inflation and output. Variables used are SBI interest rates, PUAB interest rate, deposit rates and lending rates, as well as from the Islamic side is SBIS yield, yield PUAS, profit lost sharing for the deposits and margin financing. This study use Unit Root Test, Cointegration degree of integration test, test causality, VECM and IRF estimates. Using monthly time series data from 2009 s / d 2012. Result – Results of the study showed that the test based on Granger causality, overall, the transmission channel of monetary policy accordin...

Розглянуто роль банків у системі фінансового підприємництва з тих позицій, що вони є провідними фінансовими посередниками. Виділено сегменти фінансових послуг. Надано правову характеристику фінансового підприємництва. Такий стан речей зумовлений переважанням їхнього фінансового потенціалу над потенціалами інших суб’єктів системи фінансового посередництва. У ході поступального розвитку економічних систем роль і місце банків у системі фінансового посередництва змінюється, що потребує додаткового дослідження. Наголошено, що розвиток банківського посередництва повинен відповідати стану економіки і ринку позичкового капіталу. Розкрито еволюцію організаційних форм і форм власності банківського підприємництва. Систематизовано науково-методичні підходи до з’ясування суті банку. З’ясовано, що, здебільшого, в основу поняття «банк» покладено перелік фундаментальних банківських операцій, відмінність полягає тільки в їхній кількості — від двох до п’яти. Подібний підхід узяло за основу й українсь...

This paper attempts to investigate the domestic components of the financial liberalization process in Pakistan and develops an index of domestic financial liberalization capturing the important dimensions of reform process. Employing the multivariate co-integration technique and error-correction mechanism, the results indicate a positive impact of the index on economic growth in the long run, while its short run impact is found to be negative. Empirical findings highlight the importance of further financial deepening and financial intermediation, in a conducive environment, that are essential components to successfully implement reforms for growth stimulation.

This paper attempts to investigate the domestic components of the financial liberalization process in Pakistan and develops an index of domestic financial liberalization capturing the important dimensions of reform process. Employing the multivariate co-integration technique and error-correction mechanism, the results indicate a positive impact of the index on economic growth in the long run, while its short run impact is found to be negative. Empirical findings highlight the importance of further financial deepening and financial intermediation, in a conducive environment, that are essential components to successfully implement reforms for growth stimulation.

This paper establishes that the profit-seeking activities of private intermediaries can ensure Pareto efficiency in the standard pure-exchange monetary overlapping generations economy without the need for government monetary or fiscal policy intervention. Moreover, these profit-seeking activities are shown to rule out all aperiodic and kperiodic cycles for k greater than 2. Contrary to much recent work on intermediation, the profit opportunities that arise for intermediaries in this context are not due to assumed frictions or asymmetric information. Rather, they are due to the dynamic open-ended structure of the economy, which permits debt roll-over.

Do active earnings-driven intermediaries have a significant role to play in dynamic economies, even in the absence of transactions costs and asymmetrical informa tion? This paper shows that the answer is "yes" for the overlapping generations (OG) economy. This role is not recognized in traditional OG models because an overly restrictive definition of equilibrium is used which rules out the possibility of positive earnings for intermediaries a priori. Using a simple illustrative OG model, it is shown that positive earnings are possible for intermediaries when the definition of equihbrium is relaxed to that which is standard for general equihbrium models with finitely many agents and finitely many goods. Moreover, the set of equiUbria then depends upon the actions taken by the intermediary. In particular, the incorporation of an active earnings-driven intermediary can reduce, or even eliminate, the possibility of inefficient equilibria. These findings suggest that the OG model is incomplete without an explicit description of the intermediation process.

The Economic Development Institute (EDI) was established by the World Bank in 1955 to train officials concerned with development planning, policymaking, investment analysis, and project implementation in member developing countries. At present the substance of the EDI's work emphasizes macroeconomic and sectoral economic policy analysis. Through a variety of courses, seminars, and workshops, most of which are given overseas in cooperation with local institutions, the EDI seeks to sharpen analytical skills used in policy analysis and to broaden understanding of the experience of individual countries with economic development. In addition to furthering the EDI's pedagogical objectives, Policy Seminars provide forums for policymakers, academics, and Bank staff to exchange views on current development issues, proposals, and practices. Although the EDI's publications are designed to support its training activities, many are of interest to a much broader audience. EDI materials, including any findings, interpretations, and conclusions, are entirely those of the authors and should not be attributed in any manner to the World Bank, to its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. Because of the informality of this series and to make the publication available with the least possible delay, the manuscript has not been edited as fully as would be the case with a more formal document, and the World Bank accepts no responsibility for errors.

The purpose of this article is to assess the use of the complementary relationship between the Islamic Bank of Senegal and microfinance institutions in the SME financing process. Currently in Senegal, the constraints on the financing of SMEs are intensifying more and more and continue to limit state policies in the process of promoting sustained economic growth for lack of funding model that responds effectively to investment needs of the latter. In this perspective of marginalization of SMEs by traditional financial intermediaries’ especially traditional banks, the importance of using Islamic Bank / MFI complementarity could be a solution to such a situation of under-financing of SMEs. This new funding model can have a downward impact on transaction costs, reduce risk management and increase the medium- and long-term volume of credit available to SMEs. It would thus promote the financial and social inclusion of Senegalese SMEs. This new funding model can have a downward impact on t...

We examine the determinants of financial development using our global sample and employing a rich set of measures of financial development that assess the degree of depth, access, stability and efficiency of financial intermediaries. We use Bayesian model averaging to test competing theories within this unifying framework. Examining nearly 40 potential determinants of financial development, we find that the rule of law and the level of economic development are the most important. Wealth inequality is irrelevant for banking sector development but positively associated with stock market development. Finally, our results suggest that financial market regulations matter for stock market efficiency and financial stability.

A well-developed banking system is prerequisite for a fast-growing economy. The introduction of financial instruments is a collaborative effort that pits the results of analysis of the banking sector's development and impact on the economy against basic regulatory standards and approaches to state regulation of the financial system's development and banking subsystem. Banking sectors, according to economic literature, play an intermediation role by enabling money transfers between fund-suppliers and fund-demanders. This can be accomplished by attracting savings and then directing those funds into loans to fund various economic activities, resulting in economic growth (EG). Every bank has its own internal component that affects financial performance in a particular way the more efficient a country's financial sector develops, the more likely its limited resources will be channeled to the most productive use. Openness in the banking sector may have a direct impact on growth by enhancing access to financial services and indirectly by improving the efficiency of financial intermediaries, both of which lower the cost of financing and, as a result, encourage capital accumulation and economic growth. A variety of macroeconomic links, notably the one between financial development and long-run growth, have been studied using cross-country regressions. Microeconomic explanation differs from the traditional perspective, which sees financial intermediaries as a bridge between borrowers and lenders' differing interests in terms of the size, maturity, and risk of a financial investment.

Following the 2007-2008 financial crisis, there is widespread interest in understanding how derivative use drives bank lending behavior. Our paper examines the impact of bank ownership structure on the relationship between derivative use and lending activities of U.S. banks. We find that lending recovered faster in larger banks than smaller banks post-crisis and in line with Diamond's (Diamond DW 1984 Financial intermediation and delegated monitoring. Rev Econ Stud 51:393-414) systemic risk reduction theory, derivative use is positively associated with lending growth. Ownership is significant in explaining the magnitude of the relationship even after controlling for alternative specifications of the derivative use variable. In both normal and crisis periods, the speed of adjustment of lending to derivatives use by stock banks lags that of mutual banks. We suggest that speculative trading in derivatives substitutes for lending growth to a larger extent for stock banks compared to mutual banks. These findings may have important implications for investors and bank regulators.

We focus on the economies of the North Atlantic Core during the nineteenth and early twentieth centuries and find that an impressive variety of local financial institutions emerged to supply the needs of SMEs wherever there was sufficient demand for their services. Although these intermediaries had significant weaknesses, they were able to tap into local information networks and so extend credit to firms that were too young or small to secure funds from large regional or national institutions. In addition, by raising the return to savings for local households, they helped to mobilize significant new resources for economic development.

We examine the impact of frictional financial intermediation in a HANK model. An incentive problem restricts banking sector leverage and gives rise to an equilibrium spread between the returns on savings and debt. The size of this spread impacts on the wealth distribution and movements in it subject borrowers and savers to different intertemporal prices. The model generates a financial accelerator that is larger than in a representative agent setting, derives mainly from consumption rather than investment, and works through a countercyclical interest rate spread. Credit policy can mute this mechanism while stricter regulation of banking sector leverage inhibits households' ability to smooth consumption in response to idiosyncratic risk. Thus, although leverage restrictions stabilize at the aggregate level, we find substantial welfare costs.

This paper attempts to ascertain whether or not functional diversification is valueenhancing or value-destroying in the financial services sector. Based on a U.S. dataset comprising approximately 4060 observations covering the period 1985-2004, we report a substantial and persistent conglomerate discount among financial intermediaries. Our results suggest that it is diversification that causes the discount, and not that troubled firms diversify into other more promising areas. We also investigate the geographic dimension of diversification as well as the interaction between geographic scope and functional diversification and find that the value-destruction associated with functional diversification is not apparent in geographic diversification. A further finding is that there is a significant premium for the very largest of our sample firms (with total assets above 100bn USD) indicating that there are "too big to fail" guarantees for very large financial conglomerates.

This paper revisits the problem of building a multicriteria additive value model for credit risk assessment, with a particular focus on quantitative criteria. The analysis deals with the information content of financial ratios collected from the European BACH-ESD database, covering aggregate firm data for seven countries -

Regulatory proposals that require financial intermediaries to issue subordinated debt are based on the premise that transactions in the secondary market of subordinated debt can attenuate moral hazard on the part of management if secondary market prices are informative signals of the solvency risk of the intermediary. Owing to the proprietary nature of dealer prices and the liquidity of secondary transactions, the practical value of information provided by subordinated debt issues in isolation is questionable. Following the view articulated by Flannery (1998), we propose a multivariate dynamic risk signal that combines fluctuations in equity prices, subordinated debt and senior debt yields. The signal is envisioned as a complementary instrument for regulators and investors to monitor and assess in real time the risk profile of the issuing institution. The signal is constructed as a coincident indicator with the following characteristics: (1) it is stochastic because is based in a time series model of yield fluctuations and equity returns; (2) it is extracted from pricing data; (3) it monitors idiosyncratic risk of the intermediary because yields and equity returns are filtered from market conditions; and (4) it is predictable to a large degree because it is possible to construct a leading indicator based almost entirely on spreads to Treasury. We implement the signal with data of the Bank of America after its merger with Nations Bank in October 1, 1998, and with data of Banker's Trust up to its merger with the Deutsche Bank in November 1998. In the case of Bank of America, the signal points mainly to two events of uprising risk, one in January 2000 when the bank disclosed losses in its bond and interest-rate swaps portfolios, which grew to $5.3 billions in the fourth quarter of 1999 from $3.7 billion in the third quarter; and another in November 2000 when the bank wrote off $1.1 billion for bad loans. In the case of Banker's Trust, the signal points to the period of October/November 1995 after the filing of federal racketeering charges against Banker's Trust; and October 1998 when the bank suffered substantial losses from its investments in emerging markets.

This study investigates the impact of financial inclusion on the growth and development of small and medium enterprises (SMEs) in Lagos State, Nigeria. The research aims to explore the accessibility of financial services for SMEs, assess how these services affect their growth and development, and evaluate the acceptance of new financial technologies by these enterprises. Utilizing a positivist research philosophy and a deductive approach, the study employs a quantitative methodology, involving a survey of 204 SME owners in Lagos. The findings reveal that SMEs in Lagos have broad access to traditional financial services such as savings accounts and electronic payments but face limitations in accessing more specialized services like venture capital. Financial inclusion positively influences SME growth and development, with services like insurance and payment systems significantly contributing to operational efficiency and business success. Furthermore, SMEs demonstrate a positive acceptance of new financial technologies, particularly mobile banking and cybersecurity solutions, though the adoption of some advanced technologies, such as peer-to-peer lending platforms, remains limited. This study underscores the importance of enhancing financial service accessibility and promoting technological innovations to support SME growth. It provides valuable insights into the financial needs and technological readiness of SMEs in Lagos, offering implications for policymakers and financial institutions aiming to foster a more inclusive and supportivebusiness environment

An electronic payment system, often referred to as an e-payment system, is a crucial component of electronic commerce (E-commerce) and electronic data interchange. It enables the acceptance of electronic payments for various offline transactions. As the internet has become integral to banking and shopping, E-commerce payment systems have gained widespread popularity. Credit cards are the dominant payment method for online transactions, with nearly 90% of North American online retail transactions utilising them. These systems require strict adherence to regulations set by credit and debit card issuers and the implementation of security measures, including encryption and careful coding, to protect user data. While credit card security has improved in some regions, challenges persist in enhancing it worldwide. Various financial intermediaries like PayPal, Smart Pay and Stripe facilitate online transactions, but concerns about security and trust issues between the public and financial institutions continue to be relevant in the digital payment landscape.

Purpose – This study aims to investigate fintech’s influence on enhancing banking services. Design/Methodology/Approach – Data was collected through semi-structured interviews. A total of 10 interviews were conducted, transcribed and analysed. Findings – The study revealed that fintech influences banking services through improved efficiency in banking services. Also, this study revealed the non-competitive relationship between banks and fintech companies. However, banks do perceive fintech companies as a threat. Further, the study found that IT innovation is a fundamental element enshrined in customer-centric business models that banks are pursuing. Conclusions and Key Recommendations – Banks should not only focus on fintech-enabled customer-centric business strategies and models but also note that the timing of fintech adoption is a critical competitive factor. Secondly, banks should consider investing in building innovative in-house infrastructure. Another option could be to look at acquiring fintech companies for a sustainable solution. Lastly, entering digital financial services to increase market share is recommended. Practical Implications – The present study validates the position that managing fintech influences banking services and is a fundamental element in the strategic focus and tactics of banks. Therefore, the influence of fintech is fascinating for all in the banking sector.

Financial system plays a key role in fostering economic growth by efficiently channelling the funds to investments. However, financial system is also considered as the source of instability especially during crisis periods. How to redesign financial system globally and nationally in order to achieve and maintain global financial stability without sacrificing the benefits of it is one of the priority issues for policy makers. This study surveys the benefits obtained from and damages caused by the financial system. This survey further overviews policy implications and suggestions about improving the financial system which help achieve long-term global financial stability.

Policymakers around the world have given financial inclusion more consideration since it is seen as a solid foundation for human progress. Countries' traditional financial systems are insufficiently able to appeal to all facets of society. The legacy system has a number of obstacles that prevent affluent people from participating in the financial industry. Our study uses big data analytics and artificial intelligence to examine how financial inclusion is implemented in economies that are developing. The advantages and problems of big data and artificial intelligence (AI) for financial inclusion are covered in this study. Enhancing efficiency and risk management for financial service providers, offering intelligent financial products and services to banked adults, streamlining the account opening process for unbanked adults, and generating credit scores for unbanked adults using alternative data are some advantages of artificial intelligence and big data for financial inclusion. The lack of qualified AI workers, rising unemployment in the financial sector, unconscious bias in AI system design, and other obstacles brought on by stringent data privacy regulations are some of the problems related to AI and big data for financial inclusion that require attention.

The study describes the specifics of financial intermediation and characterizes the nature and structure of the financial system. The sources for financing the entrepreneurial activity and the functions performed by the financial markets are presented. The main theories about the nature of financial intermediation are systematized and its impact on economic growth has been studied. By using a system of financial indicators an empirical research on trends in financial intermediation in selected countries in recent years was carried out.

The study describes the specifics of financial intermediation and characterizes the nature and structure of the financial system. The sources for financing the entrepreneurial activity and the functions performed by the financial markets are presented. The main theories about the nature of financial intermediation are systematized and its impact on economic growth has been studied. By using a system of financial indicators an empirical research on trends in financial intermediation in selected countries in recent years was carried out.

This short paper reviews recent literature on the use of long-term finance in developing economies (relative to advanced ones) to identify where long-term financing occurs, and what role different financial intermediaries and markets play in extending this type of financing. Although banks are the most important providers of credit, they do not seem to offer long-term financing. Capital markets have grown since the 1990s and can provide financing at fairly long terms. But few firms use these markets. Only some institutional investors provide funding at long-term maturities. Governments might help to expand long-term financing, although with limited policy tools.