In recent decades; there has been unprecedented number of disruptive banking crises. Financial performance commercial banks have challenged over time and this seen some placed under receivership. Between 2019 to 2020, return on assets equity decreased making financial decline. The main objective was determine the influence Capital adequacy requirement Performance Commercial Banks listed at Nair...

Credit Risk Analysis and Security Design* This Paper considers the potential cost of subjective judgement and discretion in credit decisions. We show that subjectivity and discretion in the evaluation of borrowers create an incentive problem on the part of the lender. The lender’s incentives to accept or reject a borrower depend only on the value of their own claims, not on the total value of t...

We show how the current institutional setting of U.S.-dollar money markets limits the passthrough effectiveness of the Federal Reserve’s monetary policy. We focus on frictions associated with imperfect competition, regulation, infrastructure, and other forms of institutional segmentation within money markets. We model how imperfect competition is exacerbated by costs to cash investors associate...

Views stated in Policy Discussion Papers are those of the authors and not necessarily those of the Federal Reserve Bank of Cleveland or of the Board of Governors of the Federal Reserve System. Materials may be reprinted, provided that the source is credited. Please send copies of reprinted materials to the editor. " Toxic waste " refers to the riskiest derivative structures arising from collate...

Through recent amendments of its Commercial Bank Law and Securities Law, China has gradually softened its previous position mandating the segregation of financial business and supervision, as well as explored the financial conglomerate operation. Two models are considered in particular, namely the “universal bank” model, prevailing in Europe, and the “financial holding company” (FHC) model in t...

Payments systems typically involve a number of interconnected systems. These typically have at the center a large-value payment system (in many cases operated by a central bank) through which banks send funds to each other for various purposes. Some of these purposes include providing liquidity to complete transactions in any number of ancillary systems, such as other large value funds transfer...

oes the advance of securitization—a key element in the evolution from banking to “shadow banking” (Pozsar et al. 2010)1—signal the decline of traditional banking? Not necessarily, for banks play a vital role in the securitization process at a number of stages, including the provision of credit enhancements.2 Credit enhancements are protection, in the form of financial support, to cover losses o...

In this article, we review the nascent literature on transmission of negative policy rates. We discuss theory how depends bank balance sheets, and changes once rates become negative. growing evidence that are special because pass-through to banks’ retail deposit is hindered by a zero lower bound. summarize existing research impact lending securities portfolios as well their consequences for rea...

Modeling the effects and paths of systemic financial risk contagion is significant for stability. This paper focuses on China’s from perspective dynamic networks. First, we construct a high-dimensional network model to capture effects. Second, considering ripple effect contagion, introduce improve basic ripple-spreading network. Finally, small- medium-sized banks economic policy uncertainty are...