Sound ALM practices ensure the stability and liquidity of banks, thus enhancing the profitability. ALM is a mechanism to address the risk faced by banks due to mismatch in assets and liabilities. In the context of India, banking industry is closely monitored and supervised by Reserve Bank of India (RBI). As a part of many norms to ensure the sound banking system, RBI also has come out with the ...

This paper investigates the impact of changes in a bank’s health on the investment behavior of its current borrowers for a panel of U.S. firms. I find that, after controlling for aggregate credit availability and the condition of outside banks, firms reduce their investment when the health of their primary bank deteriorates. Specifically, a 2% increase in the loan nonperformance of a commercial...

In the aftermath of the financial crisis, there is interest in reforming bank regulation such that capital requirements are more closely linked to a bank’s contribution to the overall risk of the financial system. In our paper we compare alternative mechanisms for allocating the overall risk of a banking system to its member banks. We explicitly take into account that overall risk as well as ea...

Regulators and managers in the banking sector prioritize system’s stability safety to limit risks, shocks, potential losses. This study reveals why a bank is more or less stable via capital, liquidity creation, asset diversification. We form structural model which capital affects through diversification moderates relationship between of banks. employ moderated mediation Partial Least Squares St...

The present study aims at developing an aggregate financial stability index by using banking sector indices to assess financial stability and examine if the variable of credit-to-GDP gap corresponds to its long-term trend which represents the macro-prudential indicator has co-movement with the built financial stability index? To this end, monthly banking balance sheet data were collected from t...

This case study discusses the management rejig in RBL Bank and its impact on bank stakeholders such as shareholders, depositors, staff. It includes analysis of balance sheets, income statements, cash flows to financial position bank. Financial is found be sufficiently stable Reserve India (RBI) also supporting with statement about stability Credit rating agencies will monitor things may revise ...

Female Central Bank chairs represent but a tiny minority. To understand why, this article analyzes socio-economic and socio-political characteristics of the countries where women have chaired Central Banks. Then, it suggests that gender differences in preferences as regards monetary policy goals may have some influence. An innovative econometric methodology, which does not require estimating al...

The most obvious characteristic of inflation targetting is an explicit numerical inflation target. There is also a logical and efficient decision process, which I have called forecast targetting. The central bank makes forecasts of inflation and other variables, such as the output gap, and then chooses the interest rate so that these forecasts “look good”, that is, are consistent with the objec...

This note characterises the evolution of Chile’s public debt, and discusses its implications for the management of the country’s monetary policy. Historically, the main issuer of public debt in Chile was the central bank. The government, in turn, has recently started to engage in a more active debt policy, with the aim of deepening the market for risk-free securities and diversifying its fundin...