Journal of Monetary and Banking Research
Year:2016 | Volume:9 | Issue:29 |Papers Count:6

For those resource (oil) exporting countries that are exposed to the terms of trade shocks and follow pro-cyclical fiscal policies, standard flexible inflation targeting with floating exchange rate may not be a suitable monetary policy framework. One of the approaches that has been discussed in the literature to improve stabilization policy is to insulate fiscal policy from the balance of payment shocks through activating a Currency Reserve Fund (CRF). In the context of a DSGE model that captures structural characteristics of the Iranian economy, the effect of activating a CRF on stabilization and welfare performance of three inflation targeting regimes: domestic inflation targeting, CPI inflation targeting, and real exchange rate targeting is evaluated in this paper. For this purpose, first we evaluate stabilization and welfare performance of the above-mentioned regimes under the following conditions: high financial vulnerability; both high exchange rate pass-through and openness, along with complete raiding of the oil windfalls. We compare this policy scenario with the scenarios in which CRF is active. The simulation results indicate that in the first scenario the real exchange rate targeting is the optimal Ramsey policy and the monetary authority must react to currency misalignments. With an active CRF, real exchange rate fluctuations are diminished. This contributes to creation of an environment conducive for implementing flexible inflation targeting of CPI without repeated interventions by the monetary authority in the currency market.

This paper using TVAR model and data from 1376Q1-1392Q4 examines the asymmetric impacts of monetary policy and banking credits on gross domestic Product in low and upper regimes in Iran Regarding the difference between the interest-free and conventional banking system and according to McCallum rule monetary base variable has been used as monetary policy index. In most studies about the nonlinear relationship between monetary policy and real economic activity threshold variables are about credit market condition, this paper instead of credit market conditions focuses on economic activity. Using R software the threshold vector auto regression model is estimated and generalized impulse response function are extracted. Results indicate that the impact of monetary policy and banking credits on GDP in low and upper regimes is completely different. In other words, the findings support the asymmetric impact of monetary policy and banking credits in Iran.

Nowadays, interest rate is considered as a direct monetary policy instrument or intermediate monetary goal. Usually, interest rates on deposits and loans are determined by monetary authorities in Iran which affect the behavior of risk-taking of banks. In this paper, we study the effects of interes rates on risk-taking of banks by using data from financial statements of banking system. Our method of estimation is panel data and our study covers the time period 2006-2015. Our index of risk-taking is the ratio of non-performing loan to total loans. Our result show that the decrease of interest rate cause the risk-taking to increasing. Also the effect of monetary policy on risk-taking depends on financial stability of banks; that is, more stable banks are able to better control risk of changing in the interest rate. On the other hand, our results imply stronger effects of interest rate on state-owned banks, compared to private banks.

Size of banks is importance for the Basel Committee and other international regulatory organization. Basel Committee of banking supervision published guidelines in November 2011 for identification of important systemically banks in the countries. After identifying the types of banks in the banking system in each country; we can identify the possibility of potential losses and systemic risk. Large banks and important systemically banks can have different behaviors and their regulation vary from another bank.In this paper we survey that the changes in bank size and the relationship between bank stability and bank size. We survey that the banking variables can be effective on the size of the bank and bank stability. According to the results, there are the relationship between the size of the bank and bank stability in the Iranian banking system. This paper show that the squared of size bank can influence on stability banking. The managers with regard to the relationship between the size of banks and banking stability can be much more important influence on the stability of banks.

Corruption is an economic, political and cultural disorder phenomenon, that influence on developed and developing countries. In this study, first, we identify the phenomenon of corruption in a general equilibrium analysis. Then, we investigate the relationship between corruption, property right, and democracy, on the basis of the evidence from developing economies. For this purpose, a panel model is used to analyze relevant data of 53 selected developing countries for the period of 1996 and 2013. The results indicate significant negative effects of democracy, property rights, economic growth and investment on the level of corruption. Moreover, Gini coefficient of inequality and political instability have a significant and positive effect on corruption. Our findings also show by adding the interaction variable between democracy and property right protection as a new variable, the relationship between the corruption and democracy increase and that shows that the effect of democracy on corruption is empowered with the property right protection variable.

Stability and the bank's risk have become important, over the past few years and after the financial crisis of 2007. Many economic determinants at the micro and macro level create the risk of the banking and financial stability. Identifying and managing of these factors can help to reduce bank risk and also improve financial stability. In this paper, the impact of macroeconomic variables on risk and financial stability is examined across commercial banks of 18 countries during 2005-2014 with using panel data methods. The results show that the macroeconomic factors have significant effects on risk and banking stability. The economic growth and inflation rate increase the bank stability, but an increase in the exchange rate, budget deficit, and oil revenues reduce banking stability. According to the results, An increase in economic growth and decrease in inflation reduce credit risk but increases liquidity risk. The budget deficit is no significant effect on liquidity risk but also reduces credit risk.