Journal of Monetary and Banking Research
Year:2019 | Volume:12 | Issue:40|Papers Count:6

The peer effects induced by social interactions have been studied empirically for several socio-economic phenomena in the last three decades. Before, economists have considered preferences of actors as exogenous parameters which are a tradition rooted in the work of Milton Friedman. But most recently, many economists have studied processes of preference formation of actors and have developed theoretical models of endogenous preferences. The aim of this study is also to examine strategic interaction or peer effect systemic component on funding liquidity risk in banking industry of Iran and whether banks’ liquidity and maturity mismatch decisions of assets and liabilities are affected by the choices of competitors or not. The research sample includes all active banks of Iran from 2002 to 2016 and the model used is the liner regression model based on Manski's assumptions and instrumental variable approach. The evidences suggest that smaller banks are affected larger banks and learning and crises seems to drive the peer effect in funding liquidity risk of banks in those years.

This research examines the effect of the Capital Buffer, on banks as a regulatory and controlling factor on the relationship between liquidity risk and banks' risk aversion. In this study, eight banks were surveyed for the period of 2011-2014. In order to measure the Capital Buffer criterion, the legal deposit rates of central bank of the Islamic Republic of Iran has been used. For measuring the liquidity risk, the three criteria of the ratio of loans to deposit, the ratio of deposit composition and deposit ratio to assets have been used, and according to Khan et al (2016), risk taking of the bank has been using two benchmarks for the bank's book and market risk taking. The results of the research show that the interactive capital buffer and liquidity risk variable have a significant and reverse relationship with the bank's risk-taking. But the results of the research on the same effect of the legal reserve on the relationship between liquidity risk and market riskiness of the bank were only confirmed in the total deposits to total assets (the inverse criterion of risk-taking) criteria.

Political relationships can have both a positive and a negative impact on bank performance, which requires an empirical analysis to identify its impact. In this regard, the purpose of this study is to investigate the relationship between political communication and financial performance of banks accepted in Tehran Stock Exchange and OTC. In this study, in order to test the research hypothesis, financial information of 14 banks accepted in Tehran Stock Exchange and OTC was used during the period between 2013 and 2017. The research hypothesis test was performed using mixed data technique and multivariate regression. The results of the research hypothesis show that there is a significant negative relationship between political communication and financial performance of banks. In other words, political communication tends to focus less on maximizing shareholder values and will result in undermining the bank's financial performance.

In spite of realizing more loss than expected and reserved provision in loaning process, some of our banks avoid recognizing the losses, through extension of the loan contracts and consequently do not shift the realized losses to their capital. With this in mind, the major objective of this study is to design a frame-work, through which we can explain the differences between the results of the current and the legal approaches in banking operation, within the following models: 1-Model CU, which indicates the current practice of banking system in avoiding loss recognition through extension of the loan's contracts. 2-Model BM, which is a benchmark model and in line with the legal rules 3-Model AT, which represents the replacement of predetermined loan rate with a realized one (with close similarity to participation loans), as an alternative method. The analysis of the impulse responses of models, within the DSGE frame-work, shows that considering the legal requirements of the banks, will amplify the effect of the shocks to the real economy and if the loan rates are determined based on the realized return, instead of predetermined rate, the bank's unexpected loan losses will decline, in the face of many negative shocks.

This paper examines the efficiency and productivity of the banking industry in Iran, consideringdifferent ownership system of banks and different definations of bank's output and input. Moreover, in this study, the inclusion of undesirable outputs in the bank's performance is evaluated. The Multi-Frontier Malmquist-Luenberger Productivity Index applied to examine the performance of the banking system in Iran. The results of the statistical tests showed that the inclusion of the undesirable output had a significant effect on the efficiency of the banking system. Therefore, the lack of attention to such risks and undesirable outputs leads to an inaccurate estimation of the performance of the banks. On the other hand, adopting different determinations of output and input in banking system, causing different results in the banking performance but considering two different banks ownership in Iran has no significant impact on banking performance. The average efficiency in public banks is more than private banks performance when we consider the model under intermediary and product approach of defining banks output and input. In the case of profit approach, the efficiency of private banks is more than that of public banks.

The ultimate goal of monetary policy is to achieve price stability and favorable economic growth through policy tools. The purpose of this paper is to determine the optimal monetary policy rule and measure and evaluate the effectiveness of monetary policy in an elected economy-Pakistan-with optimal control method. In this way, using Dynamic Programming, monetary policy maker's loss function with respect to monetary transmission mechanism constraints will be minimized and optimal monetary policy rule is extracted. In this paper, to evaluate the index of Monetary Policy Efficiency, the total time period (1960-2017) is divided into two periods 1960-1994 and 1995-2017 and the efficiency monetary policy changes in two periods examined and compared. By assessing the efficiency of monetary policy, we can conclude that macroeconomic performance in the second period is worse than in the first period in all scenarios. Supply shocks also increased in the second period than in the first period. However, policy efficiency has increased in all scenarios. In analyzing the effectiveness of monetary policy in Pakistan, it should be noted that a more efficient monetary policy has been able to counteract some of the increase in economic shocks. In other words, the damage caused by the performance of the economy would be greater if monetary policy was not efficient and would not improve.