Volume 9, Issue 35 (6-2019)                   jemr 2019, 9(35): 111-144 | Back to browse issues page

XML Persian Abstract Print


Download citation:
BibTeX | RIS | EndNote | Medlars | ProCite | Reference Manager | RefWorks
Send citation to:

Ghaemi Asl M, Ghasemi Nik E. Investigating the Assets Quality in Banking System in Iran with Emphasis on Liquidity and Non-Performing Loans Reserve Buffers. jemr. 2019; 9 (35) :111-144
URL: http://jemr.khu.ac.ir/article-1-1808-en.html
Abstract:   (671 Views)
In this research, the factors affecting assets quality in banking system of Iran and some implications for creating appropriate buffers of liquidity and non-performing loans in bank assets management has been investigated. In order to that, statistical data related to macroeconomic variables and financial statements of 30 banks from 2006 to 2016 have been used in the framework of a dynamic panel specification. The results indicate that there is a significant relationship between inflation rate, domestic gross production growth rate, bank share of total revenues, market Structure and bank liquidity with asset quality, but the growth rate of facilities and special and general reserves for non-performing loans have no significant effect on asset quality. Thus, the framework and the amount of special and general reserves for non-performing loans (unlike the liquidity buffer) failed to provide the necessary buffer to improve the quality of bank assets; so, one of the most important reasons for the persistent aggravation and lack of management of the volume of non-performing loans in banking system is dysfunctional and non-observance of the law in the maintenance of special and general reserves. The main requirement for correcting these conditions is to closely monitor the volume of reserves before refinancing and double overdraft from the central bank and other banks and credit institutions.
Full-Text [PDF 947 kb]   (175 Downloads)    
Type of Study: توسعه ای | Subject: پولی و مالی
Received: 2019/01/29 | Accepted: 2019/05/5 | Published: 2019/06/10

References
1. Abata, M. A. (2014). Asset Quality and Bank Performance: A Study of Commercial Banks in Nigeria. Research Journal of Finance and Accounting, 5(18), 39-44.
2. Abdul Gafoor, C. P., Mariappan, V., Thyagarajan, S. (2018). Does the Board Structure Affect the Asset Quality of the Banks? Evidence from India. IIM Kozhikode Society & Management Review, 7(2), 122- 131. [DOI:10.1177/2277975218767564]
3. Ahmadian, M. (2005). An Industrial Economy with a New Approach. Tehran: Publishers of collegiate Jahad, Tehran University.
4. Alhassan, A. L., Kyereboah-Coleman, A., Andoh, C. (2014). Asset Quality in a Crisis Period: An Empirical Examination of Ghanaian Banks. Review of Development Finance, 4(1), 50-62. [DOI:10.1016/j.rdf.2014.03.001]
5. Alizadeh Janvisloo, M., Muhammad, J. (2013). NonPerforming Loans Sensitivity to Macro Variables: Panel Evidence from Malaysian Commercial Banks. American Journal of Economics.
6. Alizadeh, M., Golkhandan, A. (2015). Leviathan Hypothesis Testing for the Iranian Economy by Using Generalized Method of Moments (GMM). Quarterly Journal of Applied Economics Studies in Iran, 4 (14), 141- 166.
7. De Bock, R., Demyanets, A. (2012). Bank Asset Quality in Emerging Markets: Determinants and Spillovers. International Monetary Fund (IMF) Working Paper, WP/12/71. [DOI:10.5089/9781475502237.001]
8. Dizaji, M., Panahi, H., Taghizadeh, H. (2009). The effect of military costs on foreign debts in developing countries. Journal of Economic Modeling, No. 7, 117- 136.
9. Eslamloueyan, K., Yazdanpanah, H., Khalilnezhad, Z. (2018). The Existence of a Risk-Taking Channel of Monetary Policy Transmission in Iran's Banking System. journal of Economic Modeling Research, 8 (31), 7-40.
10. Ezeoha, A. E. (2011). Banking Consolidation, Credit Crisis and Asset Quality in a Fragile Banking System: Some Evidence from Nigerian Data. Journal of Financial Regulation and Compliance, 19(1), 33-44. [DOI:10.1108/13581981111106158]
11. Farzinvash, A., heydari, H. (2011). Examining indirect effects of monetary policy on bank lending, through the balance-sheet items of the public and private banks. journal of Economic Modeling Research, 1 (2), 145-171.
12. Ghasempure, Sh., Salimi, M. J., Ebrahimi Sarv Alia, M. H., Ebrahimi, M. (2016). Analyzing the criteria for health assessment and stability of the banking system using the DEMETL method. Journal of Quantitative Studies in Management, No. 27, 93-112.
13. Grier, W. A. (2007). Credit Analysis of Financial Institutions. United Kingdom: Euromoney Institution Investor PLC, 2nd edition.
14. Hoggarth, G., Sorensen, S., Zicchino, L. (2005). Stress Tests of UK Banks Uusing a VAR Approach. Working Paper no. 282. Bank of England. [DOI:10.2139/ssrn.872693]
15. Hsiao, C. (1986). Analysis of panel data. Cambridge university press.
16. Islamic financial services board. (2012). Guiding principles on liquidity risk management for institution offering Islamic financial services [excluding Islamic insurance (takaful) institutions and islamic collective investment schemes].
17. Islamoglu, M. (2015). The Effect of Macroeconomic Variables on Non - performing Loan Ratio of Publicly Traded Banks in Turkey. Wseas transactions on business and economics. Vol (12).
18. Jim, H. Y. (2016). Impact of Macroeconomics and Bank Specifics on Nonperforming Loans and Banking Sustainability Performance. International Journal of Innovation and Applied Studies, 18 (4), 972-989.
19. Khemraj, T., Pasha, S. (2009). The Determinants of Non-Performing Loans: An Econometric Case Study of Guyana. MPRA Paper No. 53128.
20. Mehrabian, A., Seyfipure, R. (2016). Pathology of Performing Loans in Iran's Banking System. Quarterly Journal of Financial Economics, 10 (36).
21. Mehrabi, L. (2013). Management of Asset and Debt in Islamic Banks: Report of the Third Day of Islamic Banking Winter School. Article number 4.
22. Mirza'i, E., Mohammadi, T., Shakeri, A. (2016). The Interaction between Non-Performing Loans and Macroeconomic Conditions: A Panel Vector Autoregressive Approach. Journal of Economic Research, 16 (60), 183- 220.
23. Mohammadi, T., Shakeri, A., Eskandari, F., Karimi, D. (2016). Investigating The Effect of Exchange Rate Volatility on Non-Performing Loans in the Banking System of Iran. Journal of Planning and Budgeting, 21 (2), 3- 24.
24. Moinescu, B. G. (2012). Determinants of Nonperforming Loans in Central and Eastern European Countries: Macroeconomic Indicators and Credit Discipline. REBS (Review of Economic and Business Studies), 5(2).
25. Monjazeb, M., Mahmoodi Pati, M. (2017). Government Size and Inflation in Developing Countries: A Panel Data Approach. journal of Economic Modeling Research, 7 (26), 65-87. [DOI:10.18869/acadpub.jemr.7.26.65]
26. Muneer, S., Ishtiaq, M., Shahid Tufail, M., Sarwar, S. (2017). Determinants of Bank Asset Quality and Profitability. Journal of Managerial Sciences, Vol. XI, Number 3.
27. Nkusu, M. (2011). Non performing Loans and Macrofinancial Vulnerabilities in Advanced Economies. International Monetry Fund (IMF) Working Paper, WP/11/161. [DOI:10.5089/9781455297740.001]
28. Office of Banking Studies and Regulation of the Central Bank of the Islamic Republic of Iran. (2015). A statement of acceptance of the costs associated with the special reserve for doubtful loans of banks and unauthorized credit institutions as tax acceptable cost. No. 93/ 349105, Date. 2015/ 03/ 16.
29. Ongore, V. O., Kusa, G. B. (2013). Determinants of financial performance of commercial banks in Kenya. International Journal of Economics and Financial Issues, 3 (1), 237- 252.
30. Pustinchi, M., Tahsili, H., Karimzadeh, M. (2016). The impact of competition in the banking industry on the stability of banks. Two Journal of monetary Economics and financial (Former Science and Development), New course, 23 (11).
31. Pustinchi, M. (2013). The Impact of Competition in the Banking Industry on Banks delayed loans. Economic magazine, No. 7 and 8, 5- 18.
32. Rajabzadeh Maghani, N., Salimifar, M., Seyed Aghahosseini, M. (2015). Investigating the Impact of Investing in Human Capital on Economic Growth in Middle Eastern area and North African Countries Using the GMM Method. journal of research and planning in higher education, 21(1), 1- 19.
33. Seraj, S., Taheri, M. (2012). Banking surveillance based on a quick warning system, using the CAMEL ratio in format of the Logit model. Monetary and Banking Research, No. 12.
34. Seyed shokri, KH., Garusi, S. (2015). Investigating the Factors Affecting on increase Non- Performing Loans in the Banking System of the Country. Journal of Economic Sciences, 9 (31).
35. Shahchera, M., Abolfathi, F. (2016). Investigating the Factors affecting on the banking assets quality in Iran's Banking system. Journal of Economic Development Policy, Alzahra University, 4 (3).
36. Shamsabadi, P., Karimkhani, A. (2011). Investigating Bank Optimum Size from Economically (Case Study: Bank Sepah), Research and Risk Management Department.
37. Shingjergji, A. (2013). The Impact of Macroeconomic Variables on the Non Performing Loans in the Albanian Banking System during 2005-2012. Academic Journal of Interdisciplinary Studies MCSER Publishing- Rome, Italy, 2 (9). [DOI:10.5901/ajis.2013.v2n9p335]
38. Shu, Ch. (2002). The impact of Macroeconomics environment on the asset quality of Hong Kong's banking sector. Hong Kong Monetary Authority.
39. Suri, A. (2017). Advanced Econometrics (2). Tehran: Publication of farhang shenasi.
40. Swamy, V. (2017). Determinants of Bank Asset Quality and Profitability: An Empirical Assessment. Applied Economics Quarterly Vol. 63, No 1. [DOI:10.3790/aeq.63.1.97]

Add your comments about this article : Your username or Email:
CAPTCHA

Send email to the article author


© 2019 All Rights Reserved | Journal of Economic Modeling Research

Designed & Developed by : Yektaweb