Evidence of bank lending channel in Malaysia

The aim of this paper is to analyse the role of banks in the transmission of monetary policy and business cycle. This paper attempts to look into the assets side as a monetary policy channel to influence economic activities. Changes in the monetary policy channel give an idea to regulate and strengthen the banking industry. The different views raise the following questions: how do changes in the monetary policy transmission affect commercial banks portfolio? If bank lending plays as a monetary policy channel, does it affect the other portfolios? Do the current regulations (such as capital requirement)affect the bank portfolio behaviour? Furthermore, Generalise Least Squares method was used to estimate the monetary changes toward commercial banks portfolio. Annual data was compiled from the year 1994 until 2004. The number of observations was based on the combination of time series and cross-sectional data, which is known as pooled data. In addition, an unbalanced bank-level panel data set for commercial banks was used. Finally, our results found that there exists a bank-lending channel in the case of Malaysia

Adakah saluran pinjaman bank dasar monetari relevan? kajian data panel dari Indonesia

Kertas ini bertujuan untuk mengkaji kerelevanan saluran pinjaman bank (bank lending channel) di Indonesia dengan menggunakan data pada peringkat bank yang bermula pada tahun 1990 hingga 2010. Kaedah data panel statik iaitu model kesan tetap (fixed effects) dan kesan rawak (random effects) telah digunakan untuk menganggar fungsi penawaran pinjaman bank di Indonesia. Selain daripada pemboleh ubah dasar monetari, beberapa pemboleh ubah makroekonomi (KDNK benar dan inflasi) dan pemboleh ubah khusus bank (saiz bank, kecairan, dan modal bank) juga diambil kira dalam menganggarkan fungsi penawaran pinjaman bank. Hasil kajian menyokong kewujudan saluran pinjaman bank di Indonesia yang menjelaskan penawaran pinjaman bank adalah berhubungan secara negatif dan signifikan dipengaruhi oleh dasar monetari. Pemboleh ubah khusus bank seperti kecairan dan nisbah modal juga signifikan dan berhubungan secara negatif, manakala saiz aset pula signifikan dan berhubungan secara positif dengan penawaran pinjaman bank

Kemeruapan kadar syarat perdagangan dan pertumbuhan: Peranan perbelanjaan fiskal

This study analysed the correlation between the openness of international trade incorporate size of government spending, implication of stabilisation, and growth of income. Specifically, we analysed the terms of trade volatility that influence the economic growth. We also analysed how government spending has reduced the value of volatility. This research concentrated on samples from the ASEAN-6 countries, which are Philippines, Myanmar, Singapore, Thailand, Malaysia and Indonesia by using 32 years worth of data from the year 1970 to 2002. The ARCH and GARCH (1,1) model estimated were based on the endogenous stochastic growth model. The results show that trade liberalisation increased TOT risk on economic growth and not persistent for the examined countries. In addition, fiscal spending was unable to stabilise income volatility, stimulated by external risk such as trade liberalisation and TOT. Based on the findings, a few policy implications worthy are to be explored

Evidence of Bank Lending Channel in Malaysia

The aim of this paper is to analyse the role of banks in the transmission of monetary policy and business cycle. This paper attempts to look into the assets side as a monetary policy channel to influence economic activities. Changes in the monetary policy channel give an idea to regulate and strengthen the banking industry. The different views raise the following questions: how do changes in the monetary policy transmission affect commercial banks portfolio? If bank lending plays as a monetary policy channel, does it affect the other portfolios? Do the current regulations (such as capital requirement) affect the bank portfolio behaviour? Furthermore, Generalise Least Squares method was used to estimate the monetary changes toward commercial banks portfolio. Annual data was compiled from the year 1994 until 2004. The number of observations was based on the combination of time series and crosssectional data, which is known as pooled data. In addition, an unbalanced bank-level panel data set for commercial banks was used. Finally, our results found that there exists a bank-lending channel in the case of Malaysia. JEL Classification numbers: E51; E52; E58.

Liberalizing the Malaysian Stock Market

This paper tries to examine the effect of the volatility that might arises as a result of capital flows according to market opening prior to December 1985 Malaysia case. There-fore, many economists and policy makers concern about the risks associated with the open-ing and globalizing of the markets. Our findings show that stock return becomes less volatile, implying lower return offered to the investors. On the other hand, we proved that globaliza-tion do not reveal any risk to the inflation rate. In contrast, currency return becomes riskier after globalization. Ultimately, we conclude that integrated or liberalized capital flows will affect national policy in stabilizing the domestic economics. JEL Classifications: C22, G12, G18. Keywords: Liberalization, capital market, volatility, Univariate Grach-M

Kemeruapan Kadar Syarat Perdagangan dan Pertumbuhan: Peranan Perbelanjaan Fiskal

Kajian ini menganalisis hubungan antara liberalisasi perdagangan antarabangsa dengan saiz perbelanjaan kerajaan dan kesannya terhadap kestabilan dan pertumbuhan pendapatan. Kajian ini menguji kesan kemeruapan kadar syarat perdagangan (TOT) terhadap pertumbuhan ekonomi bagi sebuah ekonomi terbuka dan bagaimana perbelanjaan kerajaan berperanan mengurangkan kesan kemeruapan tersebut. Kajian tertumpu kepada kes negara ASEAN-6 iaitu Filipina, Malaysia, Myanmar, Singapura, Thailand dan Indonesia dalam tempoh 32 tahun (1970 hingga 2002). Analisis dijalankan menggunakan kaedah ARCH dan GARCH(1,1) terhadap model pertumbuhan stokastik endogen. Keputusan kajian mendapati liberalisasi perdagangan di semua negara yang dikaji adalah tidak tegar dan meningkatkan kesan pendedahan risiko TOT terhadap pertumbuhan ekonomi negara tersebut.  Dasar perbelanjaan fiskal negara dikaji juga didapati gagal menstabilkan kemeruapan tingkat pendapatan yang disebabkan oleh risiko luaran, seperti pengaruh keterbukaan dan TOT. Berdasarkan penemuan kajian yang diperolehi beberapa implikasi dasar turut dikemukakan.

Decarbonizing the global electricity sector through demand-side management : a systematic critical review of policy responses

This paper provides an up-to-date and comprehensive systematic literature review (SLR) of the existing research on long-term electricity decarbonization which is dominated by the global scenarios of Integrated Assessment Models. The aim is to synthesize and extend current understanding on the existing supply-side solutions and demand-side technological options despite the broader range of co-benefits and the latter’s lesser risk. We achieve this by adopting a two-step systematic literature review approach to analyse and review SLR datasets consisting of 103 empirical studies conducted in Asia, Europe, and North America countries in economics and environmental economics from 1994 to 2018 and published in Web of Science and Scopus indexed journals. We find that demand-side policy studies are predominantly carried out in Asia, Europe, and North America. The US contributes more than one-quarter of the studies reviewed, most of which were published after US withdrawal from the Paris Agreement. Three types of Demand-Side Management (DSM) are identified namely energy efficiency, energy conservation, and demand response policies. The corresponding policy instruments can be categorised into six basic categories. We further found that these instruments are not always implemented for emissions reduction. In addition, energy-saving is found to be the reason for DSM implementation. The findings suggest that demand-side solutions through policies need to be fully exploited to achieve carbon emission targets from the electricity sector or energy sector in general

Two-period model of Bank lending channel: Basel II regulatory constraints

This paper predicts the dynamic model of the bank lending channel under Basel II regulatory constraints with monopolistic competition. The two-period model is chosen in order to demonstrate the effects of new Basel capital constraints on the risks of banks assets during both periods; and the amount of equity in the second period. The prediction of period one and two are shown to have the same effect and the only difference is the constraint. The regulatory constraint in periods one and two are predicted depending on the regulatory parameters and constraints for both periods. Thus, the effect of optimal rates on a policy rate is felt greater or less during the first period than during the second period, which means tightening capital requirements increases or decreases the risks of assets and banks taking higher or lower risks, respectively,during the first period than during the second period

Are structural parameters stable in Malaysia? Pre- and post-crisis analysis

This research examines whether structural parameters of new keynesian models are stable in Malaysia. We imposed the structural restrictions as in DSGE models suggested by Smets and Wouters (2003) and Wickens (2011). We then estimated whether the 2007 financial crisis changes structural parameters by using structural VAR estimation. Our parameters estimates are significant and correctly signed. This empirical finding has found that the structural parameters are not stable after the 2007 financial crisis, for employment, rate of return on loans and policy rate. However, the effects are little on the real variables such as output, investment, consumption and price level. In addition, unexpected change of demand in the non-bank private sector has puzzled the rate of return on loans after the economic crisis compared with before the economic crisis. The monetary policy shocks have given a fluctuation effect on the rate of return on loans and employment after the economic crisis

Dasar kewangan dan saluran pinjaman bank di Thailand: suatu kajian data panel

Kertas ini bertujuan untuk mengkaji kerelevanan mekanisme transmisi dasar kewangan melalui saluran pinjaman bank di Thailand dengan menggunakan data pada peringkat bank. Fungsi penawaran pinjaman bank telah dianggar dengan menggunakan kaedah data panel statik (model kesan tetap dan kesan rawak). Selain pemboleh ubah dasar kewangan (kadar bunga semalaman), beberapa pemboleh ubah khusus bank (saiz, modal dan kecairan) dan pemboleh ubah makroekonomi (output benar dan tingkat harga) juga diambil kira dalam penganggaran fungsi penawaran pinjaman bank. Tempoh masa kajian bermula dari tahun 2000 hingga tahun 2010 yang terdiri daripada 25 buah bank perdagangan. Hasil kajian mendapati saluran pinjaman bank beroperasi di Thailand, yang mana perubahan dalam pemboleh ubah dasar kewangan (kadar bunga semalaman) signifikan dan berhubungan negatif dengan penawaran pinjaman bank. Selain itu, pemboleh ubah makro ekonomi iaitu KDNK dan pemboleh ubah bank khusus seperti kecairan dan saiz bank juga signifikan dalam mempengaruhi penawaran pinjaman bank