Thèses sur le sujet « Bank failures – Economic aspects »

Esta tesis proporciona evidencia empírica sobre el rol de las quiebras bancarias durante la Gran Depresión. En el primer capítulo, se presentan las vulnerabilidades previas del sistema bancario de cada estado como instrumentos de las quiebras de los bancos. Se muestra que los estados y los períodos con quiebras bancarias más severas evidenciaron mayores disminuciones del valor agregado de las manufacturas durante el período de entreguerras. El segundo capítulo emplea una nueva medida de dependencia financiera para mostrar que, durante la Gran Depresión, las industrias con mayores costos de interés, como proporción de sus ingresos, sufrieron mayores caídas de la producción que el resto de industrias; siendo estas diferencias más pronunciadas en los estados con quiebras bancarias severas. El tercer capítulo analiza si las quiebras de bancos durante la Gran Depresión condujeron a un aumento de la productividad laboral por la destrucción de los empleos menos eficientes. No se encuentra evidencia de que las quiebras bancarias puedan explicar el aumento observado en la productividad laboral.

Thesis (MTech (Business Administration))--Cape Peninsula University of Technology, 2015.
The necessary skills and knowledge on how to open and manage a business can be mastered but the uncertainties during decision-making, as well as the risks, obstacles and barriers present in the business environment can change established ways of conducting a business. However, identifying the causes of such uncertainties, risks and obstacles is essential as it may reduce the probability of failure in the future, and supports effective policy-making. The purpose of this thesis was to examine the factors contributing to the failure of small enterprises in the Luanda province in Angola, with three specific objectives: to assess the critical management and financial factors; to examine the effect of market competition; and to assess the factors in the economic conditions associated with the causes of small business failures. Recommendations made to government could mitigate the high number of business failures. Similar studies were conducted in countries other than Angola. As alarmingly high rates of business failure exist in Angola, this study sought to examine the factors associated with such failures. This research was conducted under a positivism theoretical perspective and a quantitative research method was adopted. A questionnaire was the primary data collection instrument and the snowball sampling technique was employed. Questionnaires were distributed to 130 small business owners and managers who had experienced business failures and 108 questionnaires were collected. Statistical Package for the Social Sciences (SPSS) software was used to analyse the quantitative data which was collected. Results were statistically descriptive in nature and presented in tables, pie charts, and bar charts. The results indicated that critical factors which influenced the failure of small enterprises in Angola were: small business owners and managers lacked knowledge of business systems; small business owners and managers lacked financial accounting skills; and negligence by small business owners and managers in planning and controlling business resources. This indicates that institutions do not actively promote entrepreneurship knowledge and skills development and there is an absence of successful entrepreneur role models and business mentors or coaches for entrepreneurial capacity-building. Among others factors influencing business failure in Viana, this study identified a lack of economic support and availability of fundamental business resources such as raw material, skilled people and finance, rigid policy-making regulations, and a high level of corruption and theft in the country, to the extent that the small business may lack money and is unable to continue operations.The study recommends that since most small businesses operate on a basis of sole decision-making, it is important that the entrepreneur/manager should make a concerted effort to acquire the necessary knowledge and skills in management and finance systems, primarily to start a business or as needed, so that risk and probability of failure can be reduced. Policy-making should consider support structures for entrepreneurial capacity building, increase the production of primary products and raw material, provide entrepreneurial training and skills development (higher education), and develop mechanisms to allow easy access to information, reduce trading restrictions and reduce crime.

Over the course of the last three decades, it has become popular practice to evaluate tourism events like cultural festivals in financial terms, through the use of economic impact studies. This can be attributed at least in part to the notable growth in the number of festivals being held globally and, as such, a higher level of competition between festivals for the limited funding which is available. Economic impact studies, and the resultant findings, have thus become powerful tools for the lobbying of sponsorship, and it has become increasingly important that the impact calculations be as accurate as possible, so as to effectively allocate both government and private resources to projects which will be of the greatest benefit to the host region. The allocation of funding is especially vital in an area like the Eastern Cape Province of South Africa, which is faced with many financial difficulties. The allocation of public funds to an event like the National Arts Festival, which is hosted in a relatively wealthy part of the province, might be weighed against initiatives which directly benefit the poorer parts of the region. Although it is acknowledged that the benefits which are felt by the host community of a cultural event go beyond that of the financial, it is often on this basis that festivals are most easily compared. The primary goal of the thesis was to analyse the various forms of methodological bias which can exist in the economic impact analyses (EIA) associated with cultural events. Theoretical considerations were discussed, specifically regarding economic impact as a method of measuring value. Various forms of bias (including data collection, the calculation of visitor numbers, multipliers, defining the area of interest, inclusion of visitor spending, and accounting for benefits only, not costs) are put into a real-life context, through the investigation of economic impact studies conducted on three selected South African festivals (the Volksblad, the Klein Karoo Nasionale Kunstfees, and the National Arts Festival), and one international festival (the Edinburgh Festival). An in-depth comparison of two separate studies conducted at the National Arts Festival (NAF) in 2004 (by Antrobus and Snowball) and 2005 (by Saayman et al.) was made, focussing on the manner in which the economic impact was calculated. Having considered the common forms of bias, and assessing several possible reasons for the difference of approximately twenty million Rand in the advertised economic impacts, it was concluded that, most likely, the miscalculation of visitor numbers was the cause. This was confirmed when the Antrobus and Saayman methods were applied to the 2006 NAF data, and noting that the economic impact figures arrived at were strikingly similar. As such, it is advisable that extreme caution be taken when calculating visitor numbers, as they can significantly influence the outcome of an economic impact study. It is recommended that each study should also have transparent checks in place, regarding the key calculation figures, to ensure that less scrupulous researchers are not as easily able to succumb to the pressure event sponsors might impose to produce inflated impact values.

The accurate measurement of the value of the arts to society is becoming increasingly important in developing countries, like South Africa, where the arts must compete with housing, health, education and the like for public funds. Motivation for the public funding of arts events, like the Standard Bank National Arts Festival in Grahamstown, is usually based on the economic impact, that is, the financial benefits to the region, of such events. The argument is problematic, however, because the primary recipients of such economic benefits are often middle to upper income groups who also attend more arts performances. Furthermore, the studies have not taken into account the positive externalities which, it is argued, are generated by the arts and are enjoyed by attenders and non attenders alike. This thesis argues that it is the social benefits which the arts provide, those external to the market, which should be the basis of public funding. In order to quantify these positive externalities, a willingness to pay (WTP) study was conducted in the Grahamstown region. It is generally, but erroneously, believed that the Festival does not benefit the poorer, largely black, Grahamstown East residents. The study found that, in addition to the economic value (R23 - 25 million a year), the non-market benefits which the festival provides are worth between R2.3 and R3 million a year and form a very important part of its value, particularly to low income groups. The study also found that there are methodological adjustments which can be made to WTP studies to successfully control for the many forms of bias it is prone to. By using a combination of closed and open ended and liable and non-liable questions, the motivation of respondents' answers to WTP questions was determined, making it possible to adjust for bias caused by, for example, "free rider" and "warm glow" responses. It is argued that by identifying and excluding such responses from WTP surveys, it is possible to reduce bias to an acceptable level.

In South Africa, the performing arts have contributed to enhancing national identity and distinctiveness despite coming up against weak legislation, policy and infrastructure to support their growth and proliferation (Fredericks, 2005: 9). Coupled with a decline in both government and consumer support and the contradictory disparity between valuing the arts and the funding of the arts, theatre companies can no longer rely on the comfort of external subsidies and financial support. In order to be economically viable and sustainable to ensure their survival, there is an increasing demand for theatre companies to look to novel ways of increasing audience demand for theatre and improving audience attendance. However, instead of risking artistic integrity and the performance product to satisfy the market, this research suggests that promotion and development of theatre at arts festivals provides a platform to access a wider theatre-going public, which therefore facilitates a change in the market focus toward appreciation of the product (production). It explores leading arguments pertaining to the attendance of arts and cultural events, namely, Peterson and Simkus (1992), later updated by Peterson‟s (2005)„omnivore-univore‟ argument. The argument purports cultural consumption as binary in nature: either significant and diverse or limited, if not absent altogether. Supported by a number of case-studies, including Chan and Goldthorpe (2005) and Montgomery and Robinson (2008) and Snowball et al. (2009), the investigation challenges Bourdieu‟s (1984) theory on cultural distinction as well as the homology and individualisation argument. In determining the factors that influence cultural taste and consumer behaviour, including motivators and inhibitors of attendance and a predominant emphasis on audience risk and information asymmetry, the research was placed in a local context, providing an overview of the socio-economic theatre environment in South Africa. It investigated the nature, structure and impact of local festivals (as events) in changing audience demand and theatre attendance. With specific reference to the South African National Arts Festival (NAF) the research notes the effects of Hauptfleisch‟s „eventification‟ phenomenon on univore attenders and therefore expands the omnivore-univore theory to include a new breed of attender: the “Festivore”. A case study explored the “Festivore” hypothesis through empirical research, surveys and face-to-face qualitative interviews and on-seat questionnaire responses by festival attenders. Personal interviews and communication was also carried out with leading experts in the field. The data was then analysed using SPSS 13 electronic statistical analysis programme to determine the socio-demographics and the factors that affect theatre attendance of existing, as well as potential target, theatre audiences at the National Arts Festival The study concluded that South African theatre attenders are generally omnivorous consumers and that, more importantly, there seems to be a shift towards „festivorous‟ consumption. Furthermore, evidence supports the development and proliferation of festivals as a means not only to support and promote the arts in South Africa but, more importantly, to generate new theatre audiences and entrench theatre attendance into South African culture.

Since 2005, when the International Criminal Court (ICC) issued its opinion deeming the Israeli Separation Wall and settlements illegal, there have been significant developments in the nonviolent methods adopted for countering Israeli occupation. While Palestinian nonviolent resistance has existed throughout history, from this time onwards, there have been a number of factors that give this period its unique traits. The most central method that has been adopted by all nonviolent actors is to influence economic interaction with Israel in a way that is in line with international law, and is supportive of the official positions adopted by the countries that nonviolent activists aim to influence. While Israeli settlements are illegal according to international law, they include industrial areas that export products to many countries. Through this contradiction, nonviolent activists have found an opportunity to pressurise countries to end their economic ties with those settlements, and consequently put pressure Israel to change its settlement policies. Some of these call for ending economic ties with Israel itself, because it is upholding the settlements, and some call for ending ties only with Israeli settlements; in other words, some target the criminal and others just the crime. In 2010, the Palestinian National Authority (PNA) adopted its first unilateral program that was not in agreement with Israel, and which introduced a strategy for the cessation of economic ties with Israeli settlements. This was done through a mixture of national public awareness campaigns to influence consumer behaviour, and the introduction of legislation by which it became illegal for Palestinian enterprises to have any economic ties with Israeli settlements. After starting by focussing on its own markets, the PNA called upon other countries to follow suit by lobbying government officials, parliamentarians, and financial institutions. However, this action came five years after a call for a full boycott, including divestment and sanctions against Israel, made by Palestinian civil society organizations and political parties. This call, known as the BDS call had gained tremendous support and amalgamated a large pool of members internationally by the time that the PNA started with its campaign for a limited boycott. This disparity has had a significant influence on the dynamics of the boycott movement, both locally in Palestine and globally. This research explores those dynamics. It takes an in-­‐‑depth look at the effort to end economic ties with settlements, including who the actors are, what they aim for, how they interact, and how effective they have been. The PNA’s program to end economic ties with settlements was chosen as a case study for this doctoral thesis, because of its central position in relation to the topic and the unique access to its documentation through the author’s previous role as its director.

The arts in many countries, but particularly in developing ones, are coming under increasing financial pressure and finding it difficult to justify the increases in government funding needed to maintain and grow the cultural sector. The trend in cultural economics, as well as in other areas, appears to be towards including qualitative valuations, as well as the more traditional quantitative ones. This thesis argues that the value of cultural events should include long term historical qualitative analysis, financial or economic impact and a valuation of the positive externalities provided by cultural events and that any one of these should only be regarded as a partial analysis. Four methods of valuing the arts using the South African National Arts Festival (NAF) as an example are demonstrated. Firstly, a qualitative historical analysis of the role of the NAF in South Africa’s transformation process from Apartheid to the democratic New South Africa is examined, using theories of cultural capital as a theoretical basis. It is argued that the value of cultural events needs to take into account long-term influences especially in countries undergoing political and social transformation. The second valuation method applied is the traditional economic impact study. Four economic impact studies conducted on the NAF are discussed and methodologies compared. It is concluded that, despite the skepticism of many cultural economists, the method can provide a useful partial valuation and may also be used for effective lobbying for government support of the arts. Chapter four discusses willingness to pay studies conducted at the NAF in 2000 and 2003 (as well as a pilot study conducted at the Klein Karoo Nationale Kunstefees). It is found that lower income and education groups do benefit from the positive externalities provided by the Festival and that this is reflected in their willingness to pay to support it. It is also argued that such contingent valuation studies can provide a reasonably reliable valuation of Festival externalities, but that they may be partly capturing current or future expected financial gains as well. Finally, the relatively new choice experiment methodology (also called conjoint analysis) is demonstrated on visitors to the NAF. The great advantage of this method in valuing cultural events is that it provides part-worths of various Festival attributes for different demographic groups. This enables organizes to structure the programme in such a way as to attract previously excluded groups and to conduct a cost-benefit analysis for each part of the Festival.

This research investigates the relationship between innovation and leadership in First National Bank in South Africa. In an information age paradigm, innovation is a key driver of organisational success. Innovation allows an information age company to create a sustainable competitive advantage over its competitors. First National Bank (FNB) has recognised the need for innovation and measures the amount of innovation generated in each business unit on an annual basis. Leadership is a key factor influencing innovation in large, multi-segment organisations, particularly transformational leadership. Large multi-segment organisations often have multi-functional teams and transformational leadership of these teams more effectively promotes innovation. Large multi-segment organisations also often have complex decision making processes. Transformational leadership ensures optimal innovative decisions rather than adequate decisions are reached. FNB is a multi-segment organisation comprising ten business units each headed by a Chief Executive Officer (CEO). The relationship between the level of innovation being generated annually by each business unit and the leadership style of the business unit CEO formed the focus of this research. The Multifactor Leadership Questionnaire was used to gather information on the leadership style of each CEO's. Data on the level of innovation within each of these business units was supplied by First National Bank. Data was statistically analysed against the innovation generated by each business unit using correlation analysis. Most of the results testing the relationship between transformational and transactional leadership and innovation were found not to be significant. This contradicts the theory which suggests a positive relationship between transformational leadership and innovation.

The graduating qualification paper is devoted to the analysis of socio-economic aspects of the robotic systems introduction in the banking practice. The further development scenarios of robotization in the financial sphere are considered. Possible solutions to minimize socio-economic damage in commercial banks are proposed.
Выпускная квалификационная работа посвящена анализу социально-экономических аспектов внедрения роботизированных систем в практику банковских учреждений. Рассмотрены предполагаемые сценарии дальнейшего развития роботизации в финансовой сфере и предложены возможные пути решения по минимизации социально-экономического ущерба в коммерческих банках.

The use of social media in the retail banking environment has changed the way the banking industry communicates with customers, creates sales and performs marketing and operational tasks. Social media strategies need to be aligned to business goals and effectively used to integrate social media as part of the overall marketing strategy. Only by understanding brand loyalty, multi-channel systems and social media channels can marketers effectively implement social media. In measuring brand loyalty, factors that influence customer buying behaviour and components that influence online interaction are essential in engaging different groups of customers in social media. This research study aimed to examine the use of social media within the South African retail banking environment with a focus on creating and maintaining brand loyalty. An exploratory, mixed method research design was employed. Data collection instruments used in the study includes online surveys, structured interviews, and focus groups. Participants consisted of marketing personnel and customers. Three lead/head social media marketing personnel participated in the interview process, 14 marketing personnel took the online survey and 4 participated in a focus group. Participants for the online survey also consisted of 40 customers who were connected through the internet and performed various online banking activities. Data was analysed both quantitatively and qualitatively. Data from the online surveys completed by customers was analysed quantitatively using descriptive analysis, structural equation modelling (SEM) and factor analysis which was performed on the brand loyalty variables and the brand loyalty measures. Content analysis was used to qualitatively analyse data from the structured interviews. Data from the online surveys completed by marketing personnel was analysed quantitatively and qualitatively. Findings indicated that social media forms an integral part of the marketing strategy that needs be aligned with the core business goals. Banks therefore need to focus on creating campaigns that are fun, exciting and appealing to the target market. A culture of innovation and new ideas is essential to grow the product/service. Building brand trust and creating customer satisfaction forms the core of creating brand loyalty on social media. Banks need to be aware of factors that influence customer brand loyalty and components that influence loyalty on social media in order to measure things that matter through analytical tools so that an actionable strategy can be put in place and implemented.

Recently, bankers have come to realise that banking operations, especially corporate lending, affect and are affected by the natural environment and that consequently, the banks might have an important role to play in helping to raise environmental standards. Although the environment presents significant risks to banks, in particular environmental credit risk, it also perhaps presents profitable opportunities. Stricter environmental regulations have forced companies to invest in environmentally friendly technologies and pollution control measures and in tum generated lending opportunities for bankers. This research examines the corporate practices of three of the four dominant banks in South Africa with respect to the environment, focusing on issues of climate change and environmental risk management by way of reporting and disclosure to all stakeholders. The emphasis on environmental reporting by South African banks has been reinforced by the latest release of the King III Report on Corporate Governance in South Africa. Global governance requires that the triple-bottom line should be applied in all corporate undertakings due to globalisation and trade liberalisation; however, the banking sector has responded poorly to the clarion call. The false view that the banks have no significant relationship with environmental degradation is being disproved. Environmental management is a huge and massive reconstruction of what has gone wrong with nature by human influence. The South African banks have had to face with the challenging tasks of reporting on the direct and mostly the indirect impacts of their environmental activities. Based on the three sampled banks which incidentally had greater percentages of the market capitalizations, the banks have fairly performed in environmental reporting. For example, Standard Bank (SA) Ltd has just signed the Equator Principles in 2007 implying corporate lending was done in 2007 without any respect to environmental impact assessments by corporate borrowers. Consequently, environmental reporting was not done to facilitate informed decision-making by stakeholders mostly shareholders and the communities where borrowers tun businesses. The objective of this research study is to investigate the extent and quantity of/voluntary environmental disclosures in the annual and sustainability reports of the banks listed on Johannesburg Stock Exchange. The periods examined were those subsequent to the release of the Exposure Draft Coalition for Environmentally Responsible Economies (CERES) Global Reporting Initiatives (GRI) issued in 1999. Using content analysis to focus on the environmental aspects, the research study compared three annual reports and three sustainability reports of 2007 year for the three sampled banks in order to evaluate reporting practices in the period surrounding this intervention. The results suggest a trend to triple bottom-line reporting and the extent and quantity of environmental information, albeit in specific categories.

Defense date: 24 May 2010
Examining Board: Prof. Giancarlo Corsetti, EUI, Supervisor; Prof. Andrew Bernard, Tuck School of Business at Dartmouth; Prof. Russell Cooper, EUI; Prof. Jonathan Eaton, New York University
Countries are increasingly linked internationally. The three models developed in this thesis shed light on how firms and governments respond to the increasing interconnectedness of the world economy, analyzing profit taxation, trade finance and government intervention in the event of a contagious banking crisis. They can help understand in how far integration is beneficial or harmful and what optimal policies might be. My first paper, which is joint work with Sebastian Krautheim, is based on the finding that larger firms are more likely to use tax haven operations to exploit international tax differences. We study a tax game between a large country and a tax haven modeling heterogeneous monopolistic firms, which can shift profits abroad. We show that a higher degree of firm heterogeneity increases the degree of tax competition, i.e. it decreases the equilibrium tax rate of the large country, leads to higher out flows of its tax base and thus decreases its equilibrium tax revenue. Similar effects hold for a higher substitutability across varieties. My second paper takes a first step towards building a theory of trade finance. Cross border transactions are conducted using different payment contracts, the usage of which varies across countries and over time. I build a model that can explain this observation and study its implications for international trade. In the model exporters switch between payment contracts optimally, trading of differences in enforcement and efficiency between financial markets in different countries. I find that the ability of firms to switch contracts is key to understand how trade flows respond to variations in financial conditions. Numerical experiments with a two-country version of the model suggest that limiting the choice between payment contracts reduces traded quantities by up to 60 percent. The third paper, which is joint work with Friederike Niepmann, analyzes ex-post intervention by governments in response to international banking crises under different cooperation regimes. Financial institutions are increasingly linked internationally and engaged in cross-border operations. As a result, financial crises and potential bail-outs by governments have important international implications. Extending Allen and Gale (2000) we provide a model of international contagion allowing for bank bail-outs financed by distortionary taxes. We single out inefficiencies due to spillovers, free-riding and limited burden-sharing. When countries are of equal size, an increase in cross-border deposit holdings improves, in general, the non-cooperative outcome. For efficient crisis management, ex-ante fiscal burden sharing is essential as ex-post contracts between governments do not achieve the same global welfare.

This dissertation addresses three topics on information economics. Generally, information is not perfect or costless as classical economics assumes. Thus, a consumer searches information at his cost or a seller provides information at his cost. First, chapter 2 presents a theoretical model where a consumer searches for local brand information. We show that a national brand providing information has a larger market share. Second, chapter 3 presents a theoretical model where a store randomizes prices and advertises the price changes. We show that at equilibrium the advertising intensity is negatively related to price and price density function is "U" shaped. As advertising costs decrease, average price decreases with more competition. Also as advertising costs decrease from the maximum to zero, price density function changes from monopoly price spike to nonprofit price spike. Thirdly, chapter 4 presents an example where information imperfection is not remedied so information asymmetry remains to cause moral hazard. The deposit insurance rate of a bank is set uniformly regardless of its loan quality because the government cannot discern the quality. Then, a failed bank has higher efficiency in good economic years by spending less on loan monitoring but lending aggressively, but has lower efficiency in difficult years because of its growing non-performing loan. The efficiency of Korean banks between 1990 and 1997 is measured by DEA (Data Envelopment Analysis), and the regression shows that the efficiency of the failed bank is affected by moral hazard.
Graduation date: 2003

Many communities in Canada are experiencing high levels of unemployment, poverty, social breakdown and environmental degradation. In an effort to address these problems, individuals, community groups and all levels of government, are experimenting with an approach to development called community economic development (CED). CED is a grassroots, bottom-up process that focuses on the creation of stable, viable, and equitable local economies. In trying to implement CED strategies, communities and individuals face many obstacles, one of the most significant of which is a lack of capital. Credit unions are locally-owned and controlled co-operative financial institutions with access to significant pools of “local” capital and therefore logical places for communities to turn. This thesis explores ways these institutions can support community economic development in their communities. An examination of the literature and interviews with credit union leaders and CED practitioners, demonstrate that most credit unions are not involved in CED lending. Nor are they particularly committed to CED ideals. This being said, however, the research shows that there are a few credit unions, in both Canada and the United States, that do participate in CED. These credit unions--some with a holistic commitment to CED, others with a partial commitment--support CED in a variety of ways, only one of which is through financing. In addition to providing access to capital, these credit unions fulfil other support functions such as providing technical assistance, building “community” and supporting community infrastructure development. Credit unions that participate in CED are not typical of the credit union movement. Most credit unions do not play a role in supporting community economic development in their communities. The study found that there are significant barriers to their participation in CED, barriers such as a lack of vision, the nature of CED lending, and competition from private financial institutions. In order for credit unions to participate in CED, these barriers must be removed. Ways to reduce some of the barriers are explored in the thesis. The research shows that in order to be able to participate in CED, credit unions require: a committed leadership, staff with community development expertise, new deposits of capital, a means of subsidizing the costs of CED lending, and institutional mechanisms that reduce risk as well as government support. Ways for credit unions to fulfil these needs are outlined. Lastly, research findings are summarized and conclusions are drawn about the role individual credit unions can play in CED. The kinds of initiatives credit union centrals, governments and planners can adopt to support credit unions in this work also explored.

This thesis looks into two specific topics regarding the relationship between bank lending and the economy. The first is about how non-performing loans (NPLs) are treated by individual banks, how their actions affect their viability, as well as its impact on the market for collateral. The objective is to provide insight into the decision-making process of a typical bank, and how decisions made from such a process impact on asset markets. The second topic relates to the transmission of monetary policy changes through variations in the volume of bank lending in Australia, with particular reference to the firms sector. Insight on this channel of transmission can contribute to the literature on how monetary policy is transmitted through the banking system and affects the wider economy. Chapter 2 explores the incentives that banks face when treating bad loans. Since write offs frequently involve losses, capital adequacy requirements present a binding constraint on banks' plans for liquidating bad loans. When bank safety is threatened, banks are forced to evergreen loans to bad customers and profitability is thus reduced. It is demonstrated that lowering regulatory capital requirements can ease this constraint and allow more liquidation of bad loans when liquidation is desirable. Chapter 3 investigates the effects on the asset market of bank actions in dealing with their NPLs, by extending the model in Chapter 2 to include interactions with the market for collateral. Results show that liquidation of bad loans may not be as detrimental to asset prices as commonly argued, because funds recouped from liquidation can be recycled into new loans which support the asset market. While capital regulation protects the bank health, it may sometimes limit the amount of liquidation and hence reduce the impact of the recycling channel'. This supports the idea that varying capital requirements countercyclically can dampen the economic cycle, notwithstanding the potential problems with making this a tool for economic management. Additionally, this chapter finds a distinction between two types of forbearance, that based on bank profit maximisation, and from concerns over a bank's financial health. Chapter 4 makes use of aggregate time series data in Australia to look into the strength of the bank lending channel of monetary policy. Investigation is done by examining whether monetary aggregates affect the spread between bank loan rates and bond rates. Results indicate that for small firms, the strength of the channel is dependent negatively on the size of the real deposit base. This is because deposits represent the supply of bank loans which if increased lowers bank lending rates. For large firms a different mechanism operates suggesting reduced influence of the channel, shown by larger loan volumes coinciding with a narrowing spread, implying that banks prefer to concentrate on lending to larger businesses. Rises in foreign funding coincide with a widening spread, but after a lag they also help to reduce upward pressure on loan rates, suggesting a weakening of the channel as foreign funding rises to relieve pressure on the market for bank loans.

The impact of climate change on the financial performance of companies is of concern to bank credit processes. The main objective of this research was to develop a South African contextualised credit process that incorporates environmental risk. The research methodology comprised of a mixed-method being content analysis – the qualitative portion and the Probability of Default prediction using a Merton Model and the Hoffmann and Busch (2008) carbon risk analysis model - the quantitative portion. A content analysis of the banks’ Annual Reports, Integrated Reports and Sustainability Reports showed that, while South African banks follow a qualitative approach to embedding environmental risk into their credit process, none of the four banks that formed part of the study divulged their quantitative approach to embedding environmental risk. The study used a proximity matrix method to examine the level of embedding. The second part of the study, which used prior studies as the benchmark, adopted the following: (1) a simulated carbon tax regime as a proxy for an environmental risk, and (2) the Hoffmann and Busch (2008) carbon risk analysis tool and the Merton Model (1974) as the bank credit process proxies. The second part of the study used a sample of 33 JSE-listed Carbon Disclosure Project reporting companies out of a population of 107. The carbon risk analysis showed that the companies in the materials and energy sector have a high carbon risk. However, the results from the Merton Model showed that the companies have enough profit to cushion the additional carbon tax liability, given the insignificant shift in probability of default between the three scenarios, where financial data had (1) no carbon tax, (2) was adjusted for a carbon tax with incentives, and (3) adjusted for carbon tax without incentives. Triangulation of the results from the content analysis, carbon risk analysis and the probability of default analysis confirms that South African banks do not fully integrate environmental risk across the credit value chain or process in the 2010 to 2017 period. However, the carbon risk analysis shows a heavy dependency on carbon sources for critical inputs into the South African companies’ production processes, which if not checked, will affect the credit portfolios of banks.
Finance, Risk Management and Banking
D. Phil (Management Studies)

The main objective of the study was to investigate the causes underlining small-farmers default on bank loan repayments in the North West Province. One hundred and sixty farmers were randomly selected to be part of the sample. Questionnaires were issued to both farmers and bank officials. Descriptive statistics, correlation and regression models were used to analyse the data. The overall results indicate that most of the small farmers are in the old age category (58 years on average) with very low educational level. This scenario poses a challenge to the stakeholders in agriculture specifically the succession plan to these elderly people when they leave agriculture due to retirement. It was revealed by the study that the farmers do not keep either financial or production records. The analysis shows that the small farmers lack skills in financial management therefore, they are unable to execute the prerequisite to modern farming which are literacy and numeracy as indicated by Woohall et. al.,( 1985). Most of the respondents have outstanding debt from Agribank yet they received loans from Landbank. Because of their low production and other many responsibilities, they are unable to repay loan instalments thus leading to loan default to their current financial supplier, which is Landbank. Lack of monitoring of loan funds was identified as one of the causes of the farmers Joan default. The analysis also indicates that the small farmers have access to finance but the major problem is lack of financial management skills, more involvement in household responsibilities, and lack of technical assistance from relevant stakeholders like extension officers and project managers from the bank or from the Department of Agriculture. Since the Land bank have no field officers to assist the farmers, it is recommended that the bank should have field officers to assist farmers in their business, especially with production, marketing, financial management and farm management Skills. The inability of the farmers to access good value markets for their products was identified as one of the problems, which led to loan default because the farmers are unable to market their products at the right time for good value in excess of their cost. It is recommended that financial institutions should assist their clients to access better markets for their products for better price which will in turn give them better income in order to repay their loans.
M.Sc. (Agric. Economics) North-West University, Mafikeng Campus, 2005

Using 1980 - 2012 annual data, the study empirically investigates the dynamic relationship between financial development and economic growth in three developing countries (South Africa, Brazil and Kenya) and three developed countries (United States of America, United Kingdom and Australia). The study was motivated by the current debate regarding the role of financial development in the economic growth process, and their causal relationship. The debate centres on whether financial development impacts positively or negatively on economic growth and whether it Granger-causes economic growth or vice versa. To this end, two models have been used. In Model 1 the impact of bank- and market-based financial development on economic growth is examined, while in Model 2 it is the causality between the two that is explored. Using the autoregressive distributed lag (ARDL) bounds testing approach to cointegration and error-correction based causality test, the results were found to differ from country to country and over time. These results were also found to be sensitive to the financial development proxy used. Based on Model 1, the study found that the impact of bank-based financial development on economic growth is positive in South Africa and the USA, but negative in the U.K – and neither positive nor negative in Kenya. Elsewhere the results were inconclusive. Market-based financial development was found to impact positively in Kenya, USA and the UK but not in the remaining countries. Based on Model 2, the study found that bank-based financial development Granger-causes economic growth in the UK, while in Brazil they Granger-cause each other. However, in South Africa, Kenya and USA no causal relationship was found. In Australia the results were inconclusive. The study also found that in the short run, market-based financial development Granger-causes economic growth in the USA but that in South Africa and Brazil, the reverse applies. On the other hand bidirectional causality was found to prevail in Kenya in the same period.
Economics
DCOM (Economics)

In the literature there are mixed results on the link between credit and agricultural output growth. Some authors argue that credit leads to growth in agricultural output. Others view growth as one of the factors that influence credit supply, thus growth leads and credit follows. By and large, studies have not endeavoured to establish the short-run impact of agricultural credit on output. They are generally limited in establishing the long-run relationship between credit and agricultural output and thus present a research gap in this respect. This study contributes to the existing body of literature by focusing on the finance-growth nexus at sectoral level as a departure from extant literature that has focused on the macroeconomic level. Using South African data, the study investigated the causal relationship between the supply of credit and agricultural output as well as whether the two are cointegrated and have a short-run relationship. The study found that bank credit and agricultural output are cointegrated. Using the error correction model (ECM), the results showed that, in the short-run, bank credit has a negative impact on agricultural output, reflecting the uncertainties of institutional credit in South Africa. However, the ECM coefficient shows that the supply of agricultural credit rapidly adjusts to short-term disturbances, indicating that there is no room for tardiness in the agricultural sector. The absence of institutional credit will immediately be replaced by availability of other credit facilities from non-institutional sources. Conventional Granger causality tests show unidirectional causality from (1) bank credit to agricultural output growth, (2) agricultural output to capital formation, (3) agricultural output to labour, (4) capital formation to credit, and (5) capital formation to labour, and a bi-directional causality between credit and labour. Noteworthy and significant for South Africa is that for the agricultural sector, the direction of causality is from finance to growth, in other words supply-leading, whereas at the macroeconomic level, the direction of causality is from economic growth to finance, in other words, demand-leading. Applying a structural equation modelling approach to survey data of smallholder farmers, the positive relationship between bank credit and agricultural output observed from analysis of secondary data was confirmed.
Business Management
DCOM (Business Management)

Investments in productive assets by broad-based black economic empowerment (BEE) enterprises in South Africa (SA) during the 1990s have been constrained, in part, by a lack of access to capital. Even if capital can be sourced, BEE businesses often face a liquidity problem, as conventional, equally amortized loan repayment plans do not take into account the size and timing of investment returns, or there are lags in the adjustment of management to such new investments. The aim of this dissertation, therefore, is to compare five alternative loan products to the conventional fixed repayment (equally amortized) loan (FRL) that lenders could offer to finance BEE investments in productive assets that are faced with liquidity stress, namely: the single payment non-amortized loan (SPL); the decreasing payment loan (DP); the partial payment loan (PPL); the graduated payment loan (GPL); and the deferred payment loan (DEFPLO-2). This is done firstly by comparing loan repayment schedules for the six loans using a loan principal of R200 000, repaid over 20 years at a nominal contractual annual interest rate of 10%. Secondly, data from five actual BEE loan applications to ABSA Bank and Ithala in KwaZulu-Natal (KZN) during 2003 are used to compare how the FRL, SPL, DP, GPL, and DEFPLO-l, affect investment profitability, and both the borrower's and the lender's cash-flows, assuming that the lender sources funds from a development finance wholesaler. Results for the first part of the study show that the SPL has smaller initial annual repayments than the FRL (R20 000 versus R23 492) that ease liquidity stress in the early years after asset purchase, but requires a nominal balloon repayment of both interest and principal in year 20 of R220 000. The SPL is also the most costly loan, with total nominal and real repayments that are R130 162 and R43 821, respectively, more than the FRL. The PPL has the lowest total nominal and real repayments assuming that the borrower can make the nominal balloon repayment in year 5 of R202 173. If not, the ending balance of the loan in year 4 would have to be refinanced at current market interest rates. In this situation, the PPL uses very similar financing terms to that of the variable rate long-term loans already used in SA, and thus may not be a useful option to consider for BEE investments facing a liquidity problem. Interest rates may have risen over the last four years of the loan, encouraging lenders to add a premium into the interest rate for the refinanced loan, which could worsen the liquidity position of the BEE enterprise. The DP requires higher initial nominal annual loan repayments (R6 508 more than the FRL) that do not ease the liquidity problem in the early years of operation. The DP loan, however, has total nominal and real repayments that are R59 838 and R23 118, respectively, less than the FRL. A GPL with diminishing, finite interest-rate subsidy seems to have the most potential to ease the BEE investment's liquidity stress. The 17YRGPL used to buy land had total nominal and real repayments that were R84 634 and R67 726 (after subsidy), respectively, less than the FRL. If the GPL was used to purchase machinery-type assets, then the 6YRGPL would have required total nominal and real repayments of R13 957 and R12 596, respectively, less than the FRL. Finally, the DEFPLO-2 loan required a total nominal repayment of R531 128 (R61 290 more than the FRL) and a total real repayment of R345 358 (R26 095 more than the FRL). Clearly, the GPL and DEFPLO-2 loan repayment schedules can partly resolve the liquidity problem in the early years (assuming no major income shocks), although the DEFPLO-2 plan requires higher total repayments than the FRL. The question remains whether lenders would be prepared to implement these two financing plans for BEE investments in productive assets, where the funds to finance the diminishing, finite interest-rate subsidy or the deferment would be sourced, and how the interest-rate subsidy would affect asset values. In the second part of the study, the profitability of the five proposed BEE investments in KZN during 2003 was compared for the five loan products using the Net Present Value (NPV) and the Internal Rateof- return (lRR) capital budgeting procedures. The loan terms, interest rates, principal and characteristics of each BEE firm are different with current rates of return on equity varying by business type. Companies A (five-year loan) and C (10-year loan) are agribusinesses with a higher expected current rate of return of 8% on machinery investments, while companies B (eight-year loan), D (15-year loan), and E (20-year loan) invest in farmland with a lower expected current annual rate of return of 5%. The five business plans may not be representative in a statistical sense of all BEE firms in KZN, but were used because they were readily available. Initially it was assumed that donor/grant funds from a development finance wholesaler were lent to an intermediary (like a commercial bank), which in turn, could finance the five investments using any of the five alternative loans, with the lender's repayment to the wholesaler being via a FRL. It was then assumed that the lender could repay its borrowed funds using the same loans, or combinations of them, that it had granted to these companies. Results show that GPLs and DEFPLs can resolve the liquidity problem associated with investments like land in the early years after purchase provided that projected business performance is adequate, while the SPL and GPL are preferred for BEE projects with stronger initial cash-flows like machinery investments. The study also shows that the loan product that best improves the borrower's liquidity is not always best suited to the lender. In most cases, the GPL suited the borrower, but in four of the five cases, the lender would prefer the SPL and to repay the wholesaler using the SPL. The SPL, however, is unlikely to be used, given the large negative real net cash-flows that it generates when the final payments are due. Recent SA experience with the GPLs (interest rate subsidies funded by private sector sugar millers via Ithala) and the DEFPLs (via the Land Reform Empowerment Facility (LREF) which is a wholesaler of funds in SA) suggests that there is scope to alleviate the liquidity problem if a wholesaler of funds can offer such terms to private banks and venture capital investors who then on-lend to finance BEE asset investments that are otherwise considered relatively high credit risks. This would shift the liquidity problem away from the client to the wholesaler of the funds, but requires access to capital at favourable interest rates. Such capital could be sourced from dedicated empowerment funds earmarked by the private sector, donors and the SA government. The lesson for policymakers is that broad-based BEE could be promoted in other farm and non-farm sectors in SA using similar innovative loan products to complement cash grant funds via financial intermediaries, bearing in mind the limitations of the GPL and DEFPL - such as how to finance the subsidy or deferment, and the impact of income shocks. Donor and National Empowerment Fund capital could be used to allocate grants to provide previously disadvantaged individuals with own equity and also to fund finite, diminishing interest-rate subsidies via GPLs, or to fund DEFPLs (many LREF loans have been leveraged by a cash grant component). This could create an incentive for public/private partnerships, as public/donor funds could be then used to attract private sector funds to finance broadbased BEE investments in SA that satisfy empowerment criteria. The five case studies did not show how the GPLs and DEFPLs could make all profitable (positive net present value) but financially infeasible (returns do not match the size and timing of the lender's financing plan) BEE investments in productive assets under the FRL feasible, except for Company E that showed a positive NPV and IRR when the 19YRGPL was used. They did, however, show how the alternative loans could improve liquidity for investments with either strong or poor cash-flows. The financiers consulted to source case studies in KZN in 2003 at the time of the study could not provide the researcher with any profitable, but financially infeasible, BEE business plans. This raises some concern about how effective these empowerment loan products could be in the future as there is uncertainty over how many potential BEE investments in productive assets in SA are likely to be profitable but financially infeasible. Further research is thus needed to assess the impact of these alternative loans on a wider range of broad-based BEE investments, particularly non-farm projects, than considered in this dissertation.
Thesis (M.Agric.Mgt.)-University of KwaZulu-Natal, Pietermaritzburg, 2005.

Mozambique is undergoing intensive socio-economic reforms to reconstruct war damages and develop the nation. The reforms consist of economic liberalisation through structural adjustment and monetarist economic stabilisation, e.g. government withdrawal from economic activities, privatisation, deregulation, reduction of tariff levels on imports and tax on investments, cuts of expenditure on social services, restrictive credit system, focus on monetarism, increased taxation on individual income, etc. The nature of these reforms, on the surface, leads to morally questionable conditions. There is social chaos and disintegration, high indices of corruption, subtle recolonisation, decline of civil services, etc. At the bottom lie the market ethics and fundamentalist theological discourse by dint of which the World Bank and the International Monetary Fund deny historical consciousness, lack institutional memory, vest themselves with unquestionable international authority, dictate and impose policies without accountability for the social consequences. If there is any hope for Mozambicans, it lies in development ethics which relies heavily on the liberation motif, historical consciousness, and African Heritage.
Philosophy, Practical & Systematic Theology
M. Th. (Theological Ethics)