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Секция 17. Экономика и управление
В рамках кластерной системы компании достигнут преимущества относительно сильнейших мировых конкурентов благодаря давлению и брошенным им вызовам. Они выиграют от присутствия на рынке сильных внутренних соперников, агрессивных местных поставщиков и требовательных покупателей. Но при этом следует учитывать, что конкурентоспособность предприятий и компаний зависит от результата совмещения практики и культуры управления, организационных форм, пользующихся преимуществом в стране, и первопричин конкурентных преимуществ хозяйствующих субъектов.
Наличие сильных местных конкурентов представляет собой мощный стимул к созданию и поддержанию конкурентных преимуществ. Конкуренция на региональном уровне является самой важной в связи с мощным стимулирующим воздействием на остальные элементы. Кроме того, внутренняя конкуренция стимулирует максимальное совершенствование. Внутренняя конкуренция приводит к возникновению давления на хозяйствующие субъекты, вынуждая вводить новшества и совершенствоваться. Региональные конкуренты вынуждают друг друга снижать цены, улучшать качество и обслуживание, а также придумывать новые продукты и ход развития.
В тоже время региональная конкуренция часто выходит за рамки чисто экономического соревнования и становится достаточно персонифицированной. Хозяйствующие субъекты борются не только за
раздел рынка, но и за людей, техническое совершенство и за право иметь более лучший результатами. Успех одного хозяйствующего субъекта доказывает другим, что достижения в данной сфере возможны, и часто привлекает новых участников в данную отрасль хозяйственной деятельности.
Как правило, концентрация в географическом плане усиливает внутреннюю конкуренцию, т. е. чем больше локализация конкурентов, тем интенсивнее конкурентная борьба, в тоже время чем она напряженнее, тем эффективнее. Именно сильная внутренняя конкуренция заставляет хозяйствующие субъекты выходить на внешний рынок и добиваться успеха.
Исходя из вышесказанного, можно заключить, что региональные кластерные структуры, как правило, взаимодействующих друг с другом в рамках единой цепочки создания стоимости, сосредоточенных на определенной территории и осуществляющих совместную деятельность в процессе производства и поставки определенного типа продуктов и услуг. Такая система позволяет выявить потенциальных участников экономических кластеров, а также наиболее целесообразные формы их взаимоотношений. Формирование и развитие кластеров становится частью экономического роста регионов. Объединение в кластер формирует не спонтанную концентрацию разнообразных научных и технологических изобретений, а определенную систему современных знаний и технологий.
Oleksenko Kateryna Volodymyrivna, Institute of International Relations of the Taras Shevchenko National University of Kyiv, postgraduate student E-mail: [email protected]
Lending Dynamics as Indicator of Banking Systems Financial Soundness
Abstract: The article investigates relation between the banking system financial soundness and credit volume growth before the world financial crisis and afterwards.
Keywords: financial soundness, banking systems credit volume growth, bank lending dynamics, low monetary rates paradox.
Introduction. The world economy is recovering after the prolonged financial crisis, but its implications continue to be present in all the spheres. Banking systems are weakened by the deep recession, public debt crises, high unemployment level, slowdown of economic development and growing toxic assets volume. Such conditions mean the limited possibility of banking
systems to overtake new risks and provide the real economy with new loans.
After-crisis period revealed the problem of bank lending decrease. The problem of credit slowdown should be considered from the demand and supply points of view: 1) as consequence of corporate sector high indebtness that reduces its capacity of attracting
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new loans: 2) as bank capital deficiency that impacts its credit availability, especially in the framework of growing demands towards the capital quality. Also the significant bilateral dependency should be taken into account: normal functioning of bank lending market is a precondition to macroeconomic stability and economic growth, from the other side, stable increase rate in bank credit volume is an important factor of banking system financial soundness, implying economic development. This interrelation is subject of the present investigation in dynamics and comparison aspects.
Literature Overview. Credit theory and its impact on productive forces of the economy have been a basis of fundamental researches in the financial area, starting from the Adam Smith and David Ricardo to Marxist theory followers, as well as Joseph Schumpeter, Joan Law, Alfred Marshall, and John Keynes. Henry Macleod is considered to be the first to give due prominence to the theory of credit. The current perception of dependencies among credit, banking system and national economy was formed by Edwin Dolan, Colin D. Campbell, Frederic S. Mishkin, Joseph F. Sinkey etc. The CIS economists as Anatoliy Galchinskiy, Evgeniy Zhukov and Oleg Lavrushin also have made a contribution to the credit theory development. As it can be noticed by the above listed names almost all the economic schools of thought paid attention to the credit as principal brick to the economic fundament.
The International Monetary Fund, the Bank for International Settlements, the European Central Bank and national regulatory bodies are monitoring the bank lending market and its impact on the financial stability of countries and global economy overall.
Research results. Credit volume grows when the banking system is sound. The same way that moderate and stable increase rate of bank lending is a basis of banking system financial soundness. Taking into account this interrelation and comprehension derived from the fundamental investigations of the world famous economists we consider credit growth as economic category which allows comparing such theoretical concepts as financial soundness, stability and credibility of a banking system.
The soundness of the system defines its ability to face endogenous and exogenous shocks and return to its equilibrium position. The financial soundness can be described as dynamic integrated property of the system’s ability to transform resources and risks, providing the maximum effectiveness and minimum exposure, and to perform its functions while countering impacts of
external and internal factors. The investigation of relations between different economic concepts and banking system financial soundness is complicated due to the complexity and multidimensionality.
Financial soundness is measured by the number of microeconomic (liquidity, profitability, risk and capital characteristics) and macroeconomic indicators. Bank credit growth can be considered as litmus test paper, comprising individual and environmental developments, to show the soundness level of the banking system. This indicator resembles aggregated characteristics of a banking system, omitting peculiarities and special cases, and represents the macroeconomic condition of the demand and supply markets.
Coming back to the relation between credit growth and stability of a banking system which is understood as the system state when banking system is able to realize its essence and destination, and to fulfill its functions in an adequate and effective manner [1]. It means that the stable banking system is the one that fully performs its role in the economy. As it was stipulated by Edwin Dolan and Colin D. Campbell the purpose of the banking system comprises in transforming of savings into investments, and efficient distribution ofresources among economic relations actors, and financing of real sector of the economy [2].
The banking system credibility is defined as the collective ability of financial institutions to meet their commitments that in practice means the compliance with the required solvency and liquidity ratios. As well as diversification of credit portfolio and low proportion of high risk assets are bank credibility factors.
Therefore, we consider that the investigation of the lending dynamics allows making conclusions about the financial soundness, stability and credibility of the banking systems. Also relative increase of bank credit volume favours economic recovering after the recession stage. Additionally to credit growth the structural characteristics of the lending and proportions of passive part of the bank balance should be considered.
Diversification of credit portfolio is a quality indicator of banking system financial soundness. The International Monetary Fund collects data from the bank balances in the framework of financial sector monitoring. The Table 1 demonstrates distributions of bank credit resources among institutional sectors. The weak diversification tells about potential vulnerability of the system towards shocks. And the low share of loans given to non-residents seems to be not a measure for geographical diversification, but banking system openness in the modern global world.
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Table 1. - Sectoral Distribution of Loans Provided by Deposit Takers (in % to total loans) [3]
Sector/country Ukraine Russia Great Britain USA Germany Japan
As for the date 01.01.14 02.01.14 03.01.14 04.01.14 05.01.14 06.01.14
Residents 98.70 87.10 51.70 95.00 76.80 92.50
Deposit-takers 2.00 5.70 15.10 5.00 21.40 9.10
Central banks 0.00 0.00 0.00 0.00 2.80 0.00
Other financial corporations 2.10 2.90 13.00 4.90 1.90 9.30
General government 0.60 2.00 0.10 1.20 6.60 8.10
Financial sector in total 4.70 10.60 28.20 11.10 32.70 26.50
Nonfinancial corporations 73.50 51.70 7.20 32.90 15.60 32.40
Other domestic sectors 20.60 24.90 16.30 51.00 28.50 33.50
Nonfinancial sector in total 94.10 76.60 23.50 83.90 44.10 65.90
Nonresidents 1.30 12.90 48.30 5.00 23.20 7.50
The table proves that nonfinancial sector is the major borrower; it prevails in the terms of attracted bank resources in such countries as the USA, Japan, Russia and Ukraine. The Great Britain distinguishes from the investigated countries on the following factors:
1) high portion of loans provided to nonresidents;
2) intensive distribution of assets inside the financial system: from deposit takers to other financial corporations and institutions. Germany, having a bank-centered financial system is also characterized by the great share of interbank lending. In contradiction, the US banking system is focused on corporate sector and households financing, loans to which compose 83.90 % of the total volume. Ukrainian and Russian credit
portfolio structures are very common and also the corporate sector appears to be the major borrower.
With regard to nonfinancial sector dominancy in the asset portfolio of the banking system, we consider credit dynamics of the corporate sector to be representative for the overall trends.
Eurozone banking systems are taken as investigation object regarding financial soundness and credit growth interrelation. The Figure 1 reflects moderate increase in bank loans without any significant fluctuations, as the cumulative growth is taking place. In this way credit growth in absolute terms does not show any symptoms of potential banking system fragility.
Fig. 1. Bank credit growth to nonfinancial corporate sector of Eurozone countries in absolute terms as for the end of quarter from 1999 to 2014 (in billions of euro)
Bank credit growth in relative terms which in defined as proportion of absolute increase to the credit volume of the previous period, calculated with chain method, provides us with more room for investigations. The Figure 2 depicts credit growth rate that implicitly represents
the financial soundness of the banking system at the determined date. Growth rate varied between 2-3 % from the 2nd quarter of 2005 to the 1st quarter of 2008. But starting from mid-2008 the Eurozone banking system stability was affected and the rate dropped down to 1.3 %,
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and became negative in 2009. With regard to relatively high financial soundness characteristics, the recovery to positive rates began in 2011 to maximum of 0.85 %, however the debt crisis in the EU stopped the trend and affected many European countries. The record decrease
was observed in the end of 2012 (minus 1,15 %) and the latest measurement for the 2nd quarter of 2013 equaled to -0,59 %. Active ECB policy in lowering interest rates and adopting new stimulating measures did not help in restoring the pre-crisis indicators.
Source: The graph is built based on BIS data [4].
Fig. 2. Bank credit growth rate to nonfinancial corporate sector of Eurozone countries in relative terms as for the end of quarter from 1999 to 2014 (in % calculated with the chain method)
Source: The graph is built based on BIS data [4].
Fig. 3. Comparison of bank credit growth rates to nonfinancial corporate sector in the USA, Great Britain and Eurozone as for the end of quarter from 1999 to 2014 (in % calculated with the chain method)
The comparison of the graphical representation of credit growth rates and timeline of major economic events in the Eurozone countries demonstrates instability periods and time required to return back to the equilibrium position, therefore, describes the financial soundness in the understanding of the present investigation.
We’d like to stress that attention should be paid not only to relative decrease, but increase in bank lending. High growth rates resulting from long-lasting low interest policy combined with the deterioration of credit standards may signal about the financial bubble and
coming crisis. As it’s known post factum significant acceleration in terms of bank lending in 2005-2006 that remained as inertial trend till 2007, preceded the world financial crisis.
In relation to this issue Ben Bernanke, Franklin Allen andJohn B. Taylor described low monetary rates paradox that may increase ‘bank appetite’ to sub-standard credits and expand moral hazard of financial institutions which correspondingly may lead to the financial crisis [5]. Nevertheless, when bank balances have been already exposed to excessive risk, the financial sector required
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low interest rates to support real economy financing. The latest financial crisis reflected this paradox: nominal rates of central banks in the period from 2002 to 2005 were quite low, and the financing cost sharply increased to its maximum in the end of2007. Right after the financial crisis peak a downward path prevailed in the regulatory actions and in the post-crisis world this trend remains, and central banks continue to maintain the lowest rates in order to enable recovery of the economy through bank lending increase.
The ECB has been providing financing at the record
0.25 %. Mario Draghi claims that low interest policy can restore the economic growth via availability of the credit in the banking system [6]. The US Federal Reserve System decreased the refinancing rate from 1 % to 0.25 % in December, 2008, and has been keeping it for more than 5 years [7]. The interest rate in the Great Britain equals to 0.50 % [7].
The expansionist policy that has been deployed for many years by the developed economies, lightens the borrower’s burden, but at the same time limits regulatory authorities. The low interest rate environment may reach the minimum of 0 % that will imply further impossibility to apply this instrument in order to stimulate economic growth.
Let’s compare the growth rates in the countries adopting low interest rate policy. The Great Britain showed peaking rate of 4.75 % and 9.55 % in mid-2009 and in the beginning of 2010 correspondingly that were neutralized with negative values, not being a signal of stability (see Figure 3). The most positive dynamics in 2012-2013 was observed in the US banking system as result to consecutive number of measures taken to ease the access of the enterprises to financial resources and to restore the financial soundness as the end goal. In spite of prolonged expansionist policy the credit volume growth rate remains low, and that impedes economic uprising.
The cost of lending from the central bank to deposit takers is low, meanwhile the regulatory authorities toughened the requirement to capital quality that leads to the increased cost of credit for end clients. However, we see this restriction to have a positive effect, as rougher norms towards capital adequacy and risk evaluation, particularly in the framework of Basel III, along with the low interest rate policy create the favourable environment for credit growth at qualitatively new level in the banking system, avoiding speculative supply and demand.
Conclusions. This investigation looked into the bank lending from the financial soundness perspective. The system soundness implicates its ability to perform
the functions in an efficient and complete manner despite external and internal shocks. Accumulation of savings and their transformation into loans comprises the functional basis of the banking system. Therefore, providing the economy with the required resources even during the crisis or afterwards indicates the banking system soundness.
We proved that credit volume in absolute terms continue its even trend to increase at the global level, however, growth rates as relative measurement demonstrate impact of exogenous and endogenous factors on the banking system’s ability to grant credits.
The structural and geographical analysis showed the difference in the sectoral distribution ofbank credit resources among countries. The distinctions depend on type and development stage of the financial system. The developed economies are characterized by more openness to the world processes and capital capacity that allows spreading its lending potential to nonresidents and diversifying its credit portfolio. In the countries with bank-centered financial system the major proportion of bank loans circulate in the interbank market and in the form of credit to other financial corporations. Commercial banks in the emerging economies hold their assets as credits to nonfinancial corporate sector, and it is logical as the banking system must provide the real sector with the financial resources corresponding to its growth capacity.
The comparative analysis of growth rate in such advanced economies as Eurozone, USA and Great Britain pointed out the similarity of dynamics even based on the graph representation which is clear without calculating the correlation coefficient. The obtained results prove the interdependency of the financial systems of different jurisdictions in the modern globalized world and their exposure to the same global macroeconomic factors.
In our point of view, the comparison of growth rates and timeline of different factors gives an opportunity to evaluate their impact on the banking systems. And we mean not only the direction of impact, but the scope and period required to restore the equilibrium position. The time to recover moderate credit growth rates after the shocks signals about the banking system financial soundness.
Nevertheless, rapid and long-lasting intensive accumulation of credit volume in the banking system may foretell the future problems. The high growth rates should be investigated whether the quality and diversifications standards are not violated. Our investigation showed that the deepest fall comes after the highest rise.
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Regulatory trend of the post-crisis period demonstrate expansion of low interest rate policy which aims to increase the growth rate of bank lending in order to stimulate the economic development. As low rates of pre-crisis have favoured the credit boom of speculative nature, the current regulatory implications comprise in combining expansionist monetary policy with prudential
restrictions on capital quality, reserves for the loans, and appropriate liquidity ratios.
The economic development becomes stable when the banking system becomes financially sound, particularly when credits are granted with adequate risk evaluation and there is a balance between profitability of a bank and a cost of financing of a client.
Reference:
1. Арбузов С. Г. Банювська енциклопед1я/С. Г. Арбузов, Ю. В. Колобов, В. I. Мщенко, С. В. Науменкова. - К.: Центр наукових досмджень Нащонального банку Украши: Знания, - 2011. - 504 с.
2. Долан Э. Д. Деньги, банковское дело и денежно-кредитная политика: пер.с англ./Э. Д. Долан [и др]. - М., -1996. - 448 с.
3. All Countries Latest Available Data/Financial Sector//Predefined Data reports. - Available at: http://elibrary-data.imf.org/DataExplorer.aspx
4. Long series on credit to private non-financial sectors/Bank for international settlements. - Available at: http://www.bis.org/
5. Bernanke Ben. On the Predictive Power of Interest Rates and Interest Rate Spreads/Ben Bernanke//NBER Working Paper. - 1990. - No. 3486.
6. The official site of the European Central Bank. - Available at: https://www.ecb.europa.eu
7. Central Banks’ interest rates. - Available at: http://www.forexltd.ru/ru/analytic/cbrates/
Poltoratska Oksana Volodymyrivna, the Pryazovskyi State Technical University, Degree Seeker, Department of Management and Innovations, Economist of Department of analysis and economic activity PJSC “Ilyich Iron and Steel Works” E-mail: [email protected]
The resource-saving concept in the scientific economic literature
Abstract: The article reviewed “resource-saving" concepts in the modern scientific literature works of academic economists, industries, which are investigating the given terminology in all areas of work, both national economy, and enterprise activity. It was determined that some of the “resource-saving” concepts are not taking into account the priority areas of the resource-saving object: investment and innovation component, environmental and logistic aspects. The author’s concept of “resource-saving of the industrial association” was offered, which is based on multifaceted approach and covers all aspects of the industrial enterprises activity in the industrial association.
Keywords: “resource-saving” concept, industry, enterprise, classification, areas of activity, economic level, the process, management system.
Problem statement. At the present stage of the Ukrainian economy development the processes of resource-saving are at strategic development topside for the industrial sector. Conceptual construct of the resource-saving is sufficiently large, that allows to accentuate on the diversity of both the concept of “resourcesaving” and its different types of classification. For this reason, the timeliness of the topic is connected with the definition of the most complex concept of “resourcesaving”, which should cover all aspects of industry
sectors of the national economy, industrial enterprises and associations.
Analysis of recent research and publications. Theoretical and practical studies of the problem of the effective management ofresource-saving at different economic levels at present conditions of international and national economic development, became the subject of research of many domestic and foreign scientists, including: R. A. Fathutdinov, I. M. Sotnik, Y. O. Mazin, L. G. Melnik,
I. Y. Ippolitova, S. I. Doroguntsov, V. G. Gusakov, V. I. Buts,
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