Theoretical perspective of dynamic credit risk analysis and lending model; effective to enterprises of fragile economy

Tweneboah Senzu, Emmanuel (2019): Theoretical perspective of dynamic credit risk analysis and lending model; effective to enterprises of fragile economy.

Abstract

There is an empirical evidence, which justify the core functioning of money in economic growth and the development of a State, which equally establishes the reason of the relevant role of Banks to every economy. The underpinning of this research, is to present the necessity for the financial industry of undeveloped and developing economies very fragile in their functioning, to adopt the proposed theoretical perspective of dynamic credit risk analysis and lending, as an upgrade model over the existing static risk analytical approach, found to be inefficient in credit-lending-support to the productiveness of enterprises, emerging from such economies, hence creating frustration to the welfare nature of the State and heightening it unemployment tension.

• Item Type: MPRA Paper
• Language: English
• Keywords: Economics, Banking, Enterprises, Credit Lending, Credit Risk Analysis, Employment
• Subjects: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E21 - Consumption ; Saving ; Wealth; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy; G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages; G - Financial Economics > G2 - Financial Institutions and Services > G23 - Non-bank Financial Institutions ; Financial Instruments ; Institutional Investors; G - Financial Economics > G2 - Financial Institutions and Services > G24 - Investment Banking ; Venture Capital ; Brokerage ; Ratings and Ratings Agencies

References

1.Adji, S. S., Ahn, Y. S., Holsey, M. C. & Willett, D. T. (1997), Political capacity, macroeconomic factors and capital flows. pp.127: Political Capacity and Economic Behaviour. ISBN 13:978-0-8133-03073-0

2.Boot, A. W. and Thakor, A. V. (1997), financial system architecture. Review of Financial studies 10, 693-733

3.Boot, A. W., Greenbaum, S. I. and Thakor, A. V. (1993), Reputation and discretion in financial contracting, American Economic Review 83, 1165-83.

4. Bulow, J. and P. Klemperer, (2015), Equity recourse notes: Counter-cyclical Bank Capital, Economic Journal, 125, 131-1977.

5.Bruce Kate and Jennifer Brandley (2013), the metropolitan revolution. ISBN 978-8157-2151-2. Published by Brooking Institution.

6.Calomiris, C., and Wilson, B. (2004), Bank Capital and portfolio management: The 1930’s “capital crunch” and the scramble to shed risk. Journal of Business, 77,421-455

7.Diamond, D. (1984), ‘Financial intermediation and delegated monitoring’. Review of Economics Studies

8.Feng, Y. and Chen, B. (1997), Political Capacity and Private Investment. pp.97: Political Capacity and Economic Behaviour. ISBN 13:978-0-8133-03073-0

9.Fink, A., & Kosecoff, J. (1998). How to conduct surveys: A step-by-step guide.Beverly Hills, CA: Sage Publication, Inc.

10.Fowler, F. (2002). Survey Research Method (3rd edition).Thousand Oaks: SAGE Publications, Inc.

11.Haldane, A. (2014), Constraining discretion in Bank regulation, In: Good hart, C.D. Gabor, J. Vestergaard, and I. Erturk (Eds.), Central Banking of a crossroads: Europe and Beyond. Anthem Press, London.

12.Haldane, A. and V. Madouros (2012), The Dog and the Frisbees, In: Economic policy symposium proceedings: The Changing policy landscape, Jackson hole, Wyo. Federal Reserve Bank of Kansas City.

13.Julia Kagan (2018), Financial Analysis. Investopedia. https://www.investopedia.com

14.Jonathan Golin and Philippe Delhaise (2013) the Bank Credit Analysis; Hand Book. (2nd Ed) ISBN.978-0-470-82157-2

15.Ludwig Von Mises (1944) Bureaucracy, Libertarian Press, Yale University. ISBN: 0-86597-663-5

16.Max Weber (1864-1920) Bureaucratic management

17.Mocan, N. (2008), “What determines corruption; International evidence from microdata”. Economics Inquiry 46:493-510.

18.Niskanen Jr. A. W. (1970), Bureaucracy and representation government. ISBN. 9781351530415; Taylor & Francis Group. New York

19.Olken, A. B. (2007), Monitoring corruption: evidence from a field experiment in Indonesia. Journal of Political Economics. 115:200-49

20.Olken A. B. & Pande, R. (2012) Corruption in developing countries. Annual review of economics. Vol. 4: 479-509.

21.Reinikka, R., & Svensson, J. (2004), Local capture: evidence from a central government transfer program in Uganda. Journal of Quantitative Economics. 119: 679-71

22.Roger H. Hale (1983) Credit Analysis: A complete guide. Vol. 7 of Wiley professional banking and finance series

23.Sarin, W. and Summers, L. (2016), Understanding Bank risk through market measures, Brookings paper on Economic Activity, 2, 57-109.

24.Senzu, T.E. & Ndebugri, H. (2018), The Economic evidence in the relationship between corporate tax and private investment in Ghana. Published; University Library of Ligwig- Maximilians (https://mpra.ub.uni-muenchen.de/84729). Re-published by Social Science Research Network, USA. (https://hq.ssrn.com) Elsevier; ISSN.1556-5068

25.Stiglitz, J. E., (1985), Credit markets and the control of capital, Journal of Money, Credit and Banking, 17, 133-52.

26.Smith, A. Anthony (1985). Kant’s political philosophy: Council democracy. The review of politics, 47 (2)253-280. Jstor-1406673

27.Ufuk D. Demirel (2009), optimal monetary policy in a financially fragile economy. Vol.9, Issue 1. ISBN 1935-1690. B. E. Journal of Macroeconomics.

28.Vladmir Lenin (1917) The State and revolution. Aziloth Books, London. 2017. ISBN: 978-1614271925.