I.E. Shaker and N.S. Shaker

DOI: https://doi.org/10.6000/1929-7092.2018.07.43

Published: 12 November 2018  

Abstract: Actuality: The transition to integrated financial regulation brought the issue on the central banks’ role in the new configuration of financial supervision; on the necessity of resistance to financial crises and systemic risks; on overcoming of sectoral fragmentation in the area of regulation and supervisory activities’ standardization based on best supervisory practices.

Novelty: The regulatory and supervisory function has evolved into a critical factor in management of the financial system stability. Rethinking of the essence of the financial integral regulation has allowed distinguishing three separate directions: ensuring of financial stability, macroprudential oversight and regulation of moral hazard risk in the banking sector, financial institutions’ business behavior and limitation of the intention to establish the regulatory arbitrage.

Practical Value: In countries, that have adopted the integral regulation of the financial market, in relation to all its sectors, the authors propose to develop and apply standards of the moral hazard risk regulation in the banking sphere and the business behavior of financial institutions; universal standards and technologies of regulation and supervision in order to limit the establishment of regulatory arbitrage; leveling of systemic risks of financially-credit sphere.

Keywords: Megaregulator, banking system, financial system, non-credit financial organizations, microfinancial organizations, the role of the Bank of Russia.

Download

Mbukanma Ifeanyi, Ravinder Rena and J.J. Hein Prinsloo

DOI: https://doi.org/10.6000/1929-7092.2019.08.97

Published: 23 December 2019

Abstract: The relevance of financial literacy in the lives of individuals has attracted several stakeholders from different parts of the world in the quest to provide the required financial knowledge for households to manage their financial wellbeing. Accordingly, previous studies show that financial literacy serves as a mechanism to enhance the ability of households to better allocate financial resources with regard to savings and wealth creation over their lifetimes in a world of uncertainty and imperfect insurance. Thus, this study provides a literature review on global initiatives, strategies and programmes on financial literacy as well the perspectives of financial literacy programmes in South Africa. As such, it is the objective of this study to ascertain from previous literatures the factors that hinders the smooth delivery of financial literacy programmes in South Africa. Thus, the researcher employed a descriptive literature review method to achieve this objective. The findings of this study identifies that there is a growing need for a continuous financial literacy campaign especially in South Africa as the aging populations are confronted with intensified pressure on standardised plan for future financial well-being. However, the challenges of financial literacy programmes in South Africa was ascertained which forms part of the factors that hinders smooth campaign of financial literacy programmes in South Africa. Hence, this study recommends practical intervention factors of financial literacy programme in South Africa, which is expected to assist policy makers in formulating the right financial knowledge delivery programmes in South Africa.

Keywords: Financial Literacy, National Strategies, Programmes Challenges, Practical Intervention Approach.

Download

The MENA Region – An Optimal Currency Area? Evaluating its Stability by Taylor-Rule Derived Stress Tests
Pages 310-327
Mouchera Karara

DOI: http://dx.doi.org/10.6000/1929-7092.2014.03.23

Published: 23 September 2014

Abstract: The European currency union with the EURO as its common currency is the most persistent and largest monetary union to date. At the beginning, it has attracted a lot of attention to the concept of monetary unions; yet, it has recently signaled a lot of warnings around the concept that requires careful studying prior to any duplication attempt. This paper aims at identifying potential currency unions in the MENA region based on interest rates' similarity as one of the aspects that affect a monetary union's success. To assess their sustainability, the optimal interest rates (Taylor rates) of the members of each potential union is estimated and used to calculate a stress level index. The sample used in this study consists of eleven countries where Taylor rates were calculated using data from 1998 to 2008. The stress test results provide a clear result: Two monetary sub-unions, namely the Saudi Arabia - Kuwait union and the Mashreq union (Jordan, Egypt and Syria), are found to have relatively low stress levels and high benefits from a common currency. In contrast, a large MENA union would suffer from very high stress levels and only modest advantages of a common currency.

The Natural Cycle: WHY Economic Fluctuations are Inevitable. A Schumpeterian Extension of the Austrian Business Cycle Theory
Pages 200-219
Carmelo Ferlito

DOI: http://dx.doi.org/10.6000/1929-7092.2014.03.16

Published: 07 July 2014

Abstract: The conventional version of Austrian business cycle theory focuses on a temporary imbalance between natural and monetary rates of interest. When, because of the role of monetary authorities in defining the monetary rate, the two values are in a situation of imbalance, the resulting expansion stage is followed by a recession. On the other hand, if instead the expansive phase arises without any interference by monetary authorities but through re-adaptation of the productive structure to a modified structure of temporal preferences, a period of sustainable growth begins that will not be followed by a crisis. The purpose of this essay is to demonstrate, on the other hand, that because of profit-expectations and the combined action of Schumpeterian elements (imitations-speculations and the ‘creation of money’ by banks), even a so-called ‘sustainable’ boom will be affected by a liquidation and settling crisis. What distinguishes the latter situation from the conventional case of imbalance between monetary and natural rates is not the onset or otherwise of a crisis but, rather, its intensity and duration. We will define as natural an economic cycle characterised by a stage of expansion considered to be ‘sustainable’ in the Austrian theory but followed by an inevitable readjustment crisis.