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Volume 11 (2022): Issue 3 (September 2022)

Volume 11 (2022): Issue 2 (May 2022)

Volume 11 (2022): Issue 1 (January 2022)

Volume 10 (2021): Issue 3 (September 2021)

Volume 10 (2021): Issue 2 (May 2021)

Volume 10 (2021): Issue 1 (January 2021)

Volume 9 (2020): Issue 3 (September 2020)

Volume 9 (2020): Issue 2 (May 2020)

Volume 9 (2020): Issue s1 (July 2020)

Volume 9 (2020): Issue 1 (January 2020)

Volume 8 (2019): Issue 3 (September 2019)

Volume 8 (2019): Issue 2 (May 2019)

Volume 8 (2019): Issue 1 (January 2019)

Volume 7 (2018): Issue 3 (September 2018)

Volume 7 (2018): Issue 2 (May 2018)

Volume 7 (2018): Issue 1 (January 2018)

Volume 6 (2017): Issue 3 (September 2017)

Volume 6 (2017): Issue 2 (May 2017)

Volume 6 (2017): Issue 1 (January 2017)

Volume 5 (2016): Issue 3 (September 2016)

Volume 5 (2016): Issue 2 (May 2016)

Volume 5 (2016): Issue 1 (January 2016)

Volume 4 (2015): Issue 3 (September 2015)

Volume 4 (2015): Issue 2 (May 2015)

Volume 4 (2015): Issue 1 (January 2015)

Volume 3 (2014): Issue 3 (September 2014)

Volume 3 (2014): Issue 2 (May 2014)

Volume 3 (2014): Issue 1 (January 2014)

Journal Details
Format
Journal
eISSN
2336-9205
First Published
11 Mar 2014
Publication timeframe
3 times per year
Languages
English

Search

Volume 3 (2014): Issue 3 (September 2014)

Journal Details
Format
Journal
eISSN
2336-9205
First Published
11 Mar 2014
Publication timeframe
3 times per year
Languages
English

Search

6 Articles
Open Access

Long Term Trend Analysis in the Capital Market – The Case of Serbia

Published Online: 25 Sep 2014
Page range: 5 - 18

Abstract

Abstract

The paper explores the possibility of making investment decisions in emerging markets by using the trend analysis method on a particular example of the capital market in Serbia. The authors, starting from the common features of technical analysis, have analysed the common share index value in the capital market in Serbia, in the Belgrade Stock Exchange - Belexline from 1 March 2006 to 31 March 2009, by the usage of two moving averages method - Moving Average Convergence Divergence (MACD): an intermediate term of 50 days and a long-term one of 100 days. The above mentioned moving averages identify the establishment of a trend, the cessation of the existing one, a change and an establishment of the new one.

The capital market in Serbia had two distinctive long-term trends within the above mentioned observed period of time. The method of two moving averages in combination with the MACD indicator analysis gave quite reliable signals of weakening and change of the long-term trend direction. Analysis of the long-term trend has not been considered for the period from 2009 to date because the market during this period was illiquid with little trading volume, while some stocks that are entered in the Belexline are not more subject of trade.

Keywords

  • capital market
  • common index of the Belgrade Stock Exchange - Belexline
  • trend
  • moving averages
  • MACD
Open Access

Challenges to the Implementation of a New Framework for Safeguarding Financial Stability

Published Online: 25 Sep 2014
Page range: 19 - 52

Abstract

Abstract

There is probably no single economic concept that has attracted more attention and intrigued scientific and professional circles than financial stability. For over a decade now that have been efforts to establish the starting point in explaining this condition or characteristic of the financial system since some find that the key to defining financial stability lies in stability and others argue in favour of the opposite, instability. Unfortunately, no agreement has been reached on a universal definition that would be widely accepted at the international level. Consequently, this gave rise to open discussions on systemic risk, creating a framework for preserving financial stability, and the role of central banks in this process. This article analyses the results achieved in the development of a theoretical concept of financial stability and its practical implementation. A consensus has been reached on the necessity of removing rigid barriers between macro and prudential policies and on the necessity of their coordinated actions. The primary objectives of monetary and fiscal stability have been shifted towards preserving financial stability. The isolated macroprudential principle rightfully got the epithet of an archaic approach. Coordinated micro and macroprudential policies have definitely prevailed and become reality in many countries, including Montenegro. Created institutional frameworks for safeguarding financial stability at all levels - national, Pan-European and global - represent a challenge for further comparative studies.

Keywords

  • financial stability
  • systemic risk
  • framework for safeguarding financial stability
  • microprudential and macroprudential
  • central bank
  • monetary policy
Open Access

Corporate Governance in Banks and its Impact on Risk and Performance: Review of Literature on the Selected Governance Mechanisms

Published Online: 25 Sep 2014
Page range: 53 - 85

Abstract

Abstract

Corporate governance is viewed as an important, essential, and most significant factor for well-functioning of firms. Recent academic work and policy analyses have given insight into the governance problems in banks exposed to the financial crisis and suggest possible solutions. This paper begins by explaining the importance of corporate governance and its impact on risk taking and bank performance based on the theoretical background relevant to the corporate governance of banks. I combine the literature that looks at three areas of governance: ownership structure; board structure; and risk management, with the literature on risk-taking and performance effects in order to better assess the weight of the impact that these governance mechanisms have on both performance and risk. The paper concludes by highlighting the areas where further research is needed.

Keywords

  • banks
  • boards
  • owners
  • corporate governance
  • risk taking
  • performance
Open Access

Empirical Analysis of the Impact of Inflation Targeting on the Risk Premium

Published Online: 25 Sep 2014
Page range: 87 - 99

Abstract

Abstract

The basis for the conduct of monetary policy is monetary policy strategy. Monetary strategy is necessary for monetary policy makers to analyse all relevant information in order to undertake effective policy actions. Inflation targeting has enabled countries to achieve low inflation in the very short term. Due to this, the financial markets have adjusted their long-term inflation expectations and incorporated them into the interest rate. Risk premiums that compensate for the uncertainty of inflation have fallen. The aim of this paper is to examine how the adoption of inflation targeting affects the movement of the risk premium. The hypothesis we want to test is that the adoption of inflation targeting affects the reduction of the country risk premium by affecting the formation of a more stable macroeconomic environment through a more stable and predictable inflation rate in the medium and long term. The method used for evaluating the regression coefficients is the dynamic panel generalized method of moments (GMM). This method involves the use of conditional moments in endogenous and exogenous variables with a lag as instruments for the assessment of differential equations, while the difference lagged endogenous variables are used as instruments in the levels equation.

Keywords

  • inflation targeting
  • inflation risk premiums
  • asset prices
  • monetary strategy
Open Access

Recovery and Reduction of Non-Performing Loans – Podgorica Approach

Published Online: 25 Sep 2014
Page range: 101 - 118

Abstract

Abstract

Loan portfolio of Montenegro’s banking sector was largely affected by the growth in past due loans during the current financial crisis. High level of these loans limits banks’ lending activity which results in a decline in credit supply. Negative effects of the non-performing loans’ growth reflected adversely on economic strength of the real and households sectors. Majority of Montenegrin companies have significant liquidity problems and their defaults affect adversely the sound part of the economy, while reduced households spending reflects negatively on aggregate demand.

Therefore, a new approach for the recovery of these loans should be sought and reduce their negative impact on loan portfolio of the banking sector. The World Bank Financial Sector Advisory Centre (FinSac) located in Vienna proposed a series of measures and recommendations for the resolution of these loans through several modules. In addition to the strengthening of loan portfolio and initiating more dynamic lending activity of the banking sector, the project called Podgorica Approach aims at strengthening financial stability of the system, supporting debtors’ recovery, and improving economic growth.

Podgorica Approach contributed, in particular, to quantitative assessment of the recovery of non-performing loans which could return to the performing status through the restructuring process. Better qualitative understanding of these loans is necessary to act preventively and thus largely reduce migration from performing to non-performing loans. In addition, this approach aims at strengthening the incentives proposed by the authorities so that the level of non-performing loans is reduced through their successful implementation.

Keywords

  • Podgorica Approach
  • non-performing loans (NPLs)
  • restructured loans
  • debt restructuring
  • incentives
  • financial stability of the system
  • debtors’ recovery
  • economic growth
Open Access

Book review “The Art of Money Management” by Radoica Luburić and Nikola Fabris

Published Online: 25 Sep 2014
Page range: 119 - 120

Abstract

6 Articles
Open Access

Long Term Trend Analysis in the Capital Market – The Case of Serbia

Published Online: 25 Sep 2014
Page range: 5 - 18

Abstract

Abstract

The paper explores the possibility of making investment decisions in emerging markets by using the trend analysis method on a particular example of the capital market in Serbia. The authors, starting from the common features of technical analysis, have analysed the common share index value in the capital market in Serbia, in the Belgrade Stock Exchange - Belexline from 1 March 2006 to 31 March 2009, by the usage of two moving averages method - Moving Average Convergence Divergence (MACD): an intermediate term of 50 days and a long-term one of 100 days. The above mentioned moving averages identify the establishment of a trend, the cessation of the existing one, a change and an establishment of the new one.

The capital market in Serbia had two distinctive long-term trends within the above mentioned observed period of time. The method of two moving averages in combination with the MACD indicator analysis gave quite reliable signals of weakening and change of the long-term trend direction. Analysis of the long-term trend has not been considered for the period from 2009 to date because the market during this period was illiquid with little trading volume, while some stocks that are entered in the Belexline are not more subject of trade.

Keywords

  • capital market
  • common index of the Belgrade Stock Exchange - Belexline
  • trend
  • moving averages
  • MACD
Open Access

Challenges to the Implementation of a New Framework for Safeguarding Financial Stability

Published Online: 25 Sep 2014
Page range: 19 - 52

Abstract

Abstract

There is probably no single economic concept that has attracted more attention and intrigued scientific and professional circles than financial stability. For over a decade now that have been efforts to establish the starting point in explaining this condition or characteristic of the financial system since some find that the key to defining financial stability lies in stability and others argue in favour of the opposite, instability. Unfortunately, no agreement has been reached on a universal definition that would be widely accepted at the international level. Consequently, this gave rise to open discussions on systemic risk, creating a framework for preserving financial stability, and the role of central banks in this process. This article analyses the results achieved in the development of a theoretical concept of financial stability and its practical implementation. A consensus has been reached on the necessity of removing rigid barriers between macro and prudential policies and on the necessity of their coordinated actions. The primary objectives of monetary and fiscal stability have been shifted towards preserving financial stability. The isolated macroprudential principle rightfully got the epithet of an archaic approach. Coordinated micro and macroprudential policies have definitely prevailed and become reality in many countries, including Montenegro. Created institutional frameworks for safeguarding financial stability at all levels - national, Pan-European and global - represent a challenge for further comparative studies.

Keywords

  • financial stability
  • systemic risk
  • framework for safeguarding financial stability
  • microprudential and macroprudential
  • central bank
  • monetary policy
Open Access

Corporate Governance in Banks and its Impact on Risk and Performance: Review of Literature on the Selected Governance Mechanisms

Published Online: 25 Sep 2014
Page range: 53 - 85

Abstract

Abstract

Corporate governance is viewed as an important, essential, and most significant factor for well-functioning of firms. Recent academic work and policy analyses have given insight into the governance problems in banks exposed to the financial crisis and suggest possible solutions. This paper begins by explaining the importance of corporate governance and its impact on risk taking and bank performance based on the theoretical background relevant to the corporate governance of banks. I combine the literature that looks at three areas of governance: ownership structure; board structure; and risk management, with the literature on risk-taking and performance effects in order to better assess the weight of the impact that these governance mechanisms have on both performance and risk. The paper concludes by highlighting the areas where further research is needed.

Keywords

  • banks
  • boards
  • owners
  • corporate governance
  • risk taking
  • performance
Open Access

Empirical Analysis of the Impact of Inflation Targeting on the Risk Premium

Published Online: 25 Sep 2014
Page range: 87 - 99

Abstract

Abstract

The basis for the conduct of monetary policy is monetary policy strategy. Monetary strategy is necessary for monetary policy makers to analyse all relevant information in order to undertake effective policy actions. Inflation targeting has enabled countries to achieve low inflation in the very short term. Due to this, the financial markets have adjusted their long-term inflation expectations and incorporated them into the interest rate. Risk premiums that compensate for the uncertainty of inflation have fallen. The aim of this paper is to examine how the adoption of inflation targeting affects the movement of the risk premium. The hypothesis we want to test is that the adoption of inflation targeting affects the reduction of the country risk premium by affecting the formation of a more stable macroeconomic environment through a more stable and predictable inflation rate in the medium and long term. The method used for evaluating the regression coefficients is the dynamic panel generalized method of moments (GMM). This method involves the use of conditional moments in endogenous and exogenous variables with a lag as instruments for the assessment of differential equations, while the difference lagged endogenous variables are used as instruments in the levels equation.

Keywords

  • inflation targeting
  • inflation risk premiums
  • asset prices
  • monetary strategy
Open Access

Recovery and Reduction of Non-Performing Loans – Podgorica Approach

Published Online: 25 Sep 2014
Page range: 101 - 118

Abstract

Abstract

Loan portfolio of Montenegro’s banking sector was largely affected by the growth in past due loans during the current financial crisis. High level of these loans limits banks’ lending activity which results in a decline in credit supply. Negative effects of the non-performing loans’ growth reflected adversely on economic strength of the real and households sectors. Majority of Montenegrin companies have significant liquidity problems and their defaults affect adversely the sound part of the economy, while reduced households spending reflects negatively on aggregate demand.

Therefore, a new approach for the recovery of these loans should be sought and reduce their negative impact on loan portfolio of the banking sector. The World Bank Financial Sector Advisory Centre (FinSac) located in Vienna proposed a series of measures and recommendations for the resolution of these loans through several modules. In addition to the strengthening of loan portfolio and initiating more dynamic lending activity of the banking sector, the project called Podgorica Approach aims at strengthening financial stability of the system, supporting debtors’ recovery, and improving economic growth.

Podgorica Approach contributed, in particular, to quantitative assessment of the recovery of non-performing loans which could return to the performing status through the restructuring process. Better qualitative understanding of these loans is necessary to act preventively and thus largely reduce migration from performing to non-performing loans. In addition, this approach aims at strengthening the incentives proposed by the authorities so that the level of non-performing loans is reduced through their successful implementation.

Keywords

  • Podgorica Approach
  • non-performing loans (NPLs)
  • restructured loans
  • debt restructuring
  • incentives
  • financial stability of the system
  • debtors’ recovery
  • economic growth
Open Access

Book review “The Art of Money Management” by Radoica Luburić and Nikola Fabris

Published Online: 25 Sep 2014
Page range: 119 - 120

Abstract

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