Aug 2026· Journal of Financial Economic Policy· 0 citations· 21 references
Abstract
This study aims to examine the impact of public debt composition by creditor type on financial stability in Tanzania, using quarterly data and an autoregressive distributed lag (ARDL) model. Specifically, the analysis focuses on the roles of debt held by the central bank, commercial banks, pension funds and external creditors, with financial stability proxied by the capital adequacy ratio.
Using an ARDL model, this study examines the long-run and short-run effects of public debt held by the central bank, commercial banks, pension funds and external creditors, while controlling for key macroeconomic variables such as GDP growth, inflation, interest rates and foreign exchange reserves.
The results reveal that the identity of the creditor plays a critical role. In the long run, debt held by commercial banks is positively associated with financial stability. In contrast, debt held by external creditors and the central bank is linked to increased financial vulnerability. Pension fund holdings show no significant effect. Short-term findings suggest that sudden increases in commercial bank debt and declines in foreign reserves temporarily compromise financial stability.
These results underscore the significance of public debt size and its holders, providing crucial insights for designing debt management strategies that foster macrofinancial resilience in Tanzania.
This study examines the impact of public debt financing strategies on sustainable economic
growth in Nigeria between 1990 and 2024. The research employs secondary time-series data
obtained from the World Bank, Debt Management Office, and Central Bank of Nigeria, analyzing
the relationships between public debt indicators and economic performance. Using an
econometric regression model, the study investigates how debt-to-GDP ratio, interest paymentsto-revenue, gross fixed capital formation, inflation, real interest rate, and exchange rate
influence real GDP growth. The results reveal that debt-to-GDP ratio, interest payment burden,
inflation, and exchange rate volatility exert a negative and significant impact on growth,
consistent with the debt overhang and crowding-out hypotheses. real interest rates positively
influence growth, highlighting the importance of channeling borrowed funds into productive
investments. Diagnostic tests confirm the model’s reliability, absence of serial correlation and
heteroskedasticity, and structural stability over the study period. The findings suggest that
Nigeria’s public debt can support sustainable growth only if strategically managed and directed
toward productive capital projects. The study recommends strengthening debt management
frameworks, diversifying revenue sources, reducing reliance on external borrowing, and
prioritizing infrastructure and investment-led growth. These policy measures are essential to
ensure that debt financing contributes to long-term economic sustainability.
Ogechukwuka Chegwe· IIARD INTERNATIONAL JOURNAL...· 0 citations
The study examined the effect of sectoral credit allocations (agricultural, manufacturing, and
SME) on the liquidity stability of Nigeria’s banking sector, a dimension often overshadowed
by profitability and capital adequacy studies. Using quarterly times series data for a period
of 24 years, (from 2000Q1–2023Q4) obtained from the Central Bank of Nigeria and World
Bank Development Indicators, the study applied the Fully Modified Ordinary Least Squares
(FMOLS) method with supporting cointegration and error correction models. Findings
revealed a long-run relationship between sectoral credit distribution and liquidity, where
manufacturing credit significantly enhanced liquidity stability, reflecting its relatively
predictable cash flows and lower default risks. In contrast, small and medium-sized
enterprise (SME) credit exerts a negative impact, highlighting its vulnerability to defaults and
financing constraints, while agricultural credit shows no significant effect. These results
suggest that uniform credit expansion policies may undermine systemic resilience. The study
therefore recommended sector-sensitive credit frameworks, including risk-sharing schemes
for agriculture, credit guarantees for SMEs, and targeted incentives for manufacturing, which
is believed are vital for safeguarding liquidity, depositor confidence, and long-term banking
sector stability
S. Amana· International Journal of Eco...· 0 citations
This study examines the impact of Total Bad Debts (TBD) on the performance of deposit money
banks in Nigeria. Total bad debts, which represent unrecoverable loans, remain a critical indicator
of credit risk and a major challenge to bank profitability and financial stability. The study adopts
a longitudinal research design using secondary data obtained from the financial statements of
eight (8) selected deposit money banks in Nigeria over a nine-year period spanning 2014–2022.
The analysis employs the Panel Autoregressive Distributed Lag (ARDL) model to evaluate the
relationship between total bad debts and bank performance, measured by Return on Equity (ROE).
Findings from the descriptive statistics reveal that banks experienced relatively low and unstable
profitability alongside high levels of bad debts during the study period, indicating significant
exposure to credit risk. The regression results show that total bad debts have a negative and
statistically significant effect on bank performance, with a coefficient of -18.66743 and a p-value
of 0.0014. This implies that an increase in total bad debts leads to a substantial decline in return
on equity. Although the correlation analysis indicates a weak positive association between TBD
and ROE (0.03546), further analysis confirms a significant inverse relationship, suggesting that
rising bad debts ultimately reduce profitability. The study concludes that total bad debts
significantly and negatively affect the performance of deposit money banks in Nigeria. It
recommends that banks strengthen credit appraisal and monitoring systems, adopt effective loan
recovery strategies, and implement robust credit risk management practices to minimize bad debts
and enhance financial performance.
S. Gurowa· International Journal of Eco...· 0 citations
While empirical literature on macroprudential policy exists for both advanced and emerging economies, studies that simultaneously analyze its effects on macroeconomic and financial variables within the Peruvian context are scarce, limiting the availability of evidence for the design of public policies aimed at preserving national financial system stability. This study sought to fill that gap by analyzing the effects of macroprudential policy on the preservation of macroeconomic and financial stability in Peru over the period 2003–2022, using monthly data. The policy tools evaluated are the global capital ratio and the reserve requirement; the stability variables considered include credit, asset prices, capital flows, liquidity, gross domestic product, inflation, and the exchange rate. Following a quantitative approach, a Structural Vector Autoregression econometric model was employed. The results suggest that the global capital ratio reduces credit, while the reserve requirement helps maintain liquidity in the banking system. From a financial stability perspective, these contractionary effects on credit and capital flows are desirable, as they reflect the capacity of these instruments to moderate the accumulation of systemic vulnerabilities. Additionally, favorable effects on asset prices were found, along with more moderate effects on GDP containment, CPI stability, and exchange rate control. Overall, the results indicate that macroprudential policies contribute positively to safeguarding the financial system and maintaining macroeconomic stability in Peru.
This research investigates how liquidity creation induces moral hazard behavior and affects credit quality in Indonesian commercial banks. This study examines the effect of liquidity creation, liquidity risk, and central bank policies on credit risk in Indonesian commercial banks, proxied by the non-performing loan (NPL) ratio. Using panel data from 46 banks listed on the Indonesia Stock Exchange over 2015–2024, we apply the Two-Step System Generalized Method of Moments (SYS-GMM) to address endogeneity inherent in dynamic panel models. Results indicate that liquidity creation has a significant positive effect on NPL, consistent with the moral hazard hypothesis. Liquidity risk (LDR) also significantly and positively affects NPL. Reserve requirements (GWM) and BI-Rate do not produce a direct and significant effect on NPL. Return on assets (ROA) significantly and negatively affects NPL. These results suggest that credit risk in Indonesian commercial banking is predominantly influenced by bank-level intermediation behavior rather than by macroeconomic or policy variables. The research concludes that excess liquidity conditions incentivize aggressive credit expansion without proportionate attention to borrower quality, particularly in an oligopolistic market structure with implicit state guarantees.
Jeffry Fauzan, Dewi Hanggraeni· Eduvest - Journal Of Univers...· 0 citations
Recent structural change, regulatory capital requirement related adjustment by Nepal Rastra bank, and rising assets quality concern of lending portfolio have shaped bank profitability. In this regard, there is great concern with credit management and performance of banks. Applying descriptive and causal research design and utilizing the annual reports data of ten commercial banks in Nepal for the fiscal year of 2076/77 to 2080/81 B.S., the aim of this study is to establish the dynamic relationship between credit risk and performance of commercial banks in Nepal. The study used panel data regression techniques. The appropriate model is selected on the basis of Redundant Fixed Effects Tests, Correlated Random Effects - Hausman Test and omitted Fixed Effect model. The findings of this study reveal that credit risk negatively impacts the financial performance of commercial banks in Nepal. Non-Performing Loans (NPL) and total Loan Loss Provisions (LLP) have a negative impact on both Return on Assets (ROA) and Return on Equity (ROE), implying that low-quality assets can pose serious risks to banks' financial performance. Likewise, Capital Adequacy Ratio (CAR) has a positive impact on the financial performance of the bank, implying that well-capitalized banks tend to achieve high performance levels. An increase in the Loan-to-Deposit Ratio (LDR) reduces ROA due to increased credit risk, and LLP has the most adverse effect on the profitability indicator ROE. Therefore, the study concludes that effective credit risk management is crucial for enhancing the financial performance of commercial banks in Nepal. The results provide valuable insights for bank management, policymakers, and regulators to formulate strategies that balance risk and return for sustainable banking performance.
L. Adhikari, Pitambar Sapkota, Sandip Paudel et al.· Janabhawana Research Journal· 0 citations