Query: financial institutions

title: The need for Islamic accounting standards: the Malaysian Islamic financial institutions experience
abstract: The purpose of this paper is to examine views of financial statements preparers with regard to the practices in reporting Islamic Financial Institutions (IFIs) thereby contributing to answer whether there is indeed a need for a separate set of Islamic accounting standards for IFIs.,Drawing upon seven in depth semi structured interviews conducted with IFIs' leading officers who are highly involved in preparing financial statements in Malaysia, the paper offers evidence on the current stance of reporting the operation of IFIs, the influence of AAOIFI accounting standards and the feasible application of IFRSs in reporting IFIs.,While it is shown that most of the interviewees admit the feasibility of IFRSs in reporting IFIs, many interviewees placed greater emphasis on the spirit of Islam based on Islamic contract. In that case, the findings show that to convince the public that they offer Shariah compliance products approved by Shariah Advisory Council, there is a need for specificity guidelines or standards for IFIs within the IFRS framework. The main concern raised in the paper is that separate Islamic accounting standard is not needed, instead the option needs to be within the IFRS framework with the collaboration work of Accounting and Auditing for Islamic Financial Institutions (AAOIFI) and the International Accounting Standard Board (IASB),With the recent rapid growth of IFIs, this paper contributes regarding the inconclusive stance on the need for specificity accounting standards for IFIs such as the ones issued by AAOIFI. It adds to the current body of knowledge by highlighting the collaboration of the AAOIFI and the IASB for the intended specific guidelines for IFIs to be accepted globally.

title: Does trust in financial institutions drive formal saving? Empirical evidence from Ghana
abstract: Samuel Tawiah Baidoo holds a Master of Philosophy degree in economics and he is affiliated with Department of Economics, Kwame Nkrumah University of Science and Technology (KNUST) Kumasi, Ghana. He is currently a Project Research Assistant and PhD student at the Department of Economics, KNUST. His research interests include microeconomics, monetary economics and economic policy analysis.  samueltawiahbaidoo@yahoo.com Linda Akoto holds a Master of Philosophy degree in economics and she is currently a PhD candidate at the Department of Economics, University of Ghana, Legon. Her research interests include monetary economics, economic policy analysis and international economics.  akotol@ymail.com. Schumpeter 1934; Walle 2014) stable and efficient financial institutions exert a positive impact on economic growth. Financial institutions play a key role by serving as intermediary between the deficit and surplus units (Demirguc Kunt and Levine 2008; Mishkin 2007) This crucial role is facilitated by mobilising savings from individuals who have surplus funds but do not have an immediate use for them. These excess funds mobilised by the financial institutions are subsequently made available to individuals who have insufficient or no funds but want to spend or invest now. Saving is also reported to be beneficial to individuals: it facilitates wealth accumulation, consumption smoothing (an economic concept used to express the desire of people to have a stable path of consumption) access to education and health, investment, insurance against emergencies, relaxation of credit constraints and, most importantly, poverty reduction (Goldberg 2014; Prina 2015) However, the decision by the surplus units to deposit their excess funds at the financial institutions depends on the trust and confidence level in these institutions as well as their easy accessibility (see, for instance, Ajayi 2016;  Delis and Mylonidis 2015; El Attar and Poschke 2011; Filipiak 2016; Rogg 2000; Guiso, Sapienza and Zingales 2008) Notwithstanding the importance of savings detailed earlier, mobilisation of savings by financial institutions has become arduous due to the alarming rate at which financial institutions collapse and are taken over. This is so because as the financial institutions collapse, individuals lose trust in saving their excess funds at those financial institutions. With regard to takeovers, individuals who may not understand properly the notion of take over may also panic, and for that matter not save at the financial institution. Many people in developing countries have resorted to informal ways of saving (such as saving at home, with friends or family members) because of their low trust in financial institutions. In the case of Ghana, for instance, mention can be made of UT and Capital banks which were recently acquired by the GCB bank because of insolvency. Subsequently, uniBank was also taken over by the Bank of Ghana due to abysmal performance.

title: Entrepreneurial Activities of Financial Institutions

title: Nonbank Financial Institutions:

title: Corporate governance in Islamic financial institutions
abstract: How to cite this paper: Istrefi, V. (2020) Corporate governance in Islamic financial institutions.

title: EU Regulatory Measures Following the Crises: What Impact on Corporate Governance of Financial Institutions?
abstract: This study investigates the relevance of certain EU regulatory measures introduced in response to the financial and sovereign debt crises for corporate governance and their possible impact on the modalities of company operation, notably in terms of risk assessment and management.  The contribution is based on a review of literature and an analysis of EU legislative and soft law measures agreed in 2008 onwards pertinent to corporate governance, notably of financial institutions due to their systemic relevance. The applied research methodology includes a combination of theoretical and analytical methods.  It is submitted that there is an observable trend of extending the power of shareholders and of regulation in the public interest at the cost of the management power. Moreover, certain aspects of corporate governance seem to steadily evolve from code based 'soft law' norms to mandatory rules.  EU regulatory corrective measures constitute 'grosso modo' a desirable progress towards a more transnational approach. However, there can be no single blueprint for reforms given the differences between national systems of corporate governance, including their scope, contents, and means of implementation. Hence, the potentials of an incentive oriented approach should be better exploited in both national and EU level regulatory activities.  The study offers an updated account of the most recent EU legislative activity in the area up to the end of the 8th term of the European Parliament. It may be used for corporate governance practitioners allowing for informed adapting to the new regulatory framework and trends in the foreseeable future.

title: The effects of reducing opportunity and fraud risk factors on the occurrence of occupational fraud in financial institutions
abstract: Internal fraud has been attributed as one of the contributing factors for serious banking crises. Given that opportunity is the pre eminent cause of white collar crime, this study attempts to measure the relationships between the perceived 'opportunity reduction' and other fraud risk factors with regard to the 'likelihood of fraud occurrence' in financial institutions. For analysis, the study gathered 395 survey responses from South Korean financial sector. The results of logistic regressions of the study highlight that how to operate control mechanisms combining prevention and deterrence measures (the qualitative aspect of internal control) is more important for preventing fraud than the mere existence of many anti fraud controls. In addition, the study discovers that the employees of the Korean financial institutions view that the risk of management override of controls is a more critical risk than collusion in their organization.

title: Financial Knowledge and Trust in Financial Institutions
abstract: Using fourteen years of data on Dutch consumers' trust in financial institutions, we find that financially literate consumers are more likely to trust banks, insurance companies and pension funds, and the competence and integrity of the managers of these institutions. This holds both for broad scope and narrow scope trust. Although trust in respondents' own financial institutions is significantly higher than general trust in financial institutions, both forms of trust are positively related. Financially knowledgeable people are more likely to trust the prudential supervisor. Finally, our results indicate that trust in the supervisor is positively related to trust in the financial sector.

title: Accounting and pseudo spirituality in Islamic financial institutions
abstract: The global financial crisis was followed by calls for a transformation of conventional finance, towards more ethico aesthetic models. One avenue was to consider the alternative aesthetic of Islamic financial institutions (IFIs) IFIs offer profit loss sharing (PLS) schemes as a distinctive spiritual alternative to conventional investment products. IFIs ontotheology clashes with the epistemology of modern banking and finance. The accounting for PLS creates tensions due to practical complexity that militates against implementation of the authentic Islamic financial contracts. This paper seeks to identify the role of accounting in IFIs' practice of interpretation to resolve the struggles that have taken place around the implementation of PLS schemes as a means of spiritual based financial alternatives. We explore how IFIs use accounting in rendering notions of spiritual/prophetic values applicable to practice or how it colludes against their implementation. Our study adopts a qualitative research methodology, framed around 40 interviews and observations of PLS implementation in IFIs in five Muslim countries in Asia and the Middle East, and one in the United Kingdom. We combine the literature on accounting and religion with the ideas/concepts from the literature on religion in organizations, political economy and Islamic law/finance. These perspectives enable us to better reveal how accounting works to reinvent spirituality. In our context we show how accounting mediates the conflicting interests and intentions that arise within the epistemological clashes that happen as the scared/religious strives to take its place in the capitalistic context of the conventional finance industry.

title: The role of financial institutions in gambling
abstract: Financial institutions have corporate social responsibility to assist customers in enhancing their financial well being, and to make a positive contribution to society given the considerable role that they play in customers' everyday lives. Financial institutions are involved in gambling through facilitating gambling transactions, including provision of credit to customers potentially experiencing gambling related harms. As financial institutions have an overview of customers' income, spending and debt, this potentially allows for the identification of excessive expenditure on specific activities. This article reviewed the role of financial institutions in gambling with the aim of considering ways in which policies and practices could enhance customer well being. The Australian focused review found limited evidence of gambling specific bank policies despite increasing recognition of the impact of gambling related harms. Behavioral economics and psychological approaches may be promising frameworks to guide the development of policies to assist customers in limiting their gambling to affordable levels. Financial institutions could implement products and resources for customers to enhance management of gambling expenditure. Government and community scrutiny over the role of financial institutions in gambling will likely increase given growing recognition of harms. A proactive effort to enhance customer well being could have broad positive outcomes for financial institutions' social licence to operate.