Browsing by Subject "Financial Sector"
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(2020)This paper constructs and analyses a variation on a DSGE model with a shadow banking system integrated in the financial sector by Falk Mazelis. Shadow banking is fundamentally described as credit intermediation outside the regular banking system and the description is specified in this paper during the process of historical review of the Chinese financial sector. Excess credit in the shadow banking sector and theoretical studies of banks’ and shadow banks different reaction to monetary policy shocks are the main motives behind this study. The Mazelis model builds upon a Gertler-Karadi DSGE model of financial intermediation with unconventional monetary policy. After mapping previous literature on banking, shadow banking and DSGE modelling the detailed model of Mazelis is adjusted by altering the monetary policy rule and four model parameters towards Chinese economical characteristics. The adjustments are and argued with data, previous literature, and theoretical arguments motivated by the historical review. The main objective of this approach is, trough the variation, to capture the effect of Chinese economical characteristics towards an economy with modelled shadow banking sector. The implications of the original model are considered as a foundation for the altered model. In the original model after tightening monetary policy, regular banks reduce the amount of loans on their balance sheet while shadow banks increase lending. This reduces the real effects of the shock, but at the same time shadow banks amplify the reaction of key variables to real shocks and can make the financial sector and the whole economy more unstable. The analysis of the altered model provides suggestions that the implemented Chinese characteristics make the economy slightly more vulnerable to a monetary policy tightening reducing capital and consumption. In addition, simulated shocks to productivity and monetary policy amplify the reactions of the financial sector in bank and shadow bank loan supply suggesting that the altered model can make the economy all the more unstable. The DSGE framework used in this paper does not try to model Chinese economy, but rather provides hints of economic elements in it and highlights specific aspects of it.
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(2020)The banking and financial sector has often been synonymous with established names, with some having centuries old presence. In the recent past these incumbents have been experiencing a consequential disruption by new entrants and rapidly changing consumer demands. These disruptions to the status quo have been characterised by a shift towards adoption of technology and artificial intelligence particularly in the service and products offered to the end customers. The changing business climate in the financial sector has risen many convoluted questions for the regulators. These complications cover a vast set of issues – from the concerns relating to the privacy of data of the end users to the increasing vulnerability of the financial market, to unproportionally increased compliance requirements for new entrants, all form part of the mesh of questions that have arisen in the wake of new services and operations being designed with the aid and assistance of artificial intelligence, machine learning and big data analytics. It is in this background that this Thesis seeks to explore the trajectory of the development of the legal landscape for regulating artificial intelligence – both in general and specifically in the financial and banking sector, particularly in the European Union. During the analysis, existing legal enactments, such as the General Data Protection Regulation, have been scrutinised and certain observations have been made regarding the areas that still remain unregulated or open to debate under the laws as it stands today. In the same vein, an attempt has been made to explore the emerging discussion on a dedicated legal regime for artificial intelligence in the European Union, and those observations have been viewed from the perspective of the financial sector, thereby creating thematic underpinnings that ought to form part of any legal instrument aiming to optimally regulate technology in the financial sector. To concretise the actual application of such a legal instrument, a European Union member state has been identified and the evolution of the regulatory regime in the financial sector has been discussed with the said member states’ financial supervisory authority, thus highlighting the crucial role of the law making and enactment bodies in creating and sustaining a technologically innovative financial and banking sector. The themes recognised in this Thesis could be the building blocks upon which the future legal discourse on artificial intelligence and the financial sector could be structured.
Now showing items 1-2 of 2