Monetary policy and stability of the Nigerian banking sector in the post-COVID-19 era

Small and medium-sized enterprises (SMEs) create more than half of the added value, providing about two-thirds of employment in most countries. However, they need more liquidity, access to credit resources, and significant outstanding loans. This study aims to identify the impact of interest rates on outstanding loans of enterprises on their structure as a way to prevent bankruptcy. The correlation-regression analysis used OECD statistical data for 2008‒2019 sampling individual countries; it showed an ambiguous situation between the interest rate and the share of outstanding loans of SMEs in the overall structure of outstanding loans. The paper verified constructed regression equations and estimated their parameters. The regression equations for Belgium, the Czech Republic, Estonia, and Latvia are statistically reliable. Thus, in Belgium and the Czech Republic, a negative relationship was recorded (r = –0.822; D = 0.675; r = –0.9274; D = 0.794; F-criterion > Ft, respectively), and in Estonia and Latvia – a positive one (r = 0.876; D = 0.767; F-criterion > F•Ft; r = 0.800; D = 0.641; F-criterion > Ft , respectively). Australia, Italy, Slovakia, and France practically do not have a corresponding relationship. The regression equations make it possible to estimate the change in the level of interest rate on the share of outstanding loans of enterprises in the overall structure of outstanding loans, make predictions of the corresponding performance indicator, and develop measures of restoring the solvency of enterprises as an essential task of preventing their bankruptcy.

The development of the real estate market always goes hand in hand with the fluctuation of the economy. In recent years, this market has experienced many recessions and «freezes» associated with the appearance of a real estate bubble. To approach this issue, this paper studies and gives an overview of the real estate bubble and the impact of monetary policies on the real estate bubble in Vietnam. This paper’s purpose is to identify and measure the influence of monetary policies, including interest rates, credit and money supply, on the real estate bubble in Ha Noi. The vector autoregression model (VAR) is used to test the interaction of the variables in the model. Dickey-Fuller test (DF) is applied to determine the stationarity of the variables, while the Akaike information criterion (AIC), Likelihood Ratio (LR), Final prediction error (FPE), Hannan-Quinn information criterion (HQ) and Schwarz criterion (SC) are used to find optimal lag of the model; then Granger causality test is utilized to determine the two-way correlation between variables. The results showed that the real estate bubble reacted quickly to shocks from macroeconomic factors representing the monetary policy, consisting of interbank interest rates, credit growth, and money supply growth. Thus, it is concluded that monetary policy is not only the cause of formation, but also one of the effective solutions to deflate the real estate bubble.

Acknowledgment
This research is funded by Vietnam Ministry of Education and Training (MOET) under grant number [B2022-NTH-03].

Sixty companies on the inaugural “Fortune 500” list still remained on this list in 2020 and they have monotonically increased their leverage (median debt to total assets ratio rose from 0.5% to 20.4%) over the past 70 years. This study applies factors from classic capital structure theories to this sample and explains the dynamic choice of debt usage. The methods employed include a Bayesian information criterion selection process of explanatory variables and a set of pooled cross section and panel tests with 3,536 firm-year observations. The tests use an array of factors extracted from several established theories on capital structure, including general economic growth, tax rate, interest rate and many company-specific variables proxying profitability and growth opportunities. The firm-level results first provide support to the free cash flow theory and confirm that company size and fixed assets proportion are the two factors associated with increased borrowing. Firms in the sample also actively respond to certain debt market and macroeconomic conditions, and their leverage ratio is significantly associated with credit spread and real interest rate. Further tests across subperiods and with risk measures illustrate the impact of expected inflation, investments activities, and stock volatility, providing supporting evidence to the organizational theory. The main research conclusion is that large US companies adopt a balance sheet-based approach to increase the use of debt, and they stay sensitive and versatile to market conditions and risk landscape.

Acknowledgements
The author declares no financial or personal relationships with other people or organizations that could inappropriately influence my work. The author thanks the journal editor and anonymous referees, Ahmad Etebari, Fred Kaen, discussants and participants at the Northeast Business and Economics Association 2022 annual meeting and the 2023 Global Finance Conference for their constructive critiques. All errors remain my responsibility.