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1. Maximising EU Concessional Finance for Greater Leverage and Impact: An Options Spread

Author:
Mikaela Gavas, Samuel Pleeck, Andrew Rogerson, San Bilal, and Karim Karaki
Publication Date:
03-2024
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
Already constrained by the economic aftershocks of COVID-19, the impact of the war in Ukraine, and the food and climate crisis, low-income countries and lower-middle-income countries now face a combination of soaring debt and high interest rates. Confronted with insufficient liquidity to respond to these challenges and unable to access capital markets, they need additional concessional finance, in the form of grants and soft loans. The European Union (EU) already provides concessional finance, but it is not nearly enough to respond to their growing needs. With European budgets under more strain than ever, this paper puts forward the case for finding ways to maximise the overall efficiency and impact of European concessional finance and in doing so, better articulating and combining grants and concessional loans in its support and investment toolbox. To remain relevant and maintain relationships and influence with partner countries–even more in a world characterised by the polycrisis and geopolitical fragmentation–the EU will have to step up its game when it comes to providing more strategic concessional finance. The paper sets out six complementary and non-mutually exclusive options for maximising EU concessional finance with a view to a strategic set of decisions to be made for the next EU Multiannual Financial Framework.
Topic:
Development, European Union, Financial Institutions, and Sustainable Development
Political Geography:
Europe

2. The international role of the euro and the dollar: Forever in the lead?

Author:
Martin Mühleisen
Publication Date:
09-2022
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
The international monetary system has been surprisingly resilient over the past two years, considering the size of pandemic and geopolitical shocks that hit markets during this period. Liquidity injections by the major central banks helped stabilize economic activity and avoid disruptions to capital flows or foreign exchange markets. Major exchange rates remained range-bound throughout most of the crisis, even if the dollar has appreciated sharply in recent months. Volatility is likely to pick up as monetary policy responds to high inflation, but there should be no doubt that the dollar-based monetary order has withstood a major test during the past two years. This feat has been even more remarkable as the global security landscape has deteriorated in dramatic fashion, and Russia’s invasion of Ukraine has brought international tensions to a level not seen since the 1961 Cuban missile crisis. Moreover, while the dollar’s safe haven status remains firmly established, the center of global economic activity has been shifting east. Asia has become an economic powerhouse, and China is on course to become the world’s largest economy over the next few years. It is a natural question whether China will challenge the United States and Europe for global economic leadership, and whether the renminbi will appear as a leading, if not dominant, currency. This paper argues that this is unlikely for the foreseeable future, in part because a larger global role for the renminbi would be inconsistent with the Chinese leadership’s current policy priorities. However, there is no room for complacency. With the post-World War II international order in gradual decline, the world could again reach a moment where unforeseen geopolitical events might lead to changes in long-held political and economic paradigms. The United States and Europe can reduce this risk by making their growth models more robust and sustainable. Moreover, keeping their global alliances intact could prevent a loss of influence that has heralded changes in the international monetary system in the past.
Topic:
Economic Growth, Currency, Financial Institutions, Digital Policy, Digital Currency, Dollar, and Euro
Political Geography:
Europe and United States of America

3. Intellectual Capital in Islamic Banking Sector: Evidence from Turkey

Author:
Hakan Uslu
Publication Date:
01-2020
Content Type:
Journal Article
Journal:
The Rest: Journal of Politics and Development
Institution:
Centre for Strategic Research and Analysis (CESRAN)
Abstract:
The Islamic banking sector has experienced a rapid development both in Muslim and non-Muslim geographies. In this study, using a panel dataset spanning the time period 2005-2018 and several econometric estimations, how intellectual capital affects the financial performance of the participation banks, as Islamic banks are called in Turkey is analysed. The Value-Added Intellectual Coefficient model (VAIC), a well-known methodology, is utilised as a measure for intellectual capital performances and return on assets (ROA) and return on shareholders’ equity (ROE), in general, financial performances of the banks. The results of the analyses provide evidence for a positive and statistically significant impact of intellectual capital on financial performances of Islamic banks operating in Turkey. The results also suggest that employed capital efficiency and structural capital efficiency in the operations of Islamic banks are the two crucial factors for their profitability, while human capital efficiency has no statistical relationship with their financial performances. The current study contributes to the relevant literature since there is no study on Islamic banks of Turkey in the aspect of intellectual capital and helps Islamic bankers, such as executives, investors and shareholders, or policymakers in understanding and determining their positions regarding intellectual capital.
Topic:
Banks, Financial Institutions, Capital, and Banking
Political Geography:
Europe, Turkey, and Asia