This paper develops a stylized, small, open economy macro model that incorporates an explicit and non-trivial role for financial intermediation. It illustrates how such a model could be used for policy analysis in an emerging market economy where policymakers are concerned about risks associated...

Purpose – The paper aims to provide a quantitative methodology for dealing with (true) Knightian uncertainty in the management of credit risk based on information-gap decision theory. Design/methodology/approach – Credit risk management assigns clients to credit risk categories with...

Purpose – To reopen for discussion the issue of credit creation and control in the area of Islamic banking. Design/methodology/approach – In view of a rapid expansion of Islamic banking in recent decades, the answer to questions whether Islamic banks can create credit like mainstream banks...

Foreign entry and bank competition are modeled as the interaction between asymmetrically informed principals: the entrant uses collateral as a screening device to contest the incumbent's informational advantage. Both better information ex ante and stronger legal protection ex post are shown to...

This paper presents an overview of the economy of Hungary. The paper highlights that during the Fifth Five-Year Plan (1976–80), actual growth rates for almost all major plan aggregates remained below the targets. The lower targets set for the increase in both consumption and investment in...