A note on number theoretic approach to credit creation in banking and other financial intermediaries

Shannon, AG; Zaman, F; Choudhury, T

A note on number theoretic approach to credit creation in banking and other financial intermediaries

Shannon, AG Zaman, F Choudhury, T

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Publication Type:: Journal Article
Citation:: WSEAS Transactions on Business and Economics, 2019, 16, pp. 178-184
Issue Date:: 2019-01-01

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Field	Value	Language
dc.contributor.author	Shannon, AG
dc.contributor.author	Zaman, F
dc.contributor.author	Choudhury, T
dc.date.accessioned	2022-09-15T01:54:31Z
dc.date.available	2022-09-15T01:54:31Z
dc.date.issued	2019-01-01
dc.identifier.citation	WSEAS Transactions on Business and Economics, 2019, 16, pp. 178-184
dc.identifier.issn	1109-9526
dc.identifier.issn	2224-2899
dc.identifier.uri	http://hdl.handle.net/10453/161829
dc.description.abstract	Credit is the currency of both banking and non-banking financial intermediaries. The creation of credit has always been seen as one of the key determinants of a healthy financial industry. In this paper, our objective is to use a number theoretic approach to the specification of a credit creation multiplier for interactions of banking system with non-bank financial intermediaries to produce a realistic formula. The research is further extended into more general sorting processes so that coefficients of the powers of the liquidity ratios can be selected at any stage of the process. The proposed new model yields a more realistic approach to the credit creation multiplier than traditional models. This leads in the final section to consideration of the estimation of liquidity ratios, which are one actuarial factor (among many) in superannuation calculations. Used correctly in the financial sector, the new model can provide regulators and stakeholders a better view of the credit creation scenario with increased insight into the micro factors of credit creation.
dc.language	en
dc.relation.ispartof	WSEAS Transactions on Business and Economics
dc.rights	info:eu-repo/semantics/closedAccess
dc.title	A note on number theoretic approach to credit creation in banking and other financial intermediaries
dc.type	Journal Article
utslib.citation.volume	16
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Engineering and Information Technology
utslib.copyright.status	closed_access	*
dc.date.updated	2022-09-15T01:54:25Z
pubs.publication-status	Published
pubs.volume	16

Abstract:

Credit is the currency of both banking and non-banking financial intermediaries. The creation of credit has always been seen as one of the key determinants of a healthy financial industry. In this paper, our objective is to use a number theoretic approach to the specification of a credit creation multiplier for interactions of banking system with non-bank financial intermediaries to produce a realistic formula. The research is further extended into more general sorting processes so that coefficients of the powers of the liquidity ratios can be selected at any stage of the process. The proposed new model yields a more realistic approach to the credit creation multiplier than traditional models. This leads in the final section to consideration of the estimation of liquidity ratios, which are one actuarial factor (among many) in superannuation calculations. Used correctly in the financial sector, the new model can provide regulators and stakeholders a better view of the credit creation scenario with increased insight into the micro factors of credit creation.

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http://hdl.handle.net/10453/161829