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Savings and bank loans dynamics in implementing the new international accounting standard IFRS-9: Malaysia as a case study

Author

Listed:
  • Roslan, Syed
  • Masih, Mansur

Abstract

This paper makes an attempt to assess the impact of the implementation of the new Institutional International Financial Reporting Standard 9 (IFRS-9) which started in 2018 i.e. higher allocation for impairment loans to some of the major countries in the world by analysing the long-run relationship of four-variables which are savings, bank loans, economic growth and trade transactions using Malaysia as the case study.Although we discovered mixed evidence from different methods such as, Engle-Granger, Johansen, ARDL and NARDL cointegration tests due to smaller sample size, we proceeded with our test based on Johansen results to find whether there exists a long-run relationship between all four variables of our interest. We found that bank loans variable is the most leading variable that policymakers can use i.e. set the loans rate as an intermediate target to affect economic growth, savings and trade transactions. The results have strong policy implications for countries like Malaysia.

Suggested Citation

  • Roslan, Syed & Masih, Mansur, 2018. "Savings and bank loans dynamics in implementing the new international accounting standard IFRS-9: Malaysia as a case study," MPRA Paper 111730, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:111730
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    References listed on IDEAS

    as
    1. Christopher Udry, 1994. "Risk and Insurance in a Rural Credit Market: An Empirical Investigation in Northern Nigeria," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 61(3), pages 495-526.
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    3. Yang, Yung Y. & Yi, Myung Hoon, 2008. "Does financial development cause economic growth? Implication for policy in Korea," Journal of Policy Modeling, Elsevier, vol. 30(5), pages 827-840.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    IFRS-9; savings; bank loans; economic growth; trade transactions; NARDL;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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