The Al Rayan Bank (called IBB Bank until December 2014) was the first and greatest Islamic bank i... more The Al Rayan Bank (called IBB Bank until December 2014) was the first and greatest Islamic bank in the European Union before the Brexit. The Al Rayan Bank is a trade bank in Great Britain, functioning according to the principles of Islam, taking an eminent place among the Islamic financial institutions. The bank operating in Anglo-Saxon financial environment has shown such success to the world in recent years that can be an inspiration for investors of other Islamic financial institutions. The authors are doing the analysis of the balance structure of one of the most famous West-European Islamic banks. The authors analyzing the balance sheet of the Al Rayan Bank call attention to the necessity of the cooperation of conventional and Islamic banks due to the increasing similar claims of Muslims living in Europe by drawing conclusions. Besides these, they discuss the opportunities of cooperation as well. According to the authors, the Islamic banks and their institutions provide alterna...
Acta Universitatis Sapientiae, Economics and Business, 2019
The aim of the present article is to model and predict the financial failure of non-financial com... more The aim of the present article is to model and predict the financial failure of non-financial companies listed on the Bucharest Stock Exchange. The prediction models are based on the companies’ financial reports. The paper emphasizes the importance of processing outlier data and the significance of categorical independent variables. The paper contributes to bankruptcy and corporate financial failure research by presenting a Romanian situation. Results show that the model that uses 3-year financial data prior to the failure has a better accuracy. Several models have been compared, and it was found that using categorical independent variables as explanatory variables increased the accuracy of the models against those that used numerical regressors.
Acta Universitatis Sapientiae, Economics and Business, 2016
The education system in Hungary has been greatly criticized in the last decades regarding the sta... more The education system in Hungary has been greatly criticized in the last decades regarding the standards and quality of education and its ignorance towards labour market demands. The present study focuses on factors affecting the quality of education. The first part of the research analyses the relationship between public education and competitiveness in Hungary. In the second part of the research, with the help of the linear regression model and of other statistical and mathematical tools, we tried to identify those explanatory variables which influence and mostly determine the quality of public education.The quality of education was chosen as the dependent variable of the model. Based on the data of competency measurements in Hungary, we were able to identify two explanatory variables that would also highly satisfy the goodness of fit of the linear regression model. The educational funding rates (GDP-proportionate educational spending rate) and the number of students learning Engli...
Acta Universitatis Sapientiae, Economics and Business, 2014
Our study examines some of the key aspects of education funding in Hungary. The theme of this pub... more Our study examines some of the key aspects of education funding in Hungary. The theme of this publication is a current issue because the financing of Hungarian education has been dramatically changed from October 2013 on. Enrolment-based funding has been replaced by the average salary-based normative support, and the new “teacher career model” has been introduced. The study demonstrates the changes in financing using a model school, the calculations being based on the Budget Act of each year. We look at the trends of the previous system of financing, analysing the data from 2003 to 2012. We can compare the new, average salary-based funding with the normative support in 2012. By comparing the two types of funding, we attempt to find out whether the changes in Hungarian public education represent an opportunity for true transformation or they will remain a mere alteration in the calculation method of funding.
International Conference on Eurasian Economies 2023
Mainstream economists, and most non-economists, as well, consider the existence of interest as a ... more Mainstream economists, and most non-economists, as well, consider the existence of interest as a matter-of-course. Moreover, some economists say that it is an essential regulator of the economy, which creates a balance between savers and investors, regulates the borrowings, and it is an essential tool for the central bank's monetary control. In our study we examine the role of the interest in the Christian and Islamic moral and economy. Comparing arguments for and against interest it became clear that – even if it was not discussed in detail – the pro arguments can be easily challenged, while counterarguments are considered as moral argument by mainstream economics forgetting the fact that the science of economics has emerged from ethics. In a system of interest payment every player of the economy has to pay interest, while in the Islamic monetary system, not only profit and loss are shared between the lender and borrower, but they also have to give to the poor. Within the frame...
During 2021-2022, many commodity prices rose to record levels. As a result, Hungary in 2022 exper... more During 2021-2022, many commodity prices rose to record levels. As a result, Hungary in 2022 experiencing high inflation, large trade deficits, and an unstable macroeconomic environment. High commodity prices, particularly for food, also have adverse effects on poverty. Hungary has not experienced for a long time such increase in inflation, which is among the highest in Europe. Inflation growth has recently associated with large energy price shocks, food price increases are traditionally believed to have rather small effects. At the same time, there has been an absence of rigorous work to identify empirically the relative importance of each factor contributing to inflation. It is thus of vital importance to improve the understanding of the causes of inflation in Hungary to allow adequate policies to be put in place. The purpose of this paper is to fill this gap and thoroughly analyze the determinants of inflation in Hungary using data for the current decade, with a focus on food pric...
The aim of the study is to explore the relationship between overspending and the method of paymen... more The aim of the study is to explore the relationship between overspending and the method of payment, to highlight its causes. The non-representative survey was conducted between 2020 and 2021 in Hungary (n = 499) using the snowball sampling of data collection. They examined the relationship between age, education, place of residence, and payment methods, and analyzed the impact of internal and external factors on cash consumption and sustainability. The results showed that the use of cash as a method of payment is characteristic with advancing age, and higher education has a higher willingness to pay electronically according to the examined sample, and the existence of electronic access is not related to the size of the settlement. It can be stated that the majority of respondents have no choice when choosing a payment method. The answers reflect confidence in electronic payment solutions (a value of 2.21 on a six-point scale). Each group believes that they can consciously plan their...
Since 2013, the central bank has been responsible for supervision in Hungary. In addition to the ... more Since 2013, the central bank has been responsible for supervision in Hungary. In addition to the regulatory change, a law was published in the same year that started the process of abolishing the savings co-operative system. This paper investigates the impact of these two significant changes on the profitability of the Hungarian banking sector between 2003 and 2019 using dynamic panel model estimates. The supervisory change has reduced the profitability of credit institutions and tighter supervision has been implemented. The transformation of the savings co-operative system was in fact an integration that led to the disappearance of savings co-operatives by 2019. Competition in the market has been weakened, which has increased the profitability of the remaining financial institutions. The results were robust in terms of the multiple specifications and profitability ratio.
The state of banking systems is an important issue. The purpose of this paper was to test whether... more The state of banking systems is an important issue. The purpose of this paper was to test whether the well-known CAMELS microeconomic methodology, generally used for ranking banks, is applicable to evaluating Islamic banking systems. The hypothesis was tested by implementing a method for a particular case, public, free data – from 2013 till the first quarter of 2018 – on Islamic banking systems from the “Islamic Financial Services Board” (IFBS) database. As expected, modifications were necessary. First, because of the lack of data (in Islamic databases, no data refer to the management (“M”)), and second, to avoid the subjectivity of the five-degree method and to reach more sensibility. Thus, a hundred-level (standardized) rating system was introduced – “CAELS 100”, where “100” refers to the levels. The other part of the methodology – creating a simple average of the (now level 100) rating of raw indicators to get the letters of CA(M)ELS in the relevant period – remained unchanged. A...
International Conference on Eurasian Economies 2016, 2016
Islamic banking is a banking system that is based on the principles of sharia or Islamic law. The... more Islamic banking is a banking system that is based on the principles of sharia or Islamic law. The principles of Islamic finance forbid interest - this is commonly known as riba - charity (zakat), forbid high risk (gharar), forbid some transactions like gambling, and are based on PLS (Profit-Loss Share). The most important concept is that both charging and receiving interest are strictly forbidden; money may not generate profits. Islamic banks have largely survived the global economic crisis intact and they offer a safer operation than conventional banks. CAMEL analysis is a supervisory rating system to classify a bank's overall condition according to Capital (C), Assets (A), Management (M), Earnings (E) and Liquidity (L). In the analysis a variety of indicators were calculated based on data from the annual reports. The results of the four banks were averaged separately, then classified (1 = good, 2 = adequate, 3 = satisfactory, 4 = acceptable, 5 = unacceptable) according to the ...
The paper describes some of the main economic indicators such as the Genuine Progress Indicator (... more The paper describes some of the main economic indicators such as the Genuine Progress Indicator (GPI), Sustainable Net Benefit Index (SNBI) and the Human Development Index (HDI) that have been intended to replace or supplement Gross Domestic Product. Based on our analysis, we conclude that none of the indicators is still able to replace GDP because of the difficulties in data collection and the lack of sufficient objectivity in the types of information used. Meanwhile, each indicator draws attention to important trends that are not visible from GDP so they can provide useful signals for building and evaluating policies. The study was created for the Economics Seminar of Kaposvár (KAKTUSZ) which is organized annually by the Kaposvár University. It is closely related to the paper by Varga et al. (2018) titled “Theoretical overview of MEW and ISEW alternative economic indicators” (in the present issue) and can be conceived as a continuation of that.
International Conference on Eurasian Economies 2016, 2016
There is an increasing demand for investments based on religious basics since these ethical inves... more There is an increasing demand for investments based on religious basics since these ethical investments mean much more stable financial chances. The economic and financial risk of a fragmented reserve banking system has become obvious by the failure of the neoliberal market economy. Therefore, world economy has to reform the entire credit and bank system that could only be achieved by alternative methods. The Islamic bank is a particularly young alternative opportunity that is based on more equitable and moral principles. However, bringing back the Christian-based banking system that looks back on old traditions and that became extinct could also be an alternative. One of the major principles of the Christian-based banking system is that it is not allowed to borrow and invest in worthless bonds without provision. For the Islamic bank, for instance, speculative affairs that are of high risk and monetary derivates are forbidden, there is voluntary risk management. Risk management and ...
Acta Universitatis Sapientiae, European and Regional Studies, 2020
In our study, we focused on the fourth industrial revolution, which is the revolution of machines... more In our study, we focused on the fourth industrial revolution, which is the revolution of machines at the same time and which affects the world of worthy human work significantly. Let us examine the reasons behind the machine wrecking in the modern era and the technophobia, the negative and positive outcomes of additional spare time, and the state of unemployment. We touch upon the historical antecedents of modern machine wrecking and its present situation. We briefly draw possible alternatives as regards the subthemes. In this study, ethics is ascribed a focal attention since we approach the trends that affect the world of work and have an economic significance in the context of the fourth industrial revolution. We examine the process of Industry 4.0, which has led to a significant transformation of production processes from the aspect of taxation – for example, how the automation of the production processes influences the transformation of the tax system, where humanity is in the c...
The Al Rayan Bank (called IBB Bank until December 2014) was the first and greatest Islamic bank i... more The Al Rayan Bank (called IBB Bank until December 2014) was the first and greatest Islamic bank in the European Union before the Brexit. The Al Rayan Bank is a trade bank in Great Britain, functioning according to the principles of Islam, taking an eminent place among the Islamic financial institutions. The bank operating in Anglo-Saxon financial environment has shown such success to the world in recent years that can be an inspiration for investors of other Islamic financial institutions. The authors are doing the analysis of the balance structure of one of the most famous West-European Islamic banks. The authors analyzing the balance sheet of the Al Rayan Bank call attention to the necessity of the cooperation of conventional and Islamic banks due to the increasing similar claims of Muslims living in Europe by drawing conclusions. Besides these, they discuss the opportunities of cooperation as well. According to the authors, the Islamic banks and their institutions provide alterna...
Acta Universitatis Sapientiae, Economics and Business, 2019
The aim of the present article is to model and predict the financial failure of non-financial com... more The aim of the present article is to model and predict the financial failure of non-financial companies listed on the Bucharest Stock Exchange. The prediction models are based on the companies’ financial reports. The paper emphasizes the importance of processing outlier data and the significance of categorical independent variables. The paper contributes to bankruptcy and corporate financial failure research by presenting a Romanian situation. Results show that the model that uses 3-year financial data prior to the failure has a better accuracy. Several models have been compared, and it was found that using categorical independent variables as explanatory variables increased the accuracy of the models against those that used numerical regressors.
Acta Universitatis Sapientiae, Economics and Business, 2016
The education system in Hungary has been greatly criticized in the last decades regarding the sta... more The education system in Hungary has been greatly criticized in the last decades regarding the standards and quality of education and its ignorance towards labour market demands. The present study focuses on factors affecting the quality of education. The first part of the research analyses the relationship between public education and competitiveness in Hungary. In the second part of the research, with the help of the linear regression model and of other statistical and mathematical tools, we tried to identify those explanatory variables which influence and mostly determine the quality of public education.The quality of education was chosen as the dependent variable of the model. Based on the data of competency measurements in Hungary, we were able to identify two explanatory variables that would also highly satisfy the goodness of fit of the linear regression model. The educational funding rates (GDP-proportionate educational spending rate) and the number of students learning Engli...
Acta Universitatis Sapientiae, Economics and Business, 2014
Our study examines some of the key aspects of education funding in Hungary. The theme of this pub... more Our study examines some of the key aspects of education funding in Hungary. The theme of this publication is a current issue because the financing of Hungarian education has been dramatically changed from October 2013 on. Enrolment-based funding has been replaced by the average salary-based normative support, and the new “teacher career model” has been introduced. The study demonstrates the changes in financing using a model school, the calculations being based on the Budget Act of each year. We look at the trends of the previous system of financing, analysing the data from 2003 to 2012. We can compare the new, average salary-based funding with the normative support in 2012. By comparing the two types of funding, we attempt to find out whether the changes in Hungarian public education represent an opportunity for true transformation or they will remain a mere alteration in the calculation method of funding.
International Conference on Eurasian Economies 2023
Mainstream economists, and most non-economists, as well, consider the existence of interest as a ... more Mainstream economists, and most non-economists, as well, consider the existence of interest as a matter-of-course. Moreover, some economists say that it is an essential regulator of the economy, which creates a balance between savers and investors, regulates the borrowings, and it is an essential tool for the central bank's monetary control. In our study we examine the role of the interest in the Christian and Islamic moral and economy. Comparing arguments for and against interest it became clear that – even if it was not discussed in detail – the pro arguments can be easily challenged, while counterarguments are considered as moral argument by mainstream economics forgetting the fact that the science of economics has emerged from ethics. In a system of interest payment every player of the economy has to pay interest, while in the Islamic monetary system, not only profit and loss are shared between the lender and borrower, but they also have to give to the poor. Within the frame...
During 2021-2022, many commodity prices rose to record levels. As a result, Hungary in 2022 exper... more During 2021-2022, many commodity prices rose to record levels. As a result, Hungary in 2022 experiencing high inflation, large trade deficits, and an unstable macroeconomic environment. High commodity prices, particularly for food, also have adverse effects on poverty. Hungary has not experienced for a long time such increase in inflation, which is among the highest in Europe. Inflation growth has recently associated with large energy price shocks, food price increases are traditionally believed to have rather small effects. At the same time, there has been an absence of rigorous work to identify empirically the relative importance of each factor contributing to inflation. It is thus of vital importance to improve the understanding of the causes of inflation in Hungary to allow adequate policies to be put in place. The purpose of this paper is to fill this gap and thoroughly analyze the determinants of inflation in Hungary using data for the current decade, with a focus on food pric...
The aim of the study is to explore the relationship between overspending and the method of paymen... more The aim of the study is to explore the relationship between overspending and the method of payment, to highlight its causes. The non-representative survey was conducted between 2020 and 2021 in Hungary (n = 499) using the snowball sampling of data collection. They examined the relationship between age, education, place of residence, and payment methods, and analyzed the impact of internal and external factors on cash consumption and sustainability. The results showed that the use of cash as a method of payment is characteristic with advancing age, and higher education has a higher willingness to pay electronically according to the examined sample, and the existence of electronic access is not related to the size of the settlement. It can be stated that the majority of respondents have no choice when choosing a payment method. The answers reflect confidence in electronic payment solutions (a value of 2.21 on a six-point scale). Each group believes that they can consciously plan their...
Since 2013, the central bank has been responsible for supervision in Hungary. In addition to the ... more Since 2013, the central bank has been responsible for supervision in Hungary. In addition to the regulatory change, a law was published in the same year that started the process of abolishing the savings co-operative system. This paper investigates the impact of these two significant changes on the profitability of the Hungarian banking sector between 2003 and 2019 using dynamic panel model estimates. The supervisory change has reduced the profitability of credit institutions and tighter supervision has been implemented. The transformation of the savings co-operative system was in fact an integration that led to the disappearance of savings co-operatives by 2019. Competition in the market has been weakened, which has increased the profitability of the remaining financial institutions. The results were robust in terms of the multiple specifications and profitability ratio.
The state of banking systems is an important issue. The purpose of this paper was to test whether... more The state of banking systems is an important issue. The purpose of this paper was to test whether the well-known CAMELS microeconomic methodology, generally used for ranking banks, is applicable to evaluating Islamic banking systems. The hypothesis was tested by implementing a method for a particular case, public, free data – from 2013 till the first quarter of 2018 – on Islamic banking systems from the “Islamic Financial Services Board” (IFBS) database. As expected, modifications were necessary. First, because of the lack of data (in Islamic databases, no data refer to the management (“M”)), and second, to avoid the subjectivity of the five-degree method and to reach more sensibility. Thus, a hundred-level (standardized) rating system was introduced – “CAELS 100”, where “100” refers to the levels. The other part of the methodology – creating a simple average of the (now level 100) rating of raw indicators to get the letters of CA(M)ELS in the relevant period – remained unchanged. A...
International Conference on Eurasian Economies 2016, 2016
Islamic banking is a banking system that is based on the principles of sharia or Islamic law. The... more Islamic banking is a banking system that is based on the principles of sharia or Islamic law. The principles of Islamic finance forbid interest - this is commonly known as riba - charity (zakat), forbid high risk (gharar), forbid some transactions like gambling, and are based on PLS (Profit-Loss Share). The most important concept is that both charging and receiving interest are strictly forbidden; money may not generate profits. Islamic banks have largely survived the global economic crisis intact and they offer a safer operation than conventional banks. CAMEL analysis is a supervisory rating system to classify a bank's overall condition according to Capital (C), Assets (A), Management (M), Earnings (E) and Liquidity (L). In the analysis a variety of indicators were calculated based on data from the annual reports. The results of the four banks were averaged separately, then classified (1 = good, 2 = adequate, 3 = satisfactory, 4 = acceptable, 5 = unacceptable) according to the ...
The paper describes some of the main economic indicators such as the Genuine Progress Indicator (... more The paper describes some of the main economic indicators such as the Genuine Progress Indicator (GPI), Sustainable Net Benefit Index (SNBI) and the Human Development Index (HDI) that have been intended to replace or supplement Gross Domestic Product. Based on our analysis, we conclude that none of the indicators is still able to replace GDP because of the difficulties in data collection and the lack of sufficient objectivity in the types of information used. Meanwhile, each indicator draws attention to important trends that are not visible from GDP so they can provide useful signals for building and evaluating policies. The study was created for the Economics Seminar of Kaposvár (KAKTUSZ) which is organized annually by the Kaposvár University. It is closely related to the paper by Varga et al. (2018) titled “Theoretical overview of MEW and ISEW alternative economic indicators” (in the present issue) and can be conceived as a continuation of that.
International Conference on Eurasian Economies 2016, 2016
There is an increasing demand for investments based on religious basics since these ethical inves... more There is an increasing demand for investments based on religious basics since these ethical investments mean much more stable financial chances. The economic and financial risk of a fragmented reserve banking system has become obvious by the failure of the neoliberal market economy. Therefore, world economy has to reform the entire credit and bank system that could only be achieved by alternative methods. The Islamic bank is a particularly young alternative opportunity that is based on more equitable and moral principles. However, bringing back the Christian-based banking system that looks back on old traditions and that became extinct could also be an alternative. One of the major principles of the Christian-based banking system is that it is not allowed to borrow and invest in worthless bonds without provision. For the Islamic bank, for instance, speculative affairs that are of high risk and monetary derivates are forbidden, there is voluntary risk management. Risk management and ...
Acta Universitatis Sapientiae, European and Regional Studies, 2020
In our study, we focused on the fourth industrial revolution, which is the revolution of machines... more In our study, we focused on the fourth industrial revolution, which is the revolution of machines at the same time and which affects the world of worthy human work significantly. Let us examine the reasons behind the machine wrecking in the modern era and the technophobia, the negative and positive outcomes of additional spare time, and the state of unemployment. We touch upon the historical antecedents of modern machine wrecking and its present situation. We briefly draw possible alternatives as regards the subthemes. In this study, ethics is ascribed a focal attention since we approach the trends that affect the world of work and have an economic significance in the context of the fourth industrial revolution. We examine the process of Industry 4.0, which has led to a significant transformation of production processes from the aspect of taxation – for example, how the automation of the production processes influences the transformation of the tax system, where humanity is in the c...
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