Financial Analysts’ Uncertainty for Future Benefits of Banks’ Loans and Deposits Under the

Potential New Economic Trends of Investment (Cryptocurrencies) :

Accounting and Finance Views

Tamer A. Elnashar
Part-time faculty
School of Continuing Education
The American University in Cairo

Abstract: In this paper I discuss empirically the uncertainty that financial analysts can face when predicting the potential
benefits of banks’ loans and deposits under the new economic trends of investment, which also related to the growth of
international GDP per capita. Therefore, I build a cause-and-effect relation between the variables of new economic trends of
investment [in relation to digital coins (cryptocurrencies) and other effective variables as well] and the banks’ loans and
deposits, and the international GDP per capita. Where such empirical discussion helps answer the major three questions of
this paper regarding the potential situation of banks’ loans, banks’ deposits, and international GDP per capita. And in the
meantime, provide a conclusion for the papers’ hypothesis H1 in a perspective that focuses on accounting and finance. I use
three final regression models of high explanatory power of R2 to predict the potential situation in the banking sector for the
banks’ loans and deposits, and for the international GDP per capita as an indication for the international economic growth.
The empirical results show positive effect and negative effect of number of significant variables of the new economic trends
of investment on the banks’ loans, banks’ deposits, and international GDP per capita, which can be a guide for financial analysts
to make their decision in regard to uncertainties of potential situations in the banking sectors and the economy. I recommend
future research to replicate my study for the purpose of analysing the challenges faced by the banks and the economies, and to
monitor the positive and negative effects of any new economic trends of investment (other than those used in this paper) on
the banking sectors, the economies in every government globally, and the investors secured opportunities for investment.

Keywords: banks’ loans, banks’ deposits, international GDP per capita, cryptocurrencies, uncertainties, financial analysts

I. INTRODUCTION

The past few years, almost one decade ago, the world has witnessed various financial crisis,

economic recessions, pandemics, and natural disasters. And in the meantime, several financial

innovations emerged seemingly for the purpose of avoiding financial and economic risks, which in turn

have affected the culture of investors, particularly the ordinary investors who are looking for securing

their future and their beloved ones’ future.

Most of the ordinary investors over the past decades have had their best and most secured way to

invest is by depositing their savings to the banks as deposits, some other have taken the risk and go

beyond to invest in the securities markets for higher returns under the capitalism systems. Recently,

they look for another innovated way for investing their savings by investing in new financial

instruments, gold, and the digital coins (cryptocurrencies), which, at the same time, can help them

easily transfer their cash from a country to another and avoid the governments restrictions and

regulations in regard to the monetary policies and the exchange rates.

In addition, loans as a source of finance for most of the investors whether firms or individuals, can

be replaced by the innovated sources of finance in the market, which is a threat to banks’ major financial

asset of loans, which comprise in average about 80% of banks’ total assets.

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 As a result, banks recently might face the challenge of losing clients and investors, and accordingly

having a weak financial position for the financial assets of loans and sources of finance from investors’

deposits. Where both loans and deposits for banks are the corner stone for the banks’ income margin on

the income statement, when matching the interest expenses of deposits with the interest revenues of

loans.

Moreover, banks major threats nowadays are the uncertainties of future economic circumstances

with regard to exchange rates, which is heavily affected by the mechanisms of digital coins and new

financial instruments for trading and investing. And the absence of having unified exchange rates at

the same country and government. Whereas, exchange rates can be affected by the attraction to assets

that can lead to higher returns other than trading goods and products, as well as the absence of investors’

confidence in the governments in most of the countries, as well as , the fluctuations of interest rates and

the governments’ failure to lower interest rates and to devaluate the exchange rates, and accordingly,

use the "floats" that reflect the real economic or financial market conditions, whilst most of the

countries nowadays are struggling to strength the economy, avoid recessions, inflation, and stabilize

the gross domestic product per capita (GDP per capita) and the financial market conditions.

Moreover, in the context of the new financial innovations and its potential effect on the economic

trends of investment, the banks’ monetary policy should be affected in regard to the challenges of

controlling the supply of money, and the protection of their lending policies, in order to stabilize the

economy and their success, and avoid financial failure and exchange rate crisis. Whereas, the new

financial innovations in the financial market potentially will cause distortion in the supply and demand

for money that takes the form of loans, and also will cause distortion in the investors culture to invest

their savings in deposits, as they are attracted by the new financial investments and assets they can

possess and invest in for higher returns, regardless of the high risk inherited in those financial

investments. In addition, investors nowadays might get panic when they tend to invest in banks because

the loanable funds by banks can be affected by moral hazard, banks’ excessive risk taking, and looting.

In this paper, I give insights for potential new economic trends of investment that apparently related

to the competitive advantage the governments and their private and public banks have to strategically

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create in order to keep and probably to regain the investors’ confidence and increase their demands for

banks’ products and services in order to increase total cash flows in the economy. Whereas, new

financial innovations as gold , digital coins , and the new financial instruments are the major

competitors to the fundamentals of economies and the governmental polices, and potentially will affect

the international GDP per capita negatively.

I raise three major questions in this paper in regard to the uncertainties of financial analysts: firstly,

the future of banks’ loans ? , secondly, the future of investors’ deposits ? , and finally, the future for

international GDP per capita ? where empirical evidence can be maintained in the international financial

markets as to indicate the potential future under the potential new economic trends of investment , which

are witnessed in the financial markets nowadays in the digital coins more significantly. I build my

empirical evidence from a perspective of accounting and finance.

As loans are the most important financial asset for the banks’ success in the future, its expected

benefits and cash flows must be warranted in the market. Therefore, banks make their accurate studies

to protect its financial assets and equity by the up-to-date strategies of risk management. Also, deposits

are the most important source of money to the banks, and banks work on protecting it by their marketing

strategies to attract investors to deposit their savings in the banks, and most importantly, use the

strategies for risk management in order to protect such deposits.

As a consequence, for a purposive sample of banks, I use in this study, as the financial analysts

might do, a regression model to predict the potential situation for loans of banks affected by the variables

mostly reflect the new economic trends of investments, followed by another regression model to predict

the potential situation for deposits in banks also affected by the variables mostly reflect the new

economic trends of investment. And the third regression model is for predicting the situation of

international GDP per capita in the light of the new economic circumstances. All for the purpose to

provide insights regarding the current and potential international economic circumstances.

The remainder of the paper is organized as: section II shows the theoretical models, section III

shows the empirical results, and section IV shows the conclusion and discussion. Where the hypothesis

H1 for this paper is that: banks’ loans, banks’ deposits, and international GDP per capital are to be

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significantly affected by the new economic trends of investment, and financial analysts face

uncertainties to predict the future benefits of banks loans and deposits and to predict the new economic

trends’ effect.

II. THE THEORITCAL MODELS

Data and sample

I obtain the data required for the empirical study in this paper from three sources on the websites.

Firstly, the data for the banks are obtained from the website of www.annualreports.com , from year

2010 to year 2022, for a purposive sample of 9 annual financial reports for banks with good financial

performance and high-quality reporting.

Secondly, the data for the top and the most traded 6 international cryptocurrencies from the website

of www.investing.com/crypto/xrp/historical-data, as they reflect the new economic trends of investment

among the financial analysts and all investors, the historical data for such cryptocurrencies are from

year 2010 till 2022.

Thirdly, I obtain the data for the international GDP per capita from the website of

https://data.worldbank.org/indicator/NY.GDP.PCAP.KD.ZG , also from year 2010 to year 2022.

Variables selection

For the purpose of testing this paper’s hypothesis and based on the insight I emphasis on in this

paper, I select the variables necessary to build the regression models for this study based on the data

related to the variables of: banks’ loans, investors’ deposits to banks, banks’ cash flows, investors’

contribution to the banks’ equity, cryptocurrencies mostly traded in the market and reflect a current

new economic trends of investment, governmental regulations, securities exchange commission efforts

to regulate the cryptocurrencies trading, and the effect of COVID 19 (the coronavirus pandemic).

Nevertheless, I skip the effect of the variables of the past financial crisis and the economic

recessions, whereas, their effect is implicitly included in the other variables I use in the regression

models. In this paper, I investigate the cross-sectional relation of the expected independent variables

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with the dependent variables, as to show the effect on the banks’ loans, banks’ deposits, and the

international GDP per capita.

Dependent variables

I use the time series for the average of banks’ loans as the first dependent variable

BANKSLOANS j,t , as to show how the value of the banks’ s loan is affected by the new economic trends

of investment and by other variables as well, for the timeline from year 2010 to year 2022. Then I use

the time series for the average of investors’ deposits to banks as the second dependent variable

INVDEPOSITS j,t , as to investigate how the investors’ deposits can be affected by the new economic

trends of investment and any other variable. Finally, I use the time series of the average of international

GDP per capita INTGDPPCA j,t as he third dependent variable which is one of the economic indications

can be affected by the new economic trends of investment and other variables as well. Figure (1) shows

the trend analysis for the three dependent variables used for this study.

__________________________________________________________________________________
Figure (1)

The trend analysis for the average of banks’ loans, the average of investors’ deposits to banks,
the average of international GDP per capita from Year 2010 to 2022

Trend Analysis Plot for Banks' Loans Trend Analysis Plot for Investors Deposits to Banks
Linear Trend Model Linear Trend Model
Yt = 493725460 + 210913086*t Yt = 624939297 + 301401603*t
4000000000 Variable Variable
A ctual 5000000000 Actual
3500000000 Fits Fits
Investors' Deposits to Banks

Accuracy Measures A ccuracy Measures

3000000000 MAPE 1.13615E+01 4000000000 MA PE 1.61381E+01
MAD 1.92497E+08 MA D 4.02191E+08
Banks' Loans

MSD 5.47262E+16 MSD 1.96333E+17

2500000000
3000000000
2000000000

1500000000 2000000000

1000000000
1000000000

10 11 12 13 14 15 16 17 18 19 20 21 22 10 011 012 013 014 015 016 017 018 019 020 021 022
20 20 20 20 20 20 20 20 20 20 20 20 20 20 2 2 2 2 2 2 2 2 2 2 2 2

Trend Analysis Plot for International GDP per capita

Linear Trend Model
Yt = 2.27 - 0.103254*t
5.0 Variable
Actual
Fits
International GDP per capita

Accuracy Measures
2.5
MAPE 33.1599
MAD 1.1622
MSD 4.7382

0.0

-2.5

-5.0

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Source:
www.annualreports.com
https://data.worldbank.org/indicator/NY.GDP.PCAP.KD.ZG

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 I measure and investigate in this paper the potential effect of the new economic trends of

investment and the regulations on the expected benefits of banks’ loans and investors’ deposits, as well

as on the international GDP per capita, where financial analysts may be uncertain in regard to the future

benefits of banks’ loans and investors’ deposits under the new economic trends of investment.

Independent variables

For the dependent variable of BANKSLOANS j,t

I use the independent variables expected to make the financial analysts uncertain about the future

benefits in this area of banking and the new economic trends of investment as to be 9 significant

identified independent variables to include in the first initial regression models, with the banks’ loans

as the dependent variable, I list them in order based on my expectation of their significant effect in the

regression models.

The first independent variable is the investors’ deposits to banks INVDEPOSITS j,t ,

where this variable is the major source the banks are using to raise their financial assets of loans for a

higher interest rate above the interest rate provided to the investors for their deposits, as to achieve a

purposeful interest margin. Therefore, the changes in the investors’ deposits are significantly expected

to affect the banks’ loans. The second independent variable is the investors’ contribution to the banks’

equity INVCONTEQ j,t , where this variable’s growing (as one of the important accounting types of

information for the interested parties) is significant for the banks to attract the investors to deposit their

savings in the banks, and accordingly banks can raise their financial assets in loans.

The third independent variable is the cash flows balance CASHFLOW j,t as one of the significant

accounting types of information to attract investors. Whereas, the more the bank can raise this balance

of cash flows positively, the more investors can raise their trust in the banks and contribute to the

deposits and the equity, accordingly, the banks can raise their financial assets in loans. The fourth, fifth,

sixth, seventh, eighth, and ninth independent variables are the international most traded digital coins

(cryptocurrencies) reflecting the new economic trends of investments, and are in order: Bitcoins BTC j,t

, Ethereum ETH j,t , Binance coin BNB j,t , Tether TETHER j,t , USD coin USDCOIN j,t , and XRP

XRP j,t . Where these cryptocurrencies, if heavily attracts the investor, the investors will alter their
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investment plans from depositing their savings to the banks and investing in the banks’ equity to

investing in the cryptocurrencies.

For the dependent variable of INVDEPOSITS j,t

For this dependent variable , I use the same independent variables I use for the dependent variable

of BANKSLOANS j,t , except for including the variable of BANKSLOANS j,t in this case as an

independent variable expected to affect the investors deposits to the banks, where the growth of banks’

loans indicates to the investors how banks can efficiently manage its financial assets as loans,

accordingly, investors will be attracted and their trust in banks will increase.

For the dependent variable of INTGDPPCA j,t

For this dependent variable , I also use the same independent variables I use for the dependent

variables of BANKSLOANS j,t , and INVDEPOSITS j,t , where all the variables as banks’ loans, investors’

deposits , investors’ contribution to banks’ equity , cryptocurrencies growth are significant independent

variables to affect the international economy and the GDP per capita in particular (either negatively or

positively).

Dummy variables

In this study, the governmental regulations GOVREGUL j,t is the first dummy variable I use for

all the three dependent variables, where I assign the weight 1 for all the years of the study, from year

2010 till 2022, as the governmental regulations are continuously updated and changing from a period

to another, and will affect the strategies of banks and investors on regular basis. Despite the same

weight assigned each year as 1, it is significant to include this dummy variable to the regression models

I use, because this will affect the overall results of running the models, even if running the models will

result in excluding this variable.

The securities exchange commission regulations to the digital coins trading SECREGUL j,t is

considered significant as the second dummy variable to include in the regression models, for its

expected significant effect on the three dependent variables.

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 The corona virus pandemic CORVIRS j,t is the international pandemic attacked the entire economic

environments and have had a negative effect on the daily life and the business life of services and

production in the economies all over the world. Therefore, I include it as the third dummy variable

expected to affect the three dependent variables used in this study.

Models of investigating the significance of banks’ information and economic information

I use for this paper three initial regression models, the first regression model is including the

independent variables to investigate its effect on the banks’ loans, listed in order in accordance to my

expectation for their significance to affect the banks’ loans, as well as the dummy variables expected

to cause a change in the banks’ loans. The second regression model is used for investigating the effect

of the independent variables I expressed in the preceding analysis on the investors’ deposits to the

banks, as well as the dummy variables expected to affect and change the investors’ deposits to banks. I

list the variables in order based on its significance to affect the investors’ deposits to banks. The third

regression model includes the independent variables expected to affect the international GDP per capita

listed in order based on my expectation for its effect on the international GDP per capita, in addition to

the dummy variables as well.

Model (1)

The first initial regression model for banks’ loans takes the following form:

 BANKSLOANS j,t  INVDEPOSITS j,t INVCONTEQ j,t CASHFLOW j,t
+ BTC j,tETH j,t  BNB j,t  TETHER j,t
 USDCOIN j,t  XRP j,t t GOVREGUL j,t
 SECREGUL j,t  CORVIRS j,t  e t

(1/1)
Model (2)

The second initial regression model for investors‘ deposits to banks takes the following form:

INVDEPOSITS j,t  BANKSLOANS j,t INVCONTEQ j,t CASHFLOW j,t

+ BTC j,tETH j,t  BNB j,t  TETHER j,t
 USDCOIN j,t  XRP j,t t GOVREGUL j,t
 SECREGUL j,t  CORVIRS j,t  e t
(2/1)

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Model (3)

The third initial regression model for international GDP per capita takes the following form:

INTGDPPCA j,t  BANKSLOANS j,t INVDEPOSITS j,tINVCONTEQ j,t

CASHFLOW j,t + BTC j,tETH j,t  BNB j,t 
 TETHER j,t USDCOIN j,t  XRP j,t t
 GOVREGUL j,t  SECREGUL j,t 
 CORVIRS j,t  e t
(3/1)

Where:

BANKSLOANS j,t = the time series for average banks‘ loans from year 2010 till 2022.

INVDEPOSITS j,t = the time series for average investors‘ deposits to banks average

from year 2010 till 2022.

INTGDPPCA j,t = the time series for average international GDP per capita from

year 2010 till 2022.

INVCONTEQ j,t = the time series for average investors‘ contribution to

banks‘ equity from year 2010 till 2022.

CASHFLOW j,t = the time series for average banks‘ cash flows balance from

year 2010 till 2022

BTC j,t = the time series for bitcoins for years 2010 till 2022.

ETH j,t = the time series for ethereum for years 2010 till 2022.

BNB j,t = the time series for binance coins for years 2010 till 2022.

TETHER j,t = the time series for tether for years 2010 till 2022.

USDCOIN j,t = the time series for USD coins for years 2010 till 2022.

XRP j,t = the time series for XRP for years 2010 till 2022.

GOVREGUL j,t = the governmental regulations affecting the international economy

SECREGUL j,t = the securities exchange commission regulations’ initiatives to

regulate the digital coins trading

CORVIRS j,t = the corona virus pandemic in years of effect

9
 III. THE EMPIRICAL RESULTS

For the purpose of investigating the hypothesis of this paper, I use the MINITAB statistical package

to generate all the statistical inferences required, and the descriptive statistics for all the variables

included in the initial regression models (1,2, and 3).

Descriptive statistics

Table (1) shows the descriptive statistics for all the variables included in the three initial regression

models (1, 2, and 3). These descriptive statistics represent the data of all the variables in their original

form derived from the websites aforementioned. The descriptive statistics are generated from the data

before running the initial regression models.

From table (1), researchers can visualize and interpret the significance of the data descriptions

used in this study over the timeline applied to the study. I focus on the dependent variables mainly,

where the three variables I use in this study reflect a significant economic view as well as accounting

and finance view. International Banks’ loan minimum value is $ 109,533,626 and the maximum value

is $3,757,836,386, and the mean is $1, 970,117,063, which indicate the amount of banks’ investment

in loans internationally with standard deviation of $ 856,718,012. And for the investors’ deposits to

banks , the minimum value is $ 1,542,310,273 and the maximum value is $5,173,453,524 , and the

mean is $ 2,734,750,515, which indicate the amount of investors’ deposits to banks internationally

with standard deviation of $ 1,261,141,912. For the international GDP per capita, the minimum

percentage is -5.619 and the maximum percentage is 4.312, and the mean is 1.549, which indicate

the GDP per capita internationally with standard deviation of 2.301. Therefore, I select the independent

variables that reflect the international economic trends of investment expected to affect the three

dependent variables, where the significance of these independent variables is presented in table (1)

along with the significance of the dummy variables expected to affect the same three independent

variables as well.

Test of Multicollinearity

I run the initial regression models (1 , 2 and 3) denoted as (1/1, 2/1, and 3/1) before reaching the

10
final models, and the results are shown in table (1) A , (2) A, and (3) A in the appendix , and before the

multicollinearity test as well, as the dummy variable of governmental regulations affecting the economy

GOVREGUL j,t , which has the same weight every year, will be excluded from the models, even though

it is necessary for the significance of running the initial regression models. Also, the variable of

securities exchange commission regulations’ initiatives to regulate the digital coins trading

SECREGUL j,t is excluded from the initial regression model (3/1) where its effect on the international

GDP per capita is not noticed in practice.

Table (1)

Sample Statistics
Descriptive Statistics (9 Annual Financial Reports) (2010 – 2022)
( website for digital coins, and website for world bank (2010 – 2022)
(Dependent Variable, Independent Variables, and Dummy Variables)

Variable Name Mean Std.Dev. Median Minimum Maximum


Panel (A): Dependent and independent variables for initial regression model (1/1,2/1, &3/1)

BANKSLOANS j,t 1970117063 856718012 1757388266 1098533626 3757836386

INVDEPOSITS j,t 2734750515 1261141912 2289970462 1542310273 5173453524
INTGDPPCA j,t 1.549 2.301 1.778 -5.619 4.312
INVCONTEQ j,t 382119158 168312483 333081678 180931766 657391444
CASHFLOW j,t 152022469 87885132 123506577 40878991 344310444
BTC j,t 8168 13891 590 0 47000
ETH j,t 462 886 11 0 2830
BNB j,t 59.0 132.3 0.0 0.0 390.0
TETHER j,t 0.463 0.520 0.000 0.000 1.012
USDCOIN j,t 0.308 0.480 0.000 0.000 1.002
XRP j,t 0.2155 0.2850 0.0076 0.000 0.8874
Panel (B): Dummy variables for initial regression model (1/1,2/1, &3/1)
GOVREGUL j,t 1.000 0.000 1.000 1.000 1.000
SECREGUL j,t  0.231 0.439 0.000 0.000 1.000
CORVIRS j,t 0.231 0.439 0.000 0.000 1.000

BANKSLOANS j,t = the time series for average banks‘ loans from year 2010 till 2022.
INVDEPOSITS j,t = the time series for average investors‘ deposits to banks average from year 2010 till 2022.
INTGDPPCA j,t = the time series for average international GDP per capita from year 2010 till 2022.
INVCONTEQ j,t = the time series for average investors‘ contribution to banks‘ equity from year 2010 till 2022.
CASHFLOW j,t = the time series for average banks‘ cash flows balance from year 2010 till 2022.
BTC j,t = the time series for bitcoins from year 2010 till 2022.
ETH j,t = the time series for ethereum from year 2010 till 2022.
BNB j,t = the time series for binance coins from year 2010 till 2022.
TETHER j,t = the time series for tether from year 2010 till 2022.
USDCOIN j,t = the time series for USD coins from year 2010 till 2022.
XRP j,t = the time series for XRP from year 2010 till 2022.
GOVREGUL j,t = the governmental regulations affecting the economy
SECREGUL j,t = the securities exchange commission regulations’ initiatives to regulate the digital coins trading.
CORVIRS j,t = the corona virus pandemic in years of effect.

Table (2) shows the correlation matrix for all the variables in the initial regression model (1/1) in

panel (A) the initial regression model (2/1) in panel (B), and the initial regression model (3/1) in panel

(C), for the purpose of identifying the correlated variables, and check for improving the statistical

11
inference for the three initial regression models. From the table (2), it is apparent in panel (A) and panel

(B) that all the variables have low coefficient of correlation ( r ) , where all the coefficients are less than

0.70, which indicate and predict significant results when running the initial regression models (1/1) for

the banks’ loans and (2/1) for the banks’ deposits.

Nevertheless, in the initial regression model (3/1) for the international GDP per capita, only the

variable of investors’ deposits INVDEPOSITS j,t has ( r = 0.767) greater than 0.70, indicating

multicollinearity ( high correlation ) between this variable and the variable of international GDP per

capita INTGDPPCA j,t . Therefore, I apply to this variable a mathematical transformation of logarithmic

transformation for maintaining more significant results when running this initial regression model.

Interpreting the final models’ results from the financial analysts’ perspective

For the purpose of analyzing the results I show in table (3) the results of running the three initial

regression models (1/1, 2/1, 3/1 ) that generate the three final regression models (1/3, 2/3, and 3/2) .

Then I prepare a summary in table (4) to show the positive effect of the new economic trends of

investment on the three dependent variables of banks’ loans, investors’ investments in banks’ deposits,

and the international GDP per capita. Where the positive effect, measured by positive t-statistic ,

indicates the favorable cause of the new economic trends of investment to favorably increase the

dependent variables, and the negative effect, measured by the negative t-statistics, indicates the

unfavorable cause of the new economic trends of investment to unfavorably decrease the dependent

variables.

The favorable effect of new economic trends of investment on the dependent variables

Banks’ loans BANKSLOANS j,t

From table (4), banks‘ loans BANKSLOANS j,t in the period under study are affected positively by

the changes in the investors‘ deposits to banks INVDEPOSITS j,t , where the statistical inference in

table (3) panel (A) shows positive association with the banks‘ loans ( t = 20.65, Pr = 0.000) , which

indicates how significant is the investor’s deposits to banks’s loans growing, regardless of the new

economic trends of investment available in the market, and expected to attract the investors’s savings.

12
 Table (1)
Correlation matrices
Panel (A): Correlation Matrix for Initial Regression Model (1/1) (dependent variable BANKSLOANS j,t ) ( Variables In their Original Format )

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

1. BANKSLOANS j,t 1.000

2. INVDEPOSITS j,t 0.983 1.000
(0.000)
3. INVCONTEQ j,t 0.977 0.981 1.000
(0.000) (0.000)
4. CASHFLOW j,t 0.775 0.840 0.856 1.000
(0.002) (0.000) (0.000)
5. BTC j,t 0.799 0.887 0.836 0.771 1.000
(0.001) (0.000) (0.000) (0.002)
6. ETH j,t 0.775 0.859 0.781 0.676 0.982 1.000
(0.002) (0.000) (0.002) (0.011) (0.000)
7. BNB j,t 0.754 0.835 0.739 0.626 0.952 0.986 1.000
(0.003) (0.000) (0.004) (0.022) (0.000) (0.000)
8. TETHER j,t 0.852 0.813 0.864 0.655 0.640 0.583 0.500 1.000
(0.000) (0.001) (0.000) (0.015) (0.018) (0.037) (0.082)
9. USDCOIN j,t 0.859 0.874 0.889 0.813 0.754 0.673 0.670 0.719 1.000
(0.000) (0.000) (0.000) (0.001) (0.003) (0.012) (0.012) (0.006)
10. XRP j,t 0.794 0.832 0.832 0.664 0.884 0.859 0.773 0.840 0.643 1.000
(0.001) (0.000) (0.000) (0.013) (0.000) (0.000) (0.002) (0.000) (0.018)
11. SECREGUL j,t 0.840 0.904 0.853 0.908 0.838 0.799 0.793 0.590 0.821 0.647 1.000
(0.000) (0.000) (0.000) (0.000) (0.000) (0.001) (0.001) (0.034) (0.001) (0.017)
12. CORVIRS j,t 0.544 0.590 0.679 0.751 0.576 0.421 0.360 0.591 0.882 0.536 0.567 1.000
(0.054) (0.034) (0.011) (0.003) (0.039) (0.152) (0.227) (0.034) (0.001) (0.059) (0.043)

Continued on next page ,,,,,,,,,

13
Panel (B): Correlation Matrix for Initial Regression Model (2/1) ( dependent variable INVDEPOSITS j,t ) ( Variables In their Original Format )

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

1. INVDEPOSITS j,t 1.000

2. BANKSLOANS j,t 0.983 1.000
(0.000)
3. INVCONTEQ j,t 0.981 0.977 1.000
(0.000) (0.000)
4. CASHFLOW j,t 0.840 0.775 0.856 1.000
(0.000) (0.002) (0.000)
5. BTC j,t 0.887 0.799 0.836 0.771 1.000
(0.000) (0.001) (0.000) (0.002)
6. ETH j,t 0.859 0.775 0.781 0.676 0.982 1.000
(0.000) (0.002) (0.002) (0.011) (0.000)
7. BNB j,t 0.835 0.754 0.739 0.626 0.952 0.986 1.000
(0.000) (0.003) (0.004) (0.022) (0.000) (0.000)
8. TETHER j,t 0.813 0.852 0.864 0.655 0.640 0.583 0.500 1.000
(0.001) (0.000) (0.000) (0.015) (0.018) (0.037) (0.082)
9. USDCOIN j,t 0.874 0.859 0.889 0.813 0.754 0.673 0.670 0.719 1.000
(0.000) (0.000) (0.000) (0.001) (0.003) (0.012) (0.012) (0.006)
10. XRP j,t 0.832 0.794 0.832 0.664 0.884 0.859 0.773 0.840 0.643 1.000
(0.000) (0.001) (0.000) (0.013) (0.000) (0.000) (0.002) (0.000) (0.018)
11. SECREGUL j,t 0.904 0.840 0.853 0.908 0.838 0.799 0.793 0.590 0.821 0.647 1.000
(0.000) (0.000) (0.000) (0.000) (0.000) (0.001) (0.001) (0.034) (0.001) (0.017)
12. CORVIRS j,t 0.590 0.544 0.679 0.751 0.576 0.421 0.360 0.591 0.822 0.536 0.567 1.000
(0.034) (0.054) (0.011) (0.003) (0.039) (0.152) (0.227) (0.034) (0.001) (0.059) (0.043)

Continued on next page ,,,,,,,,,

14
Panel (C): Correlation Matrix for Initial Regression Model (3/1) ( Variables In their Original Format )

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

1. INTGDPPCA j,t 1.000

2. BANKSLOANS j,t -0.131 1.000
(0.670)
3. INVDEPOSITS j,t -0.091 0.983 1.000
(0.767) (0.000)
4. INVCONTEQ j,t -0.193 0.977 0.981 1.000
(0.527) (0.000) (0.000)
5. CASHFLOW j,t -0.427 0.775 0.840 0.856 1.000
(0.145) (0.002) (0.000) (0.000)
6. BTC j,t 0.211 0.799 0.887 0.836 0.771 1.000
(0.489) (0.001) (0.000) (0.000) (0.002)
7. ETH j,t 0.336 0.775 0.859 0.781 0.676 0.982 1.000
(0.261) (0.002) (0.000) (0.002) (0.011) (0.000)
8. BNB j,t 0.378 0.754 0.835 0.739 0.626 0.952 0.986 1.000
(0.203) (0.003) (0.000) (0.004) (0.022) (0.000) (0.000)
9. TETHER j,t -0.173 0.852 0.813 0.864 0.655 0.640 0.583 0.500 1.000
(0.572) (0.000) (0.001) (0.000) (0.015) (0.018) (0.037) (0.082)
10 USDCOIN j,t -0.230 0.859 0.874 0.889 0.813 0.754 0.673 0.670 0.719 1.000
(0.451) (0.000) (0.000) (0.000) (0.001) (0.003) (0.012) (0.012) (0.006)
11. XRP j,t 0.184 0.794 0.832 0.832 0.664 0.884 0.859 0.773 0.840 0.643 1.000
(0.548) (0.001) (0.000) (0.000) (0.013) (0.000) (0.000) (0.002) (0.000) (0.018)
12 CORVIRS j,t -0.364 0.544 0.590 0.679 0.751 0.576 0.421 0.360 0.591 0.822 0.536 1.000
(0.221) (0.054) (0.034) (0.011) (0.003) (0.039) (0.152) (0.227) (0.034) (0.001) (0.059)

15
 Table (3)
Results from running the three final regression models (1/3, 2/3, 3/2)
( Dependent variables : BANKSLOANS j,t , INVDEPOSITS j,tINTGDPPCA j,t )

Panel (A): Results from running the final regression model (1/3)

BANKSLOANS j,t  INVDEPOSITS j,t INVCONTEQ j,t CASHFLOW j,t

+ BTC j,tBNB j,t  USDCOIN j,t  XRP j,t t
 SECREGUL j,t  CORVIRS j,t  e t

Variable Name Coefficient SE . Coef t- Stat Pr

 -326105213 32229099 -10.12 0.002
INVDEPOSITS j,t 1.05469 0.05108 20.65 0.000
INVCONTEQ j,t -1.0637 0.3029 -3.51 0.039
CASHFLOW j,t -0.2542 0.1241 -2.05 0.133
BTC j,t 86712 20471 4.24 0.024
BNB j,t -8305743 1576033 -5.27 0.013
USDCOIN j,t 1064733779 184989686 5.76 0.010
XRP j,t -936857411 206835392 -4.53 0.020
SECREGUL j,t -895900795 119697464 -7.48 0.005
CORVIRS j,t -1215817357 224539442 -5.41 0.012

S = 7175466
R2 = 1.00
R 2 (adj) = 1.00

Panel (B): Results from running the final regression model (2/3)

INVDEPOSITS j,t  BANKSLOANS j,t INVCONTEQ j,t + BTC j,tBNB j,t
 USDCOIN j,t  XRP j,t t SECREGUL j,t 
 CORVIRS j,t  e t

Variable Name Coefficient SE . Coef t- Stat Pr

 324219768 23872987 13.58 0.000
BANKSLOANS j,t 0.89847 0.05073 17.71 0.000
INVCONTEQ j,t 1.3131 0.2459 5.34 0.006
BTC j,t -91226 23218 -3.93 0.017
BNB j,t 8511147 1778898 4.78 0.009
USDCOIN j,t -1077373588 217136543 -4.96 0.008
XRP j,t 986330285 229406662 4.30 0.013
SECREGUL j,t 934189728 114796410 8.14 0.001
CORVIRS j,t 1236783955 262562869 4.71 0.009

S = 8700086
R2 = 1.00
R 2 (adj) = 1.00

Panel (C ): Results from running the final regression model (3/2)

INTGDPPCA j,t  BANKSLOANS j,t INVDEPOSITS j,tINVCONTEQ j,t

CASHFLOW j,t + BTC j,tETH j,t  BNB j,t 
 TETHER j,t USDCOIN j,t  XRP j,t t
 CORVIRS j,t  e t

Variable Name Coefficient SE . Coef t- Stat Pr

 446.789 2.721 164.20 0.004
BANKSLOANS j,t 0.00000001 0.000 269.67 0.002

Continued on the next page ,,,,,

16
LOGINVDEPOSITS j,t -21.6118 0.1324 -163.22 0.004
INVCONTEQ j,t -0.00000002 0.0000 -100.44 0.006
CASHFLOW j,t 0.00000001 0.0000 101.40 0.006
BTC j,t 0.00028937 0.00000803 36.02 0.018
ETH j,t -0.0467678 0.0002396 -195.16 0.003
BNB j,t 0.271074 0.000734 369.14 0.002
TETHER j,t -0.911805 0.007492 -121.70 0.005
USDCOIN j,t -22.5904 0.0512 -441.25 0.001
XRP j,t 29..4268 0.0975 301.81 0.002
CORVIRS j,t 14.7505 0.0563 261.98 0.002

S = 0.00213
R2 = 1.00
R 2 (adj) = 1.00


BANKSLOANS j,t = the time series for average banks‘ loans from year 2010 till 2022.
INVDEPOSITS j,t = the time series for average investors‘ deposits to banks from year 2010 till 2022.
INTGDPPCA j,t = the time series for average international GDP per capita from year 2010 till 2022.
INVCONTEQ j,t = the time series for average investors‘ contribution to banks‘ equity from year 2010 till 2022.
CASHFLOW j,t = the time series for average banks‘ cash flows balance from year 2010 till 2022.
BTC j,t = the time series for bitcoins from year 2010 till 2022.
ETH j,t = the time series for ethereum from year 2010 till 2022.
BNB j,t = the time series for binance coins from year 2010 till 2022.
TETHER j,t = the time series for tether from year 2010 till 2022.
USDCOIN j,t = the time series for USD coins from year 2010 till 2022.
XRP j,t = the time series for XRP from year 2010 till 2022.
SECREGUL j,t = the securities exchange commission regulations’ initiatives to regulate the digital coins trading.
CORVIRS j,t = the corona virus pandemic in years of effect.

Table (4)
Summary of the economic effect on the dependent variables
in the three final regression models used

Independent Final Regression Final Regression Final Regression

Variables (1/3) (2/3) (3/2)
(Economic effect) BANKSLOANS j,t INVDEPOSITS j,t INTGDPPCA j,

BANKSLOANS j,t - Positive Positive

INVDEPOSITS j,t Positive - Negative
INTGDPPCA j,t - - -
INVCONTEQ j,t Negative Positive Negative
CASHFLOW j,t Negative - Positive
BTC j,t Positive Negative Positive
ETH j,t - - Negative
BNB j,t Negative Positive Positive
TETHER j,t - - Negative
USDCOIN j,t Positive Negative Negative
XRP j,t Negative Positive Positive
SECREGUL j,t Negative Positive -
CORVIRS j,t Negative Positive Positive

BANKSLOANS j,t = the time series for average banks‘ loans from year 2010 till 2022.
INVDEPOSITS j,t = the time series for average investors‘ deposits to banks from year 2010 till 2022.
INTGDPPCA j,t = the time series for average international GDP per capita from year 2010 till 2022.
INVCONTEQ j,t = the time series for average investors‘ contribution to banks‘ equity from year 2010 till 2022.
CASHFLOW j,t = the time series for average banks‘ cash flows balance from year 2010 till 2022.
BTC j,t = the time series for bitcoins from year 2010 till 2022.
ETH j,t = the time series for ethereum from year 2010 till 2022.
BNB j,t = the time series for binance coins from year 2010 till 2022.
TETHER j,t = the time series for tether from year 2010 till 2022.

Continued on the next page ,,,,,,

17
 USDCOIN j,t = the time series for USD coins from year 2010 till 2022.
XRP j,t = the time series for XRP from year 2010 till 2022.
SECREGUL j,t = the securities exchange commission regulations’ initiatives to regulate the digital coins trading.
CORVIRS j,t = the corona virus pandemic in years of effect.

On the other hand, two digital coins, as new economic trends of investment, are positively

associated to banks’ loans, which are the bitcoins BTC j,t and the USD coins USDCOIN j,t for their

significant statistical inference ( t = 4.24, Pr = 0.024) , ( t = 5.76, Pr = 0.010). Which indicates that ,

despite of the attraction of digital coins of the bitcoins BTC j,t and the USD coins USDCOIN j,t , as new

economic trends of investment, to the investors, banks’ loans remain significant for the economic

growth and financing purposes.

Investors’ deposits to banks INVDEPOSITS j,t

From table (4), Investors’ deposits to banks INVDEPOSITS j,t in the same period under study are

affected positively by banks’ loans BANKSLOANS j,t , investors’ contribution to banks’ equity

INVCONTEQ j,t , binance coins BNB j,t , XRP j,t digital coin , securities exchange commission

regulations to the digital coins trading SECREGUL j,t , and corona virus pandemic CORVIRS j,t . ,

where the statistical inference in table (3) panel (B) shows positive association with the Investors’

deposits to banks ( t = 17.71, Pr = 0.000), ( t = 5.34, Pr = 0.006), ( t = 4.78, Pr = 0.009), ( t = 4.30,

Pr = 0.013), ( t = 8.14, Pr = 0.001), ( t = 4.71, Pr = 0.009), which indicates how significant these

variables to the growth of banks’ deposits, regardless of its appearance as competitive to, or alternatives

to the growth of the banks’ deposits.

Whereas, the growth of banks’ loans and the financial performance indicate strong performance

of the banks, and subsequently the investors will be attracted to deposit their savings to banks. Also,

the growth of investors’ contributions to banks equity proves the willingness of investors to deposit

their savings to the banks in addition to investing in the banks’ equity. Moreover, the digital coins of

binance coins and XRP appear to be good new economic trends of investment to the investors,

nevertheless, it affects the investors’ deposits to banks and improve its growth. On the other hand, and

unexpectedly, securities exchange commission regulations to the digital coins trading and corona virus

pandemic have a positive association with the growth of investors’ deposits to banks, where the

statistical inference shows positive association with the Investors’ deposits to banks.

18
International GDP per capita INTGDPPCA j,t

Table (3) panel (C) shows high significance for t – statisitc more than I expected compared to

the two regression models for banks’ loans and investors’ deposits to banks, which indicate the

sensitivity of the international economy to the new economic trends of investment and to the banks’

performance, and to the unprecedented pandemics. Where the positive association of the independent

variables of BANKSLOANS j,t , CASHFLOW j,t , BTC j,t , BNB j,t , XRP j,t , CORVIRS j,t ( t = 269.67,

Pr = 0.002), ( t = 101.40, Pr = 0.006), ), ( t = 36.02 , Pr = 0.018) ( t = 369.14, Pr = 0.002), ( t = 301.81,

Pr = 0.002), ( t = 261.98, Pr = 0.002) , which is summarized in table (4), shows how significantly are

these variables to the growth of the international GDP per capita.

Thus far, the banks’ loans effect on the international GDP per capita is still effective, and still

reasonably helping to grow investments in projects of manufacturing or providing services and Gig

economies as well, which directly affect the international GDP per capita, therefore, banks’ loan as a

corner stone for growing the international projects and economies should be protected by govenments

and banks’ regulatory bodies for effective marketing and aviodance of threats, in order not to lose its

importance and efficiences.

On the other hand, cash flows generated by banks reflects the strenghts of banks’ efficiency to

manage its financial assets and avoid risks, which in turn will positively affect the international

economy and the international GDP per capita and grow both, and protect the monetary policies of the

banks. Morover, the new economic trends of investment as digital coins of bitcoins, binance coins, and

XRP are positevely affecting the international economy, unlike my expectations before conducting this

research, as these types of digital coins are helpful tools to transfer cash overseas and among foreign

countries, accordingly projects can grow and the international GDP per capita can also grow.

Finally, the global pandemic of cronavirus has positive effect on the international GDP per capita,

where the damage it caused didn’t extend for a long period, and the services and products have been

manged globally in a way that did help avoid the economies’ collapse. Therefore, the internationl GDP

per capita over the period of this study is improved in the magnitude as the final regression model (3/2)

is proving.

19
The unfavorable effect of new economic trends of investment on the dependent variables

Banks’ loans BANKSLOANS j,t

From table (4), banks‘ loans BANKSLOANS j,t , in the period under study, are affected negatively

by the INVCONTEQ j,t , CASHFLOW j,t , BNB j,t , XRP j,t , SECREGUL j,t , and CORVIRS j,t , where

the statistical inference in table (3) panel (A) shows negative association with the banks’ loans

( t = -3.51, Pr = 0.039), ( t = -2.05, Pr = 0.133), ( t = -5.27, Pr = 0.013), ( t = -4.53, Pr = 0.020),

( t = -7.48, Pr = 0.005) , ( t = -5.41, Pr = 0.012). Therefore, the analysis shows that investors

contributions to banks equity can be more attractive for most of the investors , which in turn encourage

investors to invest in banks’ equity rather than investing in projects financed by borrowing loans from

the banks , accordingly, banks‘ loans can be negatively affected and decrease. And, cashflows for the

banks is not more meaningful for the investors building projects by borrowing loans from banks, where

their evaluation to banks is depending mainly on the size of investors’ deposits, which the banks use to

raise its financial assets in loans, accordingly, banks loans can decrease , where the banks’ cash flows

remaing for the banks after raising the financial assets in loans is low compared to investors’ deposits

to banks to help the banks raise the loans.

On the other hand, the binance coins and XRP affect the banks’ loans negatively, unlike the

bitcoincs which affect the banks’ loans positively, because these types of digital coins are not heavily

demanded by the investors same as the bitcoins. Neverthless, this negative association has no certain

interpretation among analysts , as it is just a mathematical relation that needs more assurance in the

future by rerunning the regression model under different circumstances. And for the dummy variable

of SECREGUL j,t , the statistical inference also shows a negative association to the banks’ loans, which

is rational due to the efforts of the securties exchange comission to regualte the trading of the bitcoins

and the digital coins, which would attract the investors more than borrowing from the banks.

On the other hand, corona virus pandemic negatively affects the banks’ loans, where investors in the

time of the pandemic are not certain about the business future at that time, therefore, the demand for

the loans is very limited, accordingly, banks’ loans decrease.

20
Investors’ deposits to banks INVDEPOSITS j,t

From table (4), Investors’ deposits to banks INVDEPOSITS j,t in the same period under study

are affected negatively by the digital coins of bitcoins BTC j,t and the USD coins USDCOIN j,t where

the statistical inference in table (3) panel (B) shows negative association with the Investors’ deposits

to banks ( t = -3.93, Pr = 0.017), ( t = -4.96, Pr = 0.008). Where, the investors‘ demand for digital coins

would negatively affect their deposits to banks and decrease it, particularly, if the digital coins mostly

trated are more attractive to investors compared to banks’ deposits.

International GDP per capita INTGDPPCA j,t

Table (3) panel (C) shows high significance for t – statisitc, as negative association with the

international GDP per capita. Where investors contribution to the banks’ deposits INVDEPOSITS j,t ,

and investors contributions to banks‘ equity INVCONTEQ j,t are negatively associated to the

international GDP per capita ( t = -163.22, Pr = 0.004), ( t = -100.44, Pr = 0.006), which indicate that

investors prefer to invest in the banks rather than constructing projects themselves , where the world

now is facing a high degree of risks and uncertainties, as well as inflation and unpredicted economic

future growth. In addition, investors tend to contribute to the banks’ equity and capital stocks as a low

risk opportunity for investing rather than investing in constructing projects under uncertainties and high

risk economies. All which rationally make the international GDP per capita decline as a result of the

economic recessions worlds apart, where, on the other hand, banks also make an indepth studies to the

market and the projects’ opportunities, and investors’ strenghts and weaknesses before constructing

projects.

Moreover, the types of digital coins of ETH j,t , TETHER j,t , USDCOIN j,t are negatively

associated with the international GDP per capita and make it decline ( t = -195.16, Pr = 0.003),

( t = -121.70, Pr = 0.005), ( t = -441.25, Pr = 0.001) , as a consequence for investors’ attraction to the

digtal coins highly traded in the market, and comprising new economic trends of investment for the

investors compared to the banks’ deposits, banks’ loans, and banks’ equity.

21
 IV. CONCLUSION AND DISCUSSION

In this paper, I raise three questions in regard to the financial analysts’ uncertainties for banks’

loans, investors’ contribution to banks deposits, and the international GDP per capita, under the new

economic trends of investment. I predict the answers for these questions by predicting the potential

situation for banks’ loans when affected by the variables mostly reflect the new economic trends of

investment, and I use the same methodology for predicting the potential situation for the banks’

deposits, and for the international GDP per capita as well.

I use three regression models for such predictions, one for the banks’ loans as dependent variable,

and another for the investors’ contribution to banks’ deposits as dependent variable , and the last one

for the international GDP per capita as dependent variable. All are empirically run using independent

variables reflecting the new economic trends of investment, specifically, the digital coins

(cryptocurrencies), in addition to other dummy variables highly expected to affect the empirical results,

which are, the governmental regulations, the securities exchange commission efforts to regulate digital

coins trading, and the global corona virus pandemic.

I obtain the data and information required for the empirical study from the public websites of the

annual reports of banks , the investments in digital coins, and the world bank. Where it helps reflect the

time series for all the variables I use in the three regression models. The data and information are

obtained for a purposive sample of banks and cryptocurrencies necessary to maintain the empirical

results required to test the paper’s hypothesis H1 , regarding the financial analysts’ uncertainties for the

potential situation of banks’ loans, banks’ deposits, and the international GDP per capita.

Empirical results show high explanatory power for the three regression models, where R2 for each

regression model is significantly high as 100%. Subsequently, the results are robust and reliable to

indicate the potential situation for the banks’ loans, banks’ deposits and the international GDP per

capita, as well as for the financial analysts’ uncertainties in this regard under the new economic trends

of investment.

22
 Empirical results split the independent variables in the three regression models into negatively and

positively affecting the banks’ loans, banks’ deposits, and the international GDP per capita. The positive

effect on the banks’ loans, as a good indication, is caused by the independent variables of banks’

deposits, bitcoins, and USD coins, where the negative effect (as bad indication), is caused by the

independent variables of investors’ contribution to banks’ equity, cash flows, binance coins, XRP coins,

the securities exchange commission efforts to regulate the trading of cryptocurrencies, and the corona

virus pandemic.

On the other hand, the positive effect on the banks’ deposits (as a good indication), is caused by

the independent variables of banks’ loans, investors’ contribution to banks’ equity, binance coins, XRP

coins, the securities exchange commission efforts to regulate the trading of cryptocurrencies, and the

corona virus pandemic, where the negative effect (as bad indication) is caused by the independent

variables of bitcoins, and USD coins.

Finally, for the international GDP per capita, the positive effect on the international GDP per

capita (as a good indication) is caused by the independent variables of banks’ loans, cash flows,

bitcoins, binance coins, XRP coins, and corona virus pandemic, where the negative effect (as bad

indication) is caused by the independent variables of banks’ deposits, investors contribution to banks’

equity, ethereum, tether, USD coins.

Therefore, financial analysts can decide whether a number of the new economic trends of

investment can be of certain positive effect on the banks’ loans, banks’ deposits, and international GDP

per capita, and also whether a number of the new economic trends of investemt can be of certain

negative effect on the banks’ loans, banks’ deposits, and the international GDP per capita. Subsequenly,

they can make accurate prediction for the future benefits in the banking sector and the international

economy. Moreover, such indications are a significant support to the paper’s hypothesis H1, where the

independent variables reflecting the new economic trends of investment are a certain effect on the

banks’ loans, banks’ deposits, and international GDP per capita.

23
 Future research need to consider the challanges faced by the banks and the economies in every

government, where the competition is high and unfair, as it threats the basic of economies in regard to

the trading , the exchange rates, the accuracy of the economic indications, and the challanges faced by

the investors to make a correct and secured investment decision. In the meantime, all of these

challanges are present whilst other challanges are evolving recently in regard to the international

political unrest, the climate change and natural disasters, unethical businesses practices to obtain high

profits and misleading the investos, the sustainability faliure to achieve its standards and goals, trading

money for money, and mostly, the unclear vision for future generations and thier wellbeing and welfare,

which lead to their unbelonging. Thus far, this paper can be usually replicated by future research as to

monitor the positive and negative effects of any new economic trends of investment on the banking

sectors, the economies in every government, and the investors secured opportunities for investment.

24
 APPENDIX

Table (1) A
MINITAB results for running the initial regression model (1/1)
(Dependent variable BANKSLOANS j,t )
and the steps for improving the model to reach to the final regression model

Regression Analysis: Initial regression model (1/1)

* GOV REG is (essentially) constant

* GOV REG has been removed from the equation.

The regression equation ( 1) Initial is

Loans = - 3.00E+08 + 0.996 Deposits - 0.689 Equity - 0.343 Cash flows

+ 60724 BTC + 1800887 ETH - 16192317 BNB + 25018152 TETHER
+ 1.44E+09 USD COIN - 1.95E+09 XRP - 1.05E+09 SEC REG - 1.32E+09 COVID

Predictor Coef SE Coef T P

Constant -300021729 39647397 -7.57 0.084
Deposits 0.99634 0.06956 14.32 0.044
Equity -0.6891 0.4178 -1.65 0.347
Cash flows -0.3434 0.1365 -2.52 0.241
BTC 60724 26914 2.26 0.266
ETH 1800887 1198144 1.50 0.374
BNB -16192317 5367426 -3.02 0.204
TETHER 25018152 27863151 0.90 0.534
USD COIN 1441478922 298849593 4.82 0.130
XRP -1952123215 699233480 -2.79 0.219
SEC REG -1051572656 151041602 -6.96 0.091
COVID -1316256091 222803382 -5.91 0.107

S = 6732687 R-Sq = 100.0% R-Sq(adj) = 100.0%

Improving the model (1/1) to generate model (1/2)

Exclude TETHER

* GOV REG is (essentially) constant

* GOV REG has been removed from the equation.

The regression equation is

Loans = - 3.23E+08 + 1.04 Deposits - 0.952 Equity - 0.283 Cash flows + 75766 BTC
+ 980023 ETH - 12901287 BNB + 1.30E+09 USD COIN - 1.50E+09 XRP
- 1.01E+09 SEC REG - 1.31E+09 COVID

Predictor Coef SE Coef T P

Constant -322934021 28836468 -11.20 0.008
Deposits 1.04047 0.04679 22.24 0.002
Equity -0.9524 0.2828 -3.37 0.078
Cash flows -0.2827 0.1127 -2.51 0.129
BTC 75766 20019 3.78 0.063
ETH 980023 735973 1.33 0.314

Continued on next page ,,,,,,,

25
BNB -12901287 3726294 -3.46 0.074
USD COIN 1304249062 244053486 5.34 0.033
XRP -1500778910 461908273 -3.25 0.083
SEC REG -1007923727 135900250 -7.42 0.018
COVID -1306504894 211482668 -6.18 0.025

S = 6398202 R-Sq = 100.0% R-Sq(adj) = 100.0%

Improving the model (1/2) to generate model (1/3) FINAL

* GOV REG is (essentially) constant

* GOV REG has been removed from the equation.

The regression equation is

Loans = - 3.26E+08 + 1.05 Deposits - 1.06 Equity - 0.254 Cash flows + 86712 BTC
- 8305743 BNB + 1.06E+09 USD COIN - 9.37E+08 XRP - 8.96E+08 SEC REG
- 1.22E+09 COVID

Predictor Coef SE Coef T P

Constant -326105213 32229099 -10.12 0.002
Deposits 1.05469 0.05108 20.65 0.000
Equity -1.0637 0.3029 -3.51 0.039
Cash flows -0.2542 0.1241 -2.05 0.133
BTC 86712 20471 4.24 0.024
BNB -8305743 1576033 -5.27 0.013
USD COIN 1064733779 184989686 5.76 0.010
XRP -936857411 206835392 -4.53 0.020
SEC REG -895900795 119697464 -7.48 0.005
COVID -1215817357 224539442 -5.41 0.012

S = 7175466 R-Sq = 100.0% R-Sq(adj) = 100.0%

Table (2) A
MINITAB results for running the initial regression model (2/1)
(Dependent variable INVDEPOSITS j,t )
and the steps for improving the model to reach to the final regression model

Regression Analysis: Initial regression model (2/1)

* GOV REG is (essentially) constant
* GOV REG has been removed from the equation.

The regression equation (2/1) Initial is

Deposits = 3.02E+08 + 0.999 Loans + 0.717 Equity + 0.337 Cash flows - 61819 BTC
- 1744964 ETH + 15972145 BNB - 23615600 TETHER - 1.43E+09 USD COIN
+ 1.92E+09 XRP + 1.05E+09 SEC REG + 1.32E+09 COVID

Predictor Coef SE Coef T P

Constant 302149593 22724245 13.30 0.048
Loans 0.99880 0.06973 14.32 0.044
Equity 0.7167 0.3705 1.93 0.304
Cash flows 0.3370 0.1526 2.21 0.271
Continued on next page ,,,,,,,

26
BTC -61819 24518 -2.52 0.240
ETH -1744964 1282723 -1.36 0.404
BNB 15972145 6050496 2.64 0.231
TETHER -23615600 29120851 -0.81 0.566
USD COIN -1431509138 351137550 -4.08 0.153
XRP 1923091508 782325399 2.46 0.246
SEC REG 1049575371 172606216 6.08 0.104
COVID 1315112314 238841390 5.51 0.114

S = 6740982 R-Sq = 100.0% R-Sq(adj) = 100.0%

Improving regression (2/1) to generate regression (2/2)

Exclude ETH

Regression Analysis: Deposits versus Loans, Equity, ...

The regression equation is

Deposits = 3.11E+08 + 0.942 Loans + 1.04 Equity + 0.232 Cash flows - 82383 BTC
+ 7882889 BNB - 1.01E+09 USD COIN + 8.91E+08 XRP + 8.52E+08 SEC REG
+ 1.15E+09 COVID

Predictor Coef SE Coef T P

Constant 310682015 19928951 15.59 0.001
Loans 0.94152 0.04560 20.65 0.000
Equity 1.0411 0.2395 4.35 0.022
Cash flows 0.2321 0.1225 1.89 0.155
BTC -82383 18686 -4.41 0.022
BNB 7882889 1425344 5.53 0.012
USD COIN -1006775560 173260954 -5.81 0.010
XRP 891453404 185651331 4.80 0.017
SEC REG 851565254 99525433 8.56 0.003
COVID 1150105320 209658241 5.49 0.012

S = 6779554 R-Sq = 100.0% R-Sq(adj) = 100.0%

Improving regression (2/2) to generate regression (2/3)FINAL

Exclude Cash flows

The regression equation is

Deposits = 3.24E+08 + 0.898 Loans + 1.31 Equity - 91226 BTC + 8511147 BNB
- 1.08E+09 USD COIN + 9.86E+08 XRP + 9.34E+08 SEC REG
+ 1.24E+09 COVID

Predictor Coef SE Coef T P

Constant 324219768 23872987 13.58 0.000
Loans 0.89847 0.05073 17.71 0.000
Equity 1.3131 0.2459 5.34 0.006
BTC -91226 23218 -3.93 0.017
BNB 8511147 1778898 4.78 0.009
USD COIN -1077373588 217136543 -4.96 0.008
XRP 986330285 229406662 4.30 0.013
SEC REG 934189728 114796410 8.14 0.001
COVID 1236783955 262562869 4.71 0.009

S = 8700086 R-Sq = 100.0% R-Sq(adj) = 100.0%

27
 Table (3) A
MINITAB results for running the initial regression model (3/1)
(Dependent variable INTGDPPCA j,t )
and the steps for improving the model to reach to the final regression model

Regression Analysis: Initial regression model (3/1)

* GOV REG is (essentially) constant
* GOV REG has been removed from the equation.

The regression equation is

Int GDP per capita = 5.62 + 0.000000 Loans - 0.000000 Deposits - 0.000000 Equity
+ 0.000000 Cash flows + 0.000017 BTC - 0.0156 ETH
+ 0.126 BNB - 0.287 TETHER - 9.68 USD COIN + 12.1 XRP
+ 8.09 COVID

Predictor Coef SE Coef T P

Constant 5.6246 0.7847 7.17 0.088
Loans 0.00000001 0.00000000 7.17 0.088
Deposits -0.00000001 0.00000000 -3.99 0.156
Equity -0.00000002 0.00000001 -4.50 0.139
Cash flows 0.00000000 0.00000000 1.78 0.326
BTC 0.0000169 0.0003443 0.05 0.969
ETH -0.01558 0.01329 -1.17 0.449
BNB 0.12582 0.04696 2.68 0.227
TETHER -0.2871 0.3393 -0.85 0.553
USD COIN -9.679 1.613 -6.00 0.105
XRP 12.102 6.314 1.92 0.306
COVID 8.094 1.450 5.58 0.113

S = 0.0848913 R-Sq = 100.0% R-Sq(adj) = 99.9%

Transform deposits using natural logarithmic where ( r = 0.767 ) greater than 0.70,
as to solve the problem of multicollinearity

Exclude SEC Reg for its insignificance

Generate regression (3/2) FINAL

The regression equation is

* GOV REG is (essentially) constant

* GOV REG has been removed from the equation.

Int GDP per capita = 447 + 0.000000 Loans - 21.6 LOG DEPOSITS - 0.000000 Equity
+ 0.000000 Cash flows + 0.000289 BTC - 0.0468 ETH
+ 0.271 BNB - 0.912 TETHER - 22.6 USD COIN + 29.4 XRP
+ 14.8 COVID

Predictor Coef SE Coef T P

Constant 446.789 2.721 164.20 0.004
Loans 0.00000001 0.00000000 269.67 0.002
LOG DEPOSITS -21.6118 0.1324 -163.22 0.004
Equity -0.00000002 0.00000000 -100.44 0.006
Cash flows 0.00000001 0.00000000 101.40 0.006

Continued on next page ,,,,,,,

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BTC 0.00028937 0.00000803 36.02 0.018
ETH -0.0467678 0.0002396 -195.16 0.003
BNB 0.271074 0.000734 369.14 0.002
TETHER -0.911805 0.007492 -121.70 0.005
USD COIN -22.5904 0.0512 -441.25 0.001
XRP 29.4268 0.0975 301.81 0.002
COVID 14.7505 0.0563 261.98 0.002

S = 0.00213952 R-Sq = 100.0% R-Sq(adj) = 100.0%

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