TY  - JOUR
TT  - The Economics of Bounced Checks in Lebanon
AU  - Azar, Samih Antoine
AU  - Elfakhani, Said
AU  - Abdallah, Khaled
PY  - 2017
DA  - March
JF  - International Journal of Economics and Financial Issues
JO  - IJEFI
PB  - İlhan ÖZTÜRK
WT  - DergiPark
SN  - 2146-4138
SP  - 106
EP  - 114
VL  - 7
IS  - 1
KW  - bounced checks
KW  - multiple regression models
KW  - econometric prediction
KW  - banks
KW  - Lebanon
N2  - The purpose of this paper is to identify the variables that determine or explain the supply of bounced checks, either issued in Lebanese pounds or issued in US dollars. This is an area that the extant empirical research fails to cover, and hence, this paper is, by itself, quite innovative. Four major explanatory variables are identified. Two of them are structural, and the other two are under the control of a bank on its own, and of the central bank, or at least of the Association of Banks. The high values of the goodness-of-fit, the favorable econometric diagnostics, and the failure to reject stability, all point to the same direction: the models have all the necessary characteristics to predict correctly bounced checks. In case actual bounced checks are consistently and persistently higher than those predicted by the models, corrective action can be taken to avert a financial crisis. The first action is that banks can control the amount of loans they extend to their clientele. And the second action is by a manipulation of interest rates. It is understood that these two actions should be used sparingly and only in a case of financial crisis.
UR  - https://dergipark.org.tr/en/pub/ijefi/article/353162
L1  - https://dergipark.org.tr/en/download/article-file/364149
ER  -