IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/69716.html
   My bibliography  Save this paper

Informality in Credit Relations Between Banks and Business Entities – a Risk on Standardization and Modernization of Kosovo Economy

Author

Listed:
  • Krasniqi, Armand

Abstract

In terms of modern societies, the definition of the notion of certain forms of informal activities in the economy has evolved dynamically. In general, the definition used for the informal economy by lawyers and economists, involves economic transactions or operations in which state institutions not only have no control over them, but they also fail to take action to stop them. Precisely in this form, informality has become one of the most discussed problems in Kosovo politics. Reducing it is vital for the national economy to improve. However, it seems that the passive path which the relevant government institutions are taking in combating this negative phenomenon, not only is not right and adequate, but, above all, presents factors that are of high risk and multidimensional. Unfortunately, the relatively new local banking system, especially in commercial banks, has gradually become a serious stimulus segment of this informal activity. Among other things, the commercial banks, upon establishing credit relations with certain business entities, mainly during the provision of loans and being fully aware, base their credit risk analysis on financial and accounting records that are not official, i.e. are not identical to those provided to the Tax Administration. Now is the last moment that the government must focus its efforts on limiting and reducing the informal economy in the country. Enhancing the role of the Tax Administration and the Financial Intelligence Unit for the purpose of increasing their operational efficiency bears no alternative.

Suggested Citation

  • Krasniqi, Armand, 2016. "Informality in Credit Relations Between Banks and Business Entities – a Risk on Standardization and Modernization of Kosovo Economy," MPRA Paper 69716, University Library of Munich, Germany, revised 15 Feb 2016.
  • Handle: RePEc:pra:mprapa:69716
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/69716/2/MPRA_paper_69716.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    economy; informality; law; tax; bank;
    All these keywords.

    JEL classification:

    • K2 - Law and Economics - - Regulation and Business Law

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:69716. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.