Stability of the Banking Sector: Deriving Stability Indicators and Stress-Testing
Journal Title: Polish Journal of Management Studies - Year 2019, Vol 19, Issue 2
Abstract
The purpose of this article is to composite a banking stability indicator (BSI) from independent sub-indices (capital adequacy ratio (СA), asset quality (AQ), profitability (P) and liquidity (L)). The BSI was calculated using the Minimax normalization method. The composite index was used to analyze the financial stability of the banking sector of 29 countries and to build a risk map based on their national basic economic indicators. The Fitch’s Banking Stability Indicator (BSI) is a composite measure of banking system quality, which ranks countries by five levels of banking system quality (“very high” or А, “high” or B, “acceptable” or С, “low” or D and “very low” or E). This study also uses a novel method of stress-testing to measure banking stability. The proposed BSI index is intended both for comparative international assessment of financial stability of the banking sector and for its evaluation in the country. It gives the ability in the most general form to assess the banking sector from the point of view of international competitiveness and to compare it with other countries. On the other hand, it allows identifying the strengths and weaknesses of the current financial condition of the banking sector at the level of individual countries and monitoring its sustainability.<br/><br/>
Authors and Affiliations
Mayis G. Gulaliyev, Nigar P. Ashurbayli-Huseynova, Aybaniz A. Gubadova, Gulsum M. Mammadova, Rumella T. Jafarova, Bahruz N. Ahmedov
Keywords
Related Articles
- EP ID EP599987
- DOI 10.17512/pjms.2019.19.2.15
- Views 65
- Downloads 0
UNDERSTANDING CONSUMER LOYALTY USING NEURAL NETWORK
Instant coffee products are very popular for consumers, at both urban and rural levels. Consumer loyalties respond to various attributes of instant coffee products, grouped by internal and external factors. The study usi...
STUDY REGARDING THE MOST ATTRACTIVE DOMAINS IN CAREER MANAGEMENT PROCESS FOR PRE-UNIVERSITY STUDENTS
The objective of this article is the practical illustration of the importance of high school career management process by means of the research results. This process runs on a long and arduous time, of course, depending...
ANALYZING SECTORIAL LEVEL DETERMINANTS OF INWARD FOREIGN DIRECT INVESTMENT (FDI) IN ASEAN
The paper studies economic determinants of sectorial level (Extractive sector, manufacturing and assembly sector, infrastructure sector and service sector) foreign direct investment (FDI) to six Asean countries (Malaysia...
SITUATIONAL ANALYSIS AND ITS ROLE IN THE PROCESS OF STRATEGIC BUSINESS MANAGEMENT
The paper focuses on the purpose and the role of methods of situation analysis, including managerial methods used as strategic tools in the management of enterprises for the formulation and development of corporate strat...
ASSESSMENT OF MATERIAL LIVING CONDITIONS BY THE MEANS OF INTEGRATED INDICES IN THE VISEGRAD GROUP
Assessment of quality of life (QOL) has been recently subject to extensive research and discussion. According to many authors, QOL includes different aspects of life which implies its multidimensional character. The main...