Evaluation of the Relationship Between the Intensity of the Banking Activities Regulation and the Profitability of Individual Banks
Journal Title: Бізнес Інформ - Year 2015, Vol 7, Issue 0
Abstract
The article carries out an evaluation of the relationship between the intensity of regulation of banking activities and the profitability of individual banks. The survey included 110 banks from 6 countries (Ukraine, Poland, Kazakhstan, Georgia, Estonia, Belarus), allowing to take into account differences in the regulation of banking systems between countries, as well as specific features of operation for individual banks. The study was carried out in the interim of 2001-2013. In conducting the assessment, the bank's return on assets was selected as an effective characteristic, which is calculated with use of profit after taxation. This indicator allows to not only detect the presence of a positive financial result of operation, but also to examine its level as to the extent of the banking system, reflects the degree of satisfaction of interests of the bank's owners. An evaluation is based on the profit after taxation, which helps to reflect the net economic effect of the bank's activities. Accordingly, the option that reflects the level of regulation is represented by the integrated indicator of intensity of banking activities regulation, calculated in terms of the countries, the banks of which were included in the survey. On the basis of the carried out calculations, the author has come to the conclusion that intensity of banking activities regulation has an important relationship with dynamics of the profitability of banks. Regarding this, attention should be drawn to the fact that individual banks show positive impacts of intensive regulation of banking activities, maintaining their stable profit in crisis conditions. Further research by the author will be aimed at the impact of the intensity and the directions of banking regulation on stability of the banking system in Ukraine and other world countries.
Authors and Affiliations
Oksana Didenko
Keywords
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