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
MULTI-CRITERIA EVALUATION OF MUNICIPALITIES IN SLOVAKIA - CASE STUDY IN SELECTED DISTRICTS
In the Slovak Republic, the economy of the municipality is governed by the law that considers the indebtedness of the municipality (share of foreign resources on assets) as the main criterion. The aim of this article is...
Negotiations in the Closed-Loop Aluminium Supply Chain
In this study, an attempt has been made to characterize the conditions and the way of conducting negotiations in the closed loop of aluminium waste supply chain. This study focuses on the negotiations on this type of was...
INTEGRATION OF ROMANI WOMEN ON THE LABOR MARKET
This paper proposes a brief analysis of the problems Romani women are facing when they want to access a job. It is a fact that, in Romania, Romani women who work are so few that we can even say that they are invisible. I...
ANALYSIS OF PRICES FOR ELECTRICITY AT THE POLISH POWER EXCHANGE
The main part presents the analysis of prices for electricity at the polish power exchange. The structure of production, energy consumption, power generation structure and energy exchange with foreign countries is descri...
EXAMINING PROSUMERS’ PARTICIPATION IN BUSINESS PROCESSES
Modern business reality forces enterprises to collaborate with various external entities. One of them is prosumers, i.e. active consumers who collaborate with enterprises in various areas. The goal of this paper is to an...