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 69
- Downloads 0
EXAMINING CULTURAL ORIENTATION AND REWARD MANAGEMENT PRACTICES IN MALAYSIAN PRIVATE ORGANIZATIONS
This study aims to focus on the dimensions of cultural orientation that may impact the perception held by employees of Malaysian private organizations towards non-monetary and monetary rewards. It further examines the li...
BENCHMARKING AS A PERFORMANCE MANAGEMENT METHOD
The paper is devoted to the theoretical ground of benchmarking as a method for performance management. The concept, evolution, typology, a model and some practical aspects of benchmarking are described. Main advantages a...
The Influence of Professional Scepticism, Self-Efficacy and Perceived Ethical Climate on Internal Auditors’ Ethical Judgment in Public Sector Management
This study examines whether professional scepticism, self-efficacy, and perceived ethical climate of an organisation has an impact in ethical judgment of internal auditors in the public sector in Malaysia. The internal a...
Editorial_Volume_13_2
Editorial_Volume_12_2 (en)<br/><br/>
AN IMPROVEMENT OF INFORMATION PROCESSES IN ENTERPRISES – THE ANALYSIS OF SALES PROFITABILITY IN THE MANUFACTURING COMPANY USING ERP SYSTEMS
Processes constitute an inseparable element of the technical, social or organizational system. Moreover, they show the dynamics of the organization and they are subordinated to its goals; they actuate the organizational...