scholarly journals Analysis of the stability factors of Ukrainian banks during the 2014–2017 systemic crisis using the Kohonen self-organizing neural networks

2019 ◽  
Vol 14 (3) ◽  
pp. 86-98 ◽  
Author(s):  
Oleksii Mints ◽  
Viktoriya Marhasova ◽  
Hanna Hlukha ◽  
Roman Kurok ◽  
Tetiana Kolodizieva
Keyword(s):  
Neural Networks ◽  
Financial Stability ◽  
Banking System ◽  
Bank Loans ◽  
Resource Base ◽  
Systemic Crisis ◽  
The Stability ◽  
Bankruptcy Rate ◽  
Legal Entities ◽  
Self Organizing

The article proposes an approach to analyzing reliability factors of commercial banks during the 2014–2017 systemic crisis in the Ukrainian banking system, using the Kohonen self-organizing neural networks and maps. As a result of an experimental study, data were obtained on financial factors affecting the stability of a commercial bank in a crisis period. It has been concluded that during the banking crisis in Ukraine in 2014–2017, the resource base of a bank was the main factor of this bank stability. The most preferred sources of resources were funds from other banks (bankruptcy rate of 5.7%) and legal entities (bankruptcy rate of 8%), and the least stable were funds from individuals (bankruptcy rate of 28.5%). The relationship between financial stability and the amount of capital and the structure of bank loans is less pronounced. However, one can say that banks that focused on lending to individuals experienced a worse crisis than banks whose main borrowers were legal entities. The tools considered in the article (the Kohonen self-organizing neural networks and maps) allow for efficiently segmenting data samples according to various criteria, including bank solvency. The “hazardous” zones with a high bankruptcy rate (up to 49.2%) and the “safe” zone with a low rate of bankruptcy (6.3%) were highlighted on the map constructed. These results are of practical value and can be used in analyzing and selecting counterparties in the banking system during a downturn.

scholarly journals Justification of the list of indicators financial stability of the banking system

2018 ◽  
Vol 17 (3) ◽  
pp. 1-16
Author(s):  
Nataliia Pohorelenko
Keyword(s):  
Financial Stability ◽  
Financial Risk ◽  
Banking System ◽  
Financial Ratios ◽  
Resource Base ◽  
Synthetic Indicators ◽  
Net Interest Margin ◽  
Hierarchic Structure ◽  
The Stability ◽  
The One

The generalization of scientific approaches to the assessment of the financial stability of the banking system has demonstrated the multivariance of views on structuring and listing of financial stability indicators and has made it possible to distinguish three main ones: on the basis of macroeconomic and macro financial indicators; on the basis of separate indicators; based on synthetic indicators. It is proved that the latter is most effective since the large number and variability of financial ratios used by different authors to assess the level of financial stability of banking systems does not allow for unambiguous results. A hierarchic structure of indicators of the stability of the banking system is proposed, which is characterized by the simultaneous existence of a certain number, not ordered in a heterarchic manner. In accordance with it, the integral index of financial stability of the banking system includes subindices: stability of the NBU, stability of system banks, banks with foreign capital, banks with private capital, financial vulnerability of the banking system. The expediency of accounting for the indicators of financial risk assessment: credit, liquidity risk, interest rate, investment risk, unstable resource base risk, which are characterized by such financial ratios as part of provisions for depreciation of loans in the loan portfolio, is justified in the composition of such a synthetic indicator of the financial stability of the banking system; the norm of instant liquidity; net interest margin; part of the provision for depreciation of securities in the securities portfolio; coefficient of instability of the resource base. Also, indicators for assessing the stability of the central bank were proposed: indicators of the adequacy of reserves; indicators of the effectiveness of monetary policy; indicators of the effectiveness of foreign exchange regulation; indicators of compliance of banking supervision with the main principles of efficiency. This approach will allow taking into account all the structural components of the banking system in the process of assessing financial stability, on the one hand, and in time to identify potential threats to the loss of stability, on the other.

scholarly journals APPROACHES TO THE CALCULATION OF ECONOMIC CAPITAL UKRAINE BANKING SYSTEM

2017 ◽  
pp. 126-136
Author(s):  
Anton SHEVCHUK
Keyword(s):  
Financial Stability ◽  
Negative Impact ◽  
Banking System ◽  
Economic Capital ◽  
Capital Adequacy ◽  
Resource Base ◽  
Rating Agencies ◽  
Banking Institutions ◽  
The Stability ◽  
The One

Introduction. Indicated that it determines the degree of capital adequacy of financial stability of the bank, so there is the element of the resource base of the bank, which should cover the risks arising in its activities. Therefore, proposed on the one hand say that the greater range of operations conducted by the bank, the greater the volume of investments in it, the more losses it may incur and the more he should be the level of capital adequacy to ensure stability in the implementation of the relevant risks. The attention that the low level of capital adequacy of the bank leading to a dangerous increase risks a negative impact on its financial stability. The comparison of approaches to the calculation of economic capital. The purpose of the study is to determine the best approaches for calculating economic capital in the presence of risk in the banking system arising in connection with the stability of the economy and fluctuations in the banking system. Results. In the sense of economic capital calculation and the effectiveness of its many internal and external stakeholders with regard to banking institutions and organizations, such as the management of bank supervisory authorities, rating agencies and shareholders. Even before the transition to the stage of calculating economic capital of most Ukrainian banks to make a number of steps to ensure that the basic requirements for risk management. Conclusion. The regulation of capital adequacy of the bank must comply with two ends, as overstating this value and reducing its value affects the reliability of the bank

scholarly journals Sources Of Non-Performing Loans In Turkish Banking System

2011 ◽  
Vol 5 (10) ◽  
Author(s):  
Gokhan Karabulut ◽  
Mehmet Huseyin Bilgin
Keyword(s):  
Financial Stability ◽  
Deposit Insurance ◽  
Developing Economies ◽  
Banking System ◽  
Bank Loans ◽  
System Stability ◽  
Insurance System ◽  
Turkish Government ◽  
Deposit Insurance System ◽  
The Impact

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="font-family: Times New Roman; font-size: x-small;">The purpose of this paper is to examine the impact of the unlimited deposit insurance on non-performing loans and market discipline. Deposit insurance program play a crucial role in achieving financial stability. Governments in many advanced and developing economies established deposit insurance schemes for reducing the risk of systemic failure of banks. Deposit insurance has a beneficial effect of reducing the probability of a bank run.<span style="mso-spacerun: yes;">&nbsp; </span>However deposit insurance systems have its own set of problems. Deposit insurance systems create moral hazard incentives that encourage banks to take excessive risk. Turkey established an explicit deposit insurance system in 1960. Until 1994, the coverage determined by a flat rate but in that date, Turkey experienced a major economic crisis. In April 1994, Turkish government started to apply an unlimited deposit insurance scheme to restore banking system stability. Unlimited deposit insurance caused a remarkable increase at non-performing loans. This paper empirically estimates the impact of unlimited deposit insurance system on non-performing bank loans (NPLs) and analyses the other potential sources of NPLs. </span></p>

MODELING THE INFLUENCE OF THE STRUCTURE AND QUALITY OF ASSETS ON THE PROFITABILITY OF A COMMERCIAL BANK

2021 ◽  
pp. 10-18
Author(s):  
Alena S. Kudriavtseva ◽  
Olga G. Arkadeva
Keyword(s):  
Economic Analysis ◽  
Commercial Banks ◽  
Financial Stability ◽  
Banking System ◽  
Factors Affecting ◽  
Correlation And Regression Analysis ◽  
The Stability ◽  
Classical Economic ◽  
Sound Management

In modern conditions, the methods of classical economic analysis are not enough to solve the problem of bank stability. This requires the development of methods and tools to analyze the current situation in the bank and to develop sound management decisions aimed at ensuring the stability of the bank. The article notes that the analysis of the influence of the structure and quality of assets on the profitability of commercial banks is an important step for assessing the financial position and reliability of a bank, and a method is proposed for constructing a model of the dependence of bank’s profitability on the factors that determine it. The scientific sources were the works of Russian and foreign researchers in the field of modeling and characteristics of the banking system, financial stability of credit institutions, assessment of the creditworthiness of potential borrowers, system organization and information technology. The article uses the methods of economic analysis, differential calculus and mathematical statistics, as well as the achievements of the main scientific schools dealing with the problems of economic and mathematical modeling and economic analysis of banking. In order to determine the most significant economic factors affecting the profitability of commercial banks, generalization of the theoretical, methodological and applied aspects of studies devoted to the study of the influence of the structure and quality of assets on the profitability of commercial banks was carried out, and a correlation and regression analysis was made. The model presented in the article can be used to predict changes in the profitability of Russian commercial banks and to predict promising directions for growth in profit and profitability of the bank.

Using Self Organizing Maps for Banking Oversight

2016 ◽  
pp. 1306-1332 ◽  
Author(s):  
Felix Lopez-Iturriaga ◽  
Iván Pastor-Sanz
Keyword(s):  
Neural Networks ◽  
Financial Stability ◽  
Bankruptcy Prediction ◽  
Self Organizing Maps ◽  
Policy Makers ◽  
Savings Banks ◽  
Visual Tool ◽  
The Government ◽  
Over Time ◽  
Self Organizing

This chapter combines two methods based on neural networks (trait recognition and self-organizing maps) to develop a model of bankruptcy prediction. The authors apply the method to the Spanish savings banks, most of them rescued by the Government between 2008 and 2013 in a costly massive process. First, the authors detect the combinations of variables (performance, asset structure, and capitalization) that best describe the profile of the rescued savings banks. Then, the authors use these combinations on a yearly basis to generate bi-dimensional maps in which banks are placed according to their risk and similarities. This method provides a visual tool that can improve the oversight of policy makers on the whole financial system and enable time pertinent answers to some threatens to the country financial stability. The maps are useful means to detect and understand how the financial threats emerge over time too.

Shadow banking in China: expanding scale, evolving structure

2014 ◽  
Vol 6 (3) ◽  
pp. 198-211 ◽  
Author(s):  
Tong Li
Keyword(s):  
Financial Stability ◽  
Banking System ◽  
Bank Loans ◽  
Data Sources ◽  
Shadow Banking ◽  
Real Economy ◽  
Content Type ◽  
Comprehensive Picture ◽  
Shadow Banking System ◽  
Banking Credit

Purpose – This paper aims to survey available data sources and put China’s shadow banking system in perspective. Although bank loans still account for the majority of credit provided to China’s real economy, other channels of credit extension are growing rapidly. The fast expansion of shadow banking has spurred wide concerns regarding credit quality and financial stability. Design/methodology/approach – This paper explores various data sources, provides an overview of shadow banking activities in China, discusses their close ties with banks and summarizes regulatory issues. Extensive descriptive data are included to provide a comprehensive picture of the nature of shadow banking activities in China. In particular, institutions and products are discussed in great details. Findings – While China’s shadow banking system is by no means simple, it does not (yet) involve the extensive use of financial derivatives. Rather, shadow banking credit is often directly extended to the real economy. In addition, shadow banks are typically interconnected with commercial banks in various ways. The expanding scale and constantly evolving structure of the shadow banking system has posed challenges for financial regulators. Originality/value – This paper attempts to quantify the scale and scope of China’s shadow banking activities and provides a consistent framework as the basis for cross-country comparison of shadow banking systems. This is one of the first scholarly research products that discusses the origin, nature and risks of China’s shadow banking system in a regulatory context.

scholarly journals PROBLEMS OF ENSURING THE FINANCIAL SUSTAINABILITY OF THE BANKING SYSTEM

2021 ◽  
Author(s):  
Olena Tarasova
Keyword(s):  
Financial Stability ◽  
Banking Sector ◽  
Banking System ◽  
Bank Lending ◽  
Financial Sustainability ◽  
Loan Portfolio ◽  
Bank Deposits ◽  
High Inflation ◽  
The Stability ◽  
Banking Institution

The article explores the problems of ensuring the financial sustainability of the banking sector, which plays a very important role in the functioning of the financial system of the state. The role of the stability of the banking system in ensuring conditions of economic growth is justified. It is noted that it is the financial stability of each banking institution that is a prerequisite for the stable functioning of the entire banking system. It is emphasized that since the financial stability of the banking system is influenced by a large number of internal and external factors, for the effective functioning of the banking system of the country must be ready for any challenges to the macro and microenvironment. The main problems of the banking system in modern conditions should be considered the reduction of deposits of the population, deterioration of the quality of the loan portfolio, significant devaluation of the hryvnia, high inflation rates, loss-making of a significant number of banking institutions. It was concluded that the banking system of Ukraine feels a significant dependence on the funds of depositors - individuals, and therefore on factors that affect their behavior in the financial market. Trends of formation of deposit base of commercial banks of Ukraine and imbalances in the sphere of attraction of banking resources were analyzed. The growth of bank deposits of the population is slow, negative changes in their structure are observed. The share of deposits of individuals after the 2014 crisis has become significantly more volatile and risky in terms of financial stability. The increase in lending is complicated by the presence of large portfolios of problem loans, as a result of which there are a number of tasks to increase the efficiency of the loan portfolio, which should ensure a compromise of profitability, liquidity and credit risk acceptable to the bank. The priorities of monetary policy and the main tasks are formulated, the solution of which will allow to intensify lending to the real sector of the economy. Theoretical and practical recommendations have been developed to improve bank lending, increase the profitability of the banking system and capitalize Ukrainian banks.

scholarly journals FINANCIAL STABILITY OF A BANK - FACTOR OF STABILITY OF BANKING SYSTEM

2018 ◽  
pp. 5-11
Author(s):  
Andrii Ramskyi ◽  
Inna Budnichenko
Keyword(s):  
Commercial Banks ◽  
Financial Stability ◽  
Banking System ◽  
Development Program ◽  
Financial Sustainability ◽  
Internal Factors ◽  
Financial Condition ◽  
Stage Of Development ◽  
Banking Institutions ◽  
The Stability

The article is devoted to the analysis of the financial stability of Ukrainian banks at the present stage of development and the identification of the main factors of influence that are associated with it. The main tendencies of development of the banking system of Ukraine are considered. The present state of the banking system of Ukraine is determined. Financial stability plays a significant role in planning the activities of commercial banks. In general, its indicators reflect the level of riskiness of the functioning of the entity of the banking system. Managing financial sustainability has a significant impact on the functioning of banks. That is why it is necessary to create special control departments in banking institutions. The research of financial stability of banks is based on financial sustainability indicators developed and used by the IMF and the World Bank as the basis for the "Integrated Financial Sector Development Program until 2020". The necessity of applying different methods for evaluating the financial stability of commercial banks has been established in order to identify a wider range of problems related to the efficiency of the functioning of the banking system. The description of  two main groups of factors, under the influence of which the financial stability of banks  undergoes changes, is presented. It was revealed that external factors have a more significant impact on the financial stability of a bank. In particular, the factors of mega environment have become more important when banks enter the international financial space. Internal factors lie mostly in the management plane, and it is just the inefficient management of the bank that leads to the disruption of its stable financial condition. Specific features of management of financial stability and methods of its evaluation are considered. The analysis of economic standards of the banking system of Ukraine is carried out. The measures are proposed to minimize the risks and maintain the stability of banking institutions at the required level for normal functioning in modern conditions. It has been proved that providing, supporting, analyzing and evaluating the financial stability of commercial banks is a driving force in the development of the banking system, and hence the entire Ukrainian economy.

scholarly journals Stabilność systemu finansowego Unii Europejskiej

Studia BAS ◽  
2021 ◽  
Vol 3 (67) ◽  
pp. 87-116
Author(s):  
Małgorzata Mikita
Keyword(s):  
Financial Stability ◽  
Stock Price ◽  
Banking System ◽  
Financial System ◽  
Price Volatility ◽  
System Stability ◽  
Volatility Index ◽  
Degree Of Stability ◽  
The Stability ◽  
The Eu

The aim of the article is to present activities undertaken at the EU level to ensure financial stability, and to assess the degree of stability of the EU financial system on the basis of selected indicators. The first part of the article introduces the concept of financial system stability and describes its importance in the modern economy and the methods of estimating the stability of the financial system. The second part of the article is devoted to the presentation of activities undertaken by the EU to increase the stability of the financial system, and the assessment of financial stability on the basis of two indicators: the Z-score indicator, used to assess the stability of the banking system, and the Stock Price Volatility index, showing the stability of the capital market.

scholarly journals Sources of formation and evaluation of resource base of credit organization

2020 ◽  
Vol 2020 (2) ◽  
pp. 116-124
Author(s):  
Viktoria Valerievna Mandron ◽  
Anton Alekseevich Antonenko ◽  
Viktoria Dmitrievna Sadovnikova ◽  
Amalya Rudikovna Chobanyan
Keyword(s):  
Banking Sector ◽  
Banking System ◽  
Key Factors ◽  
Resource Base ◽  
Priority Task ◽  
Fund Mergers ◽  
The Stability ◽  
Effective Development ◽  
Retained Earnings

The article describes the key factors in the development of the state economic system. One of the key factors is the stability of the banking system. Currently, the banking sector in Russia is characterized by increasing instability and a decrease in the reduction of opportunities to replenish the resource base. It is noted that the sources of developing the resource base of credit or-ganizations include own and attracted resources. Own resources include retained earnings, trust funds, formation of a statutory fund, additional contributions of shareholders to the statutory fund, mergers and acquisitions, etc. Borrowed funds comprise interbank loans, issuance of debt securities, term deposits, etc. The main part of the resource base of banking sector belongs to the large credit organizations. The structure and mechanism of creating own and attracted resources by organizations of the banking sector are examined in detail. A review and analysis of existing methods of raising funds by credit organizations is presented. The main trends in changing the resource base have been studied; the assessment of the indicators characterizing the volume and dynamics of bank liabilities at the present stage has been presented. It has been found that the mechanism of forming the resource base of the banking sector has the certain difficulties. A key problem in or-ganizing fundraising mechanisms is the imbalance in long-term assets and liabilities. Today, credit organizations form a significant part of their resources from short-term sources. There has been in-ferred the existence of a priority task for the credit organizations in order to increase competition and liquidity: credit organizations have to choose a method to form a resource base that, at minimal cost, will ensure the payment of dividends, replenish reserves and funds, and provide necessary conditions for the effective development of the organization activities.

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