Bank Stability Index for Selected Countries with Dual Banking Systems

This study investigates the relationship between household credit and banking stability in Malaysia using a sample of 37 commercial banks spanning the period from 2008 to 2015. In analyzing household credit’s influence on the Malaysian banking sector’s stability, household credit was categorized into two components, namely mortgage and consumer credit. The Banking Stability Index (BSI) for each bank is constructed using 15 bank-specific variables and some macro-economic variables. The determinants of the BSI are estimated using a static panel data technique. The fixed-effects regression results showed a statistically significant negative relationship between both forms of household credit (mortgage credit and consumer credit) upon the banking sector’s stability. The finding signals that understanding the link between household credit and the Bank Stability Index is crucial to the policymakers and the banks’ management in closely monitoring household credit, particularly mortgage and consumer credit.

Download Full-text

United States banking stability: An explanation through machine learning

Banks and Bank Systems ◽

10.21511/bbs.15(4).2020.12 ◽

2020 ◽

Vol 15 (4) ◽

pp. 137-149

Author(s):

José Alejandro Fernández Fernández

Keyword(s):

United States ◽

Machine Learning ◽

Interest Rates ◽

Financial Stability ◽

Ad Hoc ◽

Stability Index ◽

The United States ◽

Important Variable ◽

Bank Stability ◽

Bank Solvency

In this paper, an analysis of the prediction of bank stability in the United States from 1990 to 2017 is carried out, using bank solvency, delinquency and an ad hoc bank stability indicator as variables to measure said stability. Different machine learning assembly models have been used in the study, a random forest is developed because it is the most accurate of all those tested. Another novel element of the work is the use of partial dependency graphs (PDP) and individual conditional expectation curves (ICES) to interpret the results that allow observing for specific values how the banking variables vary, when the macro-financial variables vary.It is concluded that the most determining variables to predict bank solvency in the United States are interest rates, specifically the mortgage rate and the 5 and 10-year interest rates of treasury bonds, reducing solvency as these rates increase. For delinquency, the most important variable is the unemployment rate in the forecast. The financial stability index is made up of the normalized difference between the two factors obtained, one for solvency and the other for delinquency. The index prediction concludes that stability worsens as BBB corporate yield increases.

Download Full-text

Do institutions, religion and the economic cycle impact bank stability in dual banking systems?

Journal of International Financial Management and Accounting ◽

10.1111/jifm.12146 ◽

2022 ◽

Author(s):

Eralp Bektas ◽

Marei Elbadri ◽

Philip Molyneux

Keyword(s):

Economic Cycle ◽

Bank Stability ◽

Banking Systems

Download Full-text

Islamic Banks’ Financial Stability and Its Determinants: a Comparison Study With Conventional Banks in Indonesia

IQTISHADIA Jurnal Kajian Ekonomi dan Bisnis Islam ◽

10.21043/iqtishadia.v11i2.3346 ◽

2018 ◽

Vol 11 (2) ◽

pp. 371 ◽

Cited By ~ 2

Author(s):

Zulfikar Bagus Pambuko ◽

Nur Ichsan ◽

MB. Hendrie Anto

Keyword(s):

Exchange Rate ◽

Interest Rate ◽

Market Share ◽

Financial Stability ◽

Banking Industry ◽

Banking System ◽

Stability Index ◽

Islamic Banking ◽

Bank Stability ◽

Banking Stability

The research aimed to analyze the stability of Islamic banking industry and its determinants in Indonesia. The same analysis was also done to the conventional banking industry as Indonesia practices dual banking systems. Using monthly data on Indonesian Banking Statistics for 2008-2013, this research implemented the Banking Stability Index (BSI) model for predicting the bank's stability. The analysis began with measuring BSI then using VECM to examine the effect of variables on BSI. The result showed that the BSI of both banking system was exhibiting the moderate level of stability though Islamic banking is more stable and safe way of financing than conventional banking. The shocks of inflation, exchange rate, efficiency, income diversity, liquidity, and Industrial Production Index responded positively by Islamic Bank' stability, while interest rate and market share responded negatively. In another hand, conventional bank' stability responded positively the shock of the exchange rate, income diversity, interest rate, liquidity, and market share, while other variables responded negatively. The results of shocking variables strongly indicated that the conventional banking is more vulnerable than Islamic banking. Islamic banking looked tend to the shock resistance and less volatile. This conclusion, however, might be still questioned as the BSI was not designed specifically for Islamic banking. Therefore, constructing an Islamic BSI (under Islamic banking characters) was important to measure the banking stability more appropriate and to develop a proper early warning system for Islamic banking industry.

Download Full-text

China's Banking System as Compared to Other Transition Banking Systems

Voprosy Ekonomiki ◽

10.32609/0042-8736-2003-12-137-144 ◽

2003 ◽

pp. 137-144

Author(s):

M. Golovnin

Keyword(s):

Banking System ◽

Banking Systems

.

Download Full-text

Scaling risk assessment in a closed circuit recycled board mill by speciation methods

TAPPI Journal ◽

10.32964/tj11.5.53 ◽

2012 ◽

Vol 11 (5) ◽

pp. 53-61 ◽

Cited By ~ 4

Author(s):

PATRICK HUBER ◽

SYLVIE NIVELON ◽

PATRICE NORTIER

Keyword(s):

Calcium Carbonate ◽

Volatile Fatty Acids ◽

Inorganic Carbon ◽

Stability Index ◽

Closed Circuit ◽

Critical Problem ◽

Local Scaling ◽

Water Analyses ◽

Closed Water ◽

Speciation Calculation

Calcium carbonate scaling often is a critical problem for recycled board mills that have closed water circuits. The objective of this study was to determine local scaling risks throughout the production process. To predict scaling potential, we calculated several saturation indexes, based on speciation determined from detailed water analyses. Calculated scaling trends are in accordance with observed dissolution and precipitation of calcium carbonate in the process, when considering local aeration phenomena. The importance of volatile fatty acids (resulting from anaerobic bacterial activity) in calco-carbonic equilibriums is discussed, and taken into account in the speciation calculation. We also demonstrate the need to measure inorganic carbon instead of alkalinity in such conditions. This makes typical scaling indexes, such as the Ryznar Stability Index, irrelevant to predict scaling risk in closed circuit conditions; thus, it is necessary to use general speciation methods, as described in this paper.

Download Full-text