Bank health in varying macroeconomic conditions: A panel study

Selim Akhter and Kevin Daly

International Review of Financial Analysis, 2009, vol. 18, issue 5, 285-293

Abstract: Using panel data on selected Financial Soundness Indicators (FSIs) this paper investigates the potential strengths and vulnerabilities of financial intermediaries across more than 50 countries. Our econometric analysis reveals strong influence of business cycle, inflation, and real effective exchange rates, and size of the industry on capital adequacy --a core indicator of banks' financial soundness. Furthermore, our analyses provide evidence that banks' profitability is determined by a combination of macroeconomic, bank specific and industry characteristics such as business cycle, inflation, credit risk, capital adequacy, and the level of competition.

Keywords: Global; financial; stability; Financial; Soundness; Indicators; Generalized; Method; of; Moments; Financial; intermediaries (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:18:y:2009:i:5:p:285-293

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