Probability of Bank Failure: The Russian Case

Konstandina Natalia ()

EERC Working Paper Series from EERC Research Network, Russia and CIS

Abstract: A question of explaining bank failures constitutes perhaps one of the greatest interest to banks' clients, policy-makers and regulators. Not surprisingly, for a long time, this question has been a challenge for theoretical and empirical economists. In this paper we investigate which factors affect soundness of a bank, taking into consideration micro level data, as well as macro level component. We also employ efficiency estimate, obtained with the help of DEA, to account for the quality of management. Then we use logit model and proportional hazard model with efficiency component. We find that efficiency element, together with size and regional belonging, are highly significant in all specifications, while macro variables did not seem to influence failures significantly.

Keywords: Russia; Russian banking; failures; efficiency (search for similar items in EconPapers)
JEL-codes: G21 G33 L25 (search for similar items in EconPapers)
Date: 2006-02-13
New Economics Papers: this item is included in nep-eff, nep-fin, nep-fmk and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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