THE ASSESSMENT OF THE FINANCIAL SOUNDNESS OF THE BANKING SECTORS IN BALKAN COUNTRIES USING "EARLY WARNING INDICATORS" - A COMPARATIVE STUDY WITH POLICY IMPLICATIONS

Dr. Rezarta Shkurti (Perri) () and Dr. Brunilda Duraj ()
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Dr. Rezarta Shkurti (Perri): Lecturer, University of Tirana, Fakulteti i EkonomisA�, Rruga e Elbasanit - Tirana, Albania
Dr. Brunilda Duraj: Lecturer, University of Tirana, Fakulteti i EkonomisA�, Rruga e Elbasanit - Tirana, Albania

Journal Articles, 2010, 33-48

Abstract: This paper uses an early warning model that calculates the Probability of Distress of the banking sectors of seven Western Balkan countries. The application of the model on a country level has revealed that the riskiest country in Western Balkan is Montenegro whereas the healthiest one is Serbia. Albania, Kosovo and Macedonia are characterized by moderate risk levels. We recommend that the efforts of the supervisory authorities in each country should be focused on capitalization in the log run and on the profitability and managerial quality in the short run. The enhancement of the supervisory practices integration beyond the existing Memorandum of Understanding and the creation of a centralized dataset for Balkan banking institutions are recommended.

Keywords: early warning system; banking sector assessment; supervisory framework (search for similar items in EconPapers)
JEL-codes: G01 G21 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:cmk:journl:y:2010:p:33-48

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