Determinants of the timing of bank failure in North Cyprus

Nil Gunsel

Journal of Risk Finance, 2010, vol. 11, issue 1, 89-106

Abstract: Purpose - The purpose of this paper is to investigate the determinants of the timing of bank failure in North Cyprus over the period of 1984‐2002 using a discrete‐time logistic survival analysis. Design/methodology/approach - The empirical methodology employed in the paper allows for the determination of the factors that influence the time to bank failure. The model links the time of bank failure to a set of bank‐specific factors and macro‐environment that may have exacerbated the internal troubles of the financial institutions. Findings - An empirical examination of the results on survival analysis reveal that the three variables, namely: low asset quality (total loan as a percentage of total assets), low liquidity (total liquid asset as a percentage of total assets), and high credit extended to the private sector (ratio of the private credit to gross domestic product) are the main factors that explain the survival time of banks in North Cyprus. Research limitations/implications - For further research this paper may better distinguish time to bank failure if it extends the time period and if it uses exchange pressure from Turkey that may have a direct effect on bank failure in North Cyprus. Practical implications - Nowadays bank failure is an important problem in the world. Using time technique to investigate bank failure will help to learn the factors that determine time to bank failure, which will further help to take precautions and prevent the cost of bank failure. Originality/value - The analysis would appear to be the first to provide evidence and investigate the time to bank failure in the North Cyprus banking sector.

Keywords: Microeconomics; Macroeconomics; Banks; Business failure; Cyprus (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:jrfpps:15265941011012705

DOI: 10.1108/15265941011012705

Access Statistics for this article

Journal of Risk Finance is currently edited by Nawazish Mirza

More articles in Journal of Risk Finance from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().