A Cluster Analysis Approach for Bank’s Risk Profile: The Romanian Evidence

Dardac N. and Iustina Boitan

European Research Studies Journal, 2009, vol. XII, issue 1, 109-118

Abstract: Cluster analysis, as an exploratory technique, by gathering together those credit institutions sharing similar features in terms of financial intermediation activity, proves to be a complementary tool for the peer group analysis, accomplished at the off-site supervision level. The aim of our study was to include a representative sample of Romanian credit institutions into smaller, homogenous clusters, in order to assess which credit institutions have similar patterns according to their risk profile and profitability. We found that, over the period 2004-2006, the clusters remained relatively stable in terms of similarity of exposure to risks and profitability.

Keywords: Banking system; supervision; risk profile; resemblance coefficient; and cluster analysis (search for similar items in EconPapers)
JEL-codes: C44 E58 G21 (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:ers:journl:v:xii:y:2009:i:1:p:109-118

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