THE ROLE OF THE Z-SCORE MODEL IN ASSESSING FINANCIAL STABILITY. EVIDENCE FROM THE COMMERCIAL BANKS LISTED ON BUCHAREST STOCK EXCHANGE

Irina-Raluca Badea
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Irina-Raluca Badea: University of Craiova, Craiova, Romania

Revista Economica, 2016, vol. 68, issue 2, 188-200

Abstract: This paper represents a theoretical and practical approach regarding one of the alternatives to measure financial stability, namely the Z-score model.It is well known that the Z-score model was firstly developed for manufacturing firms, but the initial model was revised in order to become operational for banks as well. Therefore, the main goal of the paper is using Z-score for the banks listed on Bucharest Stock Exchange in order to determine their stability or instability. The Z-score method allows comparison among different institutions' stability in a simple and elegant way and proves to have more advantages than disadvantages in practice.

Keywords: financial stability; Z-score; ROA; Bucharest Stock Exchange (search for similar items in EconPapers)
JEL-codes: D81 E58 G21 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (1)

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