Dynamic Impact of Banking Performance on Financial Stability: Fresh Evidence from Southeastern Europe

Veton Zeqiraj, Flamur Mrasori, Omer Iskenderoglu () and Kazi Sohag ()
Additional contact information
Flamur Mrasori: Faculty of Law, University of Prishtina, Kosovo; Central Bank of the Republic of Kosovo
Omer Iskenderoglu: Halisdemir University, Faculty of Economics and Administrative Sciences, Nigde, Turkey

Journal of Central Banking Theory and Practice, 2021, vol. 10, issue 1, 165-181

Abstract: This study addresses the issue of whether banking performance impacts financial stability in Southeastern European countries. To answer this question, the GMM approach has been applied in the analyses of the panel data over the period 2000-2015 for Southeastern Europe. The findings reveal the presence of significant positive long-run relationship between ROA, ROE, trade openness, and human capital, while government expenditures have negative impact on financial stability. Trade openness, human capital and government expenditures can keep the financial system stable as a whole. The Granger causality analysis discloses the main hypothesis where the banking system in this part of Europe accounts for more than 80% of the financial system. The study sheds light to the policymakers and research about the role of banking performance on financial stability for this region of Europe.

Keywords: Financial stability; Banking performance; Generalized Method of Moments; Southeastern Europe. (search for similar items in EconPapers)
JEL-codes: B26 G2 G3 O1 O2 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.cbcg.me/repec/cbk/journl/vol10no1-8.pdf (application/pdf)

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:cbk:journl:v:10:y:2021:i:1:p:165-181

Access Statistics for this article

More articles in Journal of Central Banking Theory and Practice from Central bank of Montenegro Contact information at EDIRC.
Bibliographic data for series maintained by ().