Explaining bank distress in Eastern European transition economies

Kadri Männasoo and David Mayes

Journal of Banking & Finance, 2009, vol. 33, issue 2, 244-253

Abstract: This paper considers the joint role of macroeconomic, structural and bank-specific factors in explaining the occurrence of banking problems in the nineteen Eastern European transition countries over the last decade. With data at the individual bank level we show, using a discrete time survival model, that all three factors interact in their impact and have a rich dynamic profile, which underlines the highly volatile cycles challenging the stability of banks in this region. A fragile funding basis accompanied by high exposure to market risk in an environment of reforms and macroeconomic disturbances is the typical precursor of bank distress.

Keywords: Banks; Distress; Transition; Survival (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (126)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:33:y:2009:i:2:p:244-253

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