A simple index of banking fragility: application to Indian data

Saibal Ghosh

Journal of Risk Finance, 2011, vol. 12, issue 2, 112-120

Abstract: Purpose - Using data on Indian banks for 1997‐2007, the purpose of this paper is to develop an index of banking fragility and subsequently examine the factors affecting the index. Design/methodology/approach - The author employs basic distributional assumptions to develop the index and subsequently, employs panel data techniques to examine the factors which affect the index. Findings - Based on the statistical properties of the index, banks are classified as exhibiting high, moderate, and low stability. The multivariate regressions indicate an important role for banking industry variables in influencing the index. Practical implications - The paper complements the strand of literature which has been focusing on developing indicators of banking stability and examining the factors affecting them. Originality/value - To the author's knowledge, this is perhaps the first study for an emerging economy and more certainly for India, to examine this issue.

Keywords: Banks; India; Economic stability; Statistical analysis (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (3)

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Working Paper: A Simple Index of Banking Fragility: Application to Indian Data (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jrfpps:15265941111112839

DOI: 10.1108/15265941111112839

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