Proportional Hazards Model of Bank Failure: Evidence from USA

Raymond Cox, Randall K. Kimmel and Grace W.Y. Wang
Additional contact information
Randall K. Kimmel: Thompson Rivers University, Canada
Grace W.Y. Wang: Texas A & M University at Galveston. United States

Journal of Economic and Financial Studies (JEFS), 2017, vol. 5, issue 3, 35-45

Abstract: This study uses the Cox Proportional Hazards Model, examining the operating and financial characteristics of banks as well as market and economic conditions, to demonstrate what caused US bank failures. Consistent effects indicate US banks were more likely to survive when having higher capital, loan to assets, short term debt securities, and return on assets. The failure rate was greater when their loan loss allowances and past due accounts were high. The results of this research will help banks, central banks, governments, and regulators to forecast which banks are in financial trouble and understand why. They can then take effective action to shore up the financial strength of the affected banks as well as the financial system. Classification JEL:

Keywords: Bank Failure; Early Warning system; Proportional Hazard Model (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.journalofeconomics.org/index.php/site/article/view/290/322 (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:lrc:lareco:v:5:y:2017:i:3:p:35-45

Access Statistics for this article

More articles in Journal of Economic and Financial Studies (JEFS) from LAR Center Press
Bibliographic data for series maintained by S Marjan ( this e-mail address is bad, please contact ).