DID THE ECONOMIC CRISES INFLUENCE THE STRUCTURE OF ASSETS-LIABILITIES IN BANKS?

Cociuba Mihail Ioan ()
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Cociuba Mihail Ioan: Universitatea din Oradea, Facultatea de Stiinte Economice

Annals of Faculty of Economics, 2015, vol. 1, issue 2, 407-415

Abstract: Due to the important role of the banks in the financial sector and their systemic importance it is imperious to understand the relation and the influence between banks assets and liabilities. We apply the canonical correlation analysis, developed by Hotelling (1936), on a dataset of 59 banks for the 2005-2011 period, we observe that after 2009 there is a decline in the level of loans from 61% to 58% of total assets. We find that the correlation between asset and liabilities remains strong in the 2008-2009 period.The use of derivatives is affected in 2009-2010, but the pre-crisis level are exceeded in 2011; also for the analysed banks the proportion of fixed assets decline from over 1.2% in 2005 to under 0.9% in 2011, this may be due to the use of technology and automation on a larger scale, this trend is not influenced by the financial crises but by structural factors. Regarding the level of capital and equity it can be observed that there is an upward trend between 2008-2010 due to regulatory and market conditions. The level of customer deposits is over 40% for all the analysed period, with a change in dynamic after 2007 when the proportion of deposits has an upward trend. We find that exists a moderate and inverse correlation between Loans and Loans and advances to Banks, Trading Securities, Derivatives and Deposits from Banks; also the level of deposits is correlated directly and moderately with the level of loans, also we observe that deposits are moderately and inverse correlated with the level of deposits from banks. This shows that the analysed banks adapted their strategies and manage to maintain their balance sheets at values similar with those before the crisis.

Keywords: bank assets-liabilities; correlation; financial crises; balance sheet (search for similar items in EconPapers)
JEL-codes: C31 G01 G21 (search for similar items in EconPapers)
Date: 2015
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