Abstract
Bank Stability Index for Selected Countries with Dual Banking Systems
Highlights
The banking stability is acknowledged to have an important role in the stability of the overall financial system of the developing countries (Hartmann, Straetmans, & Vries, 2005; Popovska, 2014; Swamy, 2014)
This study, attempts to fill this research gap by extending its discussion to include the measurement of bank stability for selected countries with the dual banking systems
Adapting and modifying the sensitivity analysis developed by Nardo et al (2008), this analysis compares the Bank Stability Index (BSI) developed in this study (BSI1) with several others, such as the BSI, based on listwise deletion to eradicate missing values, as well as equal weightage, z-scores and Bankscope ratings for the year 2015
Summary
The banking stability is acknowledged to have an important role in the stability of the overall financial system of the developing countries (Hartmann, Straetmans, & Vries, 2005; Popovska, 2014; Swamy, 2014). The banking sector, in the developing countries, is the most developed sector in the financial system, while the other sectors are less developed (Hartmann et al, 2005; Popovska, 2014). Literature reviews on prevalent practices highlight that there is no internationally accepted framework and uniform measures of banking stability adopted by banks around the world (Segoviano and Goodhart, 2009; Gersl and Hermanek, 2010), for the countries with the dual banking system. This study, attempts to fill this research gap by extending its discussion to include the measurement of bank stability for selected countries with the dual banking systems
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