Bank Bankruptcy Research Articles

Research on the Bankruptcy Tendency of the United States Bankrupt Commercial Banks during the 2008 financial crisis

With the rapid development of the financial market, banks are faced with increasingly frequent capital flows and rapidly changing business environment. It is an important prerequisite for commercial banks to control their liquidity risk to deeply study the causes of liquidity risk and clarify its economic consequences. In the financial crisis during 2007-2009, American commercial banks were directly impacted by liquidity risk. The characteristics of their bankrupted banks are of great significance to the study of how to avoid bank liquidity losses. This study found that in aspect of the probability of commercial banks bankruptcy, the larger scale the banks’ current deposit is in the initial stage, the larger rate of the loan is. The larger the loan issuance ratio is in perportion, the worse the liquidity management of commercial banks’ efficiency acts. And other characteristics make the bank's bankruptcy probability greater. This result has reference significance for commercial banks in China.

Research on the Bankruptcy Standard of Commercial Banks in China

Crisis of commercial banks has been reported frequently, and it is normal for them to fail and quit in the market competition. In order to maintain the national financial order and prevent systemic crisis, it is of great significance to improve the legal system of commercial bank bankruptcy to deal with the problematic commercial banks in a timely manner. Commercial bank insolvency standards as the application of commercial bank insolvency legal system, scientific and reasonable commercial bank insolvency standards is the key to commercial bank insolvency legal system to play a useful role. At present, the bankruptcy of commercial banks in China applies the general corporate bankruptcy standard. Based on the special characteristics of commercial bank insolvency, the introduction of regulatory standards and the establishment of diversified commercial bank insolvency standard system can be considered.

The Effect of Income Diversification on Default Risk in Conventional Banking Companies in Indonesia

This study aims to identify variables that affect the risk of bankruptcy in banks listed on the Indonesia Stock Exchange. The research method includes collecting data from 36 listed banks on the Indonesia Stock Exchange over a 5-year period (2018-2022) and using the panel data regression analysis method. The addition of novelty variables in this study, namely bank size, net interest margin, and deposit to total assets that have a negative effect on bankruptcy risk, while the diversification index and gross domestic product variables have no effect on bankruptcy risk. the implication for bank managers is as a reference and consideration in implementing income diversification strategies. this research also provides information that is expected to be used as reference material and expand information and insight in developing research in the banking sector.

The Bibliometric Analysis of Bank Stability

The central role of banks in the economy has been getting more attention since the global crisis occurred in 2008 which was caused by the bankruptcy of large banks in the United States. The collapse of the economic system has had implications for high recovery costs so efforts to maintain bank stability must be thought continuously. The studies to analyze literature reviews on the subject of bank stability have never been specifically conducted therefore this study aims to determine and analyze literature mapping on bank stability by meta-data network and studies trends over the last 10 years (2013-2023). We used a literature review study method (a bibliometric analysis approach) to review 165 articles during the observation period. The results of this study shows that studies of bank stability associated with other keywords such as monetary policy, bank profitability, shadow banking, and price stability are still rarely conducted. Then, based on the development of studies trends over 2013-2023 shows a downward trend. This also opens up space for the study of bank stability considering that its existence is needed to prevent a global economic crisis. Furthermore, based on the density visualization, it shows that themes that are rarely associated with bank stability are efficiency, commercial bank, systemic rice, and price stability so these three variables could become study opportunities in the future.

NORMA SUBYEKTIF DAN SELF-EFFICACY DALAM PENERIMAAN APLIKASI REKSA DANA DAN SAHAM

Mutual funds and shares are investment elements that are more volatile compared to gold, but in the long term they are quite profitable elements. This can be seen during the COVID-19 pandemic, the Russian-Ukrainian war crisis, and the bankruptcy of a large bank in America, this investment element still provides profits. The financial technology industry also provides various service applications on mobile phones or smartphones that make it easier for people to invest in mutual funds and shares. This research analyzes the determinants of Indonesian society's acceptance of stock mutual fund applications using the Technology Acceptance Model (TAM) and adding two external variables, namely subjective norms and self-efficacy. This research uses Structural Equation Model-Partial Least Square (SEM-PLS) to test the hypothesis. The results show that all TAM variables and subjective norms have an influence, but self-efficacy does not influence interest in using mutual fund and stock applications. In order to increase public acceptance of mutual fund and stock investment applications, and then interest in using them, service providers should improve the ease of operation and usefulness of their applications. Efforts should also be made to encourage people to recommend each other to invest through this application.

The Role of Governance in Mitigating the Effect of Financial Contagion on Bank Bankruptcies: An Empirical Study of ASEAN Banks

The Role of Governance in Mitigating the Effect of Financial Contagion on Bank Bankruptcies: An Empirical Study of ASEAN Banks

The Collapse of Silicon Valley Banks Improves Risk Management for Other Commercial Banks

Silicon Valley Bank, a subsidiary of Silicon Valley Bank Financial Group, provides loans to venture capital as well as startups. Silicon Valley Bank primarily serves technology-based companies. Our paper focuses on the implications of the Silicon Valley bank bankruptcy for other commercial banks from four aspects. First, what are the risks in the business operation model of Silicon Valley banks; second, what caused the bankruptcy of Silicon Valley Bank; Third, the impact of the bankruptcy of Silicon Valley Bank; Fourth, the bankruptcy of Silicon Valley Bank has implications for the development of Chinese commercial banks. The main reason for the bankruptcy of Silicon Valley Bank was the Fed's interest rate hike. As a traditional commercial bank, Silicon Valley Bank's profit model is mainly based on interest differential. Affected by the epidemic, the demand for loans from Silicon Valley banks declined, so Silicon Valley banks chose to buy US Treasury bonds and MSBs. The Fed's interest rate hike coupled with a large amount of money printing in the United States has led to inflation. The sharp depreciation of US Treasuries and MSBs, coupled with the end of the mobile Internet cycle, forced Silicon Valley banks to sell a large number of unmatured bonds. Eventually a bank run occurred, leading to the bankruptcy of Silicon Valley Bank.

Silicon Valley Bank Collapse: Causes & Consequences

This paper discusses the concept of bank bankruptcy and highlights the recent failure of Silicon Valley Bank (SVB) as a significant case similar to the Lehman Brothers' collapse in 2008. Lehman's failure was attributed to the U.S. housing market collapse and internal risk management issues. SVB's failure, occurring in 2023, resulted from both internal factors (improper decisions, high-risk strategies, and poor financial management) and external factors (economic recession, Federal Reserve interest rate hikes, regulatory challenges, and changes in the tech industry). The bankruptcy of SVB has far-reaching economic impacts on depositors, borrowers, entrepreneurs, investors, and the banking industry. It triggers a crisis of confidence, liquidity pressure, and systemic risks. The Federal Reserve implements emergency measures to address the fallout, reflecting on regulatory approaches to mitigate threats to the banking system. The comparison with Lehman Brothers underscores similarities in improper development strategies, asset structures, risk management, and regulatory oversight, leading to systemic risks and undermining financial market confidence.

Customer Satisfaction Towards Banking Services in Rural areas of Alirajpur District – A Study on selected Banks

The world economy is facing difficult situations such as the bankruptcy of banks and financial institutions, the debt crisis of the world's major economies, and the Eurozone crisis. The uncertainty of the situation caused the decline of major economies such as the USA and Europe. This raises some important questions about the country's survival, growth and stability. However, banks play an important role in the development of the country with the high scores and commitments they receive. Banks perform development functions and are the source of people's hopes and expectations. Banks and finance are like oxygen for freedom. Financial markets are involved in the macroeconomic and monetary policy of any country. It plays an important role in supporting companies and projects. Business dynamics in banking are very different from other businesses. They are there to analyze loan capital, monitor the user's behavior and efforts, provide risk insurance, and create assets. Therefore, this study focuses on customer satisfaction with banking services in rural areas of selected banks in Alirajpurr district. one Keywords: Customer Satisfaction, Banking Services, Indian Economy, Rural.

Risk Assessment on Banks under Rising Interest Rates

This paper explores the critical role of the banking sector in the economy and society, with a focus on various risk dimensions affecting this industry. These dimensions include liquidity risk, credit risk, market risk, and systemic risk. The paper underscores the banking sector's significance for the national economy and financial stability, defining and explaining these risks' impact. The liquidity risk section delves into the definition, causes, and implications of liquidity risk, examining policies and measures taken by banks, especially in response to the challenges posed by the COVID-19 pandemic. Credit risk is explored through a case study of Credit Suisse, discussing the definition and consequences of credit risk and its potential role in bank bankruptcies. Market risk is analyzed with a focus on interest rate changes and their effects on banks, using the case of Silicon Valley Bank to illustrate how market risk can lead to bank failures. Systemic risk is explained, emphasizing its definition, causes, and significance to banks while also suggesting measures to avoid it. This paper concludes by summarizing the impact of these risks on the banking sector and offers recommendations for risk management and the future direction of the industry. Through case studies, it highlights the complexity of these risk dimensions and their crucial role in maintaining banking sector stability and overall economic well-being.

Bank Competition and Financial Stability in Nepal

This paper examines the casual relationship between bank competition and financial stability in Nepal. The relationship between competition and financial stability in banking system can be explain by two hypothesis: The "competition-fragility" theory holds that increased bank competition weakens profit margins, undermines market power, and lowers franchise value—the continuing concern or market worth of the banks above their book values and “competition-stability” view contends that financial institution stability may benefit from competition. The study used descriptive and causal research design. The random effect panel data of 6 commercial banks of Nepal over the period of 2014-2019. All the data are obtained from NRB monthly statistic and bank annual report. The HHI and n-bank concertration ratio are used as a measure of bank competition while Z-Index and non-performing loan ratio are the proxies of financial stability. The findings confirm the"Competition-frangility" theory by showing a negative association between bank competition and financial stability in Nepal. It states that bank tends to take excessive risks when the competition level increases. It is discovered that competition in the banking industry raises credit risk and reduces capital levels. Riskier policies enhance the likelihood of increased bank bankruptcies and non-performing loan ratios, which adds to fragility and financial instability. Thus, less concentrated banking systems are prone to experiences crisis.

On predicting the probability of default of credit organizations in the Russian Federation

Objective: to form a model for predicting the default of credit organizations under the modern conditions of the banking sector functioning.Methods: unidimensional analysis of variance, regression analysis of binary choice models.Results: in the modern economy, the banking system stability largely affects not only the financial sector, but also the economic and investment climate in the country. Understanding of the banks’ influence on the economy necessitates the formation of appropriate effective forecasting systems that allow identifying problem banks before revoking their licenses is necessary. The existing methodology of the Bank of Russia is characterized by subjectivity and inaccuracy of assessment. The analysis of studies on predicting bank defaults showed various approaches to the methodology of assessing the probability of credit institutions’ bankruptcy, though they have a number of shortcomings. Based on the selection of key factors affecting the bank’s financial stability, the logistic regression model for predicting bankruptcy of banks was formed. The methodology proposed in this article includes five predictors, selected on the basis of the improved methodology for selecting logit regression variables, and complements the existing methodologies.Scientific novelty: a methodology for assessing the probability of commercial banks’ bankruptcy in the Russian Federation was developed, which includes five key predictors for assessing the bank’s financial stability: return on assets, unit weight of liquid assets in the balance sheet currency, unit weight of the loan portfolio in the balance sheet currency, share of loans to the real sector in the balance sheet currency, and share of long-term placements in the loan portfolio. The logistic regression model of binary choice proposed in the paper allows distinguishing financially stable credit organizations from problem banks with a forecasting horizon of five months and a classification accuracy of 88,33 %.Practical significance: the relatively high classification accuracy of the model allows its use by the Bank of Russia in controlling the credit organizations functioning, as well as directly by the credit organization’s management, in order to assess the organization’s financial stability and to predict the default probability, as well as to form the bank’s development strategy.

HAK EKSKLUSIF BANK INDONESIA MENENCABUT IZIN USAHA, PEMBUBARAN BADAN HUKUM DAN LIKUIDASI BANK (PERSPEKTIF HUKUM PERBANKAN NASIONAL)

This research is intended to systematically describe and analyze the role of Bank Indonesia authorities as creditors and supervisors and supervisors of banks in maintaining the soundness of banks based on the national banking system, regulating the revocation of business permits, dissolution of business entities and liquidation of banks based on the national banking system and the relevance of granting exclusive rights. to Bank Indonesia to file bankruptcy against the bank based on the Bankruptcy Law and the Banking Law. This type of research is normative juridical, with a statutory and conceptual approach. Based on the research results, it shows: firstly, that Bank Indonesia's authority as a creditor is anticipating financial difficulties faced by a bank within a certain period of time by providing loans with a maximum repayment period of 90 days (3 months). Meanwhile, Bank Indonesia's authority as supervisor and supervisor is aimed at improving the performance of a bank which is determined on the basis of asset quality, management quality, liquidity, profitability and solvency as an effort to increase public confidence in banks. Second; One of the recommendations from Bank Indonesia for one of the banks which, based on Bank Indonesia's assessment, is difficult to save is to revoke the business license, disband the business entity and liquidate the bank. Third: Although based on Law Number 37 of 2004 concerning Bankruptcy and Suspension of Debt Payment Obligations, it is determined that a bank's bankruptcy statement can only be submitted by Bank Indonesia, but because operationally and institutionally banks have different characteristics from other business entities, the implementation bankruptcy of a bank becomes ineffective, especially if it is linked to the principle of Lex Specialis Derogat Lex Generalis

The domino effect of silicon valley Bank's bankruptcy and the role of FED's monetary policy

This paper examines the spillover effects of bankruptcy by important tech industry banks—Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank—on the top 10 institutions in the MSCI Bank Index and the role that monetary policy by the US Federal Reserve (the Fed) played in this contagion, using Dynamic Conditional Correlation-Exponentional Generalized Autoregressive (DCC-EGARCH) and time-varying Granger-causality models. Our findings show that the dynamic conditional correlations among the banks were higher during the period of the SVB crisis, implying the presence of financial contagion from the bank's bankruptcy due to uncertainty triggered by its collapse. Financial contagion emerges between SVB and the top 10 banks, and the degree of contagion rises during the crisis period. Moreover, the Fed's monetary policy plays a significant role in contagion due to bank failures. The deepening of financial contagion followed the Fed's increases in the federal funds rate to combat inflation.

Finansal Koşullar Endeksi ile Ekonomik Büyüme ve Net Sermaye Girişi Arasındaki İlişkinin İncelenmesi: Türkiye İçin Nedensellik Analizi

The global economic crisis, which had a devastating effect worldwide with the bankruptcy of Lehman Brother's investment bank in the United States of America in 2008, revealed that countries should indicate risks and take precautions accordingly. In this sense, the importance of the Financial Conditions Index (FCI), which was created by considering the monetary policy instruments of the country's central banks and various macroeconomic and financial variables as a whole, has also increased. FCI, the index that has taken place in the literature since the 1990s, with the growth of countries, has been investigated in empirical studies conducted after the global economic crisis. In this study, the related index is calculated using Principal Component Analysis (PCA), and the data generated is analyzed with growth and net capital inflow items. According to the results of the related analysis, while there is bidirectional causality between FCI and real gross domestic product (GDP) growth, one-way causality was found between FCI and net capital inflow. The index created accordingly is the Granger cause of the net capital inflow.

Comparative Analysis of Stock Price Index Before and After The Announcement of Silicon Valley Bank (SVB) Bankruptcy

The recent bankruptcy of Silicon Bank Valley (SVB) has sent shockwaves globally, given SVB’s status as a top-16 bank in the United States specializing in financing startups. The collapse of SVB has ignited concerns about a potential crisis, prompting a crucial research initiative to assess the likelihood of such a scenario. Since SVB’s bankcruptcy announcement, a notable occurence has been the sustain depression of the Composite Stock Price Index (IHSG) for several days. Consequently, this study aims to scrutinize and assess whether there are statistically significant variations in the stock price index before and after SVB’s bankcrupty announcement, not only within Indonesia but also throughout the ASEAN region. Utilizing quantitative approach, this research relies on secondary data in the form of stock price indices from multiple ASEAN stock exchanges. The observation period spans 14 days before and after March 10, 2023 (the announcement date). The analysis reveals that the stock price indices of JKSE, SETI, KLSE, and STI exhibited significant variations before and after the SVB announcement. However, the PSEI stock price index demonstrated no discernible differences. These findings shed light on the potential interconnectedness of SVB’s bankcruptcy with stock market movements in the ASEAN region.

Reasons and Enlightenment for The Bankruptcy of Silicon Valley Bank

At the beginning of 2023, the 16th Silicon Valley Bank in the United States, broke out the liquidity run crisis, and then quickly declared bankruptcy, which attracted wide attention from the society. History can guide to the gains and losses, by learning bank bankruptcy cases, enterprises can better understand the importance of corporate management, financial stability and risk management and make more informed investment decisions; It can also help enterprises realize the importance of financial stability and promote relevant regulatory agencies to take measures to ensure the healthy operation of the financial system. Finally, understanding bank bankruptcy events can help relevant stakeholders know how to protect their rights and interests. This paper will conduct a deep review of the bankruptcy of Silicon Valley Bank, and will analyze the real cause of the bankruptcy of Silicon Valley Bank, hoping to help domestic and foreign banks to give corresponding enlightenment.

Analysis and Evaluation of Bank Failure: Evidence from Silicon Valley Bank

As a matter of fact, bank failure always plays a key role in financial analysis, since this is usually the critical reason for financial crisis and systematical risks. With this in mind, the object of this study is the foreign bankrupt bank Silicon Valley Bank, which currently has huge impacts on global financial market. In reality, the importance of the study is that the banking system is not only related to individuals’ daily life, but also affect national economic lifeline and the development of the world economy. On this basis, the article mainly expounds some important reasons for the bankruptcy of silicon valley banks and the reflection it brings based on the data analysis. At the same time, the impacts on the US market as well as global market will be demonstrated. In the meantime, the corresponding suggestions for the bank industry as well as Chinese banks are proposed according to the analysis.

The impact of sentiment consistency on bank risk: A dual perspective from bank managers and credit rating experts

The article examines the predictive role of the consistency of tone between credit rating experts and bank managers on bank bankruptcy risk and systemic risk. Firstly, the article collected 716 reports, which are the intersection of credit rating reports and bank annual reports of all US commercial banks from 2006 to 2022. Secondly, the FINBERT model was fine-tuned to calculate the tone scores of all reports and the similarity of tones between parties. Empirical analysis revealed that the more positive the tone of credit rating reports, the lower the bankruptcy risk and systemic risk of banks. Furthermore, integrating the perspective of bank managers, the article used a moderation effect experiment to further explore the moderating effect of the tone of bank annual reports and the consistency of tone between parties on the tone of credit rating reports regarding bank risk. The empirical results indicate that the tone of bank annual reports can effectively moderate the predictive effect of credit rating reports on bank risk. Additionally, the consistency of tone index has a significant positive moderating effect on the impact of the tone of credit rating reports on bank risk. This study provides important insights into the exploration of financial text tones on bank bankruptcy risk and systemic risk, suggesting the use of multidimensional text tones for bank risk measurement. It also demonstrates for the first time the importance of consistency of financial text tones in different dimensions in bank risk warning.

The impact of disclosure characteristics of conference calls on bankruptcy risk: From perspectives of redundancy and boilerplate

In recent years, the volatility of global financial markets has attracted widespread attention, particularly due to numerous bank bankruptcies it has triggered. This gradual realization underscores the critical importance of adequate information disclosure for a company’s stable operation. Conference call represent a significant form of voluntary information disclosure by businesses. This paper aims to study the impact of redundancy and boilerplate in conference call on a company’s bankruptcy risk. By quantifying redundancy and boilerplate indicators in conference call textual data as explanatory variables and employing Altman’s Z-score model to measure a company’s bankruptcy risk as the explained variable, the study utilizes a fixed-effects model for regression analysis and conducts robustness tests on the model. The final research findings indicate that lower redundancy and higher boilerplate in conference call documents are conducive to reducing a company’s bankruptcy risk, thereby aiding companies in achieving long-term, stable operational status. These research results hold significant reference value for investors and corporate managers in the financial market, providing insights into enhancing corporate stability and market trust through improved methods of telephone conference information disclosure.