Bank Group Research Articles

BANK BUTIKOWY NOWY MODEL BIZNESOWY SZANS DLA BANKW SPDZIELCZYCH?

The current macroeconomic and political conditions, and above all technological progress, mean that in recent years the condition of the cooperative banking sector has been gradually deteriorating compared to commercial banks. The above premises give grounds to claim that the current operating model of the entire group of cooperative banks, as well as of a single cooperative bank, should be redefined. Remaining with the current models of operation of cooperative banks will maintain the trend of sector consolidation, departure from the idea of cooperatives and moving towards models attributed to commercial banks. The aim of the study was therefore an attempt to present one of the possible concepts for the development of a small cooperative bank as an alternative to the consolidation processes of the cooperative banking sector. An attempt was made to answer the question whether there is space for the functioning of a boutique cooperative bank and what a boutique cooperative bank is and what it can be. The focus was on presenting and transferring the concept of a boutique bank to cooperative banks. Examples of the functioning of boutique financial institutions were presented, which were an inspiration to build a model of a boutique cooperative bank. Solutions were analyzed and various variants of the functioning of commercial boutique banks were discussed as examples of the real success of this form of banking activity. On this basis, an attempt was made to present models of functioning of a boutique cooperative bank.

Issues when the parental and host country systemic institution buffers differ: the case of Czechia

The article analyses regulatory reforms in the EU to the capital buffers for mitigating risks associated with institutions' systemic importance in the Capital Requirements Directive (CRD). The Directive includes a buffer for other relevant institutions (O-SIIs) and limits its size to a general cap and a specific cap for subsidiaries. However, the specific subsidiary cap may limit national authorities' ability to set a sufficient buffer for domestic institutions that are members of European banking groups to cover risks to the domestic market. It also may lead to a situation where two institutions of similar systemic importance could be subject to different O SII buffer rates because their owners are of different systemic importance and have different O-SII buffer rates in different EU jurisdictions. The amended CRD V increases the general and subsidiary cap for the O-SII reserve by one percentage point. However, the cap for subsidiary institutions remained in force, which limits the setting of capital buffers, especially for banking sectors with significant foreign ownership. These include mainly countries of the former Soviet-aligned Eastern Bloc. This paper outlines shortcomings of the subsidiary cap, argues for a revision of it to ensure level playing field in these capital buffers and quantifies the impact of the subsidiary cap according to the CRD IV and CRD V on the capital requirement applied to the Czech banking sector.

Monthly credit from and deposits in Swedish commercial banks, 1875-2020

Since the global financial crisis in 2008, there has been an elevated interest in private debt and as a macroeconomic variable. In light of the lack of high-frequency data, this study presents a unique monthly time series dataset on credit from and deposits in Swedish commercial banks from 1875 to 2020, covering 1,752 monthly observations and most of Swedish commercial banking history. In a first application, the study examines to what extent money in Sweden has been exogenous, created independently of demand by the central bank, or endogenous, created in response to demand by commercial banks, during different institutional settings. The results, derived via cointegration and impulse-response functions, show that though the relationship between deposits and credit has changed over time, both theories often hold validity simultaneously. While changes in deposits often have had significant impact on credit, the opposite has also been true. There are, however, differences between different regulatory regimes, as well as for different groups of banks.

Deposit insurance and market discipline

Limited coverage is a standard feature in deposit insurance schemes. It is used to limit moral hazard, and achieves this objective by reinforcing market discipline: depositors have more incentives to monitor banks’ risk-taking if they have skin in the game. In this paper, I study market discipline and coverage levels by analyzing the relationship of funding costs and deposit growth with banks’ risk. I use a database of Colombian banks’ balance sheets and take advantage of a sudden, significant, and exogenous increase in the coverage level that occurred in April 2017. I find evidence of market discipline throughout the period of analysis and most results are consistent with it not being reduced by the change in the coverage level. The results are nuanced, however. Two variables are impacted: one in the quantity and the other in the price dimension. Furthermore, results also vary when I look at specific groups of banks separately. Market discipline is not present in big banks. Too big-to-fail perceptions seem to limit it. This is also the case for banks concentrated in fully insured deposits, where limited coverage has a less prevalent role.

Are Ecuadorian banks enough technically efficient for growth? A clinical study

AbstractIn this article, we estimate the technical efficiency ratio for a sample of 24 financial institutions in Ecuador over the period 2015–2019. To do so, we first apply a non‐parametric method such as the data envelopment analysis (DEA). Under variable returns to scale and output‐oriented “Interest Income”, the average technical efficiency for the 24 banks is 84.26% and, under output‐oriented “Other Operating Income”, the average technical efficiency is 73.22%. We find that the group of large banks has higher levels of efficiency and that there are still opportunities for improvement in the group of medium and small banks. We also estimate that 80% of Ecuadorian banks need to make potential improvements either by increasing their output or reducing their inputs, such as salary costs, to increase the efficiency. In addition, the growth of the banking sector is crucial to achieve the financial development in Ecuador, being significant the efficiency indices, which show that a 1% increase in banking efficiency could increase its size by USD 605 million. By using the random effects panel data econometric model, we demonstrate that the growth of the banking industry is mostly influenced by the concentration of deposits and taxes.

The impact of the embryo banking on the cumulative live birth rate in women with poor ovarian response according to the Bologna criteria.

To evaluate the impact of embryo banking on the cumulative live birth rate (CLBR) and the time to live birth (TTLB) in poor ovarian responders (POR) according to the Bologna criteria. A total of 276 infertile women undergoing IVF with POR were included in this retrospective study. They were divided into two groups with (n = 121) or without (n = 155) embryo banking at the discretion of the attending physicians. A total of 656 and 405 stimulation cycles were started in the two groups respectively during the 24 month follow-up. The biochemical pregnancy, clinical pregnancy, ongoing pregnancy, and live birth rate per transfer were comparable between two groups (p > 0.05). The CLBR was significantly lower in the banking group than in the non-banking group (31.4% (38/121) and 43.2% (67/151), p < 0.05). TTLB was significantly longer in the banking group (20.5 months vs. 16.0 months, p < 0.001). In the Kaplan-Meier analysis, the cumulative incidence of live birth was significantly lower in the banking group compared with the non-banking group (Log rank test, chi-square = 21.958, p < 0.001). Embryo banking in women undergoing IVF with POR based on the Bologna criteria reduces CLBR and lengthens TTLB when compared with no embryo banking.

ТЕНДЕНЦІЇ РОЗВИТКУ БАНКІВСЬКОЇ СИСТЕМИ УКРАЇНИ У 2023 РОЦІ

In 2023, Ukraine continues the war with the aggressor that began in February 2022. In this context, it is important to understand the state of the banking system as one of the main guarantees of the country's financial stability during the war and to identify trends in its further development. In order to identify the main trends that are inherent in the further development of the banking system in these conditions, it is necessary to analyze its current state. To do this, it is quite effective to study current statistical data (analysis of the dynamics of changes in key indicators, identification of the causes of their fluctuations, etc.), which highlight the activities of domestic banks in its various aspects and affect the overall level of development of the banking system. Thus, today it is appropriate and expedient to analyze the current state of the banking system of Ukraine, its peculiarities of functioning in the conditions of the war waged in the country. Thus, the relevance of the study is beyond doubt, and the topic is extremely important today. The purpose of the study is to analyze the state of performance indicators of the banking system of Ukraine by groups of banks for 9 months of 2023 and to identify trends in its further development. To achieve this goal, the author studied the existing structure of the banking system of Ukraine for 9 months of 2023 and analyzed its state for the same period. The research was based on the use of various general and specific scientific methods, namely: analysis, synthesis, induction, deduction, abstraction, generalization, economic, mathematical and statistical methods, etc. The key financial indicators of the modern domestic banking system are analyzed. It is established that since 2017, the National Bank of Ukraine has been using the following groups to analyze the activities of the banking system of Ukraine: banks with a state share, banks of foreign banking groups, and banks with private capital. The study found that the banking system is generally profitable, with its performance indicators most influenced by the performance of two groups of banks: state-owned banks and banks of foreign banking groups. The analysis also shows a positive trend towards an increase in the level of solvency of the banking system in the face of the aggressor. The author concludes that the NBU's policy is balanced and that the management of banking institutions is effective in the context of war.

EFFICIENCY OF THE ACTIVITIES OF BANKING INSTITUTIONS IN UKRAINE

Introduction. The article examines statistical data on the number of banks that have a banking license, banks with foreign capital and the dynamics of the influence of foreign capital on the Ukrainian banking system in 2010–2021. The analysis of the dynamics of bank assets and liabilities and the share of bank assets in the gross domestic product is carried out of Ukraine in 2010–2021. The structure of ownership of the assets of the banking system, the dynamics of income, expenses, financial results, return on assets (ROA) and return on capital (ROE) of banks of Ukraine were studied. The conclusions regarding the current state and efficiency of operations were substantiated banks in 2010–2021. The purpose of the article is to analyze the efficiency of banking institutions in Ukraine in 2010–2021, to assess the capital concentration of the Ukrainian banking system and to substantiate the directions for increasing the efficiency of the functioning of the Ukrainian banking sector in modern conditions. Methods. Statistical methods, methods of techno-economic and financial analysis and observation are used to study development trends, the current state of functioning of the banking system of Ukraine. Statistical and graphic methods are used for processing and generalization of statistical data and their display in tables and figures. On the basis of the dialectical method of cognition, the ownership structure of the banking system, the dynamics of income, expenses, financial results, return on assets (ROA) and return on capital (ROE) of Ukrainian banks are summarized. The system method was used when studying the level of concentration of the banking system. Results. The study of trends in the development of the main indicators of banks' activity in Ukraine shows that during the analyzed period the number of commercial banks systematically decreased. At the same time, during the same period, the value of assets and liabilities of the banking sector increased. Banks occupy the leading place in the financial services market of Ukraine. However, for the modern banking system, there is a noticeable tendency towards a gradual decrease in the share of bank assets in GDP. In the analyzed period, the ownership structure of the banking system underwent significant regrouping in the groups of banks with a state share, banks of foreign banking groups, and banks with private capital. As a result of the transfer in 2016 of the system JSC CB “Pryvatbank” to 100% ownership of the state, the share of state banks in the structure of assets of the banking system has increased significantly. The banking market of Ukraine is concentrated, as evidenced by the values of the share of the largest bank in net assets (CR1), the five largest banks in net assets (CR5), the ten largest banks in net assets (CR10), the largest twenty banks in net assets ( CR20) and the Herfindahl-Hirschman index (HHI). The volume of non-performing loans (NPL) in Ukrainian banks was considered. Conclusions. Today, the banking sector has successfully adapted to work in the conditions of a pandemic and martial law and is properly performing its functions, supporting the economy. According to the results of recent years, the banking sector has been making profits. The profitability of assets and capital of the banking sector is growing. Increasing the efficiency of Ukrainian banks through cost reduction, the search for new sources of income, mainly commissions, through expanding the areas of interaction between banks and clients, in particular remote banking services, the use of modern innovations, financial technologies requires further scientific research.

БАНКІВСЬКА СИСТЕМА НА ЗАХИСТІ ФІНАНСОВОЇ БЕЗПЕКИ УКРАЇНИ

The article examines changes in the structure of banking system assets during 2022 under the influence of significant stress factors. After the reduction of the amount of resources in the first months of the war, there was an active restoration of them and certain changes in the structure of assets and liabilities of banks. During the year, various aggregates of assets and liabilities of the banking system grew unevenly. In the structure of assets, the share of the investment portfolio is growing rapidly. In liabilities, the specific weight of resources to the question increases. The share of state-owned banks grew faster than that of banks with foreign capital. Banks of Ukrainian shareholders are smaller in size and have slower growth dynamics. The article examines the development trends of the largest banks of Ukraine. Examining the business model of the leaders is very important because the concentration in the banking system has been increasing for many years in a row. The risks of the largest banks determine the financial condition of the system. The strengthening of the influence of external factors is reflected in the quality and structure of assets and liabilities of banks, as well as in the general condition of the banking system. The most important tasks of Ukrainian banks in the modern realities of instability are the identification, assessment, monitoring, control and management of risks. In the conditions of major disruptive factors in 2022, the banking system ensured the performance of its main functions. Banks support the economy with cash and non-cash funds. Financial institutions successfully carry out calculations, service customer accounts, provide various services, despite increased operational risks. Among the problematic issues of the banking system at the beginning of 2023 is the reduction of credit operations of banks and the deterioration of the quality of the loan portfolio. The quality of the loan portfolio was analyzed in different groups of banks and in the largest banks of the system.

ОСОБЛИВОСТІ БІЗНЕС-МОДЕЛЕЙ БАНКІВ УКРАЇНИ

The article analyzes the business models of Ukrainian banks in the conditions of the military crisis. The key business models of the beginning of 2022 and the second half of 2023 are compared. Business models are evaluated based on bank balance sheet data published by the National Bank of Ukraine. Scientific and practical approaches to the definition of business models of banks are the subject of a debate reflected in the scientific literature. Our research uses indicators of the structure of bank assets, liabilities, income, expenses and other indicators of asset quality and performance. With the help of Kohonen's self-organizing maps (SOM), banks with close values of the selected indicator system are combined into homogeneous structural and functional groups of banks (SFGB). The structural and functional group of banks unites a homogeneous cluster of banks on the SOM with similar characteristics and patterns of response to external shocks. The method is useful for understanding the business models of specific banks at the macro level. Also, an important area of application of the SFGB method is the study of the general characteristics of the banking system at the macro level. The SFGB method makes it possible to assess the overall financial condition of the system, reveal hidden properties of homogeneous groups of banks, and model the trajectories of individual banks and analyze possible changes in their own business models. Banks sometimes migrate between business models, although the general trends persist. The SFGB's research for the period of 2003 confirms the existence of objective confirmation of the reasons for the migration of banks. The research was conducted at the macro level and in terms of changes in homogeneous groups with specific business models. Some business models have not changed between January 1, 2022 and September 1, 2023. Some models have completely changed. Most of the business model was transformed under the influence of external factors. The business model of domestic banks was significantly affected by the limitation of economic development, the reduction of classic credit operations, important measures of the state and the banking system to maintain a stable resource base, excess liquidity of banks, and the peculiarities of the design of the monetary policy of the National Bank of Ukraine during a full-scale war.

The Spareckzins: The Making of Germany’s Most Important Price for Household Savings 1967–1983

When faced with the deregulation of interest rates in 1967, German banks upheld the historical practice of defining a common benchmark rate for passbooks - the Spareckzins. To this aim, representatives of the major banking groups issued recommendations to their peers and the public. The article analyzes the decision-making process behind all 26 recommendations from 1967 to 1983. I found that the Spareckzins was determined neither by the market nor by a cartel. Instead, it resulted from a dynamic process that involved the Bundesbank, competing banking groups and political actors. The Spareckzins gave banks access to cheap funds, while households faced negative real returns. The history of the Spareckzins offers a new perspective on the German success story during the stagflation period.

Study on the Optimization of Soft Business Environment and Countermeasures in Shenyang, China

This paper analyzes the current status of the business environment in Shenyang, Liaoning Province, the countermeasures and suggestions for optimizing the development and the deep-seated connection with the economic construction with the data and information provided by the World Bank Group, the Business Environment Construction Bureau of Liaoning Province and the Shenyang Municipal People's Government about the business environment in China. The survey results show that the overall achievement of Shenyang's business environment construction results in recent years is relatively excellent, but sustainable optimization of the environment, especially the supervision of market investment always needs to be steady, and it is urgent to give practical optimization suggestions from both government and enterprise implementation, respectively, to promote the improvement and consolidation of the countermeasures of Shenyang's business soft environment.

EMPOWERING THROUGH INCLUSION: EXPLORING THE IMPACT OF MICROFINANCE INSTITUTIONS ON WOMEN'S EMPOWERMENT

This research paper examines the relationship between Microfinance Institutions (“MFIs”) and women's empowerment, demonstrating how these companies serve as catalysts for positive change. Beginning with an overview of MFIs, the research paper introduces you to three MFIs analyzed more in-depth: FINCA (Foundation for International Community Assistance), WMI (Women’s Microfinance Initiative), and the World Bank Group. Second, this paper describes the process in which MFIs tackle gender diversity through their primary goal of increasing financial inclusivity. Third, the paper also recognizes the resistance to the MFIs, by describing the reasons for opposition and why people might not be as receptive to such a novel program. Following that, the paper will provide more information on the effectiveness of MFIs on gender development on a larger scale, and then focus on individual case studies to give others a feel of the personal impact these corporations attempt to strive for. Finally, the paper introduces an anecdote to provide a more distinctive perspective of the thought process one might have when approached with the idea of MFIs and their use. In summary, this research paper offers an analysis of the use of MFIs in piloting a new generation of women who successfully utilized micro-credit tools.

Оценка размера теневой экономики промышленного региона (на примере Донецкой Народной Республики)

Introduction. Combating tax evasion, the shadow economy and unofficial (illegal) employment are important policy goals in every region. Achieving those goals requires various resources; therefore, it is important to determine the size of the shadow economy to use the resources efficiently. Purpose. The paper aims at developing and testing a methodology for neural simulation estimates to find the size of the shadow economy in an industrial region taken as an example, i.e. the Donetsk People’s Republic. Materials and Methods. The study refers to the data from the World Bank Group’s Ease of Doing Business Index and data about the size of the shadow economy calculated with L. Medina and F. Schneider’s methodology. The neural network learns from the generated data array of 17,160 values for the economies of the world for 2006–2015 with the Statistica software package. The result was then used to estimate the value of the shadow economy in the industrial region. Results. The hypothesis that the Ease of Doing Business Index and the size of the shadow economy are correlated has been proposed and tested. The indicators of the Ease of Doing Business Index and the size of the shadow economy by country were sampled. The neural network was taught to assess the size of the shadow economy with the Statistica software package. The values of the Ease of Doing Business Index have been determined for the Donetsk People’s Republic. The taught neural network calculates the size of the shadow economy in the Donetsk People’s Republic and establishes that its size ranges between 30 and 40 %. The debatable issues of applying the suggested algorithm for calculating the size of the shadow economy in an industrial region are outlined. Conclusion. It is often not the irresponsibility of the entrepreneurs themselves that leads to the shadowing of the economy, but the difficulties with the business legalization and exorbitant taxes. The measures of minimizing the level of the shadow economy in the Donetsk People’s Republic are described. The suggested information will be useful for those who determine the economic policy of the region.

Investigate the significant impact of Effective Strategic Management on The Performance of Small and Medium-Sized Businesses: A Case Study of M-Gurush Money Transfer Company

This study aims to investigate the impact of effective strategic management on the performance of small and medium-sized businesses through a case study of M-Gurush Money Transfer Company Limited. There are initiatives on the impact of mobile money in various places throughout the world, including Juba, South Sudan. Given that the definition of financial inclusion is "the share of individuals and firms that use financial services," the majority of studies have focused on the relationship between financial inclusion and mobile money (World Bank Group, 2014). Unquestionably, the growth of mobile money in Sub-Saharan Africa helps to accomplish this first goal. The global agenda item of financial inclusion is of great interest to policymakers, regulators, academia, businesses, and other stakeholders. Conduct a study for the M-Gurush Money Transfer Company, situated in Juba, South Sudan, evaluating the effectiveness of strategic management practices used by small and medium-sized businesses. Analyze how effective strategic management affects small and medium-sized firms' performance. Another crucial aspect of m-gurush money transfer is the generation of new concepts and technological innovations.

Private healthcare initiatives in developing countries – Building sustainable neurosurgery in Indonesia and Pakistan

IntroductionSevere global shortages in neurosurgery, surgery, and healthcare in general have been documented, especially in low- and middle-income countries (LMICs). Research questionIn LMICs, how do we expand both neurosurgery and overall healthcare? Material and methodsTwo different approaches to improving neurosurgery are presented. Author EW convinced a private hospital chain that neurosurgical resources were important throughout Indonesia. Author TK established a consortium (Alliance Healthcare) to obtain financial support for healthcare in Peshawar, Pakistan. ResultsThe expansion over 20 years in neurosurgery (throughout Indonesia) and in healthcare (for Peshawar and Khyber Pakhtunkhwa (KP) province, Pakistan) is impressive. In Indonesia, neurosurgery centers have expanded from one in Jakarta to over 40 throughout the islands of Indonesia. In Pakistan, two general hospitals, schools of medicine, nursing, and allied health professions, and an ambulance service have been established. Recently US$11 million has been awarded to Alliance Healthcare by the International Finance Corporation (the private sector arm of the World Bank Group) to further expand healthcare infrastructure in Peshawar and KP. Discussion and conclusionThe enterprising techniques described here can be implemented in other LMIC settings. Three keys to success both programs utilized: (1) educating the community (population at large) of the need for surgery in particular to improve overall healthcare; (2) being entrepreneurial and persistent in seeking the community support and the professional and financial support needed to advance both neurosurgery and overall healthcare through the private sector; (3) creating sustainable training and support institutions and policies for young neurosurgeons.

Empirical analysis of the impact of country-level corporate governance on starting a business in Asian countries

The purpose of this study is to investigate the impact of corporate governance on starting a business in some Asian countries over a period from 2012 to 2017. Nine Asian countries on the basis of availability of data for the research period were selected for this study. Corporate governance is measured by the Worldwide Governance Indicators of the World Bank and starting a business is measured by the score of starting business reported by the Ease of Doing Business Report of the World Bank Group. The findings of the present study reveal that voice and accountability, political stability and absence of violence and regulatory quality have statistically significant effect on starting a business in the selected countries. While both political stability and absence of violence and regulatory quality are found to have statistical significant positive influence on starting a business, voice and accountability exhibits a significant negative effect on starting a business. However, the results reported that both government effectiveness and control of corruption exhibit an insignificant negative effect on starting a business, rule of law is found to have an insignificant positive impact on starting a business.

Managing the Sustainable Ecosystems Across the Globe: An Analysis of the United States of America’s Initiative Towards the Production of Climate Smart Fertilizer as a Solution to World Food Insecurity

The aftermath of the Covid-19 pandemic occurrence in various aspects of society is undeniable. One aspect of this is the increasing number of food-insecure nations globally (FAO, 2022), these incidents have had a damaging impact on a key sustainable development goal (SDG) of the United Nations (UN) on reducing global hunger by the year 2030 (FAO, 2021). It is estimated that 1 in 3 people do not have access to affordable and nutritious food, whereas energy prices, fertilizer prices, and food prices continue to increase causing significant distress to mostly affect poorer countries of the world (World Bank Group, 2022). This dire situation calls for concern and urgent attention for resolution because the United States (US) as a major player in the global agricultural trade has a moral duty to support optimized agricultural yield and quality that strengthen global food security (The White House, 2022). The ability to produce climate-smart fertilizers that boost productivity with minimal or no environmental damage will likely position the United States as a leader in managing sustainable ecosystems, thereby achieving the thirteenth Sustainable Development Goal (SDG) - Climate Action. Consequently, building the ability to (1) "promote improved access to climate-smart and sustainable fertilizers" and (2) "enable/increase global food security" is essential (UN,2015; White House, 2022). We believe that the United States, with its advanced proprietary technologies, global supply chain systems, and market networks, is capable of resolving the growing issues of food protectionism that impede the export of agricultural produce to meet domestic demand (Espitia et al., 2020) and successfully repositioning as a leading producer and exporter of climate-smart and sustainable fertilizers (Goedde et al., 2020; Pingali, 2012) while increasing her income. Allocating part of the $19.5 billion conservation funds to drive climate-smart agriculture through the United States Department of Agriculture (USDA) will go a long way to develop the production of climate-smart and sustainable fertilizers that helps to reduce global food insecurity (USDA, 2022). This paper presents analytical insights on how the US can take on the challenge of producing and exporting sustainable and climate-smart fertilizers to help decrease global food insecurity while keeping the environment safe and maintaining its position as a key contributor to ensuring global food security. Keywords: Climate Smart Agriculture, Climate-Smart Fertilizers, Sustainable Agriculture, Food security. DOI: 10.7176/JESD/14-2-03 Publication date: January 31 st 2023

On the “double leverage” of US insurance groups

We show that a high degree of “double leverage” inside US insurance groups affects in a negative way their financial strength. Double leverage occurs when the parent firm finances the purchase of subsidiaries’ equity using external debt proceeds, i.e., without changing its stand-alone capital. The previous evidence shows that the double leverage of US Bank Holding Companies leads the firms to become riskier (Bressan, 2018b) and less efficient (Bressan et al., 2021). While regulators give instructions for the assessment of double leverage inside banking groups, in the insurance sector this topic has not received enough attention from either regulators or scholars. This article aims to fill this lack of knowledge by using data from the balance sheets of US insurance groups during the years 2000–2021, showing that indicators for the solvency and the performance of insurers decrease significantly in measures of double leverage. These findings deliver important implications for future policymaking. As we analyze accounting data from consolidated balance sheets, we argue that regulators should more carefully consider whether consolidation rules are sufficiently informative about the financial stability of insurance groups. This is an important task in relation to the systemic relevance of insurance corporations. Finally, this article is a starting point for follow-up research testing, for example, the link of double leverage to captive insurance (Weterings, 2014) and reinsurance (Park &amp; Xie, 2014; Bressan, 2018a).

Impact of Bank Size on Its Financial Indicators in Bulgaria

Introduction. One of the frequently used criteria for classifying banks is according to their size. The question of the existence of a dependence between the size of credit institutions, on the one hand, and their financial condition and results of activity, on the other hand, was logically raised. In recent years, this issue has increased its significance in Bulgaria against the background of the following circumstances: first, a process of consolidation of the banking sector in the country has begun; second, the new dimensions of the macroprudential policy impose higher regulatory requirements on banks, according to Basel III regulations; third, there is a significant number of relatively small credit institutions whose activity has a relatively limited scope; fourth, weak economic activity and low rate of economic growth of the country; fifth, the search for ways to increase the efficiency of banking activity.&#x0D; Aim and tasks. The aim of the research is to establish the extent to which the size of the credit institutions in the country has an impact on various aspects of banking activity, as well as the strength of this impact. The subject of the study is focused on delineating the comparative advantages and disadvantages of big and small banks in terms of the scale of their operations.&#x0D; Results. The analysis is based on information on the status and results of the activities of 18 banks in Bulgaria. The study covers observations on the development of the banking sector in 2020 and 2021. When specifying the size of banks, the traditional criterion is used, which is most often used to determine their size, namely the amount of their assets. It examines the impact of the size of credit institutions on 7 financial indicators reflecting different aspects of banking activity: Return on Assets, Efficiency of Administrative Costs, Staff Productivity, Asset Quality, Asset risk rating, Liquidity Coverage Ratio, Total Capital Ratio. On this basis, a correlation analysis is made, in which the correlation coefficient is used as the statistical measure of the dependence between the size of credit institutions (the assets), on the one hand, and their financial indicators, on the other hand. In parallel, the average values of the analyzed indicators for the respective years are calculated separately for each group of banks.&#x0D; Conclusions. There is reason to claim that one of the possible instruments for increasing the efficiency of the banking sector in the country is its further consolidation. Of course, the conclusions drawn are not universal. This reflects the specifics of the banking industry in Bulgaria and the specifics of the period to which the analyzed data refer. With almost all analyzed indicators, a strong or moderate dependence between the size of the banks and the values of the considered financial indicators is outlined. This dependence is most pronounced in relation to the Return on Assets– as the size of credit institutions increases, the return on their assets increases significantly. The values with credit institutions with a wider scale of activity are better, which gives them visible advantages over other smaller banks.