Article ID Journal Published Year Pages File Type
5085289 International Review of Financial Analysis 2009 9 Pages PDF
Abstract

Using panel data on selected Financial Soundness Indicators (FSIs) this paper investigates the potential strengths and vulnerabilities of financial intermediaries across more than 50 countries. Our econometric analysis reveals strong influence of business cycle, inflation, and real effective exchange rates, and size of the industry on capital adequacy -a core indicator of banks' financial soundness. Furthermore, our analyses provide evidence that banks' profitability is determined by a combination of macroeconomic, bank specific and industry characteristics such as business cycle, inflation, credit risk, capital adequacy, and the level of competition.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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