Формування методичного забезпечення стрес-тестування фінансової стійкості комерційного банку

This article describes the importance of commercial banks in the development of economic sectors, the theoretical basis of ensuring the financial stability of commercial banks, the role of commercial banks in strengthening the financial supply of corporate structures. Financial stability trends of commercial banks in the Republic of Uzbekistan were analyzed in the last five years. Scientific proposals and recommendations on ensuring and strengthening the financial stability of commercial banks have been developed.

В статье представлен анализ оценки финансовой устойчивости банков Республики Татарстан. Для оценки финансового положения банков Республики Татарстан использованы методика Кромонова В.С. и рейтинговая система оценки банков CAMELS. Глубина анализа представлена десятилетней ретроспективой. На основании полученных исследовательских данных могут быть сделаны выводы о финансовой устойчивости коммерческих банков, составлен их рейтинг. Результаты проведенного исследования могут быть использованы при оценке финансовой устойчивости региональных банков, их профессиональная интерпретация может служить основой для разработки и реализации финансовых стратегий в период турбулентности на финансовом рынке. The article presents an analysis of the assessment of the financial stability of the banks of theRepublic of Tatarstan. To assess the financial situation of the banks of the Republic of Tatarstan, V.S. Kromonov's methodology and the CAMELS rating system of banks were used. The depth of the analysis is represented bya ten-year retrospective. Based on the research data obtained, conclusions can be drawn about the financial stability of commercial banks, and their rating is compiled. The results of the study can be used to assess the financial stability of regional banks, their professional interpretation can serve as a basis for the development and implementation of financial strategies during the period of turbulence in the financial market.

This study examines the effects of technology investments on financial stability at commercial banks in Vietnam. Financial services provided by banks are vital to the growth and development of the Vietnamese economy. Due to competitive constraints and the need to keep up with fast-moving FinTech startups, Vietnamese banks have made digital transformation a top strategic goal. Therefore, the study aims to investigate the impact of technology investment on the financial stability of commercial banks in Vietnam from 2012 to 2023. The research used financial data from 26 joint-stock commercial banks and panel data analysis with the ordinary least squares (OLS), fixed effect model (FEM), random effects model (REM), and generalized method of moments (GMM) to look into the link between bank stability and technology spending. The findings reveal that while technology investment significantly enhances operational efficiency and market competitiveness, it poses risks, particularly during the initial stages of digital transformation. The results show a significant negative effect of technology investment on financial stability, highlighting the need for strategic planning and robust regulatory frameworks. These insights provide valuable recommendations for bank management and policymakers to balance technological advancements with financial stability, especially in economic disruptions like the COVID-19 pandemic. Finally, the practical implications help commercial banks strive to increase asset size and expand operations to strengthen financial capacity, increase brand recognition, create solid customer trust, improve competitiveness, and bring high profits.

This study contributes to the current debate on the downsides and benefits of revenue diversification. Diversification may affect banks when they invest in riskier activities with lower returns, while they benefit from diversified activities that are less risky but have higher returns. The study offers extended implications in the empirical literature using a different measure of revenue diversification from an emerging market perspective. The study uses recent financial data from 26 Malaysian and Nigerian banks for the period 2009–2017, totaling 234 observations. The GMM estimation technique is employed to test the relationship. The results show that revenue diversification – non-interest income/gross revenue ratio (NII), fee and commission income/revenue ratio (NII1), and non-interest income/total assets ratio (NIITA) – significantly affect the firm value and stability of Nigerian banks. Liquidity, administrative expenses, net interest margin (NIM), non-performing loans (NPL), size, GDP growth rate and inflation also affect the firm value and stability of a bank. For Malaysian banks, diversification variables do not significantly affect firm value of a bank, while liquidity, administrative expenses, NIM and size significantly affect firm value. Diversification (NII and NIITA), liquidity, administrative expenses, NIM, NPL, size, GDP growth and inflation rate has a significant impact on the stability of Malaysian banks. The study concludes that revenue diversification affects both the firm value and stability of banks, and to achieve sound financial stability, banks that focus on interest-generating activities may diversify into non-interest-generating activities.

This study investigated the relationship between the level of competition between banks and revenue diversification on financial stability of commercial banks during 2008- 2013. The level of competition in this study measured by the market share of net interest income. Revenue diversification measured using Hirscman Herfindhal Index, while the bank's financial stability is measured by ZScore for banking industry. Models were analyzed using a fixed effect regression models. The results showed that the bank samples is vurnerable to the intense of competition. Although the research sample has relatively high market share, but its has not shown the resilience to face the competition. Low level of revenue diversification on bank samples showed that they did not implement a diversification strategy, then can not gain benefit from revenue diversification strategy

The article is devoted to topical issues of assessing the stability of Ukrainian banking institutions. The stability of the banking system of Ukraine directly depends on the stability of each individual banking institution and their ability to constantly develop dynamically, and this, in turn, is determined by the macroeconomic stability of the state and the development of the market infrastructure, which is ensured by the mandatory observance of the basic corporate principles of the organization and conduct of banking activities, which are formed in the banking system with the active participation of the National Bank of Ukraine and commercial banks. The military aggression of the russian federation in Ukraine, the instability of the international financial sector and the unfavorable development of global economic processes have a significant impact on the state and confidence of participants in the Ukrainian banking sector, and as a result, on the stability of Ukrainian banking institutions. The deterioration of the stability of Ukrainian banks is connected with a number of problematic issues, namely: distrust of banking institutions of their clients; rather high credit risks caused by the imperfect structure of the Ukrainian economy; a significant increase in factors that affect the profile of banking risks. In general, the changes that have been taking place in the economy of Ukraine recently have a rather drastic impact on the pace and directions of development of the Ukrainian banking system. It is quite clear that today the assessment of the stability of Ukrainian banks is one of the priority tasks for both banking institutions and state bodies. The approaches used today to assess the stability of banking institutions differ in the composition of factors that are taken into account, the indicators that characterize the components of stability, the permissible values of these indicators, etc. Foreign experience regarding the application of certain mechanisms and methods to assess the stability of banking institutions is not always acceptable in domestic conditions and needs some adjustment. In this regard, in modern conditions, the solution of problematic issues regarding the development and implementation of an effective system for assessing the stability of Ukrainian banks and the banking system as a whole in the context of the integration of the Ukrainian economy into the world economy is of particular relevance.

This chapter compares the financial stability of Islamic banks with that of conventional banks in terms of performance based on measures such as return on equity and changes in capital structure such as core capital ratios, the equity capital to total capital ratio, and the risk-weighted capital ratio. It first reviews relevant literature on financial stability and the risks to which banks, especially Islamic banks, are exposed. It then examines stability by financial ratio analysis from three perspectives related to liquidity, performance and risk. Using the example of two British banks, it shows how ratio analysis can be used to evaluate financial stability. It also considers the financial ratios of the Malaysian banks. The results suggest that Islamic banks are not any more stable than conventional banks, and that the latter can become more stable if they operate significant Islamic windows as part of risk diversification. Finally, the stability of banks in times of distress is enhanced by personnel changes among the executive management.

This paper examines the influence of regulatory quality (RQ) on the link between foreign direct investment (FDI) and bank stability in Gulf Cooperation Council (GCC) countries. Through panel data analysis for 128 banks (Islamic and conventional) from the six GCC countries, the study reveals that FDI adversely affects bank stability of the GCC region; stability of Islamic banks shows a greater exposure to the adverse effect of FDI compared the stability of conventional banks. However, higher RQ weakens the adverse effects of FDI on the stability of banks in the GCC region. Islamic banks display a more significant role in allowing RQ to mitigate the detrimental effect of FDI on the stability of the overall banking system. This finding underscores the role of Islamic banks in stabilizing the GCC’s financial system. The study offers clear understandings for regulators, policymakers, and risk managers, emphasizing the need for careful regulatory quality management, particularly during increased foreign capital inflows to safeguard monetary and financial stability amidst FDI.

Analyzing the financial stability of commercial banks based on relationships between profits and risks

The continuous development of the banking system in our republic is an objective necessity in the conditions of market relations, which, in turn, requires the improvement of the methodological foundations of the creation of the database necessary for the continuous control of the activity and financial stability of commercial banks and their effective management.

The impact of state ownership and business models on bank stability: Empirical evidence from the Eurasian Economic Union

PurposeThe paper analyzes the impact of bank opacity on financial stability in an emerging economy.Design/methodology/approachBased on a unique dataset of 31 Vietnamese commercial banks from 2007 to 2019, the paper captures earnings opacity via discretionary loan loss provisions and reflects individual bank stability through the accounting-based Z-score index and its disaggregate components. The least squares dummy variable corrected (LSDVC) approach is employed for empirical analysis.FindingsIn contradiction to most studies on developed economies, earnings management improves bank financial stability in Vietnam. Earnings management is more important for the financial stability of smaller banks. Further, the effect of financial information disclosure on bank stability is strengthened by unfavorable macroeconomic conditions, particularly economic downturns, the global financial crisis and uncertain times in banking.Originality/valueThis is the first study to shed light on how bank opacity influences bank financial stability in an emerging market. The evidence with the conditioning roles of bank size and macroeconomic factors, such as uncertainty in banking, is entirely novel in the related literature. Additionally, the paper contributes to a growing body of banking literature by using the LSDVC estimator to examine the association between bank opacity and bank stability.

The repeated waves of the global financial crisis have impacted financial industry stability, especially commercial banks. Resultantly, banking stakeholders have taken steps to enhance the stability of these institutions. Diversification is considered effective in resolving the effects of the crisis. In this regard, a shift towards non-traditional revenue sources acts to enhance resilience. Bank size is important in shaping the relationship between diversification and financial stability. Previous literature has documented enough evidence on bank size and stability to show high resilience for large banks. Islamic banks are not as large as conventional banks, whether their resilience is equal to conventional banks? Using panel data from the banking sector, this study determines the impact of diversification on banking stability regarding bank size. The study results approve the full mediation of bank size on diversification and financial stability relations. Further, Islamic banking is found to be as resilient as conventional banking in the sample countries.

Concentration, competition and financial stability in the South-East Europe banking context

The period from 1946 until the early 1970s was a period of stability in banking in the UK and one in which there was a high degree ofcompliance with regulation. It stands in contrast to the period since the 1970s, which has been more prone to banking crises, most notably the global financial crisis of 2007-9. This research seeks better to understand and account for stability and compliance in banking by describing, exploring and explaining the regulatory, competition and institutional frameworks within which clearing banking operated in the period 1946-79. Initially, the thesis explores the regulatory framework for banks by setting out a detailed and systematic analysis ofthe forms and techniques of bank regulation. An analysis of this type does not exist in the literature. The thesis then evaluates the degree of concentration and competition in clearing banking. It questions aspects of the dominant view in the literature which sees stability as a consequence of a concentrated clearing banking system in which there was very limited competition. The third framework supporting stability and compliance in the banking system was the institutional framework. The institutional framework can be viewed as a set of constraints which had a normative dimension. It explores these constraints and demonstrates how they worked as counterweights to excessive risk-taking by banks. By the 1970s, the banking system was becoming less stable as these frameworks disintegrated or were dismantled, and in December 1973 a crisis of the secondary banks broke. Finally, drawing on a historical understanding of bank regulation in the period 1946-79 and a comparison with contemporary bank regulation, some guiding principles are suggested for regulatory policymakers and practitioners today. The methodology of the research is historical, based upon the analysis and evaluation of a broad range of published and unpublished records.