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This paper explores the typologies of risks in the banking sector and examines the strategies employed to mitigate them, with a focus on Azerbaijani banks. The study identifies key risk categories, including credit risk, market risk, liquidity risk, and operational risk, each of which plays a critical role in the financial health and profitability of banks. The research highlights that credit risk, driven by loan defaults, remains the most significant concern for Azerbaijani banks, while market risks, particularly from currency fluctuations, also pose major challenges. Effective risk mitigation strategies, including collateralization and diversified lending practices, are essential to maintaining stability in this emerging market. Additionally, the study emphasizes the importance of integrating modern risk management technologies and adhering to international regulatory standards. Azerbaijani banks that adopt advanced monitoring systems and proactive risk management frameworks demonstrate improved financial performance and resilience in the face of economic volatility. The findings underscore that well-implemented risk management practices are crucial for enhancing profitability and ensuring long-term sustainability in the banking sector. [ABSTRACT FROM AUTHOR]

Using a unique data set of Italian banks covering the 2011 to 2019 period, this study investigates the influence of human resource training on bank stability and examines whether this relationship is affected by bank efficiency and credit risk. In line with the resource‐based view (RBV) of the firm, our findings suggest that employee training exerts a positive impact on bank stability. Credit risk and bank efficiency are also identified as potential drivers in this relationship. Importantly, our results remain robust when addressing endogeneity issues and considering alternative model specifications. This study offers novel insights into the impact of employee‐related variables on bank performance. The practical implications of our findings hold relevance for both banks and regulatory authorities, as human resource training can profoundly influence the effectiveness of risk management strategies and, ultimately, the sound and prudent management of banks. [ABSTRACT FROM AUTHOR]

This study investigates the effect of financial inclusion (FI), considering micro and macro indicators as well as micro- and macro-FI separately, on the stability of Asian banks and examines the moderating effect of bank competition (BC) on this relationship. Using data from 2011 to 2021, this study examines the relationship between FI, BC, and bank stability (BS). The hypotheses were tested using a "two-step system-GMM framework". The findings were also authenticated using the panel OLS approach. The results indicate that FI (considering micro- and macro-indicators) and micro- and macro-FI have significant positive effects on the stability of Asian banks. However, the impact of micro-FI is greater than that of macro-FI on the BS in Asia. Furthermore, the results manifest that BC has a significant positive impact on BS and positively moderates the relationship between micro-FI and BS, whereas it negatively moderates the relationship between macro-FI and BS. The findings of this study have practical implications for regulators, bankers, and policymakers involved in formulating strategies to enhance Asian banks' stability. [ABSTRACT FROM AUTHOR]

Purpose: Remuneration policies may differ from country to country, and their effect on bank stability could be due to the legal framework. Therefore, this study aims to investigate how the legal system impacts the relationship between CEO compensation and bank stability across countries. Design/methodology/approach: To test the study hypotheses, the authors use panel data of 74 banks operating in ten OECD countries during the period 2009–2016 and apply the generalized moments method regression model to better remediate the endogeneity problem. Findings: The findings confirm that a country's banking regulations significantly affect its bank stability. Common law countries have less bank stability than civil law countries. This result can be interpreted by the fact that, in common-law countries, banks' CEO are strongly protected by the law, so they allocate a large part of bank assets to risky loans to improve their variable remuneration. Practical implications: The research can help policymakers understand bank stability in one country. Any legal reform would require prior knowledge of how risk-taking may arise in executive compensation. Originality/value: The contribution is to explain the controversial effect of executive compensation on bank stability in the framework of legal theory. The authors argue that regulators should monitor compensation structures and that the country's legal origin of law shapes the CEO compensation structure and is a determinant of bank stability. To the best of the authors' knowledge, there are no studies exploring this field. So, this study tries to shed more light on the dark side of CEOs' behavior when undertaking risky projects to maximize their remuneration. [ABSTRACT FROM AUTHOR]

Credit is an important component in developing micro, small, and medium enterprises (MSMEs), as it can boost a country’s economy, help boost the production capacity of MSMEs, create jobs, and reduce poverty. This study aims to examine the characteristics of banks in Indonesia that influence lending to micro, small, and medium enterprises by adopting agency theory that explains the relationship between lenders (banks) and borrowers (MSMEs) as agents and principals. Data were taken from quarterly financial reports of banks in Indonesia. There are 42 sample banks from 2010 to 2022, so the data used are 2,182 observations. Data analysis uses a fixed effect model with robust standard errors. The results show that operating costs do not influence credit access for MSMEs or medium-sized enterprises. Bank stability has an impact on increasing MSME credit access. High bank capital also increases MSME credit access. Robustness tests were also conducted using the general method of moments. The results were consistent with the main model. The implication is that cost management theory and credit decision-making need to consider differences in business scale. The results also further strengthen the argument that bank stability is an important factor that can improve access to credit for small and medium enterprises. AcknowledgmentsAppreciation is given to the Doctoral program Universitas Sebelas Maret Surakarta Indonesia and the Institute of Research and Community Services (LPPM) Unisnu Jepara Indonesia, which has supported this research.

The paper examines the impact of the war in Ukraine on the financial condition and stability of banks in Central and Eastern European nations directly bordering on the countries involved in the military conflict, i.e., Ukraine, Russia, and Belarus. The research sample, consisting of 93 banks and 45 analysed variables, was selected based on the systematic literature review presented. The empirical study uses the system generalised method of moments (SGMM). To capture the studied impact, both binary and interactive variables were used. The results are discussed in relation to banking variables and those related to the macroeconomic situation. The study allowed us to conclude that there has been no significant deterioration in the capital position of banks. However, it showed a significant negative impact of several variables on the condition and stability of the studied banks, as captured by other indicators. Additionally, the significance of 22 interactive variables indicates that the war in Ukraine has had a real impact on banks in the examined countries. Moreover, the results suggest that banks in countries with higher debt or budget deficits may be more affected by the war.

Background This paper examines the impact of financial inclusion on bank stability within Ethiopian context, using panel data from 17 commercial banks over the period 2015-2023. Given the scarcity of research focused on the relationship between financial inclusion and bank stability in Ethiopia, this paper seeks to address a crucial gap by analyzing both conventional and digital aspects of financial inclusion in relation with bank stability. Methods A two-stage principal component analysis (PCA) was conducted to construct a composite financial inclusion index, integrating 10 conventional and 5 digital indicators. The study applied a two-step robust system generalized method of moments (GMM) to examine the effects of financial inclusion on bank stability, complemented by Granger causality testing to examine the directionality of this relationship. Results The result reveals a significant positive effect of financial inclusion on bank stability and Granger causality tests confirms a bi-directional relationship between financial inclusion and stability, indicating that improvements in financial inclusion foster greater stability and vice versa. Our results also highlight that while bank efficiency and GDP growth rate positively effect stability, total assets and income diversification exhibit detrimental effects. Conclusions It is essential to capitalize policy synergies to promote bank stability and to enhance financial inclusion through conventional and digital channels, while carefully managing the implications of risks associated with income diversification and asset distribution. Ensuring inclusive financial system is vital for maintaining bank stability, thus positioning it as a key priority for financial institutions.

This article investigates the relationship between bank competition and stability within a transitioning economy, focusing on Vietnamese banks from 2007 to 2018. Set against the backdrop of a transformative banking landscape post the collapse of the socialist bloc, the article utilises the Lerner Index to measure bank competition. The Z-score is used as a measure of bank stability. Panel fixed effects and difference GMM estimations suggest that heightened competition correlates positively with bank stability. Notably, these dynamics hold true even after omitting state-owned banks, signifying that government-controlled banks do not exclusively drive the observed relationships. Policymakers, hence, face the crucial task of balancing liberalisation efforts with safeguarding bank stability and emphasising the need for robust risk management and strong corporate governance in transitioning economies dominated by public ownership. This article thus offers valuable insights for policy refinement in similarly poised nations. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to analyse the policy implications of the Insolvency and Bankruptcy Code (IBC) 2016, which was enacted in India as part of banking sector reforms. The study aims to answer the question: Has the policy helped banks enhance their asset quality, stability, and performance?" To determine the effect of IBC on these research variables, we used a difference-in-difference (DID) regression technique. We collected a sample of 924 bank year observations for three categories of banks -- public, private and foreign ownership banks for the period during 2010 to 2021. We first analysed the ownership-wise impact of IBC on asset quality, stability and performance. Then, we further investigated the policy's implications by dividing banks into unhealthy and healthy categories based on their Z scores. In our findings, bank stability and asset quality for three ownership banks (private, public and foreign banks) is significantly different from each other. For overall sample observations, the relationship between asset quality and banks stability is negative and significant. This suggests that a deterioration in asset quality leads to less change in bank stability, i.e. the result confirms banks' loan evergreening problem during the reform period. The results estimating the impact of IBC on stability of public sector banks was insufficient, except for risk capital. Our findings show that public sector banks have tightened their lending standards in anticipation of potential asset quality deterioration. However, our analysis of the IBC's impact on unhealthy banks' asset quality, stability and performance did not align with the policy's objectives. While the IBC policy in itself is passing through several changes in recent, the study's results can aid policymakers in better assessing the impact of banking policies in India and can be used a reference for future policy formulation. A few related areas where the study results will aid to help are insolvency resolution, developing liquidation and cross-board insolvency framework. This paper is the first effort to estimate the impact of IBC separately on asset quality, bank stability, and performance of banks in India. [ABSTRACT FROM AUTHOR]

The main objective of this paper is to investigate the effects of economic freedom and financial freedom on bank stability in 12 Middle-East and North Africa region countries during the period 2005–2020. Using an empirical approach based on the System Generalized Method of Moments, our results reveal that economic freedom, financial freedom, investment freedom and business freedom increase bank stability. A high degree of economic freedom promotes innovation and entrepreneurship and, hence, leads to economic growth and better banking stability. In contrary, we confirm that monetary freedom negatively affects bank stability. The same result was confirmed for the two sub-samples of Middle Eastern countries and North African countries. [ABSTRACT FROM AUTHOR]

Copyright of China Rural Water & Hydropower is the property of China Rural Water & Hydropower Editorial Office and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Bank erosion is a key feature of channel evolution in alluvial rivers, and will occur under the combined effect of hydraulic erosion and frost heave/freeze-thaw process of rivers in seasonal frozen regions. However, most research on bank erosion modeling has seldom considered the impact of the frost heave/freeze-thaw process. Therefore, the variation in the mechanical characteristics of riverbank soil under the freeze-thaw cycle was investigated firstly in the current research and then used in the modeling of bank erosion processes at typical sections of the Songhua River. Additionally, a sensitivity analysis of riverbank stability was conducted using orthogonal experiments. The results indicate that after 7 freeze-thaw cycles, the soil cohesion and internal friction angle of bank soil decreased by about 10%–47 % and 9%–19 %, respectively. Unlike lowland rivers, bank erosion of rivers in seasonal frozen regions is more likely to occur during the rising water period. The frost heaving/freeze-thaw process will make the bank stability safety coefficient Fs more quickly decrease to the unstable critical value. As compared with the case without considering the frost heaving/freeze-thaw process, the mass failure occurred in advance when the frost heaving/freeze-thaw process was considered, and the calculated bank erosion volume was increased by 11%–51 %, agreeing better with the measured value. The sensitivity ranking of the four influencing factors on riverbank stability under freezing-thawing conditions is as follows: river stage > groundwater level > cohesion > internal friction angle. The current study can provide a reference for research on bank erosion and channel evolution of rivers in seasonal frozen regions.

Purpose: The objective of this study was to investigate the effect of economic and geopolitical risks on the lending decisions, credit risk, performance, and stability of banks in South Africa. Design/Methodology/Approach: To achieve this objective, ten banks were assessed for the period ranging from 2013 to 2022, and panel regressions were estimated with cross-sectional fixed effects. Findings: The results show that economic policy uncertainty (EPU) decreases credit risk and increases stability in the South African banking sector whilst geopolitical risk (GPR) increases credit risk and decreases stability. Further, it was found that these effects are more pronounced in banks with smaller market capitalizations and higher equity capitalizations. Moreover, global GPR has a destabilizing effect on South African banks. Remarkably, both EPU and GPR do not significantly influence lending decisions and performance by banks in South Africa. Practical Implications: This research enables a greater understanding of the determinants of banks’ lending decisions, credit risk, performance, and stability which is essential for devising governance policies and regulations to reduce fragilities in the banking system. Originality/Value: Given the scarcity of banking sector research in emerging markets, this study contributes to the existing literature by investigating the role of EPU and GPR on banking sector dynamics which remains understudied in South Africa.

Abstract The present work investigates the combined effects of the upstream sediment mining pit and vegetation on the riverbank using emergent rigid vegetation beyond the toe on the flow structure and morphological changes due to fluvial erosion. A steep gradient of streamwise velocity and other turbulence parameters such as Reynolds shear stress (RSS), transverse RSS, and turbulent kinetic energy (TKE) at the interface of the vegetated and unvegetated part of the test segment was observed. The cross-sectional analysis showed that vegetation increased the velocity of the unvegetated main channel, and the sandpit increased even the near-bed velocity with a similar trend in its longitudinal variation at the center line of the main channel. The abrupt variation in RSS and transverse RSS at the location of the berm induces instability and erodes the berm present at the toe of the riverbank. The combination of the vegetation and sandpit led to increased TKE of the flow at the near-bed and berm locations. The morphological analysis showed complete riverbank erosion in both cases of the unvegetated riverbank, i.e., without or with an upstream pit. The installed stems of rigid vegetation on the riverbank helped decrease the fluvial erosion of the riverbank, and its profile observed minimal changes over the length of the test segment. However, the main channel erosion was amplified due to the vegetation (in no-pit case) at the beginning of the test segment, which eroded the bed of the main channel by about 67% of the bed thickness. Also, in the vegetated riverbank cases, the upstream pit caused an increase in erosion by 7.66% at the center of the main channel. The study helps establish the hypothesis of negating the effects of sediment mining on bank erosion by using the rigid vegetation on the riverbank beyond its toe location, which performed well by maintaining the riverbank profile.

Banks have a very important role in the economy. Not only as financial intermediaries. They have also played a big role in the effectiveness of monetary policy. Therefore, bank stability is very important. This research aims to determine the influence of micro-prudential variables represented by CAR, NPL, and LDR variables, as well as the influence of macro-prudential variables represented by the Rupiah exchange rate variable against USD, inflation, interest rates, and IHSG, on bank stability in Indonesia, both in the short and long term. Using the vector error correction model (VECM) analysis technique, this research provides results that microprudential variables and macroprudential variables are both proven to have an influence on banking stability in Indonesia. Micro-prudential indicators such as CAR and LDR have been proven to have a positive effect on banking stability. Meanwhile, NPLs have a negative effect on banking stability. Likewise for macro-prudential indicators: the exchange rate and inflation have a negative effect on financial system stability. Meanwhile, interest rates and IHSG have a positive effect on banking stability. The impact of surprises or shocks that occur in micro-prudential and macro-prudential variables on banking stability is permanent. The implication of the findings in this research is that Bank Indonesia and the Financial Services Authority have a very large role in achieving banking stability in Indonesia.

Abstract Riverbank instability in the seasonally frozen zone is primarily caused by freeze–thaw erosion. Using the triaxial freeze–thaw test on the bank of Shisifenzi Bend in the Yellow River section of Inner Mongolia, we investigated the changes in the mechanical properties of the soil at different freezing temperatures and freeze–thaw times, and analyzed the bank’s stability before and after freezing based on the finite element strength reduction method. The results showed that the elastic modulus, cohesion, internal friction angle and shear strength of the soil tended to decrease with the increase in the number of freeze–thaw cycles and the decrease in freezing temperature. After 10 freezing cycles at − 5 ℃, − 10 ℃, − 15 ℃ and − 20 ℃, the modulus of elasticity of soil decreased by 40.84 ~ 68.70%, the cohesion decreased by 41.96 ~ 56.66%, the shear strength decreased by 41.92 ~ 57.32%, respectively. Moreover, the stability safety coefficient of bank slope decreased by 18.58% after freeze–thaw, indicating that the freeze–thaw effect will significantly reduce the stability of bank slope, and the bank slope is more likely to be destabilized and damaged after freeze–thaw.

Purpose There are concerns that while stringent capital policy may enhance banks’ resilience, it may also have other unintended economic repercussions. This study contributes to this debate by investigating whether regulatory bank capital induces a trade-off between bank stability and economic growth and whether institutional quality affects this trade-off.Design/methodology/approach The study tested the model empirically with data from 71 banks in 9 Sub-Saharan African (SSA) countries from 2007 to 2021, using several estimators such as the system generalised methods of moments (SGMM), fixed effects (FE), two-stage least square (2SLS) and the Bayesian methods.Findings This study discovers that regulatory capital can maintain bank stability and economic growth, as opposed to the concern that higher regulatory capital poses economic problems. This indicates no support for a capital-induced trade-off between bank stability and economic growth, but rather opportunities. Further, while institutional quality alone does not directly impact this link, it enhances the positive effects of regulatory capital on economic growth. The findings suggest the need for governments to ensure strong institutional and capital policies to achieve economic growth.Originality/value This study has explored the intricate relationship among banking sector activities, institutional mechanisms, and the economy. The trade-off model is novel in the SSA literature, providing deeper insights into integrating selective Basel III into institutional strategies to achieve bank stability and economic growth.

AbstractGlobal tensions and uncertainty in economic policy can cause structural change and disruption in the volatile sector of the economy. This study investigates the effects of geopolitical risk on bank stability and the role of economic policy uncertainty in this relationship in BRICS countries. We use the panel VAR and the two-step System GMM estimation technique. The study uses bank-level data from 105 commercial banks during 2009–2021, totaling 1,365 observations. The empirical results revealed that increased geopolitical risk and economic policy uncertainty reduce bank stability once other traditional drivers are controlled for. We found that geopolitical events tend to adversely influence the stability of banks. The results also reveal that the interaction between economic policy uncertainty and geopolitical risk has a negative significant impact on bank stability. More importantly, our findings are robust and offer critical policy interventions and implications for managers, policymakers, and investors in emerging markets.

The present work investigates the combined effects of the upstream sediment mining pit and vegetation on the riverbank using emergent rigid vegetation beyond the toe on the flow structure and morphological changes due to fluvial erosion. A steep gradient of streamwise velocity and other turbulence parameters such as Reynolds shear stress (RSS), transverse RSS, and turbulent kinetic energy (TKE) at the interface of the vegetated and unvegetated part of the test segment was observed. The cross-sectional analysis showed that vegetation increased the velocity of the unvegetated main channel, and the sandpit increased even the near-bed velocity with a similar trend in its longitudinal variation at the center line of the main channel. The abrupt variation in RSS and transverse RSS at the location of the berm induces instability and erodes the berm present at the toe of the riverbank. The combination of the vegetation and sandpit led to increased TKE of the flow at the near-bed and berm locations. The morphological analysis showed complete riverbank erosion in both cases of the unvegetated riverbank, i.e., without or with an upstream pit. The installed stems of rigid vegetation on the riverbank helped decrease the fluvial erosion of the riverbank, and its profile observed minimal changes over the length of the test segment. However, the main channel erosion was amplified due to the vegetation (in no-pit case) at the beginning of the test segment, which eroded the bed of the main channel by about 67% of the bed thickness. Also, in the vegetated riverbank cases, the upstream pit caused an increase in erosion by 7.66% at the center of the main channel. The study helps establish the hypothesis of negating the effects of sediment mining on bank erosion by using the rigid vegetation on the riverbank beyond its toe location, which performed well by maintaining the riverbank profile. [ABSTRACT FROM AUTHOR]

This research investigates the influence of intellectual capital on the stability of banks in the evolving context of Saudi Arabia's banking sector. Against the backdrop of rapid economic reforms under Vision 2030 and the challenges imposed by the COVID-19 pandemic, this research incorporates specific metrics related to these contexts and provides a nuanced analysis of how intellectual capital and its components (human capital efficiency (HCE), structural capital efficiency (SCE), and capital employed efficiency (CEE)) affect the financial stability of Saudi banks. This research analyzes a decade-long panel dataset for ten major Saudi banks from 2012 to 2022, utilizing both fixed-effects and cross-section random-effects models to discern the impact of intellectual capital on bank stability. The findings reveal a positive overall influence of intellectual capital on bank stability; however, individual components present a complex relationship, with CEE showing a positive association and HCE and SCE demonstrating unexpected negative correlations with bank stability. The research identifies leverage (LEV) as a significant factor negatively impacting stability. Operational efficiency (OPEF) and size (SIZE) also negatively affect stability. Surprisingly, macroeconomic indicators and bank size exhibit non-significant effects on bank stability. Similarly, the direct impact of the COVID-19 pandemic was found to be non-significant, suggesting a resilient banking environment or the presence of effective mitigating strategies. As Saudi Arabia continues its ambitious economic transformation, this research underscores the critical role of effectively managed intellectual capital in ensuring the banking sector's stability. It provides a foundation for ongoing research in this vital area. [ABSTRACT FROM AUTHOR]

Purpose: This study examined how economic freedom and its related components, such as open markets, regulatory efficiency, rule of law and the size of government, affect bank risk behavior, focusing on the Japanese context. Design/methodology/approach: The study employs a two-step GMM framework on the annual data of Japanese banks ranging from 2005 to 2020 to empirically test the hypotheses. Furthermore, we also use the ordinary least square method to ensure the robustness of our mainline findings. Findings: The finding suggests that economic freedom increases the banks' risk-taking, thus making them fragile. The results also highlight that out of the four main subcomponents of economic freedom, regulatory efficiency and government size increase bank risk-taking, while the rule of law and open markets decrease banks' risk-taking. Additionally, we examine how the banks' specific characteristics affect the results by creating a subsample based on capitalization and liquidity ratios. Overall, the results are consistent with the baseline findings. Moreover, the results are robust to alternative proxy measures of risk. Practical implications: The study's findings have several implications for regulators and policymakers. The results suggest that regulators and policymakers should reconsider their strategies for economic freedom to ensure that they promote stability in the banking system and reduce banks' risk-taking inclinations. Originality/value: Although previous studies have examined the impact of economic freedom on bank stability and risk-taking, this study is the first to do so in the Japanese context, contributing to the literature by providing new insights and empirical evidence. [ABSTRACT FROM AUTHOR]

Riverbank instability in the seasonally frozen zone is primarily caused by freeze–thaw erosion. Using the triaxial freeze–thaw test on the bank of Shisifenzi Bend in the Yellow River section of Inner Mongolia, we investigated the changes in the mechanical properties of the soil at different freezing temperatures and freeze–thaw times, and analyzed the bank's stability before and after freezing based on the finite element strength reduction method. The results showed that the elastic modulus, cohesion, internal friction angle and shear strength of the soil tended to decrease with the increase in the number of freeze–thaw cycles and the decrease in freezing temperature. After 10 freezing cycles at − 5 ℃, − 10 ℃, − 15 ℃ and − 20 ℃, the modulus of elasticity of soil decreased by 40.84 ~ 68.70%, the cohesion decreased by 41.96 ~ 56.66%, the shear strength decreased by 41.92 ~ 57.32%, respectively. Moreover, the stability safety coefficient of bank slope decreased by 18.58% after freeze–thaw, indicating that the freeze–thaw effect will significantly reduce the stability of bank slope, and the bank slope is more likely to be destabilized and damaged after freeze–thaw. [ABSTRACT FROM AUTHOR]

This paper investigates the effect of CEO characteristics on bank stability of commercial banks in Vietnam. The study used regression models Pooled OLS, Fixed effects Model (FEM), random effects model (REM), and Feasible Generalized Least Square (FGLS) to evaluate the relationship between CEO characteristics and bank stability of 26 commercial banks in Vietnam. To deal with the limitations of traditional regression methods, we propose Bayesian regression method. The data collection period in the study is from 2013 to 2022. In these regression models, CEO power, female CEO, CEO tenure, and CEO age are independent variables. The dependent variable representing bank stability is the Z‐score. The research results show that the factors CEO power, female CEO, CEO tenure, CEO age have a positive impact on bank stability in Vietnam. [ABSTRACT FROM AUTHOR]

This study proposes an optimisation-based "benefit-of-the-doubt" (BoD) methodological framework for developing a new multidimensional index of bank stability. The proposed index has the ability to serve as a potent policy tool that overcomes the downsides of accounting- and market-based measures of bank stability. This data-driven approach generates endogenous weights for aggregating bank stability indicators and dimensions. Further, we integrate the BoD framework with a metafrontier approach, which we call a "meta-BoD framework". The final outcomes of the suggested framework go beyond a scalar measure of bank stability and provide the unique weighting matrix that offers valuable policy-relevant insights about the most precarious areas of stability that require the attention of management and regulators for both micro- and macro-level policy interventions. In addition, it draws insightful information about the instability gaps across heterogenous bank groups. The study presents an illustrative example of the proposed framework to obtain a bank stability index using the dataset of 76 Indian banks operating between 2014 and 2018. The bank stability index is made up of 14 financial ratio indicators covering five dimensions of stability: asset quality, management efficiency, capital adequacy, profitability and liquidity. The findings offer the detailed information required for comprehending the evolution of bank stability and assessing instability gaps across bank groups. [ABSTRACT FROM AUTHOR]

Copyright of Polish Journal of Economics / Gospodarka Narodowa is the property of SGH Warsaw School of Economics and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Liquidity risk was at the heart of 2007–2008 global financial crisis, which has led to a series of financial institutions failure. We test whether and how liquidity risk impacts European banks' stability (i.e., a bank risk-return profile) under different levels of engagement in non-traditional banking activities after the global financial crisis and during the implementation of the Basel III liquidity rules. To calculate financial stability, we adopt an efficiency perspective based on the combination of the CAMELS rating system with the data envelopment analysis technique. We implement a nonlinear panel smooth transition regression approach, where transitional factors of income diversification are endogenously captured from the data. We find that, liquidity risk stemming from liquidity creation has a positive impact on bank stability, implying that income diversification can serve as a "buffer" through which banks can ensure their liquidity creation and offset for the compression of intermediation margin in lending and deposit activities. This suggests that diversification does not impede the ability of banks to operate with lower liquidity holdings but allows them to make greater use of their balance sheets to fulfill their primary roles of credit provision and liquidity creation. The results offer interesting implications for regulators and bank managers in managing liquidity risk. [ABSTRACT FROM AUTHOR]

Purpose – This study examines the factors driving and barriers to financial inclusion in Organisation of Islamic Cooperation (OIC) countries. Methodology – This study employs panel data analysis using fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS) methods. The sample consists of OIC countries from 2011 to 2021. Findings – According to the FMOLS model, remittances, bank stability, and government debt are key drivers of long-term financial inclusion, while inflation, trade openness, and economic development act as barriers. Bank competition does not significantly impact financial inclusion. In the DOLS model, remittances and bank stability remain significant drivers, with inflation and economic growth acting as barriers. However, in the long term, financial inclusion is not significantly influenced by government debt or competition. Implications – This study offers insights for financial institutions and governments. Financial institutions should improve their access to low-income groups and small businesses. Governments should promote financial inclusion and stability through sound macroeconomic policy. Policymakers can use these findings to focus on key factors for a sustainable economy. Originality – This study fills a gap by exploring the factors affecting financial inclusion in OIC countries, a less-studied topic. It also uses additional indicators to measure the financial inclusion index, leading to more comprehensive results.

The purpose of this study is twofold. First, we attempt to quantify the quality of bank sustainability reporting (QSR) since the 2016 mandatory sustainability disclosure in Vietnam. Content analysis of banks’ annual reports is performed to assess 11 QSR items that are used to build the QSR index. Second, we investigate whether the quality of sustainability reporting influences banks’ financial stability. Employing a sample of 159 banking firm observations over the period 2016–2021, we document that the quality of sustainability reporting in Vietnamese commercial banks increased from year to year. Importantly, our empirical evidence shows that a higher level of QSR contributes to better bank stability. This result is robust to various estimation methods, different components of QSR, an alternative measure of bank stability, and controlling for reverse causality. Our findings provide important implications for bank managers by highlighting that the enhancement of QSR increases bank stability.

Given the importance of securitization markets as an alternative access to finance MSMEs, understanding bank-level MSME loan securitization issuance is essential to help shed light on the situation. This paper describes a novel dataset of 440 securitized MSME loan deals of 48 European originators covering the period between 2004 and 2022. Information regarding the originators are hand-collected by reading the prospectus filed. The ready-to-use dataset comprises four main categories: 1) bank stability measures, 2) mediator variables consisting of funding cost, regulatory capital, risk and liquidity, 3) MSME loan securitization issuances, and 4) control variables at the macro and institutional level. Further, this paper aims at providing the step-by-step technique of how to hand-collect information regarding collateral in place. The final dataset is valuable for economic and finance researchers to explore factors related to MSME loan securitization and bank stability in Europe.

This study examines the relationship between financial inclusion, institutional quality, and bank stability in sub-Saharan Africa. Using a sample of 48 countries from 2002 to 2021, the study employs the Prais-Winsten and Hansen (2000) panel threshold estimation techniques. The findings suggest that financial inclusion, measured by account ownership, ATMs, borrowers, depositors, and bank branches, positively impacts bank stability, except for bank branches which have a negative effect. Institutional quality is found to have a significant and positive impact on bank stability, indicating its importance in reducing transaction costs and addressing asymmetric information. The study also explores the moderating role of institutional quality, revealing that the presence of institutions enhances the positive effects of ATMs, borrowers, and depositors on bank stability, while negatively impacting the relationship between bank branches and stability. Moreover, the study identifies threshold effects, with certain indicators showing different impacts on bank stability below and above specific thresholds. Policy recommendations include the need for strong institutions to promote bank stability, fostering financial inclusion in the presence of institutions, and implementing strategic reforms to increase the number of ATMs, borrowers, and depositors. Regulators are urged to focus on developing more robust institutions to enable the positive impact of borrowers and bank branches on bank stability in sub-Saharan Africa. [ABSTRACT FROM AUTHOR]

Purpose: The objective of this study was to investigate the effect of economic and geopolitical risks on the lending decisions, credit risk, performance, and stability of banks in South Africa. Design/Methodology/Approach: To achieve this objective, ten banks were assessed for the period ranging from 2013 to 2022, and panel regressions were estimated with cross-sectional fixed effects. Findings: The results show that economic policy uncertainty (EPU) decreases credit risk and increases stability in the South African banking sector whilst geopolitical risk (GPR) increases credit risk and decreases stability. Further, it was found that these effects are more pronounced in banks with smaller market capitalizations and higher equity capitalizations. Moreover, global GPR has a destabilizing effect on South African banks. Remarkably, both EPU and GPR do not significantly influence lending decisions and performance by banks in South Africa. Practical Implications: This research enables a greater understanding of the determinants of banks' lending decisions, credit risk, performance, and stability which is essential for devising governance policies and regulations to reduce fragilities in the banking system. Originality/Value: Given the scarcity of banking sector research in emerging markets, this study contributes to the existing literature by investigating the role of EPU and GPR on banking sector dynamics which remains understudied in South Africa. [ABSTRACT FROM AUTHOR]

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Severe flooding and consequent river bank erosion in the north-western bank of the Majuli Island, along the Subansiri River, is causing channel migration as well as significant threat to those who reside in the floodplain. The current study investigates the stability of the Majuli Island along the north-western bank at the most susceptible locations. Such locations are identified through literature review that were specific to Missamora, Auniati Jungle and Chenimora Kangkur No. 1 area. In the analysis, geometrical inputs were taken as the bank height, bank slope having different layers established through exposed lithology of the river bank. Input geotechnical properties of layered soil were obtained from field or laboratory test results. The river bank soil at these three locations was geotechnically analysed and identified as silty sand (SM) with very low compressibility. Inputs from the field study was combined with laboratory tests and its implementation in numerical simulation indicated that the river bank slope is highly unstable with a potential to large deformation, high total accumulated strain and very low factor of safety values at all the three locations, and it needs immediate attention. Furthermore, cement stabilization of river bank soil is suggested in which mixture of cement-soil with a 1:25 ratio (4%) by weight was employed. Strength and stiffness properties of stabilized material were established through unconfined compressive strength (UCS) test in the lab. Numerical simulation for the slope stability analysis was again performed with the input parameters of stabilized material. The outcome of the study revealed 95–99% reduction in total displacement and accumulated strain and three to five times improvement in the factor of safety. By integrating soil stabilisation techniques with comprehensive numerical modelling and analysis, the study provides a solid foundation for erosion mitigation along the Subansiri River. [ABSTRACT FROM AUTHOR]

In the modern banking industry, investment in information technology (IT) is crucial to maintain technological advances, operational efficiency, financial innovation, and security. However, the impact of IT investment on the banking sector is still in question, particularly whether it follows a linear or nonlinear relationship, and what should be the optimal level of IT investment. This study investigates the nonlinear and threshold effects of IT investment on bank profitability, stability, and efficiency. We use data from 28 Bangladeshi banks from 2015 to 2020 and use panel models, including static and dynamic models, with quadratic function and dynamic panel threshold regression for analysis. The study reveals that IT investment has a U-shaped nonlinear relationship with bank profitability and stability, indicating that an optimal level of IT investment exists for both factors. In contrast, the relationship between IT investment and bank efficiency is an inverted U-shape, suggesting that, though IT investment can lead to greater efficiency gains, excessive IT investment can become counterproductive. Dynamic threshold regression analysis indicates that the threshold point for IT investment is 15.369, 16.774, and 17.370 for bank profitability, stability, and efficiency, respectively. These findings can serve as useful benchmarks for bank management, policymakers, and regulators to determine the optimal level of IT investment that maximizes the benefits while minimizing costs. [ABSTRACT FROM AUTHOR]

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The growth of financial technology (fintech) brings happiness to micro, small, and medium enterprises (MSMEs) that banks have denied access to credit. However, this condition has the potential to create a climate of intensified competition in the credit market and threaten banking stability. Therefore, this study examines the impact of banking stability and fintech on credit performance and credit access of MSMEs. This study uses a sample of 46 public commercial banks of the Republic of Indonesia and uses quarterly data from 2010 to 2022. The number of observations used for bank stability variables was 2,392, and for the fintech variables, 921 observations. This research analysis uses the fixed effect model method with robust standard errors. The results show that bank stability and fintech effect MSMEs’ credit performance and their access to credit. This finding encourages the competition-fragility theory. Bank stability reduces nonperforming loans and MSMEs’ access to credit. This indicates that stable banks encourage better MSME loan performance and thus restrict their lending to MSMEs. The existence of fintech is proven to improve MSMEs’ non-performing loans and their access to credit. Fintech that facilitates easy credit causes MSMEs` credit performance at banks to fall, which in turn opens the gate for MSME credit. The implication is that the financial services authority (OJK) needs to tighten further the online lending of fintech companies that have put more burden on MSMEs with high capital costs that can affect the ability of MSMEs to pay bank loan installments. AcknowledgmentsAppreciation is given to the Directorate General of Higher Education, Research and Technology, Ministry of Education, Culture, Research, and Technology, which has provided a fundamental research grant with contract number 182/E5/PG.02.00.PL/2023. Thanks are also given to higher education service institutions (LLDIKTI) Region 6 and the Institute of Research and Community Services (LPPM) Unisnu Jepara Indonesia, which has supported this research.