Predicting Bankruptcy Using Neural Networks in the Current Financial Crisis: A Study of U.S. Commercial Banks

2010 ◽  
Author(s):  
Félix J. López-Iturriaga ◽  
Óscar López-de-Foronda ◽  
Iván Pastor-Sanz
Keyword(s):  
Neural Networks ◽  
Financial Crisis ◽  
Commercial Banks ◽  
Current Financial Crisis

scholarly journals The effects of the bank holding equity of the firm: from a moral hazard perspective

2008 ◽  
Vol 6 (1-4) ◽  
pp. 459-466
Author(s):  
Buhui Qiu
Keyword(s):  
Financial Crisis ◽  
Asymmetric Information ◽  
Moral Hazard ◽  
Commercial Banks ◽  
Moral Hazard Problem ◽  
The Us ◽  
Equity Holding ◽  
Will Force ◽  
Current Financial Crisis ◽  
Risky Projects

After the repeal of the Glass-Steagall Act in 1999, commercial banks are allowed to hold equity in firms. The current financial crisis also helps make banks universal in the US. This paper investigates the effects of the bank’s equity holding of the firm from a moral hazard perspective. The bank’s equity holding of the firm is shown to help mitigate the conflicts between the firm’s shareholders and debtholders. However, it also creates another moral hazard problem, namely, the bank as an institutional shareholder can collude with the firm manager to pursue perks from project return. Without this moral hazard problem, the bank’s optimal equity holding of the firm is shown to be at the point where its share of the firm’s equity equals its share of the firm’s debt. With this moral hazard problem being taken into consideration, the bank’s optimal equity holding should be less than its debt share in the firm. Otherwise, the bank will force the firm to pursue overly risky projects. If asymmetric information is introduced into the model, the bank’s equity holding becomes a signal to the outside debtholders, thus should be capped above by a certain level. Thus, the paper shows that regulations still need to be imposed on banks’ equity holding in firms.

scholarly journals The market of banking services to population: the crisis of confidence, and its impact on perspectives of overcoming

2012 ◽  
Vol 2012 (2) ◽  
pp. 51-66
Author(s):  
Svitlana Brus ◽  
Yevhen Bublyk
Keyword(s):  
Financial Crisis ◽  
Commercial Banks ◽  
Economic Conditions ◽  
Banking Services ◽  
Modern Economic ◽  
Current Financial Crisis

In the article have been described main features of commercial banks politics in the field of deposit and credit services for the physical persons during the current financial crisis. There are considered reasons of declining people trust to the banks and tendency to change bank politics according to act of intensifying crisis of trust and credit resources shortage. Researched problems of reactivation commercial banks credit activity in modern economic conditions.

scholarly journals The National Bank of Romania monetary policy characteristics in addition to the current financial crisis

2012 ◽  
Author(s):  
Stefan Sambotin ◽  
Andreea Bucur
Keyword(s):  
Monetary Policy ◽  
Financial Crisis ◽  
Central Bank ◽  
Economic Crisis ◽  
Commercial Banks ◽  
Economic Life ◽  
Starting Point ◽  
Global Economic Crisis ◽  
National Bank ◽  
Current Financial Crisis

Considering the starting point for research the Central Bank key role in economic life, through the implementation of the monetary policy, by exercising prudential control and supervision of commercial banks, the present paper proposes an analysis of the National Bank of Romania monetary policy coordinates in the frame of the increased intensification harsh effects of the global economic crisis.

Finanzkrisen in Deutschland – Vergleichsperspektiven und Ursachenforschung

2011 ◽  
Vol 52 (2) ◽  
Author(s):  
Harald Wixforth
Keyword(s):  
Financial Crisis ◽  
Banking Crisis ◽  
Current Crisis ◽  
Current Financial Crisis

AbstractThe current financial crisis has provoked keen discussion on how to analyze and compare similar types of crises, in order that we might be able to draw lessons from history. This article attempts to outline different instruments of comparison. It also tries to compare the German 1931 banking crisis to the current crisis, in order to highlight parallels and differences.

scholarly journals Credit Rating Strategies: A Study of GCC Banks

2020 ◽  
Author(s):  
Y. Sree Rama Murthy ◽  
Saeed Al-Muharrami
Keyword(s):  
Financial Crisis ◽  
Commercial Banks ◽  
Credit Rating ◽  
Global Financial Crisis ◽  
Focal Point ◽  
Credit Ratings ◽  
Islamic Banks ◽  
Before And After ◽  
Capital Ratios ◽  
Financial Strategies

<p><b>Purpose</b></p> <p>It is difficult to predict when the next financial crisis will happen. Identifying financial strategies, which help a bank to survive a crisis, is the main purpose of the paper. This paper examines the financial strategies of those banks, which managed to retain good credit ratings both before and after the global financial crisis, so as to throw light on the characteristics of banks which managed to remain steady and stable. </p> Design <p>This paper analyses Fitch credit ratings of 51 banks Islamic and commercial banks operating in GCC, divided into pre global financial crisis (2002 to 2007) and post global financial crisis (2008 to 2013) periods. Trend and behavior of average ratios of top rated banks in both the periods is first attempted before moving to “Ordered Choice Logit” regression method to further analyze the data. </p> <p><b>Findings</b></p> <p>Size and cost management are very important factors in ratings, both before and after the financial crisis. As long as asset quality is under control, liquidity is the focal point in achieving good ratings. Top rated Islamic banks seem to be following a strategy of allowing capital ratios to trend down during a crisis as long as capital is well above the regulatory requirements. </p> <p><b>Originality and Value</b></p> <p>The paper is the first of its kind which examines credit rating strategies of Islamic banks as well as commercial banks. <a>The findings of the paper are extremely important for banks as they throw light on appropriate strategies to be adopted by banks during crises.</a></p>

scholarly journals Credit Rating Strategies: A Study of GCC Banks

2020 ◽  
Author(s):  
Y. Sree Rama Murthy ◽  
Saeed Al-Muharrami
Keyword(s):  
Financial Crisis ◽  
Commercial Banks ◽  
Credit Rating ◽  
Global Financial Crisis ◽  
Focal Point ◽  
Credit Ratings ◽  
Islamic Banks ◽  
Before And After ◽  
Capital Ratios ◽  
Financial Strategies

<p><b>Purpose</b></p> <p>It is difficult to predict when the next financial crisis will happen. Identifying financial strategies, which help a bank to survive a crisis, is the main purpose of the paper. This paper examines the financial strategies of those banks, which managed to retain good credit ratings both before and after the global financial crisis, so as to throw light on the characteristics of banks which managed to remain steady and stable. </p> Design <p>This paper analyses Fitch credit ratings of 51 banks Islamic and commercial banks operating in GCC, divided into pre global financial crisis (2002 to 2007) and post global financial crisis (2008 to 2013) periods. Trend and behavior of average ratios of top rated banks in both the periods is first attempted before moving to “Ordered Choice Logit” regression method to further analyze the data. </p> <p><b>Findings</b></p> <p>Size and cost management are very important factors in ratings, both before and after the financial crisis. As long as asset quality is under control, liquidity is the focal point in achieving good ratings. Top rated Islamic banks seem to be following a strategy of allowing capital ratios to trend down during a crisis as long as capital is well above the regulatory requirements. </p> <p><b>Originality and Value</b></p> <p>The paper is the first of its kind which examines credit rating strategies of Islamic banks as well as commercial banks. <a>The findings of the paper are extremely important for banks as they throw light on appropriate strategies to be adopted by banks during crises.</a></p>

Restructuring Measurements Impact on Bank Risk After the Global Financial Crisis — Empirical Evidence from Vietnam

2021 ◽  
pp. 2150019
Author(s):  
Tu T. T. Tran ◽  
Yen Thi Nguyen
Keyword(s):  
Financial Crisis ◽  
Commercial Banks ◽  
Global Financial Crisis ◽  
Banking System ◽  
The State ◽  
Bank Risk ◽  
The Government ◽  
The Global Financial Crisis ◽  
Bank System ◽  
The Impact

Project 254 signed in November 2011 which is relating to “Restructuring the system of credit institutions in the period of 2011–2015” has been considered as a milestone in marking the Vietnamese government to prevent the influence of the financial crisis of 2008. This paper identifies hypotheses evaluating the impact of restructuring measurements on the risk of the Vietnamese’s commercial banks in 10 years, starting from 2008. Using the OLS regression method for analysis by running Eviews and ANOVA test in SPSS with a unique database of 216 observations of 31 commercial banks in Vietnam, it was found that: (i) The bail-out activities of the State Bank of Vietnam in 2015 does not influence on bank risk, (ii) The mergers and acquisitions (M&A) do not support the bank to reduce risk, it increases the risk for acquiring banks, (iii) The global crisis 2008 exerts dire consequence on the bank system in Vietnam, (iv) There is the difference of risk among the groups of the bank experiencing a different number of years of operation. Basing on this result, the paper also makes recommendations to the Government, The State Bank of Vietnam and the commercial banks for effective risk management toward the development of the Vietnamese banking system.

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