Next Article in Journal
Loss Reserving Estimation With Correlated Run-Off Triangles in a Quantile Longitudinal Model
Previous Article in Journal
Do We Need Stochastic Volatility and Generalised Autoregressive Conditional Heteroscedasticity? Comparing Squared End-Of-Day Returns on FTSE
Open AccessArticle

A Comprehensive Stability Indicator for Banks

School of Business and Law, Edith Cowan University, 270 Joondalup Drive, Joondalup, WA 6027, Australia
Business and Economics Research Group, Ho Chi Minh City Open University, 97 Vo Van Tan Street, District 3, Ho Chi Minh City 73020, Vietnam
Author to whom correspondence should be addressed.
Risks 2020, 8(1), 13;
Received: 29 December 2019 / Revised: 17 January 2020 / Accepted: 21 January 2020 / Published: 3 February 2020
Stability indicators are essential to banks in order to identify instability caused by adverse economic circumstances or increasing risks such as customer defaults. This paper develops a novel comprehensive stability indicator (CSI) that can readily be used by individual banks, or by regulators to benchmark financial health across banks. The CSI incorporates the three key risk factors of Creditworthiness, Conditions and Capital (3Cs), using a traffic light system (green, orange and red) to classify bank risk. The CSI achieves similar outcomes in ranking the risk of 20 US banks to the much more complex US Federal Reserve Dodd–Frank stress tests. View Full-Text
Keywords: banks; financial stability; capital; credit risk banks; financial stability; capital; credit risk
Show Figures

Figure 1

MDPI and ACS Style

J. Powell, R.; H. Vo, D. A Comprehensive Stability Indicator for Banks. Risks 2020, 8, 13.

Show more citation formats Show less citations formats
Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Article Access Map by Country/Region

Search more from Scilit
Back to TopTop