Bank solvency: The role of credit and liquidity risks, regulatory capital and economic stability

  title={Bank solvency: The role of credit and liquidity risks, regulatory capital and economic stability},
  author={Isaiah Oino},
  journal={Banks and Bank Systems},
  • Isaiah Oino
  • Published 22 November 2021
  • Economics
  • Banks and Bank Systems
Banking stability is essential to any economy due to its many functions, including intermediation, payment facilitation, and credit creation. Thus, the stability of the banking industry is one of the critical ingredients in economic growth. This paper analyzes how bank capital requirements, credit, and liquidity impact bank solvency using ten major banks that control 90% of the market share in the UK in 2009–2018. The GMM model indicates a strong association between credit and liquidity risks… 

Tables from this paper


The Determinants of Bank Liquidity Buffer
This study investigates factors that determine of the size of the liquidity buffer in banks. In the spirit of recent papers on bank liquidity management, we examine the impact of bank loan-related
Regulatory capital and its effect on credit growth, non-performing loans and bank efficiency
Purpose - – This paper aims to investigate the influence of the central bank’s regulatory capital on commercial banks specific performance outcomes such as credit supply, interest rate spread (as a
Determinants of Banks’ Liquidity: A French Perspective on Interactions between Market and Regulatory Requirements
It is shown that in times of crisis, measured by large deviations of a financial variable capturing international markets’ risk aversion, French banks actually decreased the liquidity coefficient, with results mostly driven by less liquid banks.
Does financing structure affects bank liquidity risk?
Bank Competition and Financial Stability
Under the traditional “competition-fragility” view, more bank competition erodes market power, decreases profit margins, and results in reduced franchise value that encourages bank risk taking. Under
The impact of bank size and funding risk on bank stability
Abstract Does bank size significantly explain the variations in bank stability? Does bank funding risk significantly impact bank stability? This paper addresses these two questions with data from the
Liquidity Risk, Credit Risk and Interbank Competition
This paper examines the impact of interbank competition on liquidity risk and on the interaction between liquidity and credit risks. We first show that financial intermediation with deposit insurance
Croatian banks profitability under capital requirements pressure
Regulating bank behavior throughout capital requirements has been a focal point of prudential regulation since the late 1980s. However, their beneficial effect on the banking sector's safety and