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The Role Of The Z-Score Model In Assessing Financial Stability. Evidence From The Commercial Banks Listed On Bucharest Stock Exchange

Author

Listed:
  • BADEA Irina-Raluca

    (University of Craiova, Craiova, Romania)

Abstract

This paper represents a theoretical and practical approach regarding one of the alternatives to measure financial stability, namely the Z-score model.It is well known that the Z-score model was firstly developed for manufacturing firms, but the initial model was revised in order to become operational for banks as well. Therefore, the main goal of the paper is using Z-score for the banks listed on Bucharest Stock Exchange in order to determine their stability or instability. The Z-score method allows comparison among different institutions' stability in a simple and elegant way and proves to have more advantages than disadvantages in practice.

Suggested Citation

  • BADEA Irina-Raluca, 2016. "The Role Of The Z-Score Model In Assessing Financial Stability. Evidence From The Commercial Banks Listed On Bucharest Stock Exchange," Revista Economica, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 68(2), pages 188-200, September.
    • Handle: RePEc:blg:reveco:v:68:y:2016:i:2:p:188-200
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    File URL: http://economice.ulbsibiu.ro/revista.economica/archive/68213badea.pdf
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    References listed on IDEAS

    as
    1. Kondratenko, Anatoly, 2005. "Physical Modeling of economic systems," MPRA Paper 6123, University Library of Munich, Germany.
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    Cited by:

    1. Canan SANCAR & Yusuf Ekrem AKBAŞ & Esra CAN & Beyhan KILINÇER, 2023. "The effect of central bank independence on financial stability in developed countries: evidence from the Fourier procedure," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(4(637), W), pages 203-218, Winter.

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    More about this item

    Keywords

    financial stability; Z-score; ROA; Bucharest Stock Exchange;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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