IDEAS home Printed from https://ideas.repec.org/h/wsi/wschap/9789812770745_0011.html
   My bibliography  Save this book chapter

Early Warning Detection Of Banking Distress — Is Failure Possible For European Banks?

In: Risk Management And Value Valuation and Asset Pricing

Author

Listed:
  • Anissa Naouar

    (EconomiX — UMR 7166, 200, avenue de la république, 92000 Nanterre Cedex, France)

Abstract

The aim of this paper is to predict banking distress resulting from capitalization problems in order to justify the viability of Prompt Corrective Actions in Europe. In particular, I examine the impact of the “safety net” and the role of rating agencies through negative credit watches, using a binomial logit model in order to predict European commercial banks capital stress and to test the contribution of institutions and regulatory factors. I also study the impact of concentration and moral hazard generated by deposit insurance on banking stability. My results are in line with previous findings in the literature and demonstrate not only a negative influence of institutional and regulatory factors on European banking systems' distress probability but also a significant role for the rating agencies. In addition, the quality of national regulatory frameworks including supervision restrains considerably moral hazard and excessive risk taken by European commercial banks.

Suggested Citation

  • Anissa Naouar, 2008. "Early Warning Detection Of Banking Distress — Is Failure Possible For European Banks?," World Scientific Book Chapters, in: Mondher Bellalah & Jean-Luc Prigent & Jean-Michel Sahut & Georges Pariente & Olivier Levyne & Michel (ed.), Risk Management And Value Valuation and Asset Pricing, chapter 11, pages 231-275, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789812770745_0011
    as

    Download full text from publisher

    File URL: https://www.worldscientific.com/doi/pdf/10.1142/9789812770745_0011
    Download Restriction: Ebook Access is available upon purchase.
    File URL: https://www.worldscientific.com/doi/abs/10.1142/9789812770745_0011
    Download Restriction: Ebook Access is available upon purchase.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Risk; Value; Management; Derivatives;
    All these keywords.

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wsi:wschap:9789812770745_0011. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscientific.com/page/worldscibooks .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.