Bank Distress in the European Union 2008-2015: A General Assessment
46 Pages Posted: 8 Jul 2018 Last revised: 4 Oct 2018
Date Written: June 17, 2018
This paper focuses on EU banks that experienced distress during 2008-2015 and provides evidence regarding bank-specific, macroeconomic, and stock market variables and the probability of distress. The sample employed is unique in terms of the definition of distress. Results indicate that a combination of the above explains the probability of distress well, emphasizing the importance of the simple equity ratio and size. The paper also focuses on banks in EU countries that faced economic problems and documents that the probability of bank distress in these countries has been influenced by different factors, in comparison to the rest of the EU.
Keywords: Bank Distress, CAMELS, European Union Banks, Size, Revenue Diversification
JEL Classification: G01, G21, G33
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