Bank Distress in the European Union 2008-2015: A Closer Look at Capital, Size, and Revenue Diversification
Posted: 25 Jan 2019
Date Written: January 21, 2019
The recent financial crisis has clearly highlighted the importance of the timely identification of weak banks. This paper introduces and analyses a unique sample of EU banks, which faced distress during 2008-2015 and provides evidence regarding the relationship between distress and bank-specific and macroeconomic variables, paying particular attention to capital, size, and revenue diversification. Findings regarding these variables seem to connect well with current supervisory actions. The paper also focuses on banks in EU countries that faced economic problems and documents that the probability of distress in these countries has been influenced by different factors, in comparison to the rest of the EU.
Keywords: Bank Distress, European Union Banks, Capital Ratios, Size, Revenue Diversification, GIIPS
JEL Classification: G01, G21, G33
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