Acta academica karviniensia 2024, 24(1):43-52 | DOI: 10.25142/aak.2024.004

Determinants of the Bank Stability: Evidence of the Czech Republic

Jan Kostka, Iveta Palečková
Slezská univerzita, Obchodně podnikatelská fakulta, Univerzitní nám. 1934/3, 733 40 Karviná

The aim of the paper is to estimate the determinants of bank stability in the Czech banking sector. The effect of selected bank-specific and macroeconomic variables on bank stability measured by Z-score is examined using econometric analysis. The data set consists of a sample of the Czech banks operating together with macroeconomic factors, and the period of observation is from 2001 to 2020 on an annual basis. Using generalized method of moments, it was found that the determinants that affect the banking stability include the ratio of classified loans to total loans of the bank, capitalization and inflation rate.

Keywords: capitalization, commercial banks, Czech Republic, financial stability, Z-score.
JEL classification: C58, G21

Received: April 23, 2024; Revised: May 30, 2024; Accepted: June 24, 2024; Published: June 28, 2024  Show citation

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Kostka J, Palečková I. Determinants of the Bank Stability: Evidence of the Czech Republic. Acta academica karviniensia. 2024;24(1):43-52. doi: 10.25142/aak.2024.004.
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