The impact of credit risk on the financial stability of commercial banks in Vietnam
This study investigates the impact of credit risk on the financial stability of Vietnamese commercial banks. The paper uses the Z-score to proxy the financial stability of banks. We use the data of 27 Vietnamese commercial banks on BankScope, during 2010 - 2019. The paper applied a dynamic panel dat...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
HO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCE
2021-08-01
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| Series: | Ho Chi Minh City Open University Journal of Science - Economics and Business Administration |
| Subjects: | |
| Online Access: | https://journalofscience.ou.edu.vn/index.php/econ-en/article/view/1421 |
| _version_ | 1818568767136858112 |
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| author | Nguyen Quoc Anh Duong Nguyen Thanh Phuong |
| author_facet | Nguyen Quoc Anh Duong Nguyen Thanh Phuong |
| author_sort | Nguyen Quoc Anh |
| collection | DOAJ |
| description | This study investigates the impact of credit risk on the financial stability of Vietnamese commercial banks. The paper uses the Z-score to proxy the financial stability of banks. We use the data of 27 Vietnamese commercial banks on BankScope, during 2010 - 2019. The paper applied a dynamic panel data approach; the selected method is the difference GMM (DGMM). The key question discussed is which factor impacts on Z-score. Analysis results show the negative effect of non-performing loans on the financial stability of banks. When commercial banks have higher non-performing loans, the lower the financial stability is. Additionally, bank-specific variables such as equity on asset ratio, the return on equity, the size of the bank and set of macroeconomic variables affect the bank’s financial stability. Based on the analysis results, we imply relevant policies for the State Bank of Vietnam and commercial banks. |
| first_indexed | 2024-12-14T06:39:25Z |
| format | Article |
| id | doaj.art-b68c0969d64d4449b0ea81f384882608 |
| institution | Directory Open Access Journal |
| issn | 2734-9314 2734-9586 |
| language | English |
| last_indexed | 2024-12-14T06:39:25Z |
| publishDate | 2021-08-01 |
| publisher | HO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCE |
| record_format | Article |
| series | Ho Chi Minh City Open University Journal of Science - Economics and Business Administration |
| spelling | doaj.art-b68c0969d64d4449b0ea81f3848826082022-12-21T23:13:16ZengHO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCEHo Chi Minh City Open University Journal of Science - Economics and Business Administration2734-93142734-95862021-08-01112678010.46223/HCMCOUJS.econ.en.11.2.1421.20211563The impact of credit risk on the financial stability of commercial banks in VietnamNguyen Quoc Anh0Duong Nguyen Thanh Phuong1University of Economics Ho Chi Minh CityUniversity of Economics Ho Chi Minh CityThis study investigates the impact of credit risk on the financial stability of Vietnamese commercial banks. The paper uses the Z-score to proxy the financial stability of banks. We use the data of 27 Vietnamese commercial banks on BankScope, during 2010 - 2019. The paper applied a dynamic panel data approach; the selected method is the difference GMM (DGMM). The key question discussed is which factor impacts on Z-score. Analysis results show the negative effect of non-performing loans on the financial stability of banks. When commercial banks have higher non-performing loans, the lower the financial stability is. Additionally, bank-specific variables such as equity on asset ratio, the return on equity, the size of the bank and set of macroeconomic variables affect the bank’s financial stability. Based on the analysis results, we imply relevant policies for the State Bank of Vietnam and commercial banks.https://journalofscience.ou.edu.vn/index.php/econ-en/article/view/1421commercial bankcredit riskfinancial stabilitygmmz-score |
| spellingShingle | Nguyen Quoc Anh Duong Nguyen Thanh Phuong The impact of credit risk on the financial stability of commercial banks in Vietnam Ho Chi Minh City Open University Journal of Science - Economics and Business Administration commercial bank credit risk financial stability gmm z-score |
| title | The impact of credit risk on the financial stability of commercial banks in Vietnam |
| title_full | The impact of credit risk on the financial stability of commercial banks in Vietnam |
| title_fullStr | The impact of credit risk on the financial stability of commercial banks in Vietnam |
| title_full_unstemmed | The impact of credit risk on the financial stability of commercial banks in Vietnam |
| title_short | The impact of credit risk on the financial stability of commercial banks in Vietnam |
| title_sort | impact of credit risk on the financial stability of commercial banks in vietnam |
| topic | commercial bank credit risk financial stability gmm z-score |
| url | https://journalofscience.ou.edu.vn/index.php/econ-en/article/view/1421 |
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