Financial Stability and Public Confidence in Banks

Chernykh, Lucy; Davydov, Denis; Sihvonen, Jukka

doi:10.2139/ssrn.3339743

Cited by 8 publications

(9 citation statements)

References 23 publications

(24 reference statements)

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“…The larger banks size is used as a way to create a competitive advantage (Onour et al, 2019). In addition, it will enhance public trust in saving their money in the bank, resulting in a rise in ROA (Chernykh et al, 2019). Based on this statement, it can be concluded that Size has a positive effect on ROA.…”

Section: Bank Size On Return On Assets (Roa)mentioning

confidence: 95%

Determinants of Financial Performance of Commercial Banks: Evidence from Indonesia

Oktapiani

2022

Journal of Business, Management, and Social Studies

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The purpose of the study was to examine the determinants of banks’ profitability at commercial banks listed on the Indonesia Stock Exchange. This study employs a quantitative approach that emphasizes objective measurements. The Return on Assets is the dependent variable in this research. In addition, there are four independent variables, namely Loan to Deposit Ratio, Non-Performing Loan, Cost to Income ratio, and Bank Size. The data on Return on Assets was retrieved from Otoritas Jasa Keuangan. In addition, the LDR, NPL, CIR, and Bank Size were also obtained from the bank annual report and Otoritas Jasa Keuangan. The number of samples used in this study was 115 data retrieved from 23 commercial banks during five years of cross-time data. The test results show that Cost to Income ratio and Bank size significantly influence ROA negatively, while Loan to Deposit ratio and Non-Performing loans insignificantly influence ROA. The suggested study will contribute to the growing body of Return on Assets knowledge in the context of commercial banks in Indonesia.

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Section: Bank Size On Return On Assets (Roa)mentioning

confidence: 95%

Determinants of Financial Performance of Commercial Banks: Evidence from Indonesia

Oktapiani

2022

Journal of Business, Management, and Social Studies

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“…Thus establishing the levels and understanding the dynamics of public confidence in financial institutions following crisis and strong regulatory response are crucial for financial and economic growth strategies and forecasts. Even though the importance of public confidence in financial institutions is recognized by researchers and policymakers, little is known about the combinations of factors that affect trust (Chernykh et al, 2019). In Ghana (Ayanou et al, 2014;Oduro et al, 2019;Sarpong, 2018) studied the financial sector in one way or the other, rigorous studies that focus on public confidence in financial institutions are lacking.…”

Section: Study Backgroundmentioning

confidence: 99%

“…Majority of these researches estimate confidence levels and explain them by socio-demographic, economic and institutional factors (see for example, Dutch Banking Association [DBA], 2017; Fungáčová et al, 2019;Jansen et al, 2015). Others have focused on comparative studies within and across countries (see Afandi & Habibov, 2017;Fungáčová et al, 2019;Hussein, 2016;Knell & Stix, 2015;Mosch & Prast, 2010;Osili & Paulson, 2014); while very few have explored the role of bank-specific characteristics on public confidence (Carbo-Valverde et al, 2013;Chernykh et al, 2019).…”

Section: Related Studiesmentioning

confidence: 99%

“…Applying two alternative measures of public confidence in banks, constructed by using an aggregation of bank clients" opinions, Chernykh et al (2019) showed that public confidence in individual Russian banks strongly associated with the overall financial health of the banking industry. In Carbo-Valverde et al (2013), it was concluded that aggregated bank-specific qualitative characteristics were the major determinants of public trust in financial institutions by Spanish households during the global financial crisis.…”

Section: Related Studiesmentioning

confidence: 99%

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Partial Ordered Logit Analysis of Confidence Levels in Financial Institutions in Ghana. The Case of Asante Mampong Municipality

Abunyuwah¹

2020

IJEF

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In recent times the financial sector (FS) of Ghana has been saddled with liquidity and operational challenges leading to several financial policies put in place by the Central Bank. The financial crisis and its resultant stringent measures affected public confidence as many customers lost their investments/savings while some financial institutions were consolidated or collapsed. Noting the critical role of public confidence in the financial sector, this paper assessed the confidence levels in FS of Ghana, using Asante Mampong Municipality as a case study. A random sample of 384 respondents was used. Due to the ordinal nature of the dependent variable (confidence levels), the Partial Proportional Odds (PPO) model was used when the ordered logit model failed to pass the proportional odds assumption. About 46.4% of the respondents reported having ‘no confidence’ in the financial institutions of the country, while 37% indicated having ‘somehow confident’ in the sector. Less than 20% of the respondents expressed ‘confident’ (13.3%) or ‘very confident’ (3.4%) in the FS. Duration of engagement with a financial institution, loss of investment, awareness of crisis/reforms of the financial sector and income levels affected the confidence levels in the financial sector. Financial institutions are recommended to strengthen their relationship with customers by providing improved services and policy measures that secure customers investment/savings to ensure sustained and increased levels of confidence.

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“…Bank stability is the crucial factor for staying in the financial industry. The importance of bank stability, according to Chernykh et al (2019) is essential for rising public confidence that the safety and soundness of individual bank. The resilient and stable banking system reinforces trust in banks and assures bank customers that their deposits are safe and used judiciously (Yakubu and Abokor, 2020).…”

Section: Introductionmentioning

confidence: 99%

Monetary Policy and Islamic Bank Stability in Indonesia

Syapriatama¹,

Pratiwi²

2021

JED

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The purpose of this paper is to examine the role of monetary policy to Islamic Bank Stability in Indonesia from January 2007 to December 2020. The policy is presented by Bank Indonesia 7DRR while Islamic Bank Stability uses Islamic Bank Z-score. This paper also employs several variables as control variable in order to manage effectiveness of the model. This paper uses Autoregressive Distributed Lag method (ARDL) in order to investigate the long run and short run effect between selected variables. The results reveal that the policy does not affect the Islamic Bank Stability in the long run. It only affects the Stability in the short run. The result also implies that tightening policy is responded by Islamic Bank Stability based on the financial environment.

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Financial Stability and Public Confidence in Banks

Cited by 8 publications

References 23 publications

Determinants of Financial Performance of Commercial Banks: Evidence from Indonesia

Determinants of Financial Performance of Commercial Banks: Evidence from Indonesia

Partial Ordered Logit Analysis of Confidence Levels in Financial Institutions in Ghana. The Case of Asante Mampong Municipality

Monetary Policy and Islamic Bank Stability in Indonesia

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