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...

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Autores principales:	Nguyen Quoc Anh, Duong Nguyen Thanh Phuong
Formato:	article
Lenguaje:	EN
Publicado:	HO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCE 2021
Materias:	commercial bank credit risk financial stability gmm z-score Economic theory. Demography HB1-3840
Acceso en línea:	https://doaj.org/article/b68c0969d64d4449b0ea81f384882608
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spelling	oai:doaj.org-article:b68c0969d64d4449b0ea81f3848826082021-11-15T08:44:54ZThe impact of credit risk on the financial stability of commercial banks in Vietnam2734-93142734-958610.46223/HCMCOUJS.econ.en.11.2.1421.2021https://doaj.org/article/b68c0969d64d4449b0ea81f3848826082021-08-01T00:00:00Zhttps://journalofscience.ou.edu.vn/index.php/econ-en/article/view/1421https://doaj.org/toc/2734-9314https://doaj.org/toc/2734-9586This 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.Nguyen Quoc AnhDuong Nguyen Thanh PhuongHO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCEarticlecommercial bankcredit riskfinancial stabilitygmmz-scoreEconomic theory. DemographyHB1-3840ENHo Chi Minh City Open University Journal of Science - Economics and Business Administration, Vol 11, Iss 2, Pp 67-80 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	commercial bank credit risk financial stability gmm z-score Economic theory. Demography HB1-3840
spellingShingle	commercial bank credit risk financial stability gmm z-score Economic theory. Demography HB1-3840 Nguyen Quoc Anh Duong Nguyen Thanh Phuong The impact of credit risk on the financial stability of commercial banks in Vietnam
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.
format	article
author	Nguyen Quoc Anh Duong Nguyen Thanh Phuong
author_facet	Nguyen Quoc Anh Duong Nguyen Thanh Phuong
author_sort	Nguyen Quoc Anh
title	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_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_sort	impact of credit risk on the financial stability of commercial banks in vietnam
publisher	HO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCE
publishDate	2021
url	https://doaj.org/article/b68c0969d64d4449b0ea81f384882608
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The impact of credit risk on the financial stability of commercial banks in Vietnam

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