Capital adequacy ratio and a bank’s financial stability in Vietnam

The objective of this study is to provide more empirical evidence on the impact of the capital adequacy ratio, as well as control and micro variables, on the financial stability of commercial banks in emerging markets such as Vietnam. The study analyzes the impact of the capital adequacy ratio on th...

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Autor principal:	Nguyen Minh Sang
Formato:	article
Lenguaje:	EN
Publicado:	LLC "CPC "Business Perspectives" 2021
Materias:	Basel commercial banks GMM Vietnam Banking HG1501-3550
Acceso en línea:	https://doaj.org/article/ca157e974bf94eb191ce9ba57dd6c555
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spelling	oai:doaj.org-article:ca157e974bf94eb191ce9ba57dd6c5552021-11-18T10:02:18ZCapital adequacy ratio and a bank’s financial stability in Vietnam10.21511/bbs.16(4).2021.061816-74031991-7074https://doaj.org/article/ca157e974bf94eb191ce9ba57dd6c5552021-11-01T00:00:00Zhttps://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/15825/BBS_2021_04_Sang.pdfhttps://doaj.org/toc/1816-7403https://doaj.org/toc/1991-7074The objective of this study is to provide more empirical evidence on the impact of the capital adequacy ratio, as well as control and micro variables, on the financial stability of commercial banks in emerging markets such as Vietnam. The study analyzes the impact of the capital adequacy ratio on the financial stability of 18 Vietnamese commercial banks in the period 2010–2020 using the Generalized method of moments (GMM) model. Empirical research results show that the capital adequacy ratio has a positive correlation with the financial stability of Vietnamese commercial banks during the study period. Besides, the study also uses control variables such as Profitability through ROA and ROE, Bank Size (SIZE), Loans to Assets Ratio (LTA), Deposits to Assets Ratio (DTA), and Loan Loss Ratio (LLR), to analyze their impact on the financial stability of Vietnamese commercial banks. Based on the above results, the study proposes some policy implications to enhance the financial stability of Vietnamese commercial banks using the capital adequacy ratio and the control variables from the GMM model that are statistically significant. The paper also pointed out four limitations of the study in terms of data, research samples, methods and research models, so that further research can be more complete. AcknowledgmentThe author wishes to acknowledge support from the Banking University of Ho Chi Minh City. This research was made possible thanks to all valuable support from relevant stakeholders.Nguyen Minh SangLLC "CPC "Business Perspectives"articleBaselcommercial banksGMMVietnamBankingHG1501-3550ENBanks and Bank Systems, Vol 16, Iss 4, Pp 61-71 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	Basel commercial banks GMM Vietnam Banking HG1501-3550
spellingShingle	Basel commercial banks GMM Vietnam Banking HG1501-3550 Nguyen Minh Sang Capital adequacy ratio and a bank’s financial stability in Vietnam
description	The objective of this study is to provide more empirical evidence on the impact of the capital adequacy ratio, as well as control and micro variables, on the financial stability of commercial banks in emerging markets such as Vietnam. The study analyzes the impact of the capital adequacy ratio on the financial stability of 18 Vietnamese commercial banks in the period 2010–2020 using the Generalized method of moments (GMM) model. Empirical research results show that the capital adequacy ratio has a positive correlation with the financial stability of Vietnamese commercial banks during the study period. Besides, the study also uses control variables such as Profitability through ROA and ROE, Bank Size (SIZE), Loans to Assets Ratio (LTA), Deposits to Assets Ratio (DTA), and Loan Loss Ratio (LLR), to analyze their impact on the financial stability of Vietnamese commercial banks. Based on the above results, the study proposes some policy implications to enhance the financial stability of Vietnamese commercial banks using the capital adequacy ratio and the control variables from the GMM model that are statistically significant. The paper also pointed out four limitations of the study in terms of data, research samples, methods and research models, so that further research can be more complete. AcknowledgmentThe author wishes to acknowledge support from the Banking University of Ho Chi Minh City. This research was made possible thanks to all valuable support from relevant stakeholders.
format	article
author	Nguyen Minh Sang
author_facet	Nguyen Minh Sang
author_sort	Nguyen Minh Sang
title	Capital adequacy ratio and a bank’s financial stability in Vietnam
title_short	Capital adequacy ratio and a bank’s financial stability in Vietnam
title_full	Capital adequacy ratio and a bank’s financial stability in Vietnam
title_fullStr	Capital adequacy ratio and a bank’s financial stability in Vietnam
title_full_unstemmed	Capital adequacy ratio and a bank’s financial stability in Vietnam
title_sort	capital adequacy ratio and a bank’s financial stability in vietnam
publisher	LLC "CPC "Business Perspectives"
publishDate	2021
url	https://doaj.org/article/ca157e974bf94eb191ce9ba57dd6c555
work_keys_str_mv	AT nguyenminhsang capitaladequacyratioandabanksfinancialstabilityinvietnam
_version_	1718420870913851392

Capital adequacy ratio and a bank’s financial stability in Vietnam

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