The Impact of Monetary Policy on Insolvency Risk at Vietnamese Commercial Banks

Mai Thi Phuong Thuy

The Impact of Monetary Policy on Insolvency Risk at Vietnamese Commercial Banks

Mai Thi Phuong Thuy *

Contact

The Impact of Monetary Policy on Insolvency Risk at Vietnamese Commercial Banks

Article Fingerprint

ReserarchID

MBR8L055

The Impact of Monetary Policy on Insolvency Risk at Vietnamese Commercial Banks Banner

AI TAKEAWAY

Connecting with the Eternal Ground

Abstract

The study assesses the impact of monetary policy on Vietnamese commercial banks’ insolvency risk during the 2008-2017 period, with balanced panel data for 30 commercial banks in Vietnam. Results from the study show that an increase in the M2 money supply creates an increase in the Z index, which means a reduction in the risk of insolvency. The expansionary monetary policy increases real estate prices, collateral value, and bank capital, resulting in higher asset value for the bank. As a result, both deposit growth and credit growth in the economy have positive signs; therefore, the activity of commercial banks results in efficiency and improved profit, reducing the risk of insolvency. This result is consistent with the Borio and Zhu (2012) reports.

References

21 Cites in Article

Reference Format

Itai Agur,Maria Demertzis (2012). Excessive Bank Risk Taking and Monetary Policy.
Piergiorgio Alessandri,Benjamin Nelson (2015). Simple Banking: Profitability and the Yield Curve.
C Borio,H Zhu (2012). Capital regulation, risktaking and monetary policy: A missing link in the transmission mechanism.
Claudio Borio,Haibin Zhu (2012). Capital regulation, risk-taking and monetary policy: A missing link in the transmission mechanism?.
Claudio Borio,Haibin Zhu (2012). Capital regulation, risk-taking and monetary policy: A missing link in the transmission mechanism?.
S Brissimis,M Delis,M Iosifidi (2014). Bank market power and monetary policy transmission.
G De Nicolò,G Dell' Ariccia,L Laeven,F Valencia (2010). Monetary policy and bank risk taking.
Manthos Delis,Georgios Kouretas (2011). Interest rates and bank risk-taking.
Giovanni Dellʼariccia,Luc Laeven,Robert Marquez (2014). Real interest rates, leverage, and bank risk-taking.
G Dell'ariccia,R Marquez (2009). Lending booms and lending standards.
A Demirgüç-Kunt,H Huizinga (2010). Bank activity and funding strategies: The impact on risk and returns.
Atish Ghosh,Jonathan Ostry,Marcos Chamon (2016). Two targets, two instruments: Monetary and exchange rate policies in emerging market economies.
J Houston,C Lin,P Lin,Y Ma (2010). Creditor rights, information sharing, and bank risk taking.
G Jiménez,S Ongena,J Peydró,J Saurina (2014). Hazardous Times for Monetary Policy: What Do Twenty-Three Million Bank Loans Say About the Effects of Monetary Policy on Credit Risk-Taking?.
A Kashyap,J Stein (1995). The impact of monetary policy on bank balance sheets.
L Laeven,R Levine (2009). Bank governance, regulation and risk taking.
Luc Laeven,Fabián Valencia (2013). Systemic Banking Crises Database.
Rosa Lastra,Mariá & Schiffman,N Henry (1999). Bank failures and bank insolvency law in economies in transition.
Minghua Chen,Ji Wu,Bang Jeon,Rui Wang (2017). Monetary policy and bank risk-taking: Evidence from emerging economies.
Mohamed Aymen,Ben Moussa (2015). The Determinants of Bank Liquidity: Case of Tunisia.
Teodora Paligorova,João Santos (2012). Monetary Policy and Bank Risk-Taking: Evidence from the Corporate Loan Market.

Download References

Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

Data Availability

Not applicable for this article.

How to Cite This Article

Mai Thi Phuong Thuy. 2020. "The Impact of Monetary Policy on Insolvency Risk at Vietnamese Commercial Banks". Global Journal of Management and Business Research - C: Finance GJMBR-C Volume 20 (GJMBR Volume 20 Issue C4).

More Citation Formats

Select Citation Style:

Download Citation

GJMBR Volume 20 Issue C4

Explore Journals Explore Volume Read This Issue

Journal Specifications

Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

Keywords

Not Found

Classification

GJMBR-C Classification JEL Code: E5

E52

E51

Submission ReceivedDecember 8, 2019
Peer Review Double Blind
Handling Editor
Accepted December 31, 2019
Published January 15, 2020

Version of record

v1.2

Issue date

September 22, 2020

Language

English

Experiance in AR

Explore published articles in an immersive Augmented Reality environment. Our platform converts research papers into interactive 3D books, allowing readers to view and interact with content using AR and VR compatible devices.

View in VR

Read in 3D

Your published article is automatically converted into a realistic 3D book. Flip through pages and read research papers in a more engaging and interactive format.

View in 3D

Article Matrices

Total Views: 692

Total Downloads: 40

All Trends