The Relationship of the Market Position of the Bank and its Financial Stability

Student: Fedotov Kirill

Educational Programme: Financial Engineering (Master)

Year of Graduation: 2017

This paper describes influence of the bank's market position on its financial stability. The hypothesis that the inclusion of indicators characterizing the position of the bank relative to its competitors into the model of prediction of bank's defaults will have a positive effect on its predictive power, has been fully confirmed. During the research, were considered possible sources of information, were written automated scripts for loading data from open sources and their subsequent processing. Two models were built: a model that includes the indicators that make up the classic method of analyzing the financial stability of the bank (CAMEL), and a model that also includes indicators of the market position of banks. Comparative analysis showed that the inclusion of these factors allows us to strengthen the predictive power of the original model, as well as provide a more comprehensive analysis of the financial stability of banks.

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