The main purpose of this paper is to empirically investigate the determinants of bank fragility in the\r\nNorth Cyprus Economy from 1984 to 2008, using a multivariate logit model. A panel data set containing\r\nbank level data for 24 commercial banks together with variables related to the macroeconomic\r\nenvironment. The empirical methodology employed in the article allows for the determination of the\r\nfactors that influence the probability of bank failure. The model links the probability of banking\r\nproblems to a set of bank-specific factors and macro-environment that may have exacerbated the\r\ninternal troubles of the financial institutions. The empirical findings suggested that, capital inadequacy,\r\nlower income, lower bank size, high inflation rate, lower growth rate, adverse terms of trade shocks and\r\nmarket pressure in Turkey are important determinants of banking sector distress in North Cyprus
Loading....