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KEY PROBLEMS OF FORMATION AND EFFECTIVE USE OF BANK ECONOMIC CAPITAL

Journal: University Economic Bulletin. Collection of scientific articles of scientists and post-graduate students (Vol.1, No. 27)

Publication Date:

Authors : ;

Page : 168-173

Keywords : economic security bank balance; regulatory and economic capital; Assets of segments; measurement indicators; integral index; economic capital modeling;

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Abstract

Scientific substantiation of key issues and measures to implement them in order to ensure the formation of sufficient capital for economic stability of the banking institutions in terms of economic stagnation, inflation of the currency, challenges and threats in the financial sector as the object and purpose of the study determine its relevance and the need to complete the necessary methods and organizational support for development and effective use of financial resources of the bank. The article analyzes the theory and methodology for the formation and use of economic capital bank for its adequacy and proposed order of investigation of these processes: modeling techniques functional relationships (formation) methods of regulation (assessment and determination of sufficiency), risk management (use). The directions search tools and impact assessment identifying indicators of financial stability of banks depending on the criterion signs of his state. Given the banks' ability to withstand financial shocks Basel Committee in 2008 announced a comprehensive strategy and risk management of banks, as well as recommendations on modeling integral index of economic security of the bank. Based on the theoretical foundations of economic capital formula published volumes simulations concluded that the most suitable to assess and determine the economic capital model is WACC (Weighted Average Cost of Capital), model estimation of capital assets CAPM, methods of Swiss bank Credit Suisse, as well as technique calculation of economic capital at risk. We offer a new optimization model determine the need for economic capital as the potential capital or the total amount of unpredictable risk weighting considering all types of assets to certain risks, including by business segments and comparison with variants volume of regulatory capital as a resource economic capital. The obtained results of scientific research system means expanding the coverage of economic capital, make it possible to estimate the margin of safety regulatory capital and setting individual approaches to the officially accepted standards and basic adequacy of bank capital that the use of the calculations, comparisons and justifications enables banks to reduce their activities in all kinds risks.

Last modified: 2016-07-21 22:08:54