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The Effect of Macroeconomic Variables and Internal Factors<br />

On Banking Stability<br />

Gunavathi A/P Anmbarasan<br />

Supervisor: Dr. Suhal Kusairi<br />

Bachelor of Economics (Natural Resources)<br />

School Of Social and Economic Development<br />

Banking stability is very important for supporting the economic stability of the country<br />

because the banking institution is the main factor of the financial system works well.<br />

The study aims to explore the impact of interest rate, inflation rate, bank concentration<br />

and bank size towards the bank stability. Data collected from 6 countries in Asia from<br />

year 2007 to 2016. Using the static panel data analysis, the results stated that there<br />

is a negative relationship between inflation rate and bank stability and shows positive<br />

relationship between bank size, interest rate and bank concentration towards bank<br />

stability. The implication of the study is the bank stability of a country will fall due to<br />

slope in serious contagious. Therefore, all countries should step up measures to<br />

develop bank stability system to be more effective.<br />

JEL Code: E43, G21<br />

Keywords: Bank Stability, interest rate, inflation rate, bank concentration and bank<br />

size<br />

1378 | UMT UNDERGRADUATE RESEARCH DAY 2018

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