Rethinking Credit Risk under the Malinvestment Concept: The Case of Germany, Spain and Italy

Ekinci, Aykut

doi:10.18267/j.efaj.152

Cited by 3 publications

(2 citation statements)

References 33 publications

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“…It can be argued that these approaches are over-simplistic because of their restrictive assumptions. In fact, forecasting different indicators (including here the probability of default) is a common practice in finance (Ekinci, 2016). For instance, Monte Carlo simulations can be used in forecasting the probability of an investment project to generate a positive net present value (e.g.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

What Do Post-Communist Countries Have in Common When Predicting Financial Distress?

Popescu¹,

Dragotă²

2018

Prague Economic Papers

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Business failure prediction is an important issue in corporate finance. Different prediction models are proposed by financial theory and are often used in practice. Their application is effortless, selecting only few key inputs with the greatest informative power from the large list of possible indicators. Our paper identifies the financial distress predictors for 5 post-communist countries (Bulgaria, Croatia, the Czech Republic, Hungary and Romania) based on information collected from the Amadeus database for the period 2011-2013 using CHAID decision trees and neural networks. We propose a short list of indicators, which can offer a synthetic perspective on corporate distress risk, adapted for these countries. The best prediction models are substantially different from country to country: in the Czech Republic, Hungary and Romania the flow-approach indicators perform better, while in Bulgaria and Croatia-the stock-approach indicators. The results suggest that the extrapolation of such models from one country to another should be made cautiously. One interesting finding is the presence of the ratios per employee as predictors of financial distress.

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Section: Theoretical Backgroundmentioning

confidence: 99%

What Do Post-Communist Countries Have in Common When Predicting Financial Distress?

Popescu¹,

Dragotă²

2018

Prague Economic Papers

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“…At present, China has not established its own credit risk measurement model, which is based on its own supervisor's judgment and cannot make objective evaluation, so credit assets cannot be quantitatively priced or traded. At present, China's commercial bank outlets are all over the country, covering a wide range [13]. With the changes of the times, many commercial banks are also based on the Internet, e-commerce, and online banking, but the market risks are obviously increasing [14].…”

Section: Introductionmentioning

confidence: 99%

Risk Management Analysis of Modern Commercial Banks Using Behavioral Finance Theory and Artificial Neural Networks

Piao

Xiao

2022

Wireless Communications and Mobile Computing

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With the increasing trend of economic globalization, China’s pace of promoting interest rate marketization is gradually accelerating, and financial market volatility is increasing day by day. Credit risk is at an all-time high for commercial banks. The most significant risk that banks face is credit risk. The methods and technologies of commercial bank risk management have improved with the accelerating process of financial globalization, but the rationality of risk managers who implement daily management is limited and will be influenced by emotion and will. As a result, they will be unable to implement completely unbiased risk management, i.e., they will not be able to apply risk management objectives to daily risk management in an optimal manner. The importance and measurement complexity of commercial bank credit risk is growing in tandem with the financial market’s increasing complexity. The traditional credit risk assessment model is no longer adequate to meet the requirements of today’s financial risk management system. The research into the credit risk assessment model is both theoretically and practically significant.

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Pointlessness of average period of production: A critique of Lewin and Cachanosky

Rapka

2024

Rev Austrian Econ

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Peter Lewin and Nicolas Cachanosky seek to rehabilitate the concept of the average period of production (APP) introduced into Austrian capital theory by Böhm-Bawerk (1930). In their works, they argue that the financial concepts of Macauley’s Duration and Modified Duration are appropriate measures of the average period of production. For this reason, the most relevant aspects of the Austrian Business Cycle Theory (ABCT), i.e. the lengthening and shortening of the production structure, can be captured by them. In fact, the introduction of this concept into ABCT is pointless, since it only shows the sensitivity of the economy to changes in interest rates. Meanwhile, it does not help us understand a number of other phenomena that can be observed over the business cycle. By focusing on APP as represented by duration and modified duration, we are only referring to how the average value of all investments in the economy changes under the influence of a change in interest rates, ignoring other important phenomena that take place over the course of the business cycle.

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Rethinking Credit Risk under the Malinvestment Concept: The Case of Germany, Spain and Italy

Cited by 3 publications

References 33 publications

What Do Post-Communist Countries Have in Common When Predicting Financial Distress?

What Do Post-Communist Countries Have in Common When Predicting Financial Distress?

Risk Management Analysis of Modern Commercial Banks Using Behavioral Finance Theory and Artificial Neural Networks

Pointlessness of average period of production: A critique of Lewin and Cachanosky

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