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Theory and Practice of Capital Estimation Methods: An Application in Bank Management

Author

Listed:
  • E.A. Posnaya
  • M.I. Kaznova
  • I.E. Shapiro
  • I.G. Vorobyova

Abstract

The mechanism of the banking institution’s capital management is a complex array of effective management’s actions and activities aimed at maximization of profit. Banking institutions should carry out theoretical and practical analysis of existing methods of capital estimation in order to develop appropriate management decisions. Nowadays, every banking institution should accentuate the key points and properly define priorities in the bank management system, as it directly influences the main goal of the bank’s activity, i.e., profit-making. Special attention should be paid to bank capital estimation, as the correct capital estimation influences the bank’s activity; the capital plays a dominant role and is considered to be a base value for planning, forecasting and implementing banking transactions. Taking into consideration the existing legislative framework and the experience of various countries in bank capital estimation, it is proposed to identify strengths and weaknesses of the existing methods of bank capital estimation to determine proposals for appropriate estimation.

Suggested Citation

  • E.A. Posnaya & M.I. Kaznova & I.E. Shapiro & I.G. Vorobyova, 2018. "Theory and Practice of Capital Estimation Methods: An Application in Bank Management," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 2), pages 497-505.
    • Handle: RePEc:ers:journl:v:xxi:y:2018:i:special2:p:497-505
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    References listed on IDEAS

    as
    1. Olesya Stroeva & Innara R. Lyapina & Elena E. Konobeeva & Oksana E. Konobeeva, 2015. "Effectiveness of Management of Innovative Activities in Regional Socio-Economic Systems," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 63-76.
    2. E.A. Posnaya & S.V. Tarasenko & I.G. Vorobyova & E.V. Dobrolezha, 2018. "Methodology and Results in Bank Capital Assessment," European Research Studies Journal, European Research Studies Journal, vol. 0(Special1), pages 518-524.
    3. repec:ers:journl:v:special_issue:y:2018:i:1:p:518-524 is not listed on IDEAS
    4. Irina Japparova & Ramona Rupeika-Apoga, 2017. "Banking Business Models of the Digital Future: The Case of Latvia," European Research Studies Journal, European Research Studies Journal, vol. 0(3A), pages 846-860.
    5. E.A. Posnaya & I.G. Vorobyova & S.V. Tarasenko, 2017. "Improving the Bank Reliability Evaluation Framework," European Research Studies Journal, European Research Studies Journal, vol. 0(3B), pages 138-147.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Bank; capital; estimation; mechanism; management; bank resources; legislative framework.;
    All these keywords.

    JEL classification:

    • F60 - International Economics - - Economic Impacts of Globalization - - - General
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • O35 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Social Innovation
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth

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