Bank Stability: The Case of Nordic and Non-Nordic Banks in Latvia

The banking industry is facing huge challenges due to technology-enabled innovation, to changes in customer preferences, to bank de-risking and to new regulatory initiatives. To go through all these changes, banks need to be stable. The present study contributes to the empirical literature by identifying the determinants of stability of banks in the Latvian Banking Industry. This study covers both bank-specific (endogenous) factors and macroeconomic (exogenous) factors that impact the stability of banks. The data set used in this study is the annual financial statements of Latvian banks operated in the period 2003-2016. Using multivariate regression analysis techniques, we found evidence th…