CLUSTER ANALYSIS OF THE EU BANKING SECTOR BASED ON EBA RISK INDICATORS

PATRIK MIHALECH – MARTINA KOŠÍKOVÁ

https://doi.org/10.53465/EDAMBA.2021.9788022549301.306-316

 

Abstract: Banking sector plays a key role in financial system of every developed country. To know possible weaknesses proper risk management is necessary. European Banking Authority (EBA) is the arterial institution in attempt to consolidate risk management among different countries of European Union. EBA discloses on quarterly basis various Key Risk Indicators (KRIs) for all EU member countries. The goal of this paper is to analyze chosen KRIs of all EU countries and based on distances and similarities among them, insert them into homogenous groups. The purpose of the analysis is to seek insights into different countries bank’s sector and finding similarities among them, which might not be visible at the first glance. For the research, both hierarchical and non- hierarchical cluster analysis were performed. Results show that we could observe four groups of states which could be, with a little generalization, labeled as eastern countries, southern countries, northern countries and middle and core countries of EU, based on analyzed KRIs.

Keywords: cluster analysis, EU banking sector, risk indicators

JEL classification: C38, G21

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Online publication date: 12 May 2022

 

To cite this article (APA style):

Mihalech, P. & Košíková, M. (2022). Cluster Analysis of the EU Banking Sector Based on EBA Risk Indicators. Proceedings from the EDAMBA 2021 conference, 306 – 316. https://doi.org/10.53465/EDAMBA.2021.9788022549301.306-316