Abstract

MUNOZ-UPEGUI, Dimitri  and  ACOSTA-GONZALEZ, Nicolás. Financial fragility in private banking system of Ecuador. Revista Economía y Política [online]. 2020, n.32, pp.42-68.  Epub July 08, 2020. ISSN 2477-9075.  https://doi.org/10.25097/rep.n32.2020.02.

This paper identifies the main determinants of financial fragility in the private banking sector. We use principal component analysis for dimensionality reduction, then a logit model to estimate the probability of financial fragility. We found that fiscal deficit and the increase in the size of the credit segment in proportion to the total portfolio are the main reasons of an increase in the probability of vulnerability of the private banking sector.

Keywords : Financial fragility; private banking system.

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