Banking Financial Stability Measured by Credit Risk Measurements (Quantitative Technique): New Evidence from Palestinian Commercial Banking Sector.

Abstract

Credit risk management is the vital part of the comprehensive management and in addition to part of the control system. Credit risk is entirely considered as the most important risk for banks and financial institutions in general due to it being related with every trade transaction and financial activities. Banks must fulfill the priorities and the international standards of financial stability and sustainability. The present study is an attempt to evaluate and measure the Palestinian banking sector performance. For this reason, credit risk management approach (basically a quantitative technique includes; Capital Adequacy, Asset Quality, Leverage, Liquidity and Earning) has been implemented. A total of 13 banks were selected for a nine-year period from 2011 till 2019). This approach found that all the selected banks are in unsatisfactory performance.