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The Role of Human Factors in the Bank Capital Evaluation Framework

Author

Listed:
  • E.A. Posnaya
  • I.G. Vorobyova
  • E.M. Sokolova
  • M.P. Leonova
Abstract
The article assesses various versions of «Bank capital» definitions, and the own bank capital definition is suggested by authors. It assumes that bank capital is a monetary value of the bank’s debts and equities. Milestones of managing the bank capital such as formation and application are provided in the paper. Two groups of bank capital users such as external and internal stakeholders are highlighted. The key-note of the paper is defining the role of human capital in evaluating the bank capital. Human capital is suggested to play positive and negative role through the whole bank capital evaluation. Both subjective pros and cons of the human factor are revealed in the paper. Typical errors such as low-skilled staff, non-flexible mind, inconsistent risk policy in decision-making, deficient analytical framework, lack of useful forecasting are defined. Authors also defined a set of advantages of the human factors such as: quality education, professional skills, professional development, and diplomatic, highly analytical and independent mind, stress tolerance, and so on. The paper highlights the concept that entities’ benefits which are in evaluating the bank capital could be structured in importance and effect of the parties concerned. The hierarchical framework of interests completely depends on the person arranging the framework. The paper stresses that interests of the parties concerned should be listed in the bank capital’s evaluation policy. A set of key indicators such as capital profitability rate, adequacy ratio to highlight stakeholders’ interests are defined. Key features of bank capital management are described. Objectives of internal and external stakeholders’ activity are defined. The set of factors indicating the impact of human factors on evaluating the bank capital are discussed.

Suggested Citation

  • E.A. Posnaya & I.G. Vorobyova & E.M. Sokolova & M.P. Leonova, 2017. "The Role of Human Factors in the Bank Capital Evaluation Framework," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 148-154.
    • Handle: RePEc:ers:journl:v:xx:y:2017:i:1:p:148-154
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    File URL: http://www.ersj.eu/repec/ers/papers/17_1_p14.pdf
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    References listed on IDEAS

    as
    1. Sofya Glavina, 2015. "Influence of Globalization on the Regional Capital Markets and Consequences; Evidence from Warsaw Stock Exchange," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 117-134.
    2. E.S. Akopova & N.V. Przhedetskaya, 2016. "Imperative of State in the Process of Establishment of Innovational Economy in the Globalizing World," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 79-85.
    3. A.V. Sultanova & O.S. Chechina, 2016. "Human Capital as a Key Factor of Economic Growth in Crisis," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 71-78.
    4. Jean-Pierre Allegret & Helene Raymond & Houda Rharrabti, 2016. "The Impact of the Eurozone Crisis on European Banks Stocks Contagion or Interdependence?," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 129-148.
    5. Nikolaos Theriou & Vassilis Aggelidis & Georgios Theriou, 2014. "The Mediating Effect of the Knowledge Management Process to the Firm’s Performance: A Resource-Based View," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(1), pages 87-114.
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    Cited by:

    1. Signe Balina & Kristine Rozite & Inna Steinbuka, 2017. "ICT Industry's Challenge in Latvia," European Research Studies Journal, European Research Studies Journal, vol. 0(3A), pages 802-814.

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    More about this item

    Keywords

    Bank capital; banks; internal and external stakeholders; human factors;
    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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