Banking Stability and Financial Conglomerates in European Emerging Countries

This Element introduces a new approach to financial stability measured by an aggregate index incorporating the effect of parent companies.

This Element estimates and incorporates financial stability and assesses the effect of the parent company on the financial stability of commercial banks and national financial sectors. The results showed that although financial conglomerates contributed to higher financial stability in all banking sectors, the impact on individual banks differed.This Element focuses on the specific role of financial conglomerates in managing banking and financial stability. The Element aims to estimate financial stability in CEE using the constructed aggregate financial stability index, to incorporate the financial stability of the parent company into the index, and to assess the effect of the parent company on the financial stability of commercial banks and national financial sectors.