Model for assessing the financial stability of commercial bank

Abstract

This article is devoted to a model for assessing the financial stability of a Kazakhstan bank. One of
the priority tasks for effective management of the bank’s activities is the established work of existing
business processes that have a direct impact on financial stability. At the same time, supervisory regulation
of the banking sector is aimed at assessing the acceptability of risks taken by second-tier banks and,
if necessary, timely adjusting their activities.
The hypothesis of the study is the assumption that the Bank’s early diagnosis of the impact of potential
external and internal risks on the Bank’s strategic indicators, as well as the effective management
of capital adequacy, serve as the basis for ensuring the financial stability of a commercial bank and its
stable functioning.
The study examines the theoretical foundations of solvency, defines the concept of bank stability,
studies the factors affecting the financial position of the bank, and defines the main criteria for evaluating
banks accepted in international practice.
This paper gives general recommendations when developing a model for assessing the capital adequacy
of a second-tier bank, both when checking the stability of the bank, and in strategic planning to
support management decisions.