Abi Abboud, Joanna Michel
(Notre Dame University-Louaize, 2018)
Purpose - The purpose of this study is to capture the relationship between credit risk of
European commercial banks and their profitability, taking into consideration regulatory
requirements under several stressed scenarios.
Design/Methodology/Approach - The sample of this study consists of 12 out of 15
largest commercial banks in Europe as measured by their total assets in 2017. This study
uses hypothesis testing and stress testing approaches to capture the relationship between
credit risk of banks and their profitability and to determine the sufficiency of bank
capital adequacy.
Findings ...