Economic and financial determinants of bankrupcy: evidence from Ecuador’s private banks and the impact of dollarization on financial fragility

Uquillas, Adriana; Flores, Francis

doi:10.7819/rbgn.v22i4.4080

Adriana Uquillas

National Polytechnic School, Department of Mathematics, Quito, Equador. E-mail: adriana.uquilas@epn.edu.ec

https://orcid.org/0000-0003-1052-6260

Francis Flores

National Polytechnic School, Department of Quantitative Economics, Quito, Equador. E-mail: francis.flores@epn.edu.ec

https://orcid.org/0000-0002-0983-4250

Responsible Editor:

Prof. Dr. Ilidio Lopes

1
. Adriana Uquillas, PhD, Universidade de Sao Paulo, SP, Brazil.

2
. Francis Flores, Escuela Politécnica Nacional, Quito, Equador.

Contribution of each author

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Contribution Adriana Uquillas Francis Flores 1. Definition of research problem √ 2. Development of hypotheses or research questions (empirical studies) √ 3. Development of theoretical propositions (theoretical work) √ 4. Theoretical foundation/literature review √ 5. Definition of methodological procedures √ 6. Data collection √ 7. Statistical analysis √ √ 8. Analysis and interpretation of data √ √ 9. Critical revision of the manuscript √ 10. Manuscript writing √ √ 11. Other

Figures (8)
Tables (5)

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Figure 1
Evolving banking system of Ecuador 1996-2016

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Figure 2
Evolutionary monthly inflation and default rate of the private banking system 1996-2016

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Figure 3
Evolutionary financial spread 1996-2016

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Figure 4
Leveraging of the financial system and default rate

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Figure 5
Bank bankruptcy rate based on ROE

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Figure 6
Portfolio delinquency by deciles versus bankruptcy rate.

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Figure 7
ROC curve validation sample

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Figure 8
Estimated fragility states of the national financial system: real vs. projected bankruptcy rate of Ecuador’s private banks

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Contribution Adriana Uquillas Francis Flores 1. Definition of research problem √ 2. Development of hypotheses or research questions (empirical studies) √ 3. Development of theoretical propositions (theoretical work) √ 4. Theoretical foundation/literature review √ 5. Definition of methodological procedures √ 6. Data collection √ 7. Statistical analysis √ √ 8. Analysis and interpretation of data √ √ 9. Critical revision of the manuscript √ 10. Manuscript writing √ √ 11. Other

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Table 1
Description of each exogenous variable of the model

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Table 2
Bankruptcy model estimated using the Firth method

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1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Abn Amro Abn Amro Abn Amro Abn Amro Abn Amro Amazonas Guayaquil Guayaquil Guayaquil Guayaquil Albobanco Amazonas Amazonas Amazonas Amazonas Austro Pacifico Pacifico Pacifico Pacifico Amazonas Aserval Aserval Aserval Aserval Bolivariano Pichincha Pichincha Pichincha Pichincha Aserval Austro Austro Austro Austro Centromundo Produbanco Produbanco Produbanco Produbanco Austro Azuay Azuay Azuay Azuay Citibank Austro Austro Austro Austro Azuay Bancomex Bancomex Bolivariano Bolivariano Cofiec Bolivariano Bolivariano Bolivariano Bolivariano Bolivariano Bolivariano Bolivariano Centromundo Centromundo Comercial De Manabí Citibank Citibank Citibank Citibank Caja Credito Centromundo Centromundo Citibank Citibank De Guayaquil General Rumiñahui General Rumiñahui General Rumiñahui General Rumiñahui Centro Mundo Citibank Citibank Comercial De Manabí Comercial De Manabí Gnb (Ecuador) S.A. Internacional Internacional Internacional Internacional Citibank Cofiec Cofiec De Guayaquil De Guayaquil Gral.Rumiñahui Lloyds Bank Lloyds Bank Machala Machala Cofiec Comercial Manabi Comercial Manabi Gnb (Ecuador) S.A. Gnb (Ecuador) S.A. Internacional Machala Machala Solidario M.M. Jaramillo Arteaga Com. De Manabi Credito Credito Gral.Rumiñahui Gral.Rumiñahui Litoral Solidario Solidario Amazonas Solidario Continental De Colombia De Guayaquil Ing Bank Ing Bank Lloyds Bank Unibanco Unibanco Andes Unibanco Credito De Guayaquil Del Occidente Internacional Internacional Loja Amazonas Amazonas Centromundo Amazonas De Colombia Del Occidente Filanbanco Litoral Litoral Machala Centromundo Centromundo Cofiec Andes Del Occidente Filanbanco Finagro Lloyds Lloyds Tsb Bank Mm Jaramillo Aretaga Cofiec Cofiec Comercial De Manabí Centromundo Filanbanco Finagro Financorp Loja Loja Pichincha Comercial De Manabí Comercial De Manabí Delbank S.A. Cofiec Finagro Financorp Finec Machala Machala Produbanco Litoral Litoral Litoral Comercial De Manabí Financorp Finec Gnb (Ecuador) S.A. Pacifico Pacifico Solidario Loja Loja Loja Delbank S.A. Finec Gral.Rumiñahui Gral.Rumiñahui Pichincha Pichincha Sudamericano M.M. Jaramillo Arteaga M.M. Jaramillo Arteaga Lloyds Bank Litoral G. Rumiñahui Ing Bank Ing Bank Popular Popular Territorial Sudamericano Sudamericano M.M. Jaramillo Arteaga Loja Multibanco Bg Internacional Internacional Produbanco Produbanco Unibanco Territorial Territorial Sudamericano Lloyds Bank Ing Bank Litoral Litoral Solidario Solidario Pacifico - - Territorial Sudamericano Inca Loja Loja Sudamericano Sudamericano Azuay - - Unibanco Territorial Internacional Lloyds Lloyds Territorial Territorial - - - - Procredit Invesplan Machala Machala Unibanco Unibanco - - - - - Litoral Pacifico Pacifico - - - - - - - Lloyds Bank Pichincha Pichincha - - - - - - - Loja Popular Popular - - - - - - - Machala Prestamos Previsora - - - - - - - Merc. Unido Previsora Produbanco - - - - - - - Pacifico Produbanco Progreso - - - - - - - Pichincha Progreso Solidario - - - - - - - Popular Solbanco Sudamericano - - - - - - - Prestamos Solidario Territorial - - - - - - - Previsora Sudamericano Unibanco - - - - - - - Produccion Territorial Union - - - - - - - Progreso Tungurahua - - - - - - - - Soc. General Unibanco - - - - - - - - Sudamericano Union - - - - - - - - Territorial - - - - - - - - - Tungurahua - - - - - - - - - Unibanco - - - - - - - - - 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Guayaquil Guayaquil Bp Guayaquil Bp Guayaquil Bp Guayaquil Bp Guayaquil Bp Guayaquil Bp Guayaquil Bp Guayaquil Bp Guayaquil Bp Guayaquil Pacifico Pacifico Bp Pacifico Bp Pacifico Bp Pacifico Bp Pacifico Bp Pacifico Bp Pacifico Bp Pacifico Bp Pacifico Bp Pacifico Pichincha Pichincha Bp Pichincha Bp Pichincha Bp Pichincha Bp Pichincha Bp Pichincha Bp Pichincha Bp Pichincha Bp Pichincha Bp Pichincha Produbanco Produbanco Bp Produbanco Bp Produbanco Bp Produbanco Bp Produbanco Bp Produbanco Bp Produbanco Bp Produbanco Bp Produbanco Bp Produbanco Austro Austro Bp Austro Bp Austro Bp Austro Bp Austro Bp Austro Bp Austro Bp Austro Bp Austro Bp Austro Bolivariano Bolivariano Bp Bolivariano Bp Bolivariano Bp Bolivariano Bp Bolivariano Bp Bolivariano Bp Bolivariano Bp Bolivariano Bp Bolivariano Bp Bolivariano Citibank General Rumiñahui Bp General Rumiñahui Bp General Rumiñahui Bp General Rumiñahui Bp General Rumiñahui Bp Citibank Bp Citibank Bp Solidario Bp Citibank Bp Citibank General Rumiñahui Internacional Bp Internacional Bp Internacional Bp Internacional Bp Internacional Bp General Rumiñahui Bp General Rumiñahui Bp General Rumiñahui Bp General Rumiñahui Bp General Rumiñahui Internacional Machala Bp Machala Bp Machala Bp Machala Bp Machala Bp Internacional Bp Internacional Bp Internacional Bp Internacional Bp Internacional Machala M.M. Jaramillo Arteaga Bp Mm Jaramillo Arteaga Bp Promerica Bp Promerica Bp Promerica Bp Machala Bp Machala Bp Machala Bp Loja Bp Loja M.M. Jaramillo Arteaga Solidario Bp Amazonas Bp Amazonas Bp Amazonas Bp Citibank Bp Promerica Bp Promerica Bp Citibank Bp Machala Bp Machala Solidario Unibanco Bp Citibank Bp Citibank Bp Citibank Bp Amazonas Bp Amazonas Bp Solidario Bp Loja Bp Solidario Bp Solidario Unibanco Amazonas Bp Cofiec Bp Cofiec Bp Cofiec Bp Cofiec Bp Cofiec Bp Amazonas Bp Procredit Bp Procredit Bp Procredit Amazonas Citibank Bp Comercial De Manabi Bp Comercial De Manabi Bp Comercial De Manabi Bp Comercial De Manabi Bp Comercial De Manabi Bp Cofiec Bp Amazonas Bp Amazonas Bp Amazonas Centromundo Cofiec Bp Litoral Bp Litoral Bp Litoral Bp Litoral Bp Litoral Bp Comercial De Manabi Bp Cofiec Bp Comercial De Manabi Bp Comercial De Manabi Cofiec Comercial De Manabí Bp Lloyds Bank Bp Lloyds Bank Bp Loja Bp D-Miro S.A. Bp Loja Bp Litoral Bp Comercial De Manabi Bp Litoral Bp Litoral Comercial De Manabí Delbank S.A. Bp Loja Bp Loja Bp Solidario Bp Loja Bp Solidario Bp Loja Bp Litoral Bp Coopnacional Bp Coopnacional Delbank S.A. Finca Bp Solidario Bp Solidario Bp Sudamericano Bp Solidario Bp Sudamericano Bp Unibanco Bp Coopnacional Bp Capital Bp Capital Litoral Litoral Bp Sudamericano Bp Sudamericano Bp Territorial Bp Sudamericano Bp Territorial Bp Coopnacional Bp Capital Bp Finca Bp Finca Loja Loja Bp Territorial Bp Territorial Bp Unibanco Bp Territorial Bp Unibanco Bp Procredit Bp Finca Bp Delbank Bp Delbank Lloyds Bank (Blsa) Lloyds Bank (Blsa) Bp Unibanco Bp Unibanco Bp Procredit Bp Unibanco Bp Coopnacional Bp Capital Bp Delbank Bp D-Miro S.A. Bp D-Miro S.A. Sudamericano Sudamericano Bp Procredit Bp Procredit Bp Capital Bp Coopnacional Bp Procredit Bp Finca Bp D-Miro S.A. Bp Bancodesarrollo Bp Bancodesarrollo Territorial Territorial Bp Capital Bp Capital Bp Finca Bp Procredit Bp Capital Bp Delbank Bp Bancodesarrollo - Bp Visionfund Ecuador Procredit Procredit Bp Finca Bp Finca Bp Delbank Bp Capital Bp Finca Bp D-Miro S.A. - - - - - BP Delbank BP Delbank - BP Finca BP Delbank - - - - - - - - - BP Delbank BP D-Miro S.A. - - - -

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Variable Source Calculation Formula Macroeconomic Indicators Oil Price. U.S. Energy Information Administration https://www.eia.gov/ - Monthly Inflation National Institute of Statistics and Censuses https://www.ecuadorencifras.gob.ec I N F L A T I O N t = ( C P I t ,0 C P I t − 1,0 − 1 ) × 100 Where: CPIt,0: Consumer Price Index over time t. CPIt−1: Consumer Price Index at time t-1. Country Risk JP Morgan https://www.jpmorgan.com - Real Annual GDP Growth Central Bank of Ecuador https://www.bce.fin.ec TcGDPkpercapita=(GDPk(t)pop(t))−GDPk(t−1)pop(t−1)(GDPk(t−1)pop(t−1))*100 Where: TcGDPkpercapita: Constant per capita GDP growth rate GDPk(t): Constant GDP of current year t GDPk(t−1): Constant GDP from previous year t-1. pop(t): Population in current year t pop(t−1): Population in previous year t-1. Consumption restriction National Institute of Statistics and Censuses https://www.ecuadorencifras.gob.ec CR=Costi−IncomeI Where: Costi: Consumer Price Index Basket (CPI) Incomei: Monthly family income GDP/Trade Balance Central Bank of Ecuador https://www.bce.fin.ec C o m m e r c i a l T r a d e B a l a n c e G D P Banking System Indicators Financial Spread Central Bank of Ecuador https://www.bce.fin.ec A c t i v e R a t e − P a s s i v e R a t e GDP/Credit Central Bank of Ecuador https://www.bce.fin.ec CreditVolumeCEAI Where: Conjunctural Economic Activity Index CEAI: Conjunctural Economic Activity Index GDP/Credit Central Bank of Ecuador https://www.bce.fin.ec C r e d i t G D P Funding Central Bank of Ecuador https://www.bce.fin.ec T o t a l A s s e t s T o t a l L i a b i l i t i e s Leveraging Central Bank of Ecuador https://www.bce.fin.ec T o t a l A s s e t s T o t a l E q u i t y Liquidity Central Bank of Ecuador https://www.bce.fin.ec A v a i l a b l e F u n d s T o t a l s h o r t − t e r m d e p o s i t s Capture/GDP Central Bank of Ecuador https://www.bce.fin.ec C a p t u r e s G D P Capital and Reserves / Credit Volume. Central Bank of Ecuador https://www.bce.fin.ec C a p i t a l & Re s e r v e s C r e d i t V o l u m e n Delinquency Portfolio Central Bank of Ecuador https://www.bce.fin.ec U n p r o d u c t i v e P o r t f o l i o G r o s s P o r t f o l i o Idiosyncratic Indicators Productive Assets / Total Assets Superintendency of Banks https://www.superbancos.gob.ec Pr o d u c t i v e A s s e t s T o t a l A s s e t s Productive Assets/Cost-generating Liabilities Superintendency of Banks https://www.superbancos.gob.ec Pr o d u c t i v e A s s e t s Cos t − g e n e r a t i n g L i a b i l i t i e s Size of the bank Superintendency of Banks https://www.superbancos.gob.ec ln ( T o t a l a s s e t s ) Capital & Reserves / Assets Superintendency of Banks https://www.superbancos.gob.ec C a p i t a l & Re s e r v e s T o t a l A s s e t s Fiscal Year Results / Assets Superintendency of Banks https://www.superbancos.gob.ec F i s c a l Y e a r Re s u l t s T o t a l A s s e t s Fiscal Year Results / Assets Superintendency of Banks https://www.superbancos.gob.ec F i s c a l Y e a r Re s u l t s A s s e t s Gross Portfolio / Total Assets Superintendency of Banks https://www.superbancos.gob.ec G r o s s P o r t f o l i o T o t a l A s s e t s Fiscal Year Results / Volume of Credit System Superintendency of Banks https://www.superbancos.gob.ec F i s c a l Y e a r Re s u l t s V o l u m e n o f C r e d i t S y s t e m Funding Superintendency of Banks https://www.superbancos.gob.ec T o t a l A s s e t s T o t a l L i a b i l i t i e s Leveraging Superintendency of Banks https://www.superbancos.gob.ec T o t a l A s s e t s T o t a l E q u i t y Portfolio Delinquency Superintendency of Banks https://www.superbancos.gob.ec N o n p e r f o r min g P o r t f o l i o G r o s s P o r t f o l i o Coverage of problematic portfolios Superintendency of Banks https://www.superbancos.gob.ec Pr o v i s i o n s N o n p e r f o r min g l o a n p o r t f o l i o Operating Costs / Financial Margin Superintendency of Banks https://www.superbancos.gob.ec O p e r a t i n g Cos t s F i n a n c i a l M arg e n ROE Superintendency of Banks https://www.superbancos.gob.ec Re s u l t s o f t h e F i n a n c i a l Y e a r A v e r a g e E q u i t y ROA Superintendency of Banks https://www.superbancos.gob.ec Re s u l t s o f t h e F i n a n c i a l Y e a r A v e r a g e T o t a l A s s e t s Liquidity Index Superintendency of Banks https://www.superbancos.gob.ec A v a i l a b l e F u n d s T o t a l s h o r t − t e r m d e p o s i t s

Exogenous Variable	Source	Calculation Formula
Dollarization	Source	Calculation Formula
Dummy variable used to measure the precise impact of dollarization on the probability of bankruptcy of a financial institution. The dummy dollarization variable considers the official adoption date of the new monetary regime in the Ecuadorian economy, so it takes the value 1 as of the year 2000, and the value 0 the year before 2000.	Own Preparation	$D = {\begin{matrix} 0, b e f o r e d o l l a r i z a t i o n \\ 1, a f t e r d o l l a r i z a t i o n \end{matrix}$ $D$ : Dollarization
Inflation
Macroeconomic variable indicating the continuous and sustained rise in the general level of prices normally measured by the consumer price index (CPI). Has a monthly periodicity.	National Institute of Statistics and Censuses https://www.ecuadorencifras.gob.ec	$I N F L A T I O N_{t} = (\frac{C P I_{t}}{C P I_{t - 1}} - 1) \times 100$ Where: $C P I_{t}$ : Consumer Price Index at time t. $C P I_{t - 1}$ : Consumer Price Index at time $t - 1$ .
The CPI is an economic indicator that measures the evolution of the general level of prices corresponding to a set of consumer items (goods and services) purchased by households in the country’s urban area.	Banco Central del Ecuador (Central Bank of Ecuador) https://www.bce.fin.ec
Financial Spread
Also known as “financial intermediation margin.” Systemic variable that is defined as the difference between the active interest rate (lending rate) and the passive rate (borrowing rate) of interest.	Superintendencia de Bancos Banking Superintendency	$S P R E A D_{t} = T A_{t} - T P_{t}$ Where: $T A_{t}$ : Active interest rate in a given period t. $T P_{t}$ : Passive interest rate in a given period t.
These are the net profits generated by the financial intermediation business. Its periodicity is monthly.	https://www.superbancos.gob.ec
Leveraging
Indicator of the level of indebtedness of an organization in relation to its assets. It is measured as the relationship between the debts and the equity of the financial institution.	Superintendencia de Bancos Banking Superintendency https://www.superbancos.gob.ec	$A P P E A S E M E N T_{t} = \frac{P A S_{t}}{P A T_{t}}$ Where: $P A S_{t}$ : Represents liabilities in a given period t. $P A T_{t}$ : Represents the equity in a given period t. $L E V E R A G E_{t}$ : Corresponds to the leverage variable in its first difference.
Leverage is a variable of the financial system that refers to the effect that indebtedness has on profitability. It has a monthly periodicity.	Superintendency of Companies https://www.supercias.gob.ec
Portfolio delinquency
The Portfolio delinquency coefficient is used to detect problems with the quality of assets in the portfolio.	Banking Superintendency https://www.superbancos.gob.ec	$D E L I N Q U E N C Y_{t} = \frac{C I_{t}}{C T B_{t}}$ Where: $C I_{t}$ : Non-productive portfolio in a given period $t$ . $C T B_{t}$ : Total Gross Portfolio in a given period $t$ .
The idiosyncratic indicator of portfolio delinquency measures the portion of the total portfolio that has past due installments, therefore, it does not generate interest or income. It has a monthly periodicity.	Banking Superintendency https://www.superbancos.gob.ec
ROE
Idiosyncratic indicator that measures the profitability of the equity, in other words, it measures the patrimonial return with respect to the net profits of the entity. Therefore, higher values of this indicator represent better conditions for the entity. It has a monthly periodicity.	Central Bank of Ecuador https://www.bce.fin.ec	$R O E_{t} = \frac{R E_{t}}{P P_{t}}$ Where: $R E_{t}$ : Result of the period at time $t$ $P P_{t}$ : Average equity at time $t$ .

TYPE	INDICATORS	COEF.
Control	Dollarization	-2.289***
		(0.323)
	delinquency*dollarization	5.179***
Idiosyncratic		(1.238)
	ROE*dollarization	-3.500***
		(1.065)
	Leveraging in first difference	0.107**
Financial		(0.044)
System	Spread	-32.623***
		(9.734)
Macroeconomics	Inflation	10.729*
		(5.433)
	Interceptor	-0.478
		(0.395)
	Observations	1951

1996	1997	1998	1999	2000	2001	2002	2003	2004	2005
Abn Amro	Abn Amro	Abn Amro	Abn Amro	Abn Amro	Amazonas	Guayaquil	Guayaquil	Guayaquil	Guayaquil
Albobanco	Amazonas	Amazonas	Amazonas	Amazonas	Austro	Pacifico	Pacifico	Pacifico	Pacifico
Amazonas	Aserval	Aserval	Aserval	Aserval	Bolivariano	Pichincha	Pichincha	Pichincha	Pichincha
Aserval	Austro	Austro	Austro	Austro	Centromundo	Produbanco	Produbanco	Produbanco	Produbanco
Austro	Azuay	Azuay	Azuay	Azuay	Citibank	Austro	Austro	Austro	Austro
Azuay	Bancomex	Bancomex	Bolivariano	Bolivariano	Cofiec	Bolivariano	Bolivariano	Bolivariano	Bolivariano
Bolivariano	Bolivariano	Bolivariano	Centromundo	Centromundo	Comercial De Manabí	Citibank	Citibank	Citibank	Citibank
Caja Credito	Centromundo	Centromundo	Citibank	Citibank	De Guayaquil	General Rumiñahui	General Rumiñahui	General Rumiñahui	General Rumiñahui
Centro Mundo	Citibank	Citibank	Comercial De Manabí	Comercial De Manabí	Gnb (Ecuador) S.A.	Internacional	Internacional	Internacional	Internacional
Citibank	Cofiec	Cofiec	De Guayaquil	De Guayaquil	Gral.Rumiñahui	Lloyds Bank	Lloyds Bank	Machala	Machala
Cofiec	Comercial Manabi	Comercial Manabi	Gnb (Ecuador) S.A.	Gnb (Ecuador) S.A.	Internacional	Machala	Machala	Solidario	M.M. Jaramillo Arteaga
Com. De Manabi	Credito	Credito	Gral.Rumiñahui	Gral.Rumiñahui	Litoral	Solidario	Solidario	Amazonas	Solidario
Continental	De Colombia	De Guayaquil	Ing Bank	Ing Bank	Lloyds Bank	Unibanco	Unibanco	Andes	Unibanco
Credito	De Guayaquil	Del Occidente	Internacional	Internacional	Loja	Amazonas	Amazonas	Centromundo	Amazonas
De Colombia	Del Occidente	Filanbanco	Litoral	Litoral	Machala	Centromundo	Centromundo	Cofiec	Andes
Del Occidente	Filanbanco	Finagro	Lloyds	Lloyds Tsb Bank	Mm Jaramillo Aretaga	Cofiec	Cofiec	Comercial De Manabí	Centromundo
Filanbanco	Finagro	Financorp	Loja	Loja	Pichincha	Comercial De Manabí	Comercial De Manabí	Delbank S.A.	Cofiec
Finagro	Financorp	Finec	Machala	Machala	Produbanco	Litoral	Litoral	Litoral	Comercial De Manabí
Financorp	Finec	Gnb (Ecuador) S.A.	Pacifico	Pacifico	Solidario	Loja	Loja	Loja	Delbank S.A.
Finec	Gral.Rumiñahui	Gral.Rumiñahui	Pichincha	Pichincha	Sudamericano	M.M. Jaramillo Arteaga	M.M. Jaramillo Arteaga	Lloyds Bank	Litoral
G. Rumiñahui	Ing Bank	Ing Bank	Popular	Popular	Territorial	Sudamericano	Sudamericano	M.M. Jaramillo Arteaga	Loja
Multibanco Bg	Internacional	Internacional	Produbanco	Produbanco	Unibanco	Territorial	Territorial	Sudamericano	Lloyds Bank
Ing Bank	Litoral	Litoral	Solidario	Solidario	Pacifico	-	-	Territorial	Sudamericano
Inca	Loja	Loja	Sudamericano	Sudamericano	Azuay	-	-	Unibanco	Territorial
Internacional	Lloyds	Lloyds	Territorial	Territorial	-	-	-	-	Procredit
Invesplan	Machala	Machala	Unibanco	Unibanco	-	-	-	-	-
Litoral	Pacifico	Pacifico	-	-	-	-	-	-	-
Lloyds Bank	Pichincha	Pichincha	-	-	-	-	-	-	-
Loja	Popular	Popular	-	-	-	-	-	-	-
Machala	Prestamos	Previsora	-	-	-	-	-	-	-
Merc. Unido	Previsora	Produbanco	-	-	-	-	-	-	-
Pacifico	Produbanco	Progreso	-	-	-	-	-	-	-
Pichincha	Progreso	Solidario	-	-	-	-	-	-	-
Popular	Solbanco	Sudamericano	-	-	-	-	-	-	-
Prestamos	Solidario	Territorial	-	-	-	-	-	-	-
Previsora	Sudamericano	Unibanco	-	-	-	-	-	-	-
Produccion	Territorial	Union	-	-	-	-	-	-	-
Progreso	Tungurahua	-	-	-	-	-	-	-	-
Soc. General	Unibanco	-	-	-	-	-	-	-	-
Sudamericano	Union	-	-	-	-	-	-	-	-
Territorial	-	-	-	-	-	-	-	-	-
Tungurahua	-	-	-	-	-	-	-	-	-
Unibanco	-	-	-	-	-	-	-	-	-
2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Guayaquil	Guayaquil	Bp Guayaquil	Bp Guayaquil	Bp Guayaquil	Bp Guayaquil	Bp Guayaquil	Bp Guayaquil	Bp Guayaquil	Bp Guayaquil	Bp Guayaquil
Pacifico	Pacifico	Bp Pacifico	Bp Pacifico	Bp Pacifico	Bp Pacifico	Bp Pacifico	Bp Pacifico	Bp Pacifico	Bp Pacifico	Bp Pacifico
Pichincha	Pichincha	Bp Pichincha	Bp Pichincha	Bp Pichincha	Bp Pichincha	Bp Pichincha	Bp Pichincha	Bp Pichincha	Bp Pichincha	Bp Pichincha
Produbanco	Produbanco	Bp Produbanco	Bp Produbanco	Bp Produbanco	Bp Produbanco	Bp Produbanco	Bp Produbanco	Bp Produbanco	Bp Produbanco	Bp Produbanco
Austro	Austro	Bp Austro	Bp Austro	Bp Austro	Bp Austro	Bp Austro	Bp Austro	Bp Austro	Bp Austro	Bp Austro
Bolivariano	Bolivariano	Bp Bolivariano	Bp Bolivariano	Bp Bolivariano	Bp Bolivariano	Bp Bolivariano	Bp Bolivariano	Bp Bolivariano	Bp Bolivariano	Bp Bolivariano
Citibank	General Rumiñahui	Bp General Rumiñahui	Bp General Rumiñahui	Bp General Rumiñahui	Bp General Rumiñahui	Bp Citibank	Bp Citibank	Bp Solidario	Bp Citibank	Bp Citibank
General Rumiñahui	Internacional	Bp Internacional	Bp Internacional	Bp Internacional	Bp Internacional	Bp General Rumiñahui	Bp General Rumiñahui	Bp General Rumiñahui	Bp General Rumiñahui	Bp General Rumiñahui
Internacional	Machala	Bp Machala	Bp Machala	Bp Machala	Bp Machala	Bp Internacional	Bp Internacional	Bp Internacional	Bp Internacional	Bp Internacional
Machala	M.M. Jaramillo Arteaga	Bp Mm Jaramillo Arteaga	Bp Promerica	Bp Promerica	Bp Promerica	Bp Machala	Bp Machala	Bp Machala	Bp Loja	Bp Loja
M.M. Jaramillo Arteaga	Solidario	Bp Amazonas	Bp Amazonas	Bp Amazonas	Bp Citibank	Bp Promerica	Bp Promerica	Bp Citibank	Bp Machala	Bp Machala
Solidario	Unibanco	Bp Citibank	Bp Citibank	Bp Citibank	Bp Amazonas	Bp Amazonas	Bp Solidario	Bp Loja	Bp Solidario	Bp Solidario
Unibanco	Amazonas	Bp Cofiec	Bp Cofiec	Bp Cofiec	Bp Cofiec	Bp Cofiec	Bp Amazonas	Bp Procredit	Bp Procredit	Bp Procredit
Amazonas	Citibank	Bp Comercial De Manabi	Bp Comercial De Manabi	Bp Comercial De Manabi	Bp Comercial De Manabi	Bp Comercial De Manabi	Bp Cofiec	Bp Amazonas	Bp Amazonas	Bp Amazonas
Centromundo	Cofiec	Bp Litoral	Bp Litoral	Bp Litoral	Bp Litoral	Bp Litoral	Bp Comercial De Manabi	Bp Cofiec	Bp Comercial De Manabi	Bp Comercial De Manabi
Cofiec	Comercial De Manabí	Bp Lloyds Bank	Bp Lloyds Bank	Bp Loja	Bp D-Miro S.A.	Bp Loja	Bp Litoral	Bp Comercial De Manabi	Bp Litoral	Bp Litoral
Comercial De Manabí	Delbank S.A.	Bp Loja	Bp Loja	Bp Solidario	Bp Loja	Bp Solidario	Bp Loja	Bp Litoral	Bp Coopnacional	Bp Coopnacional
Delbank S.A.	Finca	Bp Solidario	Bp Solidario	Bp Sudamericano	Bp Solidario	Bp Sudamericano	Bp Unibanco	Bp Coopnacional	Bp Capital	Bp Capital
Litoral	Litoral	Bp Sudamericano	Bp Sudamericano	Bp Territorial	Bp Sudamericano	Bp Territorial	Bp Coopnacional	Bp Capital	Bp Finca	Bp Finca
Loja	Loja	Bp Territorial	Bp Territorial	Bp Unibanco	Bp Territorial	Bp Unibanco	Bp Procredit	Bp Finca	Bp Delbank	Bp Delbank
Lloyds Bank (Blsa)	Lloyds Bank (Blsa)	Bp Unibanco	Bp Unibanco	Bp Procredit	Bp Unibanco	Bp Coopnacional	Bp Capital	Bp Delbank	Bp D-Miro S.A.	Bp D-Miro S.A.
Sudamericano	Sudamericano	Bp Procredit	Bp Procredit	Bp Capital	Bp Coopnacional	Bp Procredit	Bp Finca	Bp D-Miro S.A.	Bp Bancodesarrollo	Bp Bancodesarrollo
Territorial	Territorial	Bp Capital	Bp Capital	Bp Finca	Bp Procredit	Bp Capital	Bp Delbank	Bp Bancodesarrollo	-	Bp Visionfund Ecuador
Procredit	Procredit	Bp Finca	Bp Finca	Bp Delbank	Bp Capital	Bp Finca	Bp D-Miro S.A.	-	-	-
-	-	BP Delbank	BP Delbank	-	BP Finca	BP Delbank	-	-	-	-
-	-	-	-	-	BP Delbank	BP D-Miro S.A.	-	-	-	-

Variable	Source	Calculation Formula
Macroeconomic Indicators
Oil Price.	U.S. Energy Information Administration https://www.eia.gov/	-
Monthly Inflation	National Institute of Statistics and Censuses https://www.ecuadorencifras.gob.ec	$I N F L A T I O N_{t} = (\frac{C P I_{t,0}}{C P I_{t - 1,0}} - 1) \times 100$
		Where:
		$C P I_{t,0}$ : Consumer Price Index over time t.
		$C P I_{t - 1}$ : Consumer Price Index at time t-1.
Country Risk	JP Morgan https://www.jpmorgan.com	-
Real Annual GDP Growth	Central Bank of Ecuador https://www.bce.fin.ec	$T c G D P k p e r c a p i t a = \frac{(\frac{G D P k_{(t)}}{p o p_{(t)}}) - \frac{G D P k_{(t - 1)}}{p o p_{(t - 1)}}}{(\frac{G D P k_{(t - 1)}}{p o p_{(t - 1)}})} * 100$ Where: $T c G D P k p e r c a p i t a$ : Constant per capita GDP growth rate $G D P k_{(t)}$ : Constant GDP of current year t $G D P k_{(t - 1)}$ : Constant GDP from previous year t-1. $p o p_{(t)}$ : Population in current year t $p o p_{(t - 1)}$ : Population in previous year t-1.
Consumption restriction	National Institute of Statistics and Censuses https://www.ecuadorencifras.gob.ec	$C R = Cos t_{i} - I n c o m e_{I}$ Where: $Cos t_{i}$ : Consumer Price Index Basket (CPI) $I n c o m e_{i}$ : Monthly family income
GDP/Trade Balance	Central Bank of Ecuador https://www.bce.fin.ec	$\frac{C o m m e r c i a l T r a d e B a l a n c e}{G D P}$
Banking System Indicators
Financial Spread	Central Bank of Ecuador https://www.bce.fin.ec	$A c t i v e R a t e - P a s s i v e R a t e$
GDP/Credit	Central Bank of Ecuador https://www.bce.fin.ec	$\frac{C r e d i t V o l u m e}{C E A I}$ Where: Conjunctural Economic Activity Index $C E A I$ : Conjunctural Economic Activity Index
GDP/Credit	Central Bank of Ecuador https://www.bce.fin.ec	$\frac{C r e d i t}{G D P}$
Funding	Central Bank of Ecuador https://www.bce.fin.ec	$\frac{T o t a l A s s e t s}{T o t a l L i a b i l i t i e s}$
Leveraging	Central Bank of Ecuador https://www.bce.fin.ec	$\frac{T o t a l A s s e t s}{T o t a l E q u i t y}$
Liquidity	Central Bank of Ecuador https://www.bce.fin.ec	$\frac{A v a i l a b l e F u n d s}{T o t a l s h o r t - t e r m d e p o s i t s}$
Capture/GDP	Central Bank of Ecuador https://www.bce.fin.ec	$\frac{C a p t u r e s}{G D P}$
Capital and Reserves / Credit Volume.	Central Bank of Ecuador https://www.bce.fin.ec	$\frac{C a p i t a l & Re s e r v e s}{C r e d i t V o l u m e n}$
Delinquency Portfolio	Central Bank of Ecuador https://www.bce.fin.ec	$\frac{U n p r o d u c t i v e P o r t f o l i o}{G r o s s P o r t f o l i o}$
Idiosyncratic Indicators
Productive Assets / Total Assets	Superintendency of Banks https://www.superbancos.gob.ec	$\frac{\Pr o d u c t i v e A s s e t s}{T o t a l A s s e t s}$
Productive Assets/Cost-generating Liabilities	Superintendency of Banks https://www.superbancos.gob.ec	$\frac{\Pr o d u c t i v e A s s e t s}{Cos t - g e n e r a t i n g L i a b i l i t i e s}$
Size of the bank	Superintendency of Banks https://www.superbancos.gob.ec	$\ln (T o t a l a s s e t s)$
Capital & Reserves / Assets	Superintendency of Banks https://www.superbancos.gob.ec	$\frac{C a p i t a l & Re s e r v e s}{T o t a l A s s e t s}$
Fiscal Year Results / Assets	Superintendency of Banks https://www.superbancos.gob.ec	$\frac{F i s c a l Y e a r Re s u l t s}{T o t a l A s s e t s}$
Fiscal Year Results / Assets	Superintendency of Banks https://www.superbancos.gob.ec	$\frac{F i s c a l Y e a r Re s u l t s}{A s s e t s}$
Gross Portfolio / Total Assets	Superintendency of Banks https://www.superbancos.gob.ec	$\frac{G r o s s P o r t f o l i o}{T o t a l A s s e t s}$
Fiscal Year Results / Volume of Credit System	Superintendency of Banks https://www.superbancos.gob.ec	$\frac{F i s c a l Y e a r Re s u l t s}{V o l u m e n o f C r e d i t S y s t e m}$
Funding	Superintendency of Banks https://www.superbancos.gob.ec	$\frac{T o t a l A s s e t s}{T o t a l L i a b i l i t i e s}$
Leveraging	Superintendency of Banks https://www.superbancos.gob.ec	$\frac{T o t a l A s s e t s}{T o t a l E q u i t y}$
Portfolio Delinquency	Superintendency of Banks https://www.superbancos.gob.ec	$\frac{N o n p e r f o r \min g P o r t f o l i o}{G r o s s P o r t f o l i o}$
Coverage of problematic portfolios	Superintendency of Banks https://www.superbancos.gob.ec	$\frac{\Pr o v i s i o n s}{N o n p e r f o r \min g l o a n p o r t f o l i o}$
Operating Costs / Financial Margin	Superintendency of Banks https://www.superbancos.gob.ec	$\frac{O p e r a t i n g Cos t s}{F i n a n c i a l M \arg e n}$
ROE	Superintendency of Banks https://www.superbancos.gob.ec	$\frac{Re s u l t s o f t h e F i n a n c i a l Y e a r}{A v e r a g e E q u i t y}$
ROA	Superintendency of Banks https://www.superbancos.gob.ec	$\frac{Re s u l t s o f t h e F i n a n c i a l Y e a r}{A v e r a g e T o t a l A s s e t s}$
Liquidity Index	Superintendency of Banks https://www.superbancos.gob.ec	$\frac{A v a i l a b l e F u n d s}{T o t a l s h o r t - t e r m d e p o s i t s}$

[1] Responsible Editor:

Prof. Dr. Ilidio Lopes

Brasil

Brasil

Economic and financial determinants of bankrupcy: evidence from Ecuador’s private banks and the impact of dollarization on financial fragility

Abstract

Purpose:

Design/methodology/approach:

Findings:

Originality/value:

Contribution	Adriana Uquillas	Francis Flores
1. Definition of research problem	√
2. Development of hypotheses or research questions (empirical studies)	√
3. Development of theoretical propositions (theoretical work)	√
4. Theoretical foundation/literature review	√
5. Definition of methodological procedures	√
6. Data collection		√
7. Statistical analysis	√	√
8. Analysis and interpretation of data	√	√
9. Critical revision of the manuscript	√
10. Manuscript writing	√	√
11. Other