Contribution to the Analysis and Measurement of Bank Insolvency

The study of bank insolvency is of fundamental importance to the economy. Two basic justifications for it lie in the fact that without stability in the banking system monetary stability cannot be achieved, not to mention the high cost of banking crises for society as a whole. Greater financial instability in the last years and the new spate of banking crises in developed and developing countries have generated renewed interest in the subject. This article seeks to put forward a theoretical model capable of identifying the main aspects of bank insolvency in order to foster greater understanding of the issue and the implantation of more effective preventive measures.