The Role of Human Factors in the Bank Capital Evaluation Framework

By Posnaya, E. A.; Vorobyova, I. G. et al. | European Research Studies, January 2017 | Go to article overview

The Role of Human Factors in the Bank Capital Evaluation Framework


Posnaya, E. A., Vorobyova, I. G., Sokolova, E. M., Leonova, M. P., European Research Studies


JEL Classification Codes: F60, F63, 035, 044

1. Introduction

Bank capital is defined in economic dictionary as a complex of monetary capitals raised in banks for applying in payments and other transactions i.e. bank funds. According to Raizberg B., Lozovsky L., Starodubtseva E. bank capital is a monetary capital rose in bank from multiple sources and used for bank transactions i.e. bank funds. So we can define bank capital as a monetary value of the total bank capital and divide into equity and debt.

Bank capital is evaluated through the whole capital flow process. Bank capital's management includes two major stages:

1) Generating the bank capital;

2) Applying the bank capital.

Both of the stages are connected with human factors which could have both positive and negative influence at generating and applying the bank capital.

It's notably that there are a set of errors and advantages connected with the human factors. We can highlight errors such as low-skilled staff, non-flexible mind, inconsistent risk policy in decision-making, deficient analytical framework, lack of useful forecasting.

Advantages of the human factors are: quality education, professional skills, professional development, and diplomatic, highly analytical and independent mind, stress tolerance (Sultanova and Chechina, 2016). Stakeholders always make financial decisions, define policy priorities, and define targets and goals. Entity's targets and goals defined because the set of methods and research tools of applying the policy based on the core concepts of financial management and banking and also with internal and external factors to be taken into account. All of these elements take place through the whole evaluation process namely during the generating as well as applying the bank capital stages (Akopova and Przhedetskaya, 2016; Allegret et al., 2016; Glavina, 2015).

According to the evaluation framework, we should consider all the stakeholders' interests and hereafter the framework of the interests in order of importance and impact comes to life (Theriou et al., 2014). This framework depends on the person who arranges it. Therefore we emphasize on the essential role of the human factor.

Bank capital evaluation policy should include the description of stakeholders' interests to be satisfied through the evaluation process.

We can consider ROC (return on capital) rate, capital adequacy ratio, and others as target ratios to indicate the stakeholders' interests.

Bank capital evaluation policy should take human factors into consideration to balance the stakeholders' interests and indicate and specify them in the evaluation policy and objectives.

2. Theoretical, Informational and Empirical, and Methodological Grounds of the Research

The bank capital evaluation system should consider human factors and provide solving the set of objectives such as:

1) Methodical and regulatory support of applying the evaluation system i.e. analysis, planning and control;

2) Providing a legal board of directors' responsibility for the evaluation process;

3) A rule of methodical certainty;

4) A rule of confidential evaluation process' procedures;

5) Other rules dealing with applying the evaluation process' procedures and portfolio approach.

Highlighting the following rules needs further study.

The term of "Human factors" should include human capital because of its components.

So, the human capital framework includes:

1) physiological capital i.e. longevity, health, disability;

2) intellectual capital i.e. skills, education;

3) Organizational capital i.e. management skills.

We should stress the importance of skills, education, health, and management abilities when building the evaluation process' framework since any of these factors could easily affect the evaluation process and its accuracy. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

The Role of Human Factors in the Bank Capital Evaluation Framework
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.