Iron and steel sector is one of the
key determinants of a country's GDP and Industrial Production, both due to size
of its volume and the strategic importance of its outputs. Due to high
installation costs, it is quite costly to compensate capacity losses. Hence,
the financial viability of the iron and steel sector, which is in the
locomotive position, is critical for the continuity of intermediate goods
supply and overall price volatility. The sector also comprises an important
part of banking system total credit risk, so the measurement of the sector’s
"liquidity" capacity of the balance sheet and the resistance of the
equity against possible shocks determines the overall credit quality. It is
aimed that the Basel III liquidity and capital adequacy criteria which are
applied to the financial institutions will be applied on the balance sheets of
selected iron and steel sector companies, since the risks of the real sector
constitute counterparty risk for financial sector firm balance sheets.
Journal Section | Articles |
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Authors | |
Publication Date | June 30, 2017 |
Published in Issue | Year 2017 Volume: 3 Issue: 1 |
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