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ORIGINAL RESEARCH article
Front. Appl. Math. Stat.
Sec. Dynamical Systems
Volume 11 - 2025 | doi: 10.3389/fams.2025.1517447
IMPLEMENTATION OF BANKING DYNAMICS MODEL USING SYSTEM OF DETERMINISTIC DIFFERENTIAL EQUATIONS
Provisionally accepted- Bandung Institute of Technology, Bandung, Indonesia
This paper discusses modeling the interaction among components of a bank's balance sheet, consisting of deposit, loan, and equity, that can be a useful tool in analyzing the risks condition, which comes from NPL (Non-Performing Loan) and deposit withdrawals factors. The model utilizes a deterministic differential equation system in the form of modified logistic growth model. Having implemented into some banks of Indonesia and some assumptions, the model performs well in describing the growth of their balance sheet. We find that banks with a higher core capital group do not imply that the banks have more stable equilibrium than banks whose lower core capital. Additionally, the equity equilibrium has not produced a particular pattern for the banks with different amounts of core capital.
Keywords: bank's balance sheet dynamics, Differential equation system, sensitivity analysis JEL Classification: C61, C62, G21, equilibrium points and stability
Received: 26 Oct 2024; Accepted: 10 Mar 2025.
Copyright: © 2025 Vincent and Sumarti. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence:
Aloysius Vincent, Bandung Institute of Technology, Bandung, Indonesia
Novriana Sumarti, Bandung Institute of Technology, Bandung, Indonesia
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