Finance and Credit

Analyzing changes in financial soundness of the BRICS countries

Vol. 24, Iss. 6, JUNE 2018

Received: 13 March 2018

Received in revised form: 3 April 2018

Accepted: 17 April 2018

Available online: 30 June 2018


JEL Classification: C13, C43, E02, F01, F15

Pages: 1261—1279

Smirnov V.V. I.N. Ulianov Chuvash State University, Cheboksary, Chuvash Republic, Russian Federation

Mulendeeva A.V. I.N. Ulianov Chuvash State University, Cheboksary, Chuvash Republic, Russian Federation

ORCID id: not available

Subject The article reviews the financial soundness of the BRICS countries.
Objectives Our aim is to analyze changes in the BRICS countries' solvency with evaluation of the growth rate (GR) of a set of mutually conditioned financial and economic factors and subsequent polynomial approximation.
Methods The methodology of the study rests on fundamental provisions of the theory and practice of factor analysis, financial and economic laws, findings in the field of equilibrium and non-equilibrium development of countries in the world economy.
Results The analysis of trends in the financial soundness of the BRICS countries with GR assessment and polynomial approximation of liquid bank reserves versus assets, broad money supply, exchange rate, deflator index, inflation rate, consumer prices, interest rates on loans (private sector) of listed domestic companies unveiled countries with high and low GR for 2006–2016, as well as high and low instability by absolute amplitude value.
Conclusions It is practicable to use the findings in the process of formation and adjustment of international policy and foreign trade with the BRICS countries, and for improving the mechanism of their implementation.

Keywords: amplitude, polynomial approximation, growth rate, factor analysis, financial viability


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