Factor affecting US bank / Muhammad Syahmi Muhammad Hazman

The stability of banks remains a significant marker for the nation's economic and financial development. Accordingly, the performance of the banking sector becomes the base for profitable, proficient and beneficial conditions. Bank failures frequently happen when the economy is struggling. From the first financial panic of 1819 to the Great Recession of 2008, several significant economic crises led to a high percentage of bank failures. In order to determine the factor that affects bank performance, the researcher had chosen five United State banks as a sample in this paper since the United States is the top largest economy and a benchmark in the world. Using bank data from 2000 to 2021, this paper uses internal (capital adequacy, bank size) and external (gross domestic product) factors as a variable to test the aspect that affects bank performance. Return on equity is a proxy for bank performance, and the researcher used panel regression to test the data and conclude that capital adequacy and gross domestic product had a significant relationship toward return on equity, whereby bank size has no relationship.