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Distress in European Banks: An Analysis Basedon a New Dataset
Author: Mr. Tigran Poghosyan and Mr. Martin Cihakhttps://orcid.org/0000-0002-3571-9707
Series:
IMF Working Papers
Volume/Issue:
Volume 2009: Issue 009
Language:
English
Publication Date:
01 Jan 2009
DOI:
https://doi.org/10.5089/9781451871562.001
ISBN:
9781451871562
ISSN:
1018-5941
Pages:
39
Keywords:
WP; bank distress; EU bank; baseline hazard; bank assets; bank Pd; bank PDs; bank-year observation; European Union; Early Warning System; Regulation; Early Intervention; bank analyst; Early warning systems; Distressed institutions; Loan loss provisions; Bank supervision; Bank soundness; Europe; Global
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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The global financial crisis has highlighted the importance of early identification of weak banks: when problems are identified late, solutions are much more costly. Until recently, Europe has seen only a small number of outright bank failures, which made the estimation of early warning models for bank supervision very difficult. This paper presents a unique database of individual bank distress across the European Union from mid-1990s to 2008. Using this data set, we analyze the causes of banking distress in Europe. We identify a set of indicators and thresholds that can help to distinguish sound banks from those vulnerable to financial distress.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund