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Mapping Financial Sector Vulnerability in a Non-Crisis Country
Author:
Ms. Inci Ötker null

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,
Mr. Patrick Downes
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Mr. Dewitt D Marston
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Series:
IMF Policy Discussion Papers
Volume/Issue:
Volume 1999: Issue 004
Language:
English
Publication Date:
01 May 1999
DOI:
https://doi.org/10.5089/9781451973433.003
ISBN:
9781451973433
ISSN:
1564-5193
Pages:
30
Keywords:
PDP; bank; balance sheet data; financial condition; bank assets; problem bank
Legal-disclaimer:
This Policy Discussion Paper should not be reported as representing the views of the IMF. The views expressed in this Policy Discussion Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Policy Discussion Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.
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The forward-looking framework expounded in this paper links a qualitative evaluation of system-wide vulnerability (covering macro, sectoral, institutional, and systemic liquidity issues) with a quantitative assessment of the financial condition of significant financial institutions. Based on vulnerability criteria and judgmental stress tests, twelve indicators of soundness (measuring risk exposure, solvency, liquidity, profitability, and supervisory assessment) are developed. This holistic methodology can be used not only as an early warning/crisis-avoidance system to identify potential systemic problems—and problem institutions—requiring immediate attention, but also to pinpoint needed reforms in the legal, regulatory, and institutional infrastructure that can lessen the likelihood of a future crisis.
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Cover IMF Policy Discussion Papers
IMF Policy Discussion Papers
ISSN:
1564-5193
Publisher:
International Monetary Fund