Distress in European Banks

Download or read book Distress in European Banks written by Mr.Martin Cihak and published by International Monetary Fund. This book was released on 2009-01-01 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.