Download or read book Financial Soundness Indicators and Banking Crises written by Matias Costa Navajas and published by International Monetary Fund. This book was released on 2013-12-23 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper tests the effectiveness of financial soundness indicators (FSIs) as harbingers of banking crises, using multivariate logit models to see whether FSIs, broad macroeconomic indicators, and institutional indicators can indeed predict crisis occurrences. The analysis draws upon a data set of homogeneous indicators comparable across countries over the period 2005 to 2012, leveraging the IMF’s FSI database. Results indicate significant correlation between some FSIs and the occurrence of systemic banking crises, and suggest that some indicators are precursors to the occurrence of banking crises.