Distress in European Banks: An Analysis Based on a New Dataset

39 Pages Posted: 11 Mar 2009

See all articles by Tigran Poghosyan

Tigran Poghosyan

International Monetary Fund (IMF)

Martin Čihák

International Monetary Fund (IMF)

Date Written: Janurary 2009

Abstract

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.

Keywords: Banks, Europe, Bank soundness, Bank supervision, Financial stability, Databases, Forecasting models, Data analysis, Cross country analysis, Economic integration

Suggested Citation

Poghosyan, Tigran and Cihak, Martin, Distress in European Banks: An Analysis Based on a New Dataset (Janurary 2009). IMF Working Papers, Vol. , pp. 1-37, 2009. Available at SSRN: https://ssrn.com/abstract=1356465

Tigran Poghosyan

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Martin Cihak (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street N.W.
Washington, DC 20431
United States

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