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Using Index for Predicting Banking Crisis in Asian Countries

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  • Musdholifah

Abstract

This study aims to develop predictive models of the banking crisis in Asia by utilizing methods of measurement indices in the banking crisis. The CD index is used as a measure of the crisis which includes four components, namely liquidity risk, credit, investment, and exchange rates that is combining of BSS index and BSF index. This research used six countries in Asia for a sample and logit analysis during observation period 1997-2012. The results show that the banking crisis in Asia affected by the decline in real GDP and inflation rate, an increase in the capital adequacy ratio, increasing of profitability ratios ROA, ROE and decreasing of ratio of interest income to operating income, decreasing of liquidity ratio, increasing of sensitivity to market ratio, declining in institutional quality, and increasing in US real interest rates.

Suggested Citation

  • Musdholifah, 2015. "Using Index for Predicting Banking Crisis in Asian Countries," International Journal of Empirical Finance, Research Academy of Social Sciences, vol. 4(3), pages 170-183.
    • Handle: RePEc:rss:jnljef:v4i3p5
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    Cited by:

    1. Musdholifah Musdholifah & Ulil Hartono & Yulita Wulandari, 2020. "Banking Crisis Prediction: Emerging Crisis Determinants in Indonesian Banks," International Journal of Economics and Financial Issues, Econjournals, vol. 10(2), pages 124-131.
    2. Yulita Wulandari & Musdholifah & Suhal Kusairi, 2017. "The Impact of Macroeconomic and Internal Factors on Banking Distress," International Journal of Economics and Financial Issues, Econjournals, vol. 7(3), pages 429-436.

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