This paper investigates leading indicators of systemic banking crises in a panel of 11 EU countries, with a particular focus on Finland. We use quarterly data from 1980Q1 to 2013Q2, in order to create a large number of macro-financial indicators, as well as their various transformations. We make...

This paper introduces a new loss function and Usefulness measure for evaluating early warning systems (EWSs) that incorporate policymakers’ preferences between issuing false alarms and missing crises, and individual observations. The novelty derives from three enhancements: (i) accounting for...

The aim of this paper is to introduce modern mapping techniques to the finance community. Mapping techniques provide means for representing high-dimensional data on low-dimensional displays. This paper lays out a methodology called the Self-Organizing Financial Stability Map (SOFSM) based upon...

The paper develops an early-warning model for predicting vulnerabilities leading to distress in European banks using both bank and country-level data. As outright bank failures have been rare in Europe, the paper introduces a novel dataset that complements bankruptcies and defaults with state...