This article examines the potential contribution to bank supervision of a model designed to predict which banks will have their supervisory ratings downgraded in future periods. Bank supervisors rely on various tools of off-site surveillance to track the condition of banks under their...

We examine the value of jumbo certificate-of-deposit (CD) signals in bank surveillance. To do so, we first construct proxies for default premiums and deposit runoffs and then rank banks based on these risk proxies. Next, we rank banks based on the output of a logit model typical of the...

We examine the value of feedback from the jumbo-certificate-of-deposit (CD) market in the off-site surveillance of community banks. Using accounting data, we construct proxies for default premiums on jumbo CDs. Then, we produce rank orderings of community banks -- defined as institutions holding...

The diagnosis on banks is comforting, despite a few weak spots here and there and an economy that's slowing down.

Off-site surveillance involves using financial ratios to identify banks likely to develop safety-and-soundness problems. Bank supervisors use two tools to flag developing problems: supervisory screens and econometric models. Despite the statistical dominance of models, supervisors continue to...

Risky behavior by banks is kept in check primarily with two tools: examinations and the rule that requires owners to keep a certain amount of their own money invested in their banks. Some people now want to tap the markets for further assistance with bank supervision.

The Federal Reserve’s off-site surveillance system includes two econometric models that are collectively known as the System for Estimating Examination Ratings (SEER). One model, the SEER risk rank model, uses the latest financial statements to estimate the probability that each Fed-supervised...

Much recent academic attention has focused on the relative ability of markets and bank supervisors to assess the risk of depository institutions. We add to that literature by comparing the factors influencing bank holding company risk, as gauged by equity markets, with the factors influencing...