Toward an early warning system of financial crises: What can index futures and options tell us?

2015 ◽  
Vol 55 ◽  
pp. 87-99 ◽  
Author(s):  
Wei-Xuan Li ◽  
Clara Chia-Sheng Chen ◽  
Joseph J. French
Keyword(s):  
Early Warning ◽  
Financial Crises ◽  
Early Warning System ◽  
Warning System ◽  
Index Futures ◽  
Futures And Options

Early Warning System for Financial Crises

2018 ◽  
pp. 1-25 ◽  
Author(s):  
Amir Manzoor
Keyword(s):  
Financial Crisis ◽  
Early Warning ◽  
Financial Crises ◽  
Early Warning System ◽  
Financial Stability ◽  
Time Horizon ◽  
Warning System ◽  
False Alarms ◽  
Financial Risks ◽  
Policy Makers

To maintain financial stability, prevention of financial crisis is very important. This prevention is especially is especially important for developing countries where we need robust instruments for prediction of financial crises. One such instrument is Early Warning System (EWS). An EWS provided signals that could reflect the likelihood of a financial crisis over a given time horizon. Changing nature of financial risks due to liberalization of economies has increased the importance of an effective EWS. This chapter explores the state of the art of EWS. It is suggested that policy makers should take into account their objectives and related thresholds of various while developing an EWS since there exists a sharp trade-off between correctly calling crises and false alarms.

Predicting Global Financial Meltdown and Systemic Banking Failure

2016 ◽  
pp. 46-79 ◽  
Author(s):  
Shefali Virkar
Keyword(s):  
Early Warning ◽  
Financial Distress ◽  
Financial Crises ◽  
Early Warning System ◽  
Warning System ◽  
Financial Contagion ◽  
Financial History ◽  
National Boundaries ◽  
Constituent Elements

The last two decades of international financial history have witnessed an unprecedented increase in the number of episodes of financial distress; wherein the incidence of these episodes has not been restricted to national boundaries as localised systemic incidents but have instead been spread to other countries and across regions in the form of financial contagion. This book chapter proposes a detailed discussion and analysis of the scholarly and practitioner literature used to conceptualise and to encapsulate the theoretical construct of an Early Warning System (EWS) developed to predict and mitigate the onset and persistence of systemic banking failures and financial crises. The models that constitute the focus of this overview are pivotal to the prediction of systemic banking meltdowns, either on their own or as constituent elements of other methodological approaches that contribute significantly towards the design and development of an Early Warning System.

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