HEAT! A Bank Health Assessment Tool

By Li L Ong, Phakawa Jeasakul, Sarah Kwoh

August 9, 2013

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Format: Chicago

Li L Ong, Phakawa Jeasakul, and Sarah Kwoh. HEAT! A Bank Health Assessment Tool, (USA: International Monetary Fund, 2013) accessed December 26, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Developments during the global financial crisis have highlighted the importance of differentiating across financial systems and institutions. Assessments of financial stability have increasingly considered the characteristics of individual banks within a financial system, as well as those with significant international reach, to identify vulnerabilities and inform policy decisions. This paper proposes a simple measure of bank soundness, the Bank Health Index (BHI), to facilitate preliminary analyses of individual financial institutions relative to their peers. The evidence suggests that the BHI is useful for a first-pass identification of bank soundness conditions. Automated spreadsheet templates of the bank Health Assessment Tool (HEAT!) are provided for users with access to the BankScope, Bloomberg and/or SNL database(s).

Subject: Bank soundness, Banking, Commercial banks, Financial institutions, Financial sector policy and analysis, Global systemically important banks, Loans, Nonperforming loans

Keywords: Asset quality, Bank health, Bank Health Assessment Tool, Bank Health Index, Bank soundness, Capital adequacy, Commercial banks, Earnings, Financial statements data, Global, Global systemically important banks, Group of bank, HEAT!, Heatmap, Leverage, Liquidity, Loan portfolio, Loans, Nonperforming loans, WP

Publication Details

Pages:

20
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2013/177
Stock No:

WPIEA2013177
ISBN:

9781484385227
ISSN:

1018-5941

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