IMF Working Papers

Contingent Liabilities from Banks: How to Track Them?

By Serkan Arslanalp, Yin Liao

December 9, 2015

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Serkan Arslanalp, and Yin Liao. Contingent Liabilities from Banks: How to Track Them?, (USA: International Monetary Fund, 2015) accessed October 3, 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

In this paper, we develop a methodology to assess potential losses to the government that could arise from bank failures. The approach is intended to be simple, parsimonious, and used in real time. It generates an index that we call the banking sector contingent liability index (BCLI), based on the banking sector’s size, concentration, diversification, leverage, and riskiness of assets. The index is illustrated for 32 advanced and emerging market economies from 2006 to 2013, as well as a group of banks including global systemically important banks (G-SIBs).

Subject: Banking, Banking crises, Commercial banks, Contingent liabilities, Financial crises, Financial institutions, Global financial crisis of 2008-2009, Public financial management (PFM)

Keywords: Asset volatility, Bank Distress, Bank liability, Bank resolutions cost, Banking crises, Banking sector, Commercial banks, Contingent Liabilities, Distress probability, Global, Global financial crisis of 2008-2009, Sovereign Risk, Support measure, WP

Publication Details

  • Pages:

    30

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2015/255

  • Stock No:

    WPIEA2015255

  • ISBN:

    9781513568560

  • ISSN:

    1018-5941