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Financial Soundness Indicators for Financial Sector Stability: A Tale of Three Asian Countries

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  • Asian Development Bank (ADB)
  • Asian Development Bank (ADB)

    (Economic Research and Regional Cooperation Department, ADB)

  • Asian Development Bank (ADB)

    (Economic Research and Regional Cooperation Department, ADB)

  • Asian Development Bank (ADB)

Abstract

The development and analysis of financial soundness indicators (FSIs) help policy makers identify the strengths and vulnerabilities in their countries’ financial systems and take preventive action to avert a crisis or at least minimize its effects. This publication presents the country-case studies for Bangladesh, Georgia, and Viet Nam focusing on the growing evidences in the development of financial soundness indicators to effectively monitor the financial performance of the country. With the support from Investment Climate Facilitation Fund under the Regional Cooperation and Integration Financing Facility, the tales of three countries shows the diverse financial vulnerabilities of each economy. For example, Georgia and Viet Nam have met capital adequacy standards but Bangladesh has faltered in this aspect for it requires an injection of capital into state owned commercial banks that is contingent upon improved governance. On the other hand, Georgia and Viet Nam could have been more susceptible to global economic crises than Bangladesh. A significant amount of public and private debt in Georgia is denominated in foreign currency while Viet Nam’s economic openness—largely because of rapid economic integration in East Asia—has made it vulnerable to global economic slowdowns.

Suggested Citation

  • Asian Development Bank (ADB) & Asian Development Bank (ADB) & Asian Development Bank (ADB) & Asian Development Bank (ADB), 2015. "Financial Soundness Indicators for Financial Sector Stability: A Tale of Three Asian Countries," ADB Reports RPT157598-2, Asian Development Bank (ADB).
    • Handle: RePEc:asd:wpaper:rpt157598-2
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    References listed on IDEAS

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    1. Mr. Fabian Valencia & Mr. Luc Laeven, 2012. "Systemic Banking Crises Database: An Update," IMF Working Papers 2012/163, International Monetary Fund.
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    Cited by:

    1. Bui Trinh & Pham Le Hoa, 2017. "Comparing the Economic Structure and Carbon Dioxide Emission between China and Vietnam," International Journal of Economics and Financial Research, Academic Research Publishing Group, vol. 3(3), pages 31-38, 03-2017.
    2. Joshi, Seema & Surana, Divya, 2023. "HDFC Bank (premerger scenario) v/s SBI: Assessing the Financial Performance of two leading Banks in India using the CAMEL approach," MPRA Paper 118104, University Library of Munich, Germany, revised 27 Jul 2023.
    3. Nguyen Thi Nhung & Nguyen Thi Thanh Huyen & Vo Hoai Anh & Nguyen Phuong Thao & Trinh Thao Van, 2025. "The impact of house prices on banking stability in Vietnam: the moderating role of investor sentiment," Journal of Banking Regulation, Palgrave Macmillan, vol. 26(2), pages 176-195, June.

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