Calice, Pietro2014-08-152014-08-152014-07https://hdl.handle.net/10986/19356This paper uses a panel of annual observations for 198 banks in 19 Middle East and North Africa countries over 2001-12 to develop an early warning system for forecasting bank insolvency based on a multivariate logistic regression framework. The results show that the traditional CAMEL indicators are significant predictors of bank insolvency in the region. The predictive power of the model, both in-sample and out-of-sample, is reasonably good, as measured by the receiver operating characteristic curve. The findings of the paper suggest that banking supervision in the Middle East and North Africa could be strengthened by introducing a fundamentals-based, off-site monitoring system to assess the soundness of financial institutions.en-USCC BY 3.0 IGOACCOUNTABILITYACCOUNTINGASSET PORTFOLIOASSET RATIOASSETS RATIOBALANCE OF PAYMENTSBALANCE SHEETBALANCE SHEETSBALANCE-SHEETBALANCE-SHEET INSOLVENCYBANK ASSETBANK ASSET QUALITYBANK CAPITALIZATIONBANK EARNINGSBANK FAILUREBANK FAILURESBANK FOR INTERNATIONAL SETTLEMENTSBANK HOLDINGBANK HOLDING COMPANIESBANK INSOLVENCYBANK LIQUIDITYBANK MANAGEMENTBANK OF ENGLANDBANK PROFITSBANK REGULATIONBANK RISKBANK RUNBANK SUPERVISIONBANKING ASSETSBANKING CRISESBANKING MARKETBANKING MARKETSBANKING SECTORBANKING SUPERVISIONBANKING SYSTEMBANKING SYSTEM DISTRESSBANKING SYSTEMSBANKRUPTCYBANKSBUSINESS CYCLECAPITAL ADEQUACYCAPITAL BASECARCERTIFICATES OF DEPOSITSCHECKSCOMMERCIAL BANKCOMMERCIAL BANKSCONSOLIDATIONCONTAGIONCOOPERATIVE BANKSCORPORATE GOVERNANCECORRUPTIONCREDIT DEFAULTCREDIT DEFAULT SWAPSCREDIT RISKDEBTDEFAULT RISKDEFAULTSDEPENDENTDEPOSITDEPOSIT INSURANCEDEPOSITORSDEPOSITSDEREGULATIONDEVELOPING COUNTRIESDIVERSIFICATIONDOMESTIC CURRENCYDUMMY VARIABLEEARLY WARNING SYSTEMEARLY WARNING SYSTEMSEARNING ASSETSECONOMIC POLICYEQUALITYEQUITY CAPITALEQUITY RATIOESTATEEUROPEAN CENTRAL BANKEXCHANGE RATEFEDERAL RESERVEFEDERAL RESERVE BANKFEDERAL RESERVE BANK OF NEW YORKFINANCIAL ACCESSFINANCIAL CRISESFINANCIAL CRISISFINANCIAL DEEPENINGFINANCIAL DEVELOPMENTFINANCIAL INDICATORSFINANCIAL INFORMATIONFINANCIAL INSTITUTIONSFINANCIAL INTERMEDIATIONFINANCIAL POLICYFINANCIAL REPORTINGFINANCIAL RISKFINANCIAL SECTOR REGULATIONFINANCIAL SERVICESFINANCIAL STABILITYFINANCIAL SYSTEMSGOVERNANCE STRUCTURESGOVERNMENT OWNERSHIPINCOME STATEMENTSINDIVIDUAL BANKINDIVIDUAL BANKSINFLATIONINSOLVENCIESINSOLVENCY EPISODESINSOLVENCY RISKINSOLVENTINSOLVENT BANKSINSTITUTIONAL ENVIRONMENTINTEREST INCOMEINTEREST RATESINTERNATIONAL BANKISLAMIC BANKSLARGE BANKSLEVERAGELIABILITYLIABILITY SIDELIQUID ASSETSLIQUIDATIONLIQUIDITY POSITIONLIQUIDITY PROBLEMSLIQUIDITY RATIOSLIQUIDITY RISKLOANLOAN CLASSIFICATIONLOAN LOSSLOAN LOSS PROVISIONINGLOAN LOSS PROVISIONSLOAN PORTFOLIOMACROECONOMIC ENVIRONMENTMACROECONOMIC VARIABLESMARKET CONCENTRATIONMARKET DISCIPLINEMARKET PARTICIPANTSMARKET SHAREMARKET STRUCTUREMONETARY FUNDMORTGAGEMORTGAGE BANKSNEGATIVE SHOCKSNONPERFORMING LOANSNPLOPERATING COSTSOPERATIONAL RISKOWNERSHIP STRUCTUREPENDING INSOLVENCYPOLITICAL STABILITYPREDICTIONSPRIVATE BANKSPROBABILITY OF INSOLVENCYPROFITABILITYPRUDENTIAL REQUIREMENTSPUBLIC DISCLOSURERATING SYSTEMREAL ESTATERECAPITALIZATIONRECEIVERRECEIVERSHIPREGULATORY FRAMEWORKRESERVE BANKRESERVESRETURNRETURN ON ASSETSRISK EXPOSURESRISK OF INSOLVENCYRISK TAKINGRULE OF LAWSAVINGSSAVINGS BANKSSENSITIVITY ANALYSISSEPARATION OF OWNERSHIPSHAREHOLDERSSMALL BANKSSOLVENCY PROBLEMSSOLVENT INSTITUTIONSSTOCK EXCHANGESSTOCK MARKETSYSTEMIC BANKING DISTRESSSYSTEMIC RISKTRANSITION ECONOMIESUNIONVULNERABILITYWHOLESALE BANK10.1596/1813-9450-6969