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

The 1997 Asian financial crisis and the 2008 global financial and economic crisis further demonstrated the importance of financial stability. Both crises showed how balance sheets of financial institutions can negatively impact the financial sector in a manner that may lead to financial instability. Moreover, vulnerability of the financial institutions could exist hand-in-hand with robust macroeconomic indicators, calling for the importance of monitoring the balance sheets of financial institutions. Therefore, assessing macroeconomic performance alongside healthiness of financial institutions is very important.