The study on the development of the financial sector early warning system

Euihwan Park, Dong Heon Kim, Kyun Kim

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)


This study tries to build the financial early warning system (EWS) of the individual financial sector such as banks, securities and savings-loans banks by applying the non-parametric signal approach and to establish a new composite EWS. The empirical results show that the financial sector’s EWSs appeared to identify the financial sector’s crisis timely and the new composite EWS seemed to be very similar with the existing EWS. This study suggests that the financial sector EWS is useful for conducting the microprudential policy based on the financial sector’s characteristics and relating to the implementation of the macroprudential policy for financial stability.

Original languageEnglish
Pages (from-to)36-67
Number of pages32
JournalJournal of Economic Theory and Econometrics
Issue number3
Publication statusPublished - 2017 Sept

Bibliographical note

Funding Information:
∗This research is supported by the Hana Institute of Finance and the Korea University Research Grant. The part of this research has been filed to the Euihwan Park’s Ph.D. dissertation (Graduate School of Korea University) with consent of the co-authors. The authors would like to two anonymous referes, and the seminar participants in the Hana Institute of Finance for their helpful comments and suggestions. The authors remain responsible for any errors.

Publisher Copyright:
© 2017, Korean Econometric Society. All rights reserved.


  • Early Warning System (EWS)
  • Financial crisis
  • Financial stability
  • Macroprudential policy
  • Parametric and non-parametric early warning index
  • Signal approach

ASJC Scopus subject areas

  • Economics and Econometrics


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