Yellow-card system
The Yellow-card system is a regulatory mechanism used by financial supervisors to detect and address potential financial instability in institutions early on. It utilizes a set of warning indicators to signal when an institution might be heading towards distress, allowing for timely intervention.
Tumisang Bogwasi
Tumisang Bogwasi
What is Yellow-card system?
The yellow-card system, also known as the ‘early warning system’ or ‘preventive mechanism,’ is a regulatory framework designed to identify and address potential financial instability in banks or other financial institutions before they become critical. This system typically involves a set of quantitative and qualitative indicators that are monitored by a supervisory authority. When an institution’s performance or financial health breaches certain thresholds, it triggers a
