The Financial Surveillance Model for Risk Management Mechanism: An Early Warning System

Abstract

The present study undertakes a quantitative research of a relative Stock Exchange of a new emerging country, of the Stock Exchange of Thailand (SET) while its subsidiary serve as a clearing house; Thailand Securities Depository (TSD). The major issues investigated in the measurement of variables that aimed to monitor its clearing house's members and its relation to Surveillance Model and its extensions. The financial ratios measured in this study are 27 variables from five categories (profitability, leverage, liquidity, performance, and asset quality). This methodology used in this study utilized the Logit Model to apply the information and to test significance by using t-test significance. Finally, research findings showed that only 6 financial variables were significant and served as the early warning system of financial problem for securities firms monitoring.