Comprehensive analysis of banking sector stability indicators and early warning system development

Posted: Oct 28, 2025

• Prof. Emma Mehta
• Prof. Harper Schmidt
• Prof. Isaac Rossi

Abstract

The global financial system has experienced multiple crises over the past decades, with banking sector instability often serving as the epicenter of systemic disruptions. Traditional approaches to banking stability assessment have predominantly relied on financial ratios, regulatory capital metrics, and macroeconomic indicators. However, the increasing complexity of financial networks, the emergence of digital banking ecosystems, and the growing interconnectedness of global markets demand more sophisticated computational frameworks for early warning systems. This research addresses the critical gap in current banking stability assessment methodologies by developing a novel computational architecture that integrates quantum-inspired optimization with network dynamics analysis.