The International Monetary Fund conspicuously failed to do it last year, the Asian Development Bank wants to try to do it next time, and ABN-Amro Asia is attempting it now - call an emerging-market banking crisis. The broking arm of the Dutch banking group has put together an index to track some of the main factors that it said typically preceded financial-sector meltdowns in non-developed economies. 'Those [factors] that got in [the index] showed up in many studies, were particularly applicable to emerging markets and resonated with the recent experience in Asia,' strategy team head Ajay Kapur said. 'High financial vulnerability does not have to result in a banking crisis but equity investors are almost always better off exiting these markets.' Running the figures for eight Asian centres, ABN-Amro said that even 10 months after Bangkok had devalued the baht, investors should steer clear of Thailand, South Korea and Indonesia. Although the situation appeared to be improving in the Philippines and Malaysia, these markets were also still too risky, it said. 'Hong Kong and Singapore demonstrate little financial vulnerability,' ABN-Amro said. 'Taiwan's banking system is now at peak stress levels, which will worsen in coming months.' It added that despite the warning, it was maintaining its positive recommendation on Taipei-listed stocks. 'We have an overweight in Taiwan in anticipation of a logical policy response from Taiwan's central bank. 'The [central bank] should ease monetary policy without delay, if impending banking stress is to be contained.' The index's main components are data on real growth in domestic bank lending and the ratio of short-term foreign debt to hard-currency reserves, both of which claim a 15 per cent weighting. Mr Kapur said a spurt in bank lending frequently presaged financial crises as in the competitive rush to boost business, bankers tended to extend ever-greater resources, endangering credit quality. Of equal importance as a danger signal was a consistent climb in the amount of short-term indebtedness compared to a country's stock of reserves, he said. 'Panic-driven runs, especially when contagion is an issue, focus on countries with naked short forex positions. We have seen that in Asia recently.' The other factors - which all held an 8.75 per cent weighting - comprised information on loan-deposit ratios, foreign liabilities to bank deposits, money supply, trade balance and real effective exchange rates. ABN-Amro said the indicator's track record of highlighting crises that broke out since 1980 was 'quite good', although some serious problems were missed. 'Not all banking crises will be picked up by our financial vulnerability indices - sometimes just being in the wrong neighbourhood can be injurious, as contagion is intensified by herd behaviour in the part of nervous investors and illogical policy actions [and] statements by governments,' it said. A significant miss came with Indonesia's extraordinary meltdown, which started last year. ABN-Amro said that nine of the 10 favoured indicators were at safe levels, right up until the storm broke. The blame was laid on regional contagion sparking pure investor panic. 'We are not alone in this predicament [of the indicator missing the Jakarta collapse],' it said. 'The IMF's recent attempt at creating financial-stress indices also failed to register the current crisis.'