This paper describes some experiments with the construction of relatively simple
indices which summarise in a systematic and objective way information about
emerging economies currently under pressure in financial markets and those
vulnerable to such pressure in the future. A survey of the literature suggests
financial crises are typically preceded by overvalued exchange rates, inadequate
international reserves, recessions and excessive credit growth. These indicators
and others, such as short-term external debt, which appear more important in
recent crises are included in the summary indices of vulnerability. The
vulnerability indices are shown to have modest predictive power for the pressure
index but are far from conclusive in themselves.