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1 Harsono Yoewono , Diin Fitri Ande 2* Copyright © 2018 Authors. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. International Journal of Business Studies Vol. 2 No. 1 ( February 2018) 2 The published inancial reports are the only tools available for the public to analyse the soundness of a bank and predict its probable inancial distress and bankruptcy. This research intends to analyse 3 aspects of a bank, that is its inancial soundness/performance, distress, and the actual and relative price of a bank’s share. Three common and primary inancial performance indicators of a bank are liquidity, solvability, and rentability/pro itability. These three parameters are a part of CAMELS rating and supervisory system. Three other indicators, that is C (for capital), M (for management), and S (for sensitivity), are con ined to the ‘subjective’ de initions and interpretations of the authorities. As a non-participant observer, the researchers stand independent and apart from various aspect of reassessing, recounting to the published unaudited inancial reports. Some inancial ratios re lecting the inancial distress of a bank are used as an indication and initial predictor of probable inancial distress of a bank. The randomly changing stock price (stochastic) is a resultant of changing various inancial indicators cited in the inancial reports. On the other hand, the stock price can somehow re lect and provide signs of a bank to fail. A bank is deemed to fail when the words spread out that such bank cannot ful ill its obligation in the clearing process, the inter-bank money market, loan defaults, or elses. LITERATURE REVIEW Bank Performance The CAMEL supervisory system as mentioned above was set on the Decree of BI Director No.30/11/ KEP/1997. Alas , i t cannot be implemented on any branch level. Therefore, some revisions were taken place later on. On the other hand, EAGLES (Earning ability, Asset Quality, Growth, Liquidity, Equity, Strategic management) was perceived as an alternative of CAMEL system (Irmayanto et al, 2007:92-94). Soundness, healthiness is a mince word for performance. It can be de ined further to pro itability, rentability, liquidity, solvability. Some negative performance can be worded as inancial distress. The indicators for pro itability may include ROA (return on asset), ROE (return on equity), NPM (net pro it margin), OCR (operating cost ratio), or elses. In terms of ROI (return on investment), failure to manage the revenues and pro its accordingly can put the company as the or elses. As the unfavorable market depressed the stock prices, some banks are doomed to fail as they cannot satisfy the minimum capital requirements. As is the case, such banks get some kind of warnings from the government of icials, either from Bank Indonesia and/or Otoritas Jasa Keuangan (OJK). The penalties can take a form of excluded from the clearing process, or worst, gets liquidated. Some early warning systems have been set to detect, signal, and notify the authorities once a bank begins to crumble and experience some level of inancial distress, particularly the capital adequacy ratio (CAR) requirement. However, some troubled banks can and worth to be saved and salvaged. Especially when the epitome of ‘too big to fail’ takes precedence. Some political and moral hazard usually steps in, building the fragile arguments. Some cherry picking usually creates criticisms, chain reactions, and snowballing. The patchy salvations create a mockery such as another day, another bail out. The usual stale arguments spoken out loud have been the highly potential of systemic nature of risks in banking, payment, inancial, and economic, in partial or the whole. The public can only know and be aware of the soundness of a bank through their published inancial reports. The authorities have never been disclosing and publishing the health status of any bank, but when the markets begins to jitter and unravel. Some massive press release is usually issued and disseminated, then. Huge press conferences are held and covered by all media companies.

The Effect of Financial Performance and Financial Distress Indicators to the Stock Price of Bank Rakyat Indonesia