Financial Stability Monitoring
Daniel Covitz (),
Nellie Liang () and
Tobias Adrian ()
Additional contact information
Daniel Covitz: Research and Statistics, Board of Governors of the Federal Reserve, Washington, DC 20551
Nellie Liang: Office of Financial Stability Policy and Research, Board of Governors of the Federal Reserve, Washington, DC 20551
Annual Review of Financial Economics, 2015, vol. 7, issue 1, 357-395
We present a forward-looking monitoring program to identify and track the sources of systemic risk over time and to facilitate the development of preemptive policies to promote financial stability. We offer a framework that distinguishes between shocks, which are difficult to prevent, and vulnerabilities, which amplify shocks. Building on substantial research, we focus on leverage, maturity transformation, interconnectedness, complexity, and the pricing of risk as the primary vulnerabilities in the financial system. The monitoring program tracks these vulnerabilities in four areas: the banking sector, shadow banking, asset markets, and the nonfinancial sector. The framework also highlights the policy trade-off between reducing systemic risk and raising the cost of financial intermediation by taking preemptive actions to reduce vulnerabilities.
Keywords: asset valuations; financial stability; macroprudential policies; shadow banking; systemic risk (search for similar items in EconPapers)
JEL-codes: E50 E60 G10 G20 (search for similar items in EconPapers)
References: Add references at CitEc
Citations: View citations in EconPapers (6) Track citations by RSS feed
Downloads: (external link)
Full text downloads are only available to subscribers. Visit the abstract page for more information.
Working Paper: Financial Stability Monitoring (2014)
Working Paper: Financial stability monitoring (2014)
Working Paper: Financial stability monitoring (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:anr:refeco:v:7:y:2015:p:357-395
Ordering information: This journal article can be ordered from
Access Statistics for this article
More articles in Annual Review of Financial Economics from Annual Reviews Annual Reviews 4139 El Camino Way Palo Alto, CA 94306, USA.
Bibliographic data for series maintained by http://www.annualreviews.org ().