A Comparative Analysis on US Financial Stress Indicators

Nimantha Manamperi
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Nimantha Manamperi: Department of Economics, St. Cloud State University, 740 Fourth Ave S. Saint Cloud, MN 56301, USA.

International Journal of Economics and Financial Issues, 2015, vol. 5, issue 2, 613-623

Abstract: This paper provides a comparative analysis on different fi nancial stress indexes (FSIs) available for the United States. The main objective of these stress indexes is to provide detailed insights about the fi nancial conditions in the U.S. economy. In general, all stress indexes indicated a very high fi nancial risk during the 2008 fi nancial crisis. Among all the Federal Reserve Bank FSIs, the Kansas city fed FSI and the St. Louis fed FSI show considerable similarities during 2008 fi nancial crisis. However, the behavior of Chicago Fed's National Financial Conditions Index and the Cleveland Fed's FSI were different. The stress indexes had responded to notable events with considerable shifts in their values. Indexes showed a signifi cant increase for Fannie Mae/Freddie Mac and Lehman Brother bankruptcies while signifi cant reductions for fi nancial healing processes such as TARP, TALF and fed funds rate cuts during the great recession. If a researcher wants to study the fi nancial conditions of the U.S. economy then these FSIs should be the first choice.

Keywords: Financial Stress Index; Financial Crisis; FED; US Economy; Recession (search for similar items in EconPapers)
JEL-codes: E44 E58 G10 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ1:2015-02-34

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