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A risk dashboard for the Italian economy

Fabrizio Venditti (), Francesco Columba () and Alberto Maria Sorrentino ()
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Alberto Maria Sorrentino: Bank of Italy

No 425, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: In this paper we describe an analytical framework to assess financial stability risks in the Italian economy. We use a large number of indicators, selected to take into account the peculiarities of the Italian economy, to monitor risks in seven areas: interlinkages, the credit markets, the macroeconomic environment, funding conditions, the financial markets, and the banking and insurance sectors. Based on thresholds selected on the basis of either expert judgment or historical distributions, we construct risk heatmaps and derive aggregate scores for each of the above risk categories. By providing timely information on the buildup of risks, the proposed dashboard usefully complements other analytical tools currently used for developing and implementing macroprudential policy.

Keywords: early warning indicators; financial stability risks; heatmaps; macroprudential policy (search for similar items in EconPapers)
JEL-codes: G12 G21 G23 G28 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec, nep-mac and nep-rmg
Date: 2018-02
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