Indicator and boundaries of financial stability
Jan Willem End ()
DNB Working Papers from Netherlands Central Bank, Research Department
This paper presents an information variable for financial stability consisting of a composite index and its related critical boundaries. It is an extension of a Financial Conditions Index with information on financial institutions. The indicator is bounded, on one side, by the instability boundary which depends on the solvency buffers of the institutions and the stress level on financial markets. On the other side, the imbalances boundary signals when extreme imbalances accumulate. This concept is applied to the Netherlands and six OECD countries which experienced a financial crisis.
Keywords: financial stability; indicator; crisis (search for similar items in EconPapers)
JEL-codes: E44 G10 G12 G20 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-fin, nep-fmk and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:dnb:dnbwpp:097
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