Assessing Financial System Vulnerabilities

R. Johnston, Liliana Schumacher and Jingqing Chai

No 2000/076, IMF Working Papers from International Monetary Fund

Abstract: Recent financial crises have highlighted the potentially significant macroeconomic costs of financial system instability, and the potential for the instability in the financial system of one country to have broader implications for the stability of financial systems and macroeconomic performance in other countries. This paper reviews the different analytical approaches to assessing vulnerabilities in the financial systems and the benefits and limitations of the different approaches, and suggests enhancements that could help strengthen financial system stability assessments.

Keywords: WP; financial system vulnerability; interest rate; risk model; vulnerability assessment; asymmetric information; incentive structure; risk models; financial system vulnerabilities; banking system; risk-management model; var model; net risk; financial system assessment; bank portfolio; market participant; risk-measurement model; bank exposure; Financial sector risk; Credit risk; Market risk; Financial sector stability; Financial statements (search for similar items in EconPapers)
Pages: 35
Date: 2000-04-01
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Citations: View citations in EconPapers (17)

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