## Figure 2.1.1. Measuring the Riskiness of Credit Allocation

## Source details

**Canonical URL:** [Figure 2.1.1. Measuring the Riskiness of Credit Allocation](https://www.imf.org/-/media/files/publications/gfsr/2018/april/chapter-2/pdf/boxfigure2-1-1.pdf)

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### Visualization summary
- Vertical axis labels: 10, 9, 8, 7, 6, 5, 4, 3, 2, 1.
- Plotted series/labels shown in the figure:
  - Average vulnerability
  - Bottom issuers’ average vulnerability
  - Top issuers’ average vulnerability
  - Riskiness of allocation increases (appears twice in the figure)
  - Riskiness of credit allocation

### Definitions (as given in the figure note)
- Top (bottom) issuers: firms in the top (bottom) quintile of the distribution of the ratio of change in net debt to lagged total assets.
- A firm's vulnerability: measured by its decile in the distribution of a vulnerability indicator (for example, expected default frequency).

### Key implications and interpretation (from figure labels and note)
- The figure ranks firms by vulnerability decile (1 through 10) on the vertical axis.
- Comparisons are made between:
  - Average vulnerability across all firms,
  - Average vulnerability of bottom-quintile issuers,
  - Average vulnerability of top-quintile issuers.
- The repeated label "Riskiness of allocation increases" indicates that shifts in credit allocation toward higher-vulnerability deciles raise the overall riskiness of credit allocation.
- The label "Riskiness of credit allocation" identifies the overall concept being measured by the plotted comparisons.

*Source: IMF staff.*

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_Source: https://www.imf.org/-/media/files/publications/gfsr/2018/april/chapter-2/pdf/boxfigure2-1-1.pdf_