A Monitoring Framework for Global Financial Stability

Staff Discussion Notes, August 26, 2019

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A Monitoring Framework for Global Financial Stability

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Bibliographic details

• Authors: Tobias Adrian, Dong He, Nellie Liang, Fabio M Natalucci
• Published: August 26, 2019
• Series: Staff Discussion Notes
• DOI: https://doi.org/10.5089/9781498300339.006

Overview and Purpose

• This paper describes the conceptual framework that guides assessments of financial stability risks for multilateral surveillance, as currently presented in the Global Financial Stability Report (GFSR).
• The framework emphasizes consistency in measuring financial vulnerabilities across countries and over time and offers a summary statistic to quantify aggregate financial stability risks.
• The two parts of the empirical approach—a matrix of specific vulnerabilities and a summary measure of financial stability risks—are distinct but highly complementary for monitoring and policymaking.

Key Findings and Concepts

• The framework provides a structured approach to assess financial stability risks for multilateral surveillance.
• Emphasis on: consistency in measuring financial vulnerabilities across countries and over time.
• Offers: a summary statistic to quantify aggregate financial stability risks.
• Empirical approach comprises:
  • A matrix of specific vulnerabilities.
  • A summary measure of financial stability risks.
• These two parts are distinct but highly complementary for monitoring and policymaking.

Subjects and Keywords (as listed)

• Subjects:
  • Financial conditions index
  • Financial sector policy and analysis
  • Financial sector risk
  • Financial sector stability
  • Growth-at-risk assessment
  • Macroprudential policy
• Keywords:
  • downside risk
  • equity price
  • financial condition
  • financial conditions
  • Financial conditions index
  • financial conditions switch
  • financial market risk appetite
  • Financial sector risk
  • Financial sector stability
  • Financial stability
  • fire-sale risk
  • GDP
  • Global
  • growth distribution
  • Growth-at-risk assessment
  • loose financial conditions
  • macroprudential policy
  • price
  • price of risk
  • risk
  • SDN
  • term structure

Usage Note

• Disclaimer provided in the original text: "This Staff Discussion Note represents the views of the authors and does not necessarily represent IMF views or IMF policy. The views expressed herein should be attributed to the authors and not to the IMF, its Executive Board, or its management. Staff Discussion Notes are published to elicit comments and to further debate."

Source: IMF Staff Discussion Note "A Monitoring Framework for Global Financial Stability" by Tobias Adrian, Dong He, Nellie Liang, and Fabio M Natalucci, August 26, 2019.

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