Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212315 
Authors: 
Year of Publication: 
2015
Series/Report no.: 
Bank of Finland Research Discussion Papers No. 7/2015
Publisher: 
Bank of Finland, Helsinki
Abstract: 
​I propose a financial stress index (FSI) for the Finnish financial system that aims to reflect the functionality of the financial system and provide an aggregate measure of financial stress in the money, bond, equity and foreign exchange markets and the banking sector. The FSI is a composite index that combines information from these markets and provides a measure of stress in the financial system as a whole. The FSI has obvious benefits for all participants in the financial markets who need a tool for monitoring the functioning of the financial markets, as it provides information on systemic stress events which are not as easily captured with the stress measures of individual markets or sectors. The ESRB recommendation (ESRB, 2014a) also states that national or international FSIs could be used when making a decision about the release of the counter-cyclical capital buffer. Hence, the index can also be used to support the macro-prudential policy decision making in Finland.
JEL: 
G01
G28
C43
Persistent Identifier of the first edition: 
ISBN: 
978-952-323-034-7
Document Type: 
Working Paper

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