Can You Map Global Financial Stability?

Abstract

The Global Financial Stability Map was developed as a tool to interpretthe risks and conditions that impact financial stability in a graphicalmanner. It complements other existing tools for assessing financialstability, and seeks to overcome some of the drawbacks of earlierapproaches. This paper provides the motivation for the tool, a detaileddiscussion of its construction, including the choice of risk factorsand conditions, a description of the underlying indicators, and adiscussion on how the final assessment is determined. When appliedto past events of financial instability, the Global Financial StabilityMap performs reasonably well in signaling risks to stability, aswell as in characterizing the depth of crisis episodes.