Assessing Financial System Vulnerabilities
36 Pages Posted: 15 Feb 2006
Date Written: April 2000
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: asymmetric information incentive structure risk models financial system vulnerabilities
JEL Classification: G15 B40 C4
Suggested Citation: Suggested Citation