A new framework for comparing financial stability risks
Abstract
Since the global financial crisis of 2007/08, policymakers and market participants alike have paid more attention to financial stability risks, alongside a more longstanding focus on macroeconomic developments. While the emphasis on such risks is welcome, however, it can often be focused solely on specific concerns or issues; there has been relatively little attempt to assess different financial stability risks relative to one another. This opinion piece proposes a simple approach for doing so, based on the building blocks of classical credit analysis. It describes and illustrates a new way of presenting different financial stability risks relative to one another, which would enhance the analysis of both risk managers and policymakers alike.
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Author's Biography
Colin Ellis is Visiting Professor of Finance at Hult International Business School in London. He has degrees from York University, the London School of Economics (LSE) and Middlesex University, has held professional roles at the Bank of England, Daiwa Capital Markets, the British Private Equity & Venture Capital Association (BVCA) and Moody’s Investors Service, and is a Fellow of the RSA. Colin has published on topics including corporate investment and pricing, data uncertainty, private equity, ratings and financial markets and central banking.
Citation
Ellis, Colin (2025, March 1). A new framework for comparing financial stability risks. In the Journal of Risk Management in Financial Institutions, Volume 18, Issue 2. https://doi.org/10.69554/LDRJ1455.
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