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A Comparative Analysis on US Financial Stress Indicators

Author

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  • Nimantha Manamperi

    (Department of Economics, St. Cloud State University, 740 Fourth Ave S. Saint Cloud, MN 56301, USA.)

Abstract

This paper provides a comparative analysis on different fi nancial stress indexes (FSIs) available for the United States. The main objective of these stress indexes is to provide detailed insights about the fi nancial conditions in the U.S. economy. In general, all stress indexes indicated a very high fi nancial risk during the 2008 fi nancial crisis. Among all the Federal Reserve Bank FSIs, the Kansas city fed FSI and the St. Louis fed FSI show considerable similarities during 2008 fi nancial crisis. However, the behavior of Chicago Fed's National Financial Conditions Index and the Cleveland Fed's FSI were different. The stress indexes had responded to notable events with considerable shifts in their values. Indexes showed a signifi cant increase for Fannie Mae/Freddie Mac and Lehman Brother bankruptcies while signifi cant reductions for fi nancial healing processes such as TARP, TALF and fed funds rate cuts during the great recession. If a researcher wants to study the fi nancial conditions of the U.S. economy then these FSIs should be the first choice.

Suggested Citation

  • Nimantha Manamperi, 2015. "A Comparative Analysis on US Financial Stress Indicators," International Journal of Economics and Financial Issues, Econjournals, vol. 5(2), pages 613-623.
    • Handle: RePEc:eco:journ1:2015-02-34
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    Cited by:

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    3. Caporin, Massimiliano & Garcia-Jorcano, Laura & Jimenez-Martin, Juan-Angel, 2021. "TrAffic LIght system for systemic Stress: TALIS3," The North American Journal of Economics and Finance, Elsevier, vol. 57(C).
    4. Chao Liang & Yanran Hong & Luu Duc Toan Huynh & Feng Ma, 2023. "Asymmetric dynamic risk transmission between financial stress and monetary policy uncertainty: thinking in the post-covid-19 world," Review of Quantitative Finance and Accounting, Springer, vol. 60(4), pages 1543-1567, May.
    5. Hong, Yanran & Wang, Lu & Liang, Chao & Umar, Muhammad, 2022. "Impact of financial instability on international crude oil volatility: New sight from a regime-switching framework," Resources Policy, Elsevier, vol. 77(C).

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    More about this item

    Keywords

    Financial Stress Index; Financial Crisis; FED; US Economy; Recession;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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