IDEAS home Printed from
   My bibliography  Save this article

Indicators of financial system stability: towards an aggregate financial stability indicator?


  • Adam Geršl
  • Jaroslav Heřmánek


This article sets out to describe and discuss the methodology of selected financial soundness and financial stability indicators, including the attempts to construct an aggregate financial stability indicator. The first part is devoted to discussion of Financial Stability Indicators by the International Monetary Fund and presents also the values of the IMF's core Financial Soundness Indicators for the Czech Republic and other selected countries, using the data from the 2005 pilot study. This part partly covers also other existing approaches to definition and collection of partial financial soundness indicators, such as the indicators regularly assessed by the European Central Bank. In the second part, the article reviews existing approaches to construct an aggregate financial stability indicator. These include alternative approaches using balance sheet and profit and loss data, as well as financial market and regulatory agencies' data. The last part constructs a preliminary composite indicator for the stability of the Czech banking system and discusses its development over time.

Suggested Citation

  • Adam Geršl & Jaroslav Heřmánek, 2008. "Indicators of financial system stability: towards an aggregate financial stability indicator?," Prague Economic Papers, University of Economics, Prague, vol. 2008(2), pages 127-142.
  • Handle: RePEc:prg:jnlpep:v:2008:y:2008:i:2:id:325:p:127-142

    Download full text from publisher

    File URL:
    Download Restriction: free of charge

    File URL:
    Download Restriction: free of charge

    As the access to this document is restricted, you may want to search for a different version of it.


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Kristína Kočišová & Daniel Stavárek, 2015. "Banking Stability Index: New EU countries after Ten Years of Membership," Working Papers 0024, Silesian University, School of Business Administration.
    2. Rosaria Rita Canale & Paul Grauwe & Pasquale Foresti & Oreste Napolitano, 2018. "Is there a trade-off between free capital mobility, financial stability and fiscal policy flexibility in the EMU?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 154(1), pages 177-201, February.

    More about this item


    financial stability; banking system; aggregation;

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:prg:jnlpep:v:2008:y:2008:i:2:id:325:p:127-142. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Frantisek Sokolovsky) or (Rebekah McClure). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.