Paradox of financial instability and credit risk formation

Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F26138077%3A_____%2F14%3A%230000694" target="_blank" >RIV/26138077:_____/14:#0000694 - isvavai.cz</a>
Result on the web
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DOI - Digital Object Identifier
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Result language
angličtina
Original language name
Paradox of financial instability and credit risk formation
Original language description
This paper focuses on the identification of sources of systematic risk which is one of the key tasks in conducting macroprudential policy in central banks. To succeed, the macroprudential analyses must be focused primarily on the identification of latentrisks being generated in the balance sheets of financial intermediaries and their clients. It may be rather difficult to distinguish normal cycle fluctuations and long-term trends from a dangerous financial cycle. In addition, the early identification of emerging systematic risk may be a complex issue since the analysts can be trapped into the paradox of financial instability. It means that sources of systematic risk may be increasing exactly when actual indicators of potential credit losses seem to bethe lowest. To explore the importance of the financial instability paradox, we estimate on historical data the sensitivity of banks´ balance sheets to adverse changes in macro fundamentals applying panel data methods to selected European
Czech name
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Czech description
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Project
<a href="/en/project/GA13-08549S" target="_blank" >GA13-08549S: Post-crisis regulation of banks and its impact on economic activity in a small export-oriented economy</a><br>
Continuities
P - Projekt vyzkumu a vyvoje financovany z verejnych zdroju (s odkazem do CEP)

Publication year
2014
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

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