Measuring systemic risk: the role of macro-prudential indicators

Release date
01/12/2013
Reference
Vol. 76. No. 4. December 2013
Author
Tony Wolken
Supplementary file
Bulletin Data file (XLS1 MB)
This article outlines some of the key indicators the Reserve Bank uses to help inform macro-prudential policy decisions. Macro-prudential indicators (MPIs) play an important role in the identification of financial system risk; the assessment of the banking system's capacity to weather periods of financial stress; and in signalling periods of financial stress. The indicators inform decisions to both deploy and remove macro-prudential instruments. The article explains how the MPI framework helped to frame the recent decision to impose residential mortgage loan-to-value (LVR) restrictions. Data-file for MPIs (XLS 1.1MB) discussed in the main text of this article.