Measuring Financial Markets Stability

“A new, systematic approach for the early detection of financial market crises”

The effects of the last major financial market crisis in 2008 are still present worldwide today. Notwithstanding the fact that policymakers, regulators and central banks have jointly managed to stabilize the financial markets after 2008 and thereby avoided a "meltdown" of the entire financial system, there is still a constant fear of the next upcoming, severe crisis, with possibly uncontrollable consequences.

In this discussion paper, we would like to present a new systematic approach that can help - through reliable early detection of financial market crises - to take countermeasures before a crisis can fully develop.