Index of Financial Stability

Finance Think, for the first time, prepared and published the Index of Financial Stability of the banking system of Macedonia for the period 2006:Q1 to 2014:Q3. The purpose of the index is to measure the current stability and to compare it to the previous periods. The index includes the main risks: capital adequacy, asset quality, profitability, liquidity and interest rate risk of banks. The movement of the index upwards indicates that the stability of the banking system increases, and vice versa.

Source: Calculation of Finance Think, based on data collected from NBRM.

By 2008, the index shows high stability of the banking sector, led by the stability of all subindices: low level of non-performing loans and high quality of assets, high profitability, liquidity and capital adequacy and low interest rate risk. Due to the negative consequences of the global financial and economic crisis, the stability of the banking system has been decreasing until the third quarter of 2010, after which the increasing trend resumed.

The calculated series is available here (data collected / calculated from FT).

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